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Wheels India Ltd.

BSE: 590073 Sector: Auto
BSE 00:00 | 23 Jul 834.10 25.55






NSE 00:00 | 23 Jul 831.30 16.60






OPEN 825.00
52-Week high 852.00
52-Week low 380.00
P/E 297.89
Mkt Cap.(Rs cr) 2,007
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 825.00
CLOSE 808.55
52-Week high 852.00
52-Week low 380.00
P/E 297.89
Mkt Cap.(Rs cr) 2,007
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Wheels India Ltd. (WHEELS) - Director Report

Company director report

Your Directors present their Sixty first Annual Report and the AuditedAccounts of your Company for the year ended March 31 2020.


Sales (net of Indirect taxes) for the year were Rs. 2407.81 crorescompared to Rs.3151.70 crores in the previous year showing a decrease of 23.60%.

Financial Results

The Company has adopted IndAS with effect from 01.04.2017 in pursuanceof the notification dated 16.02.2015 issued by The Ministry of Corporate Affairs under theCompanies (Indian Accounting Standards) Rules 2015.

The standalone financial results of your Company are as below:

Rs. in Crores

2019-20 2018-19
Gross Profit before finance cost and depreciation 176.33 240.63
Finance cost 61.53 62.00
Depreciation 70.20 70.21
Profit before tax 44.60 108.42
Profit after tax 54.11 75.67
Total Comprehensive 51.34 75.74
Transfer to General 22.00 32.00

Dividend and transfer to General Reserve

The Board approved and paid an Interim Dividend of Rs 3.00 per equityshare (30%) in February 2020.

Your Directors are pleased to recommend a final dividend of Rs. 2.65per equity share (26.5%) for the year ended 31st March 2020. The finaldividend recommended subject to approval at the 61st Annual General Meetingwill be paid to all the shareholders as on 23.07.2020 The total dividend payout for thefinancial year 2019-20 is Rs.13.60 crores.

The Company proposes to transfer an amount of Rs. 22 crores to theGeneral Reserves. An amount of Rs. 95.84 crores is proposed to be retained under RetainedEarnings.

Management Discussion and Analysis

The last year 2019 was a difficult year for the global economy withgrowth slowing to 2.9% the lowest level since the global financial crisis in 2009. Themomentum in global manufacturing weakened with geopolitical tensions affectinginternational trade. The weakening of demand was further affected by the outbreak ofcovid-19 in early 2020 with a number of large economies in succession enforcing lockdownsin their economies. The global economy is expected to have a negative growth in 2020affecting trade and commerce the worst economic prospects in this century.

The Indian economy in 2019-20 saw a slowing down of growth from thesecond quarter onwards with the second half of the year seeing the economy growing at4.2%. The collapse of a few large financial institutions made the lending community morerisk averse limiting the liquidity in the economy. The slowdown in India was broad basedaffecting the auto and construction sector in particular. In an attempt to revive theeconomy and capital formation the government reduced corporate tax from 34.94% to 25.17%in September 2019. However the global pandemic covid-19 resulted in a national lockdownin the latter part of March 2020 bringing economic activity to a standstill.

In the coming year 2020-21 the World Bank forecasts a -3.2% growth inthe Indian economy negative growth for the first time in 60 years largely due to theimpact of covid-19.

The medium and heavy commercial vehicle market started the lastfinancial year with a strong first quarter. However the slowdown in both the global andIndian economy affected our customers adversely. The increasing cost of insurance tollsand drivers affected the domestic truck customer sentiment. The medium and heavycommercial vehicle market saw a decline of around 50% in 2019-20. The decline was mostsignificant in the multi-axle vehicle segment that uses more wheels.

The light commercial and small commercial vehicle markets saw a drop ofbetween a quarter and a third of the previous year's volume. The bus market was stable inthe year under review bolstered by orders from the state transport undertakings.

