Birla Corporation Ltd.
|BSE: 500335||Sector: Industrials|
|NSE: BIRLACORPN||ISIN Code: INE340A01012|
|BSE 00:00 | 24 Apr 2020||Birla Corporation Ltd|
|NSE 05:30 | 01 Jan 1970||Birla Corporation Ltd|
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|Mkt Cap.(Rs cr)||3,182|
|Mkt Cap.(Rs cr)||3,182|
Birla Corporation Ltd. (BIRLACORPN) - Director Report
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Company director report
To the Shareholders
Your Directors have the pleasure in presenting their Annual Report onthe business and operations of your Company together with the audited financial statementsof the Company and its Subsidiaries for the year ended 31st March 2019.
The summarized standalone and consolidated results of your Company andits Subsidiaries are given in the table below:
* After adjustment of re-measurement of the defined benefit plans (netof tax expenses).
Your Directors are pleased to recommend a dividend of र 7.50 per share(i.e. 75%) on 77005347 ordinary shares for the year ended 31st March 2019 aggregatingto र 69.63 crores (including Corporate Dividend Tax of र 11.87 crores) as compared to र60.34 crores (including Corporate Dividend Tax of र 10.29 crores) in the previous year.
Dividend Distribution Policy
Pursuant to Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has formulated a DividendDistribution Policy. The Policy is annexed hereto and marked as "Annexure A" forming part of the Directors' Report and is also uploaded on theCompany's website athttp://www.birlacorporation.com/investors/policies/dividend-distribution-policy.pdf.
TRANSFER TO RESERVES
The Company proposes to transfer an amount of र50 crores to GeneralReserves.
The paid up Equity Share Capital as on 31st March 2019 stood at
र 77.01 crores. During the year under review the Company has notissued shares with di_erential voting rights nor has granted any stock options or sweatequity. As on 31st March 2019 none of the Directors of the Company holds instrumentsconvertible into equity shares of the Company.
ADOPTION OF IND AS :
The Company has prepared its financial statements as per IND ASrequirement for the financial year 2018-19. The estimates and judgments relating to theFinancial Statements are made on a prudent basis so as to reflect in a true and fairmanner the form and substance of transactions and reasonably present the Company'sstate of affairs profits and cash flows for the year ended 31st March 2019.
CONSOLIDATED FINANCIAL STATEMENTS :
The Consolidated Financial Statements of the Company are prepared inaccordance with relevant IND AS issued by the Institute of Chartered Accountants of Indiaand forms an integral part of this Report.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year 2018-19and the date of this Report.
KEY FINANCIAL RATIOS
Consequent to the introduction of the Goods and Services Tax (GST)w.e.f 1st July 2017 Gross Revenue from sale of products for the year ended 31st March2019 is not comparable with the previous year. Hence Debtors Turnover ratio InventoryTurnover ratio Operating Profit margin and Net Profit margin for the year ended 31stMarch 2019 are not comparable with the previous year.
The key Financial Ratios pursuant to Schedule V(B) to the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 for the financial year ended 31st March 2019 are given herein below:
* Change in the Inventory Turnover Ratio is 33% mainly due tosubstantial increase in Net Sales of र551.56 crore i.e. around 15% compared to the lastyear.
** Return on Net Worth is higher for the year ended 31st March 2019due to higher rate of growth in Profit after Tax.
CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business of the Companyduring the financial year 2018-19.
1.1 CEMENT DIVISION
(a) INDUSTRY STRUCTURE AND DEVELOPMENTS :
After China India is the world's second largest cement producerand accounts for over 8% of the global installed capacity. The cement industry is one ofthe key drivers of the Indian economy and provides employment to over one million people.
The housing or real estate sector accounts for almost 66 per cent ofcement consumption in India while the rest is split between public infrastructure (22 percent) and industrial development (12 per cent).
In 2018-19 India's GDP grew at 7 per cent according to the UnionGovernment compared with 6.6 per cent in the previous year. Data released by the UnionGovernment shows demand for cement is slowly firming up. In 2018-19 cement productiongrew 13.3 per cent over the previous year compared with a growth of 6.3 per cent in2017-18.
The year witnessed steady implementation and completion of largeinfrastructure projects in the northern and central regions driven partly by Assemblyelections in November-December in Rajasthan Madhya Pradesh and Chhatisgarh. Several newprojects are being pursued full-steam to create new infrastructure such as Bharatmala forroads Sagarmala for ports and dedicated freight corridors. The cement industry witnesseda surge in demand from smart city projects as well - both from projects underimplementation and those that were newly launched.
Infrastructure development and the Government's Housing for Allprogrammes were the key drivers of growth. The implementation of the Real Estate(Regulation and
Development) Act 2016 or RERA appears to have given a fillip to theconstruction sector by making transactions more transparent.
During 2018-19 the Company registered a 12.11 per cent growth incement sales on a standalone basis and a 10.12 per cent growth on a consolidated basis. Inabsolute terms the sale of cement on a standalone basis increased to 89.10 lakh tonnesfrom 79.48 lakh tonnes in the previous year. The wholly owned subsidiary RCCPL Pvt. Ltdsold 49.28 lakh tonnes in the year till 31st March 2019 compared with 45.10 lakh tonnes inthe previous year.
(b) REVIEW OF PERFORMANCE : Production of the Company:
The details of production of clinker and cement of the Company are asfollows :-
Production of RCCPL Pvt. Ltd. (RCCPL) (formerly known as RelianceCement Company Private Limited) wholly owned subsidiary of the Company:
The details of production of clinker and cement of RCCPL are as follows:-
During the year under review your Company has registered an increaseof 12.11% in cement sales on standalone basis and 10.12% on consolidated basis. Inabsolute terms the sale of cement on standalone basis has increased to 89.10 lakh tonscompared to 79.48 lakh tons in the previous year. RCCPL has sold 49.28 lakh tons of cementduring the year. Power Plant :
The details of power generated at various plants are as under:
Integration of RCCPL :
The bene_ts and synergies of RCCPL acquisition have now been fullyassimilated. The RCCPL plants have been operating at the highest level of e_ciency theiroperating parameters being among the best in the industry. Capacity utilization has goneup to 90% compared to 82% in the corresponding year. Volumes in RCCPL have been ramped upin less than two years of the take-over and cash profit increased by 94% in two years atestimony of seamless integration of the operations of RCCPL with BCL.