The tractor market saw the impact of cyclicity after three years ofcontinued growth. This resulted in the Indian tractor market declining by 13% in 2019-20.

As the economy slowed down in the last financial year and as banksbecame more risk averse the passenger vehicle market was adversely affected coming downby 18%. This was also impacted by declining prospects in the job market with the slowingdown of the economy. The year also saw a shift in the market with the sports utilityvehicle segment gaining at the expense of the car segment.

Your Company's sales of forged aluminium wheels were stable withincreased volumes from the United States offsetting a drop in volume from Europeancustomers. The team at Wheels India did a lot of work last year on improving thecompetitiveness of the product for global markets.

The construction equipment industry in India declined by almost 30%last year following the slowing down of the economy. The global industry saw a cyclicaldecline following high volumes in the previous year. The segment of the mining equipmentindustry that we support saw a decline in volume due to decline in commodity demand fromChina in the second half of the year.

Your Company's air suspension business for buses had a good year with ahealthy flow of orders from state transport undertakings resulting in offtake of systemsby our customers. This was however offset by the decline in the demand for systems forlift axles that bore the brunt of the decline in commercial vehicles.

Wheels India has emerged as a major supplier to windmill manufacturersin India. We saw an increase in our domestic volumes due to increased export of windmillsub-systems by our international customers in India. Further we started export of partsthat were awarded as a result of a global tender of one of our multinational customers.This resulted in considerable growth in our supply of components to windmill manufacturersto the extent of 70% last year.

The year under review also saw substantial growth in our supplies ofbogie frames for LHB coaches to Indian Railways as we were able to increase our share ofbusiness within the scope of supply.

The declining international trade and slowing down global economyresulted in a 20% decline in export of products by your Company vis-a-vis the previousfinancial year.

In the last financial year there was a lag in the reduction of steelprices vis-a-vis scrap prices resulting in lower realization for your Company. While therewas an overall reduction in steel prices this lag affected our profitability in the yearunder review.

There has been considerable fixed capital additions by the Company in2018-19 and 2019-20. The depreciation and interest from these investments affected theCompany in the last financial year as revenues dropped by over 20%. The fixed manpowercost was also exposed when there was considerable drop in the automotive and constructionwheel business. These elements resulted in the profit before tax interest coverage ratioand return on net worth dropping.

The spread of the global pandemic in India resulted in the governmentimposing a national lockdown that resulted in a stop of your Company's operations in thelatter part of March. While we did enable work at home facilities for our employees wherepossible being essentially a manufacturing company our revenues came to a standstill.The government also advised companies to pay salaries and wages to all employees whetherpermanent or temporary for the period of the lockdown till May 18th.

The health and safety of our employees are of utmost importance to yourCompany. We had an internal team put in place various safety and health precautionarysystems in place in production and other parts of the plant prior to the start ofoperations. The lockdown has been through various phases with some limited activityallowed from the end of April through May. In our Company during this period we focusedon serving export customers. In the second half of May as domestic customers startedoperations in a limited manner we started sales to domestic customers. UnfortunatelyTamil Nadu and Maharashtra two states where we have significant operations were severelyaffected by the pandemic and are likely to have limitations on operations in theimmediate term.

The impact of the lockdown over most of the first quarter will affectyour Company's prospects in the coming year. In addition both the global and the Indianeconomy are likely to see a sharp slowdown in FY21. This will have a significant impact onyour Company's prospects in the coming year.

The negative growth in the economy will affect demand for commercialvehicles even after significant de-growth in the previous year. While fuel prices havedropped in the international markets there has been no pass through of these benefits totruck and bus operators. These end customers are also facing a major shortage of driversas many of them have returned to their hometowns. The coming year also sees theintroduction of BS VI norms that increases the cost of vehicles. All these factors willcontinue to depress the demand for medium and heavy commercial vehicles in the comingyear even after the lifting of the national lockdown.