The co-branding strategy at the BCL and RCCPL plants has enabledenhancing the marketing footprint as well as o_ering a bouquet of brands across pricebands. MP Birla Cement is now a substantial player in the fast-growing markets of UttarPradesh and Madhya Pradesh with high share of the premium segment.
Cost and Profitability :
The profitability of the Company recorded a healthy growth during theyear with cash profit increasing by 26.56% to
र 308.54 crores.
The Company's strategy of increasing volumes in the highcontribution core markets and moving up the value chain by increasing the proportion ofcement sales in trade segment premium grade cement and blended cement have contributed tothe growth in profitability and helped mitigate the cost pressures witnessed during theyear.
During the year there has been a turnaround in the performance of theCompany's Chanderia unit made possible by a series of cost reduction measures andmarketing initiatives despite low prices prevailing in the North markets throughout theyear. Launch and gradual ramping up of premium grade cement in the North improvement inproportion of blended cement and geo mix led to higher realisations and better margins.The unit has systematically enhanced its capability of mechanical mining thereby reducingdependence on purchased limestone which has resulted in savings in the cost ofproduction. Higher absorption of _y ash in blended cement higher usage of pet coke andalternate fuel helped arrest increase in fuel cost at the unit.
The Company witnessed cost pressure over the course of the year due toincrease in various input costs. These increases were caused largely due to externalfactors.
The freight and forwarding expenses during the year went up on accountof higher volume of dispatches rise in diesel prices and increase in packing materialcosts on account of polypropylene prices. Diesel prices went up by 4% during the financialyear 2018-19. This increase was despite the continuous efforts made to improve evacuationefficiency reduce lead by increasing the market share in home markets availing ofbeneficial railway schemes for freight reduction benchmarking and renegotiation ofcontracts with transporters.
Further non-availability of railway rakes affected dispatch of cementand clinker. The Company has been undertaking various initiatives to reduce logistics costsuch as Route to Marketing Optimization with the help of IT analytics and VehicleTracking Systems to reduce lead distance and turnaround time. A similar focus on in-boundlogistics to secure supply chain has yielded savings through cost-effective sourcing.
Power and fuel prices were higher during the year due to variousfactors. Pet Coke has been the major fuel for cement manufacturers in recent times.Domestic Pet Coke prices rose by over 20% in year-on-year basis and the cost of importedPet Coke also went up partly due to 10% depreciation of Indian Rupee against USD. With theGovernment's directive to prioritise coal for Independent Power Plants [IPP] by railthere has been huge deflicit of domestic coal for other industries including cement. Tomitigate the situation we converted the Rail linkage into Road and further by Rail [RCR].Sustained efforts were made to improve _y ash absorption which enabled the Company toreduce the consumption of clinker which in turn had a positive impact on thecontribution.
The Company's obsessive focus on cost rationalisation continuesunabated. Increase in fuel prices has been partially off-set by improving energy-usageefficiencies in plants and economical sourcing of other raw materials such as _y-ash andgypsum and relentless focus on lowering logistics costs for both inward and outwardmovement.
Cement Demand and Prices :
After having witnessed revival during the financial year 2017-18 thecement industry witnessed robust growth during the financial year 2018-19 on the back ofstable construction activity in residential and real estate increased demand forafordable housing and robust demand from the infrastructure segment. With robust demandcapacity utilization in the financial year 2018-19 registered a double digit growthdespite capacity expansion during the year. India has recorded the highest pace of highwayconstruction which now stands at about 30 kms per day. Bank lending for rural housing andinfrastructure has boosted cement demand.
Over the next couple of years supply is expected to lag demand whichhas not been the case in the last five years. This is expected to lead to higher capacityutilization and pricing power of the cement companies.
Cement prices remained stagnant in the North and East and improved inthe Central region.
MP Birla Cements is now a co-leader in the fast growing Central IndiaMarkets and Bihar in the East - with a strong brand-folio straddling across differentprice segments and high market share in the premium segments.
The Company has successfully created a unique identity for itsofferings under the MP Birla Cement franchise. The co-branding initiatives between BCL andits subsidiary have deepened and widened markets for our wide variety of productofferings. MP Birla Group's _agship premium cement brand - Perfect Plus - launchedafter the acquisition of the RCCPL units has now been extended to other geographies wherethe Company has a marketing footprint namely North and East.
Consistent with the Company's "Cement se Ghartak"strategy of focussing on the "Individual Home Builder" in the value-addingretail segment there has been a thrust on increasing the share of"eco-friendly" blended cement.
Substantial investments in brands increasing the depth width andquality of distribution assets high focus on technical support for customers deepeningchannel relationships and in_uencers connect have started showing results. This is visiblein brand salience product placement and availability at outlets and above allimprovement in price positioning.
During the last quarter of the year the work for laying permanent railtracks and mechanical wagon loading facilities for dispatches was commissioned atKundanganj. This has significantly enhanced the evacuation capabilities of the plantwhich will contribute both by reduction in logistics cost and increasing market reach.
With a master brand architecture in place the Company now has aportfolio of 10 premium and popular brands. MP Birla is one of the pioneers in the cementcategory to follow a differentiated brand strategy across price points and consumerpsychographics. MP Birla Cement with its wide portfolio of brands attempts to offersbest value to customers depending on their aesthetic preferences construction needsapplications and geographical conditions.
The latest super-premium range of value-added cement Samrat AdvancedPerfect Plus and Ultimate Ultra has been designed to produce superior quality concretefor high-class construction. With focus on increasing the share of premium grade cement inthe overall volumes the newly launched premium grade brands are fast penetrating themarkets. As a part of "co-branding" initiatives the premium cement brands MPBirla Perfect Plus and MP Birla Ultimate have started being manufactured at Chanderiaduring the year for the North markets Western Madhya Pradesh Gujarat and Western UttarPradesh. Once the segmentation exercise has been rolled out the Company launched itsumbrella brand positioning Cement se Ghartak' whereby expert on-sitetechnical service is provided to customers through a wide network of engineers on vans andbikes.