It is expected that due to the fiscal condition of the stategovernments there will be limited funds available to state transport undertakings toorder new buses. This and the reduction of travel within the country is likely to severelyaffect demand for buses in the coming year. The slowing economy will also affect demandfor small and light commercial vehicles as well.

We expect the forged aluminium business of your Company to maintain atlast year's levels despite the decline in the global economy as new businessopportunities make up for drop in demand.

The agricultural economy is expected to do well in the coming yearwith the expectations of good monsoons reasonable ground water levels and with the ruraleconomy less affected by covid-19 than urban India. The government has also committed toincreased spend on MNREGA and introduced various schemes for the farm economypost-covid-19. While the national lockdown till the middle of May meant no production oftractors during this period this segment is expected to see demand at close to the samelevel as last year.

The slowing global economy will affect demand for construction andmining wheels for your Company in the coming year. The earthmoving equipment industry wasalready facing headwinds in FY20 and the slowdown will only worsen the situation. Thereis a positive development in that customers in this segment are open to change the mix oftheir global sourcing and this could open opportunities for us in the coming years.

The air suspension system business of your Company will be adverselyaffected by the limited buying of buses by state transport undertakings in the currentyear given wider deficits at the various state governments. The suspension systems thatwe supply for lift axles to truck manufacturers is likely to see limited demand in thecoming year.

Even as we were not able to manufacture components for windmills in anyvolume till the middle of May we see stable demand from international markets both by wayof direct exports as well as manufacture of components for sub-systems that will beexported out of India by multinational windmill manufacturers. We are increasingly beingrecognized as part of the global supply chain in this industry. A number of the westernwindmill manufacturers have also stated that de-risking of their sourcing could openfuture opportunities for us.

The Indian Railway factories had shut down operations till the middleof May and the demand for bogie frames from us is expected to be reasonable in theremaining months of the year.

While demand generation is likely to be a problem in our variousindustry segments in the coming year manpower supply and working hour constraints willlimit us till the lockdown criteria are eased in our main manufacturing locations. Thespread and control of the pandemic within the country and the government actions willgovern that.

Your Company has made a significant investment in a cast aluminiumwheel plant that should start operations in the second quarter of the coming year. Theplant will cater primarily to OEMs and after-market requirements in international markets.

The commencement and continuation of operations at our facilities hasonly been possible due to the dedication and commitment of the Wheels India team who inthese turbulent and uncertain times have committed themselves whole-heartedly towards theCompany and ensuring customer requirements are met. At the same time we are enhancing ourquality health and safety systems to align with the challenging times ahead.

Your Company is and will be taking various steps to improve our coststructure in this most difficult year ahead of us. I am confident that with this effortand the continued support of our customers bankers suppliers and communities around ourplants that we will strengthen our Company to survive these turbulent times and be thereto make use of opportunities that arise in the future.

WIL Car Wheels Limited (WCWL) your Company's subsidiary had adifficult year with a reduction in demand for passenger vehicles. The higher percentage ofsports utility vehicles in the passenger vehicle mix also meant a lower proportion ofsteel wheels. The drop in sales with a new plant in Gujarat resulted in low capacityutilization and losses in the year under review. This restrictions on operations imposedby the lockdown has meant that our operations have been and will be severely affected fromthe latter part of March to the end of the first quarter.

Any improvement in the passenger vehicle market will depend on theeasing of the lockdown and any improvement in sentiment post-lockdown. While we are indiscussion with the WCWL team and partner on ways to improve our situation the prospectswill be limited in the coming year and dependent on the recovery of the economy.

Consolidated Financial Statements

In accordance with the provisions of Section 129(3) of the CompaniesAct 2013 (“2013 Act”) the Consolidated Financial Statements drawn up with theapplicable Indian Accounting Standards forms part of the Annual Report.

In accordance with the provisions of Section 136 of the 2013 Act theAudited Financial Statements including the Consolidated Financial Statements and relatedinformation of the Company will be available on our website Thesedocuments will also be available for inspection during business hours at the registeredoffice of the Company.

The Consolidated Profit after Tax for the year 2019-20 is Rs. 47.32crores and the Consolidated Net worth is Rs. 663.73 crores as on 31.03.2020 as against Rs.76.15 crores and Rs. 640.34 crores as on 31.03.2019.

Subsidiary Company

WIL Car Wheels Limited reported a gross revenue of Rs. 301.32 croresand loss after tax of Rs. 6.66 crores for the financial year 2019-20 as against Rs. 364.92crores and loss after tax of Rs. 1.29 crores for the financial year 2018-19.

Associate Company

Axles India Limited an Associate Company has achieved a turnover ofRs. 408.62 crores and profit after tax of Rs. 12.16 crores for the financial year 2019-20as against the turnover of Rs. 621.05 crores and profit after tax of Rs. 38.06 crores forthe financial year 2018-19.

A statement containing the salient features of the financial statementsof the Subsidiary Company / Associate Company is provided in Form AOC-1. Refer Annexure Iof this report.

Fixed Deposits

As at 31st March 2020 fixed deposits accepted by theCompany from public and shareholders aggregated to Rs. 167.74 crores which are within thelimits prescribed under the 2013 Act and the rules framed thereunder.

The provisions of the 2013 Act also mandate that any Company inviting/accepting / renewing deposits is required to obtain Credit Rating from a recognized creditrating agency. Your Company has obtained a credit rating of “MA+ (Negative)” forits fixed deposits from ICRA.

The details relating to deposits covered under Chapter V of the 2013Act are given in Annexure II forming part of this Report.

Board Evaluation

Pursuant to the provisions of Section 134 (3) (p) Section 149(8) andSchedule IV of 2013 Act SEBI (Listing Obligations & Disclosure RequirementsRegulations) 2015 (SEBI LODR) Annual Performance

Evaluation of the Board the Directors as well as Committees of theBoard have been carried out.

The criteria for evaluation of the Board and nonindependent directorsat a separate meeting of Independent Directors were in accordance with the Nomination& Remuneration Policy adopted by the Company. The evaluation was carried out takinginto consideration the Composition of the Board and availability of multi-disciplinaryskills commitment to good corporate governance practices adherence to regulatorycompliance grievance redressal mechanism track record of financial performanceexistence of integrated risk management system use of modern technology and commitment tocorporate social responsibility.

The Board at its meeting carried out the evaluation of the Directorsperformance of Independent Directors and Committees of the Board based on the guidelinesprescribed by SEBI.

particulars of Loans Guarantees or Investments

The Company has not given any loans or guarantees covered under theprovisions of Section 186 of the 2013 Act. The details of the investments made by Companyare given in the notes to the financial statements.

Directors appointed / resigned during the year Mr.Rishikesha T Krishnan

Mr. Rishikesha T Krishnan has been appointed as an Additional Directorin the capacity of an Independent Director on the Board of the Company for a term of fiveyears with effect from November 04 2019 subject to regularization of his appointment bythe shareholders of the Company. The Nomination and Remuneration Committee and the Boardhas recommended appointment of Mr. Rishikesha T Krishnan (DIN: 00064067) as an IndependentDirector of the Company to hold office for a term of five years with effect from November04 2019 in terms of Section 149 of the 2013 Act read with the Rules made thereunder(including any statutory modification(s) or re-enactment thereof for the time being inforce). In the opinion of the Board Mr. Rishikesha T Krishnan fulfils the conditionsspecified in the 2013 Act and Rules made thereunder for appointment as IndependentDirector and is independent of the management of the Company. The Company is in receipt ofa notice in writing pursuant to Section 160 of the 2013 Act proposing the candidature ofMr. Rishikesha T Krishnan as an Independent Director of the Company.

Under Regulation 17(1A) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 a specialresolution is proposed for the continuance of Mr. S Viji Non-executive Director on theBoard of the Company. Necessary resolution to this effect is included in the Noticeconvening the 61st Annual General Meeting.