In January 2019 MP Birla Cement Perfect Plus introduced a range ofconstruction chemicals for waterproof homes and wall putty to give homes enduringbeauty. These are Perfect Plus IWP (integral waterproo_ng) Perfect Plus SBR (styrenebutadiene rubber) Latex and Perfect Plus Wall Putty. Perfect Plus IWP has unique waterresistance properties whereas Perfect Plus SBR Latex is a multipurpose polymer-basedwaterproo_ng and repair solution. The introduction of these products will create asignificant new revenue stream for the Company and all its trade partners. This will alsocreate opportunities for the Company to foster new partnerships with retailers ofconstruction materials.
Digital Marketing and Analytics
The Company has invested in CRM and digital platforms to connect betterwith customers and in_uencers and drive loyalty. It has Club Ultimate a dealers'loyalty programme. Also there is Armaan Nirmaan an app for dealers retailers andin_uencers to place order track sales and get rewarded. Within a short time more than100000 masons contractors and engineers have come on board with whom the Company now hasdirect communication links. This is already showing results in increasing Recommendationscores for MP Birla Cement brands.
Mining operations at Chanderia:
The Mining Operations (through blasting) at the Chanderia plant hadbeen suspended since August 2011 owing to the Order of Jodhpur High Court (Rajasthan)which was challenged by the Company before the Hon'ble Supreme Court. As a partialrelief the Supreme Court had allowed mining operations beyond two kms from theChittorgarh
Fort by using heavy earth moving machinery. The Hon'ble SupremeCourt had further directed the Central Building Research Institute (CBRI) to submit areport after comprehensive study of all relevant aspects and facets relating to full-scalemining operations and its impact if any on the Chittorgarh Fort. The report of CBRI hasconcluded that vibrations and air pressures induced by the mine of Birla Cement Works andadjoining mines are well within safe limits as per national and international standardsand there is no damage to the Fort due to the mining operations. The Company has _led anInterim Application seeking Interim Relief for blasting at the existing working pit. Thematter is in the _nal stage of hearing.
The Principal Bench of the National Green Tribunal (NGT) on 8th March2019 has ordered to stop all mining activities which are being carried out within themunicipal limits of Chittorgarh City and within 10 km of Bassi Wildlife Sanctuary orwithin the eco-sensitive zone of Bassi Wildlife Sanctuary if _nally noti_ed.
The Company has taken effective steps to ensure that no mining takesplace in the area falling within the restrictions prescribed in NGT's Order.
The Company does not anticipate any material impact of the said Orderon the current operations as it has sufficient reserves in areas outside the limitscovered by the Order.
(c) THREATS RISKS AND CONCERNS : The cement industry iswitnessing consistently increasing trend in cost of inputs and dearer imports due todepreciation of the rupee and increase in fuel costs which may affect margins.
Cement companies may face pressure on their profit margins on accountof higher power and fuel and freight costs led by rising prices of pet coke coal anddiesel.
Non-availability of railway rakes is posing a key risk to the industryas the movement of both in-bound as well as outbound materials is getting constrainedaffecting volumes. Any restriction on use of Pet Coke may also affect the profit marginsof the industry. Non-resolution of restriction on sand mining in various States cancontinue to hamper the demand for cement.
The Ministry of Environment Forest and Climate Change (MoEFCC) hasintroduced new environment norms which are very difficult to implement. Non-compliance ofnew standards imposes high degree of complexity as it may lead to reputational andfinancial consequences. Various projects across operations within the Company have beentaken up to comply with the new emission standards (Sox and Nox) issued by MoEFCC.
(d) OPPORTUNITIES AND OUTLOOK :
The Company has successfully created a unique Master-brand identity forits offerings under the MP Birla Cement franchise. Its material benefits are now availablein the form of significant opportunities in cross-branding higher share of shelf andsynergies in the trade and distribution channels.
The Company has radically restructured its Logistics function both forinward and outward movement. This has resulted not only in cost optimisation and serviceefficiencies but also helped tighten the working capital cycle.
Cement Production is expected to grow 6%-7% in the current fiscal yeardriven by pick-up in afordable and rural housing segments and infrastructure primarilyroad and irrigation projects. However rising costs may put pressure on the operatingprofitability of cement firms in the coming quarters.
It is believed that the capacity utilizations of the cement industrywould improve gradually over the next two years on account of limited capacity additionsamidst the turnaround of acquired assets.
The Indian Real Estate Sector is likely to witness a surge in demandand sales in the financial year 2019-20 on the back of recent changes in Goods andServices Tax (GST) Rate for the sector and reduction in Repo Rate.
India being an agro-based economy monsoon plays an important role. TheIndian Meteorological Department has projected a near normal monsoon this year at 96% ofthe long period average. The formation of the new government after the conclusion of theGeneral Elections would have a bearing on the growth of the economy of the country.
Cushman and Wakefield has in a recent report said investors haveinjected a staggering $ 2.5 billion or र17600 crore into the real estate sector in theMarch quarter a record high for the quarter in at least a decade. The trend isexpected to continue. As a strategy Birla Corporation Limited will continue to focus onIndividual Home Buyers providing them with quality construction materials and supportservices to further increase realisation and sale of its premium brands.
1.2 JUTE DIVISION
(a) INDUSTRY STRUCTURE AND DEVELOPMENTS:
The jute industry is mostly concentrated in the eastern part of Indiaparticularly in West Bengal. It plays a vital role in the economy of the State supportingmore than 300000 workers and more than 4 million farm families. The industry isprincipally dependent on orders from the food grains procuring agencies of the Governmentand over the previous few years dependence on Government orders has been increasing andcurrently accounts for about 70% of its installed capacity.
Shortage of labour has been affecting the industry as adequate manpoweris not available to run the plant at optimum levels.