Re-appointment of director retiring by rotation

Under Article 94(3) of the Articles of Association of the Company Mr.S Ram (DIN: 00018309) retires by rotation and being eligible offers himself forreelection.

Profile of Directors seeking appointment /reappointment

Profile of the directors seeking appointment / reappointment asrequired to be given in terms of the Secretarial Standards and as per SEBI (LODR)Regulations 2015 as amended forms part of the Notice convening the ensuing Annual Generalmeeting of the Company.

All the Independent Directors have given declaration that they meet thecriteria of independence as laid down under Section 149(6) of the 2013 Act and the SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015 (as amended).

Cessation of Directors

Mr. B Santhanam Independent / Non-Executive Director had resigned fromthe Board of the Company with effect from 23rd August 2019.

Mr. B Santhanam has confirmed to the Company in writing that there areno material reasons for his resignation.

Independent Directors

In the opinion of the Board the Independent Directors fulfill theconditions specified in the Regulations and are independent of the Management.

Key Managerial personnel

During the year there is no change in the Key Managerial Personnel.

Remuneration policy

The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and to fix their remuneration. The Company's policy on appointment andremuneration including criteria for determining qualifications positive attributes andindependence are provided in the Corporate Governance Report forming part of this Report.The policy is given as Annexure III forming part of this Report.

Corporate Social Responsibility

As an initiative under Corporate Social Responsibility (CSR) and inaccordance with Schedule VII of the 2013 Act your Company has constituted the CSRCommittee under the Board to frame monitor and execute the CSR activities. The Board hasapproved the CSR Policy and guidelines for implementation. The Committee effectivelysupervises the program.

Your Company has fulfilled its obligation towards CSR by spending a sumof Rs.186.27 lakhs during the year. The constitution of the CSR Committee and the reportas required under the 2013 Act are provided in Annexure IV forming part of this Report.

Risk Management Internal Financial ControlSystems and Audit

Your Company has implemented a mechanism for risk management and hasformulated a Risk Management Policy. The Policy provides for identification of risks andmitigation measures. The Audit committee is informed on the risk assessment andminimization mechanism adopted by the Company.

The implementation of IT based Governance Risk and Compliance (GRC)software across the multiple locations of the Company has further strengthened thebusiness processes and has significantly supported the internal audit requirement towardsachieving a controlled environment.

Your Company maintains an adequate and effective Internal ControlSystem commensurate with its size. These reasonably assure that the transactions are dulyauthorized and recorded to facilitate preparation of financial statements in line with theestablished practices and that the assets are secured against any misuse or loss. Theinternal control system is supplemented through an extensive internal audit programbesides periodic review by the Management and the Audit Committee. The Company has inplace adequate internal financial controls.

Vigil Mechanism / Whistle Blower policy

In accordance with the requirements of the 2013 Act your Company hasestablished a Vigil Mechanism/ Whistle Blower Policy for Directors and Employees to reportgenuine concerns. The said Policy meets the requirement of the Vigil Mechanism frameworkunder the 2013 Act and the members can view the details of the policy

Directors' Responsibility Statement

The Directors acknowledges their responsibility of ensuring compliancewith the provisions of Section 134(3)(c) of the 2013 Act. To the best of their knowledgeand belief and according to the information and explanations obtained by them yourDirectors make the following statements in terms of Section 134(3)(c) of the 2013 Act:

a. that in the preparation of the annual financial statements theapplicable IndAS have been followed along with proper explanation relating to materialdepartures if any;

b. that such accounting policies as mentioned in the financialstatements have been selected and applied consistently and judgement and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 312020 and of the profit of the Company for theyear ended on that date;

c. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the 2013 Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. that the annual financial statements have been prepared on a goingconcern basis;

e. that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;

f. that proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Related party Transactions

The Company has formulated a policy on Related Party Transactions andthe same is uploaded on the Company's website

All Related Party transactions that were entered into by the Companyduring the financial year 2019-20 were in the ordinary course of business and on arm'slength basis. The Company did not enter into any material transaction with relatedparties under Section 188 of the 2013 Act and the Rules framed thereunder. There are no“Material” contracts or arrangement or transactions at arm's length basis andhence disclosure in form AOC-2 is not required.