(b) PERFORMANCE : Production & Despatch
(c) OPPORTUNITIES AND THREATS RISKS AND
CONCERN : Opportunities :
With increasing concern and awareness about the adverse effect ofsynthetic packaging material on the environment the demand for jute goods is expected torevive in the near future. Jute products being environment friendly and biodegradable havean edge over the packing material. Increase in use of jute shopping bag floor coveringand jute geotextile products provide opportunity to boost demand of jute goods. There is ahuge order for B.twill bags from the Government but the industry is not able to meet thedemand due to acute shortage of labour. With the signing of tripartite agreement minimumwages have increased significantly from र257 to र370 per day. The hike in wages is likelyto help in better availability of workforce in the ensuing year.
Threats Risks and Concern :
The jute industry faces the daunting task of competing with subsidizedduty-free imports from Bangladesh. Not only is the industry losing overseas market sharesto Bangladesh but Bangladesh is also extensively pushing its jute goods to India erodingthe market share of Indian mills. Jute manufacturing is a labour intensive process andrequires huge labour force. It has traditionally been dependent on migrant labours fromnearby States. Now migration from the other States has virtually dried due to employmentavailability locally. Further local people are getting alternate employment in lighterjobs like embroidery masonry etc. Difficulty in getting workers for running the mills isresulting in lower capacity utilization causing increase in the cost of production perunit.
To overcome the problems of a) loss of traditional market b) loweravailability of workers c) subsidized import from Bangladesh and d) ever increasing rawjute prices the Company has taken up large-scale modernization of the mills which wouldlead to lower requirement of manpower. It will also help reduce cost and diversify innon-traditional product category.
(d) OUTLOOK :
The increase in cost of jute bags has further widened the gap betweentheir prices with those of synthetic bags. If this trend continues there is strongconcern that packing of many more commodities will shift to synthetic packaging material.Loss of traditional market of jute to synthetic fabric is likely to cause a major problemof insufficient demand for the industry.
With a view to improving its performance the Jute Division is takingvarious measures such as reducing dependence on Government orders increase presence infood-grade jute bags in various countries develop new value-added products/designsincluding new fabrics for shopping bags curtains upholstery etc.
The Division is con_dent that the above efforts coupled with theinvestments both currently and past will help it mitigate the structural risks facingthe industry.
1.3 VINDHYACHAL STEEL FOUNDRY :
Vindhyachal Steel Foundry produces iron & steel castings primarilyfor internal consumption. The total production of castings during the year has been 591Ts. as against 731 Ts. in the previous year. The total sale of castings during the yearwas 552 Ts. (including 402 Ts. within the company) against 550 Ts. (382 Ts.) the previousyear.
Projects Completed during 2018-19
Commissioning of Bag House at SCW kiln & Raw Mill circuitand ESP at BVC kiln & Raw Mill circuit to reduce dust emission.
Installation of fuel efficient low NOx pyro jet burner at bothSCW & BVC Kiln _ring.
Installation of Air Cooled Condenser (ACC) at 27 MW CPP toreduce water consumption substantially and reduce auxiliary power consumption.
Replacement of old cooling tower with new energy efficientcooling tower at WHRS BVC to reduce water consumption and auxiliary powerconsumption.
Project Sanctioned/Started in 2018-19 and under implementation
Installation of AFR handling and shredding system.
Installation of Cross Belt Analyser in limestone circuit tocontrol the quality of limestone stockpile.
Installation of 1 MW solar power plant to promote green energy.
Projects Completed during 2018-19
Installation of 2 Nos Bag filter in cement mill area for properventilation and control dust emission.
Installation of belt conveyor and feeding hopper for gypsumfeeding into crusher.
Installation of _y ash extraction system at new ESP field atNTPC Unchahar.
Project Sanctioned/Started in 2018-19 and under implementation
Installation of new 100 MT truck tipper for handling long-bodytrucks and increasing clinker and gypsum unloading capacity.
र Installation of dense phase system to convey the coarse _y ash fromRHTC coarse silo to RCW _y ash silo.
Construction of new 2000 MT cement silo with packer to increasecement dispatch capacity.
Installation of water harvesting system.
Projects Completed during 2018-19
Increase of existing shed height with structural strengtheningof gypsum store yard to ramp up storage capacity.
Replacement of existing twin lobe roots blowers with higherspeed 2 Nos turbo blowers for CCW pyro section for energy saving.
Project Sanctioned/Started in 2018-19 and under implementation
Expansion project of NCCW plant to increase clinker productioncapacity from 3600 to 5500 TPD.
Installation of 3 MW solar power plant.
Installation of cross belt analyzer at OLBC discharge for inlinequality control of limestone stockpile.
Projects Completed during 2018-19
Side covering done at crane gantry area for clinker gypsum andslag.
Cover shed constructed for raw coal near coal mill.
Project Sanctioned/Started in 2018 -19 and under implementation
Capacity enhancement of old wagon tipper from 90 MT to 110 MT tounload high capacity wagons and improving structural stability of the system.
Construction of RCC retaining wall in C-D crane gantry.
Birla Jute Mills Birlapur :
Project Sanctioned/Started in 2018-19 and under implementation
Replacement of old 64 Victor looms with new looms.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in FormMGT-9 as required under Section 92 of the Companies Act 2013 and Rules framed thereunderis marked as "Annexure B" which is annexed hereto and forms partof the Directors' Report and is also uploaded on the Company's website athttp://www. birlacorporation.com/annual-return-form-mgt-9.pdf.
COMPOSITION NUMBER AND DATES OF MEETINGS OF THE BOARD AND COMMITTEES
The details of the composition number and dates of meetings of theBoard and Committees held during the financial year 2018-19 form part of the Report onCorporate Governance. The number of meetings attended by each Director during thefinancial year 2018-19 also forms part of the Report on Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(3)(c) of the Companies Act 2013 yourDirectors state that: (a) in the preparation of the annual accounts for the year ended31st March 2019 the applicable accounting standards have been followed with properexplanation relating to material departures if any; (b) the accounting policies adoptedin the preparation of the annual accounts have been applied consistently except asotherwise stated in the Notes to Financial Statements and reasonable and prudent judgmentsand estimates have been made so as to give a true and fair view of the state of affairs ofthe Company at the end of the Financial Year 2018-19 and of the profit for the year ended31st March 2019; (c) proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; (d) the annual accounts for the year ended 31st March 2019 havebeen prepared on a going concern basis; (e) that proper internal financial controls werein place and that the financial controls were adequate and were operating effectively; (f)that systems to ensure compliance with the provisions of all applicable laws were in placeand were adequate and operating effectively.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.