All Related Party transactions were placed before the Audit Committeefor their prior approval in accordance with the requirements of the SEBI (LODR) 2015. Thetransactions entered into pursuant to such approval are placed periodically before theAudit Committee for its review.

Meetings of the Board/ Committees

The Board meets at regular intervals to discuss and decide on Company /business policy and strategy apart from other businesses. The Board / Committee Meetingsare pre-scheduled and a tentative annual calendar of the Board and Committee Meetings arecirculated to the Directors in advance to facilitate them to plan their schedule and toensure meaningful participation in the meetings.

The details of the meetings of the Board as well as the Committees aredisclosed in the Corporate Governance Report forming part of this Report.

Significant and Material Orders Passed by theRegulators or Courts

There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its futureoperations. The changes and commitments if any which have occurred between the end ofthe financial year of the Company to which the financial statements relate and the date ofthis report is not material so as to have an affect on the financial position of theCompany.

Force Majeure Event

On account of the spread of COVID-19 pandemic the Government of TamilNadu as a precautionary measure vide notification in Go(Ms) No. 152 dated 23.03.2020imposed restrictions in the territorial jurisdiction of the State of Tamil Nadu from 18.00hrs of 24.03.2020 to 06.00 hrs of 01.04.2020. On the very next day the Government ofIndia announced a complete lockdown of the entire country for a period of 21 days witheffect from 25.03.2020 till 14.04.2020 and subsequently got extended till 03.05.2020.

In compliance with the order imposed the Company was constrained toshut-down all the plants from 24.03.2020 till 03.05.2020 and resumed its operations in aphased manner after obtaining necessary approvals from the Government. The Company iscomplying with the protocols in all its plants as prescribed by the Ministry of HomeAffairs (MHA).

Employees and details of Remuneration:

The statement of Disclosure of Remuneration under Section 197 of 2013Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 (“Rules”) is provided in Annexure V forming part of this Report.

The information as per Rule 5(2) and Rule 5(3) of the Rules forms partof this Report. However as per first proviso to Section 136(1) of 2013 Act and SecondProviso to Rule 5 of the Rules the report and financial statements are being sent to themembers of the Company excluding the statement of particulars of employees under Rule 5(2)and Rule 5(3) of the Rules. Any member interested in obtaining a copy of the saidstatement may write to the Company Secretary at the Registered office of the Company. Thesaid statement is also available for inspection by the members at registered office of theCompany during office hours till the date of Annual General meeting.

Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. During the year under review there were no cases filed pursuantto the above Act.

Corporate Governance

In pursuance to SEBI (LODR) 2015 Corporate Governance Report is givenin Annexure VI and forms part of this Report.

Statutory Audit

The Company had appointed M/s Brahmayya & Co CharteredAccountants as the Statutory Auditors of the Company for a term of five consecutive yearsi.e. from the conclusion of the 58th Annual General Meeting till the conclusionof 63rd Annual General Meeting of the Company.

The Company has received the eligibility certificate from the auditorsconfirming that they are not disqualified to act as Auditors and are eligible to holdoffice as Auditors of the Company.

Cost Auditor

Pursuant to Section 148 of the 2013 Act read with the Companies (CostAudit and Record) Rules 2014 the cost records and the accounts maintained by the Companyare required to be audited. The Board on recommendation of the Audit Committee hadappointed M/s. Geeyes and Co Cost and Management Accountants to audit the cost recordsand the accounts maintained by the Company for the financial year ended 31.03.2020.

The report of the said Cost Auditor will be filed with the CentralGovernment in accordance with the rules framed thereunder.

The said firm were appointed by the Board to conduct the Cost Audit forthe year 2020-21 at the remuneration of Rs.700000./- (excluding applicable taxes and outof pocket expenses).

The Companies Act 2013 mandates that the remuneration payable to theCost Auditor is ratified by the members. Accordingly a resolution seeking shareholders'ratification of the remuneration payable to the Cost Auditor for the year 2020-21 isincluded in the Notice convening the 61st Annual General Meeting.

Secretarial Audit

Pursuant to the provisions of Section 204 of the 2013 Act and the rulesframed thereunder the Company appointed M/s. S Dhanapal & Associates a firm ofCompany Secretaries in Practice to undertake the Secretarial Audit of the Company. TheReport of the Secretarial Audit is given in Annexure VII and forms part of this Report.

The Company has complied with the Secretarial Standards for the BoardMeetings (SS-1) and the General Meetings (SS-2) during the year 2019-20.

Comments on Auditors' report

There are no qualifications reservations or adverse remarks ordisclaimers made by the Statutory Auditors and Company Secretary in Practice in theirreports respectively. The Statutory Auditors have not reported any incident of fraud tothe Audit Committee of the Company for the year under review.


Your Company has been working towards inculcating a safety-firstculture by adopting a globally recognized safety recording and review system with afortnightly review of safety performance across all its plants. Your Company's employees'captures and reports near-misses classified as major and minor safety observations andcorrective actions to the safety committee. The safety committee meets twice a month toreview the performance and recommend action. The actions are horizontally deployed acrossbusiness units and across plants. Last year saw good progress towards this endeavor tokeep our employees safe.

Employees are encouraged to adhere to safety in all their activities.Safety training is conducted at all levels on a continuous basis and additional emphasisis given in implementation of safety work standards. The Company rewards best safetyperformers from different groups of employees regularly. This has helped to inculcate asafety mind-set in the workplace and outside.

Given the COVID-19 pandemic your Company has setup systems andprocesses to ensure a safe and healthy work environment. These processes include cleaning& sanitization of factories checking the employees for symptoms (body temperature andblood oxygen level) at entry and exit maintaining a health record for each employeephysical distancing standards around the factory and standard operating procedures forthe shop floor the offices and in open areas. Your Company is dedicated to providing asafe environment for all its employees visitors and contractors.

CEO/CFO Certificate

The Managing Director and Chief Financial Officer have submitted acertificate to the Board on the integrity of the financial statements and other mattersrequired under regulation 17(8) of the SEBI (LODR) Regulations.

Extract of Annual Return

The details forming part of the extract of the Annual Return inAnnexure VIII forms part of this Report.

In compliance with section 134(3)(a) of the Act MGT - 9 is uploaded onCompanies website and can be accessed at

Energy Conservation Technology Absorption and Foreign ExchangeEarnings & Outgo

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and outgo as required under Section 134(3)(m) of the 2013 Act read with rule8(3) of the Companies (Accounts) rules 2014 are enclosed as Annexure IX and forms part ofthis report.

Business Responsibility Reporting

During the year consequent to the requirements of reporting of itsbusiness responsibility initiatives becoming mandatory under the SEBI LODR Regulations2015 (as amended) the Company's policy on Business Responsibility laying down the broadprinciples guiding the Company in delivering various responsibilities to its stakeholdersfor the year ended 31.03.2020 is given in Annexure X and forms part of this report. A copyof this policy is available at


The Directors wish to thank United Bank of India State Bank of IndiaStandard Chartered Bank HDFC Bank other Banks and financial institutions for theircontinued support.

Your Company wishes to thank its customers suppliers and thecommunities around its plants for their continued support.

Your Company continues to have the full co-operation of all itsemployees. The Directors would like to place on record their appreciation of the effortsof the employees in controlling costs and improving the profitability of the Company.

On behalf of the Board of Directors
Chennai S Ram
June 17 2020 Chairman
DIN 00018309