CRISIL has reafirmed its ratings on short term debt includingCommercial Paper (CP) to the extent of र300 crore as "A1+". Long termNon-Convertible Debentures of the Company of र280 crore has reafirmed its rating as"AA" (Outlook Negative) by CRISIL. ICRA has assigned a rating of "AA"(Outlook Negative) for Long Term Non-Convertible Debentures of the Company of र400 crore.
Further CARE has reafirmed its rating on Long Term Facilities as"CARE AA" (Outlook Stable) and "CARE A1+" (outlook Stable) for theCompany's Short Term Bank facilities aggregating to र1898 crore. The rating Committeeof CARE has reafirmed as "CARE AA" (Outlook Stable) for the outstandingNon-Convertible Debentures of र680 crore. CARE has assigned its rating of "AA"(Outlook Stable) for Long Term Bank Facilities of र376.08 crore.
The Company efficiently manages its surplus funds by investing inhighly rated debt securities _xed deposits and debt schemes of mutual funds consideringsafety liquidity and return. The Company continuously undertakes review of itsliabilities to reduce cost.
The Company has prepaid External Commercial Borrowing (ECB) aggregatingto USD 25 Million to DBS Bank Limited Singapore and Standard Chartered Bank London andalso prepaid USD 3.05 Million to Deusche Bank AG Germany. The Company has borrowed र280crore from Axis Bank Limited.
The Company has complied with the Corporate Governance Code asstipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. A separate section on Report on Corporate Governance along with certi_cate from theauditors confirming the compliance of conditions of Corporate Governance is annexed andforms part of the Annual Report.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties during the financial year2018-19 were on an arm's length basis and were in the ordinary course of business andthe provisions of Section 188 of the Companies Act 2013 are not attracted. Further thereare no materially significant related party transactions during the year under review madeby the Company which may have a potential con_ict with the interest of the Company atlarge. Accordingly the disclosure required under Section 134(3)(h) of the Act read withRule 8(2) of the Companies (Accounts) Rules 2014 in Form AOC-2 is not applicable to yourCompany.
All Related Party Transactions are placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted along with a statement giving details of allrelated party transactions are placed before the Audit Committee. The policy on RelatedParty Transactions as approved by the Board is uploaded on the Company's websiteand may be accessed at the link http://www.birlacorporation.com/ investors/policies/related-party-transactions-policy.pdf.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
As required under the provisions of the Companies Act 2013 and Rule8(3) of Companies (Accounts) Rules 2014 details relating to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo are given in "Annexure C" which is annexed hereto and forms part of the Directors' Report.
Risk Management is the process of identification assessment andprioritisation of risks followed by coordinated efforts to minimise monitor andmitigate/control the probability and / or impact of unfortunate events or to maximise therealisation of opportunities. The Company has adopted a comprehensive Risk ManagementPolicy which is reviewed by the Audit Committee and approved by the Board from time totime. These procedures are reviewed to ensure that executive management controls riskthrough means of a properly defined framework. The major risks have been identified by theCompany and its mitigation process/ measures have been formulated in the areas such asbusiness quality market litigation logistics project execution financial humanresources environment and statutory compliance.
AWARDS & RECOGNITIONS
During the year the Satna Unit has won CSR Platinum Award2008.
The Durgapur Unit has received Excellence award from NationalConvention on Quality Concepts Gwalior.
Chanderia Unit has received the following awards : i) FirstAward from Quality Circle Forum of India Hyderabad for various initiatives undertaken bythe Unit in the areas of environment. ii) Gold Award in the field of Environment Excellentand Best Practices in Cement Sector by Apex India Foundation New Delhi.
OCCUPATIONAL HEALTH & SAFETY
Employees of the Company play an important role in operations andgrowth and are considered the most valuable assets. Their personal and professionaldevelopment along with health and safety are among the top priorities of the organization.The Company complies with all Statutory Provisions as required under the Factories Act.Competent persons carry out compulsory testing / examination of lifting tools pressurevessels cranes safety belts etc. as per statutory requirement. For effective accidentprevention we routinely investigate and analyse all serious and fatal accidents andobtain recommendations/remedial measures to prevent similar accidents. Near-misssituation/incident with no injury is accorded serious consideration for planning ofpreventive measures. As a part of safety measures we are ensuring almost 100 per cent useof Personal Protective Gear by educating workers the need to use them. Various periodicalhealth check-ups are conducted from time to time to monitor health hazards if any.
Safety posters slogans are widely displayed inside our factories at shop floors canteen and plant gates to continuously remind everyoneabout safe working practices and environment so as to inculcate a culture of safety amongworkers. Safety day/ week celebration is organized every year with a view to improvingconsciousness amongst workers.
CORPORATE SOCIAL RESPONSIBILITY
In line with the provisions of the Companies Act 2013 the Company hasframed its Corporate Social Responsibility (CSR) policy for the development of programmesand projects for the benefit of weaker sections of society and the same has been approvedby the CSR Committee and the Board of Directors of the Company. The Corporate SocialResponsibility (CSR) policy of the Company provides a road map for its CSR activities. Thepurpose of CSR Policy is to devise an appropriate strategy and focus its CSR initiativesand lay down the broad principles on the basis of which the Company will ful_ll its CSRobjectives. As per the said policy the Company continues the strategy of discharging partof its CSR responsibilities related to social service through various trusts/ societiesin addition to its own initiatives and donations made to other non-governmentorganizations.
The CSR Policy has been uploaded on the Company's website and maybe accessed at the link http://www.birlacorporation.com/ investors/policies/csr-policy.pdfPursuant to the requirement under Section 135 of the Companies Act 2013 and Rules madethereunder a Report on CSR activities and initiatives taken during the year in theprescribed format is given in "Annexure D" which is annexedhereto and forms part of the Directors' Report. The Company is actively associatedwith various social and philanthropic activities undertaken on its own as well as bydifferent Trusts and Societies. As a constructive partner in the communities in which itoperates the Company has been taking concrete action to realize its social responsibilityobjective. The Company has been playing a pro-active role in the socioeconomic growth andhas contributed to all spheres ranging from health education empowerment of women ruralinfrastructure development environment conservation etc. In the past nine decades theCompany has supported innumerable social initiatives in India touching the lives of lakhsof people positively by supporting environmental and health-care projects and socialcultural and educational programs.
Health Educational and Social Initiatives :
The Company provides active assistance financial as well asmanagerial to various hospitals and educational and philanthropic institutions set up bytrusts and societies. The Company has provided financial as well as administrative supportfor setting up a hospital in Chittorgarh namely M.P. Birla Hospital & Research Centrewhere the Company has two cement plants.
This is a state-of-the-art multi-speciality hospital which hasdiagnostic and treatment facilities for Emergency General Medicines CardiologyOrthopaedics Gynaecology Childcare (NICU & SCBU) General Surgery UrologyNephrology Neurology Ophthalmology Radiology including CT scan & Colour DopplersDental ENT Dermatology Pharmacy and Physiotherapy amongst others. The hospital hasin-house modern medical & pathological laboratories. The hospital also has ModularOperation Theatres and advanced Intensive Cardiac Care Unit Intensive Care Unit andIntensive Therapy Unit. A Blood Bank is soon to be started. Currently in the"In-Patient Department" approximately 115 beds are operational and best medicalservices are provided to patients at a nominal cost. The hospital has been registeredunder Bhamashah Swasthya Bima Yojana thereby enabling poor people to get the benefit ofthe services provided by the hospital. The initiative has helped people in and aroundChittorgarh to avoid travelling to nearby cities like Ahmedabad and Udaipur to getthemselves treated.
The 200000 sq. ft hospital has capacity to hold up to 200 beds. Thehospital building consists of basement ground and four floors. The separate housing wingis made up of ground and four floors which are used as residence by doctors nurses andparamedical staff.
This apart the CSR activities undertaken include: 01] Health careactivities :
As a part of CSR activity under the health care initiatives theCompany provides various health care facilities like free medical check-up free treatmentand medicines for needy people. The Company organized medical check-up camps free eyecamps speciality health camps on paediatric and gynaecology cases. Apart from this theCompany conducted adolescent health awareness camp and provided baby kits to new bornbabies to improve health and reduce death rate. The Company also donated gowns for motherand infants under Kangaroo Mother Care Scheme' launched by the U.P. Governmentwith a view to giving proper and better care to mothers and infants.
02] Education :
In addition to financial and institutional support provided to theschools located close to the Company's plants the Company organized variouscompetitions involving students. School dresses bags and stationeries copies are alsoprovided free to underprivileged students. Foods and sweets were distributed in villagesnear our plants on Independence Day and Republic Day. Under the Swachh Bharat'mission the Company renovated toilets for girls and boys and provided water tank fordrinking water. The Company also upgraded math labs in schools. For better computer skillsof students the Company provided teachers to impart basic training in computers.
03] Empowerment of women :
Empowerment of women is one of the Company's long-terminitiatives. With the aim of imparting women the skills to get jobs the Company has takenvarious initiatives to promote skill development. The Company also supports schemes thatgenerate employment for women in villages surrounding its factories and mining areas.Necessary training and support are provided to self-help groups run by women under variousprojects to make them self-reliant. 04]
Animal welfare : Livestock Development :
A programme for livestock and agricultural development was launched bythe Company with the support of M/s. BAIF Development Research Foundation Pune in thevillages near the mining areas of the Company. It will help in developing high-yieldingbreeds of cattle and small ruminants such as goat and sheep. Secondly this will help inproviding good quality seeds and training on best practices to farmers by experts.
Horticultural Development :
The Company has developed 31 orchards in its mining lease area wherethe bene_ciaries have started accruing income on regular basis. 05] Promotion on ruralsports :
The Company encourages rural sports and activities by financiallysupporting State-level competition in which rural youths participate.
06] Other Social Initiatives :
The Company undertakes various other social welfare activities andrural development projects such as providing drinking water facilities ceiling fans toplaces of worship and water coolers at public places in the neighbourhood of its plants.The Company has made contribution towards various art and cultural programmes and hashelped with the upkeep of Sitamata Wildlife Sanctuary. The Company has also supportedvarious awareness programmes on road safety and the importance of voting in elections. TheCompany has also donated blankets to the underprivileged and contributed to the renovationof important historical and religious sites.
07] Environmental sustainability :
The Company is well aware of its responsibility towards sustainabledevelopment and environment. Various initiatives have been taken for Clean DevelopmentMechanism (CDM) and pollution prevention. Eco-friendly plantations have been created inand around the plants. Equipment for pollution control is kept under regular inspectionand emission levels are monitored to remain within statutory limits. Concerns forenvironment and sustainable development are integral to the Company's businessdecisions.
Interventions such as Bag Dust Collectors and water spray system indust generation areas have significantly reduced pollution. SO2 & NOX gas analyzer inkiln stack has been installed for close monitoring. Sheds have been constructed formaintaining good housekeeping inside plants. Measures have also been taken forconservation of limestone reserves. Water tankers pumps rain guns and water spray systemhave been provided for pressurized spraying to control dust pollution around mining areasand connecting roads. The Company has started using Alternative Fuel and Raw MaterialFeeding System (AFRS) for higher use of alternative fuel on continuous basis at itsclinker manufacturing units. This move ensures availability of alternative fuel throughoutthe year and has resulted in reduction of fuel costs and also helped in reducing thecarbon footprint.
The Waste Heat Recovery System at Satna and Chanderia plants of theCompany uses the hot gases coming out of the pre-heater and clinker cooler to generatesubstantial power thereby reducing Green House Gas (GHG) emissions. Grinding aid isintroduced in all the units to improve consumption of _y ash and slag. Further to protectthe environment the Company has consumed substantial quantity of _y ash during 2018-19 atvarious cement plants. This has resulted in reduction of clinker usage which in turnreduced GHG emissions at our plants without compromising on the quality and the strengthof our cement.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report as required under Regulation 34(2)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 form anintegral part of this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Retirement by Rotation
Shri Bachh Raj Nahar (DIN: 00049895) Director who retires by rotationat the ensuing Annual General Meeting (AGM) has expressed his unwillingness to bere-appointed.
Smt. Shailaja Chandra (DIN: 03320688) has been re-appointed as anIndependent Director of the Company for a second term of 5 (five) consecutive years w.e.f.4th February 2020 subject to approval of the shareholders at the ensuing Annual GeneralMeeting of the Company by passing Special Resolution as per Section 149(10) read withSchedule IV of the Companies Act 2013.
Key Managerial Personnel (KMP)
The following are the Key Managerial Personnel of the Company :
1. Shri Bachh Raj Nahar : Managing Director
2. Shri Pracheta Majumdar : Wholetime Director designated as ChiefManagement Advisor
3. Shri Aditya Saraogi : Chief Financial Officer
4. Shri Girish Sharma : Company Secretary
None of the Directors/KMP has resigned during the financial year2018-19.
DECLARATION BY INDEPENDENT DIRECTORS
Shri Vikram Swarup Shri Anand Bordia Shri Brij Behari Tandon ShriDhruba Narayan Ghosh Dr. Deepak Nayyar and Smt. Shailaja Chandra are IndependentDirectors on the Board of the Company. The Independent Directors hold office for a fixedterm of five years and are not liable to retire by rotation.
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed both under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board of Directors of the Company based on the recommendation ofthe Nomination and Remuneration Committee has formulated a Nomination and RemunerationPolicy. The Nomination and Remuneration Policy of the Company inter alia includes theaims and objectives principles of remuneration guidelines for remuneration to ExecutiveDirectors and Non-Executive Directors fixed and variable components in the remunerationpackage criteria for identification of the Board members and appointment of seniormanagement. The criteria for identification of the Board Members including those fordetermining qualification positive attributes independence etc. is summarily givenhereunder:
The Board member shall possess appropriate skillsqualification characteristics and experience. The objective is to have a Board withdiverse background and experience in business government academics technology humanresources social responsibilities finance law etc. and in such other areas as may beconsidered relevant or desirable to conduct the Company's business in a holisticmanner.
An Independent Director shall be a person of integrity andpossess expertise and experience and/or someone who the Committee/Board believes couldcontribute to the growth/ philosophy/strategy of the Company.
In evaluating the suitability of individual Board members theCommittee takes into account many factors including general understanding of theCompany's business dynamics global business social perspective educational andprofessional background and personal achievements.
A Director should possess high level of personal andprofessional ethics integrity and values. He/she should be able to balance the legitimateinterest and concerns of all the Company's stakeholders in arriving at decisionsrather than advancing the interests of a particular constituency.
A Director must be willing to devote sufficient time and energyin carrying out his/her duties and responsibilities effectively. He/she must have theaptitude to critically evaluate management's working as part of a team in anenvironment of collegiality and trust.
The Committee evaluates each individual with the objective ofhaving a group that best enables the success of the Company's business and achieveits objectives. The Nomination and Remuneration policy as approved by the Board isuploaded on the Company's website and may be accessed at the linkhttp://www.birlacorporation.com/investors/ nomination-and-remuneration-policy.pdf.
The Nomination and Remuneration Committee pursuant to the powersdelegated to it by the Board has carried out an annual evaluation of the performance ofthe Board the Directors individually as well as the evaluation of the functioning ofvarious Committees. The Independent Directors also carried out the evaluation of theChairman and the Non-Independent Directors. The Board has carried out the performanceevaluation of Independent Directors of the Company.
CRITERIA FOR EVALUATION OF DIRECTORS
For the purpose of proper evaluation the Directors of the company havebeen divided into 3 (three) categories i.e. Independent Non-Independent &Non-Executive and Executive.
The criteria for evaluation include factors such as engagementstrategic planning and vision team spirit and consensus building effective leadershipdomain knowledge management qualities team work abilities result/ achievementsunderstanding and awareness motivation/ commitment/ diligence integrity/ethics/ valuesand openness/receptivity.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
During the year under review the name of the Company's materialsubsidiary Reliance Cement Company Private Limited has been changed to RCCPL PrivateLimited (RCCPL) w.e.f. 1st August 2018.
Considerable efforts have been made by the management for improving itsoperational efficiencies which has led to significant improvement in all parameters acrossthe board. The operations of RCCPL have stabilized and it is achieving operatingparameters that are among the best in the industry. The planned synergies expected out ofthe acquisition are also getting realized with successful integration of its operationswith the Company.
During the year under review the Board of RCCPL had approved thefollowing capital expenditures :
1. Setting up of 3.90 million tons Greenfield Integrated Cement Plantat Mukutban (Maharashtra) with 40 MW Captive Power Plant and 10.60 MW Waste Heat RecoverySystem at an estimated cost of Rs.2450 crore. The bhoomi puja or the ground breakingceremony for the project took place on 23rd January 2019. Since then construction of theplant has started. The project is progressing as per schedule and is expected to becommissioned in 2021-22.
2. Second phase expansion of existing capacity of grinding cement plantat Kundanganj by installing a third line with a capacity of 1.20 million tons per annumwith cement mill packing plant wagon loading and permanent connectivity with railwayetc. at an estimated cost of र250 crores.
3. 12.25 MW Waste Heat Recovery System (WHRS) is going to becommissioned at Maihar in the _rst quarter of 2019-20.
4. The Company has been steadily ramping up production at its SialGhogri coal mine in Madhya Pradesh. The production is expected to go up to the optimumlevel in the next financial year.
As on 31st March 2019 the Company had 7 (seven) subsidiary companies.During the year 1(one) subsidiary company namely Birla North East Cement Limited waswound up. Two subsidiary companies namely Thiruvaiyaru Industries Limited and BirlaCorporation Cement Manufacturing PLC Ethiopia are under the process of voluntary windingup. In view of the aforesaid these subsidiaries have not been considered in preparing theConsolidated Financial Statements.
The erstwhile 2 (two) Associate Companies namely Birla ReadymixPrivate Limited and Birla Odessa Industries Private Limited have been struck off and thenames of the same have been removed from the Register of Companies.
No Company has become or ceased to be the joint venture of the Companyduring the financial year 2018-19.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5of the Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements of Subsidiaries/Associate Companies/Joint Ventures is given in FormAOC-1 forms part of the consolidated financial statement and hence not repeated here forthe sake of brevity.
During the year under review the Company has not accepted depositsfrom the public falling within the ambit of Section 73 of the Companies Act 2013 and theRules framed thereunder.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSCOURTS AND TRIBUNALS
No significant and material order has been passed by the regulatorscourts tribunals impacting the going concern status and company's operations infuture.
INTERNAL CONTROL AND SYSTEMS
The Company has adequate internal control procedures commensurate withits size and nature of business. The objective of these procedures is to ensure efficientuse and protection of the Company's resources accuracy in financial reporting anddue compliance with statutes corporate policies and procedures. Internal Audit isconducted periodically across all locations by Chartered Accountant/ (audit) firms whoverify and report on the efficiency and effectiveness of internal controls. The adequacyof internal control systems are reviewed by the Audit Committee of the Board periodically.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has a robust and comprehensive Internal Financial Controlsystem commensurate with the size scale and complexity of its operations. The systemencompasses the major processes to ensure reliability of financial reporting compliancewith policies procedures laws and regulations safeguarding of assets and economicaland efficient use of resources. The controls were tested during the year and no reportablematerial weaknesses either in their design or operations were observed.
The policies and procedures adopted by the Company ensures orderly andefficient conduct of its business and adherence to the company's policies preventionand detection of frauds and errors accuracy in the record-keeping and timely preparationof reliable financial information.
The Internal Auditors and the Management Audit Department continuouslymonitor the efficacy of Internal Financial Control system with the objective of providingto the Audit Committee and the Board of Directors an independent objective and reasonableassurance on the adequacy and effectiveness of the organization's risk managementmeasures with regard to the Internal Financial Control system.
VIGIL MECHANISM POLICY
The Company has framed a Vigil Mechanism Policy to deal with unethicalbehaviour actual or suspected fraud or violation of the Company's code of conduct orethics policy if any. The Vigil Mechanism Policy has also been uploaded on the website ofthe Company.
DETAILS RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNELAND EMPLOYEES
Disclosure pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is marked as "Annexure E" which is annexed hereto and forms part of the Directors' Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of the Companies Act 2013 and Rule 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement comprising the names of top 10 (ten) employees in terms of remuneration drawnand every person employed throughout the year who were in receipt of remunerationexceeding the prescribed limit forms an integral part of Directors' Report.
The above Annexure is not being sent along with this Annual Report tothe Members of the Company in line with the provision of Section 136 of the Companies Act2013. Members who are interested in obtaining these particulars may write to the CompanySecretary at the Registered Office of the Company. The aforesaid Annexure is alsoavailable for inspection by Members at the Registered Office of the Company 21 daysbefore and up to the date of the ensuing Annual General Meeting during the business hourson working days.
HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS
Employees are the core strength of the Company. Therefore at alltimes we focus on creating the right workplace environment that provides opportunitiesfor our employees to improve their performance. Robust and up to date HR Policies are inplace for proper evaluation of performances which is the key to building future leaders.
HR functions in the organization have witnessed a paradigm shift andevolved to bring together modern day practices with proper use of technology andautomation. This has had a profound impact on the morale and motivation of the employeeswho are the prime-movers. The Company has succeeded in fostering a relationship with itsemployees which will help transform the organization.
There is a well-calibrated mechanism to reward meritocracy.
Learning and development initiatives for our employees are geared toenable all-round performance both as individuals and as teams.
Encouraging cordial working relation and maintaining good industrialrelations have been the philosophy and endeavour of the HR Department. On the wholeindustrial relation scenario has been good. Statutory compliances related to labour lawshave been followed with due emphasis.
Industrial relations continued to remain cordial throughout the year atall the units. Suspension of Operation continues at Soorah Jute Mills Auto Trim DivisionBirlapur and at Birla Vinoleum Birlapur.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
In order to provide women employees with a safe working environment atworkplace and also in compliance with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunderthe Company has formulated a Policy on Prevention and Redressal of Complaintsrelating to Sexual Harassment of Women at the workplace'. The said Policy has beenuploaded on the internal portal of the Company for information of all employees. AnInternal Compliance Committee has been set up comprising three employees and one outsidemember. One of the female employees is the Presiding Officer of the Committee. Nocomplaint pertaining to sexual harassment of women employees from any of theCompany's locations was received during the financial year ended 31st March 2019.
AUDITORS & AUDITORS' REPORT
Statutory Auditors :
M/s. V. Sankar Aiyar & Co. Chartered Accountants (FirmRegistration No. 109208W) were appointed the Statutory Auditors of the Company at the97th Annual General Meeting of the Company held on 31st July 2017 for a term of fiveconsecutive years commencing from the conclusion of the 97th (Ninety Seventh) AnnualGeneral Meeting till the conclusion of the 102nd (Hundred and Second) Annual GeneralMeeting of the Company to be held in 2022.
The notes on accounts referred to in the Auditors' Report areself-explanatory and therefore do not call for any comments.
Cost Auditors :
The Board of Directors on the recommendation of the Audit Committeeappointed M/s. Shome & Banerjee (Firm Registration No.000001) Cost Accountant asthe Cost Auditors of the Company for the financial year 2019-20 for auditing the costrecords relating to cement jute goods and steel products manufactured by the Company. Theremuneration proposed to be paid to the Cost Auditor is subject to ratification by theshareholders of the Company at the ensuing Annual General Meeting.
M/s. Shome & Banerjee has confirmed that they are free from anydisqualifications specified under Section 141(3) and proviso to Section 148(3) read withSection 141(4) and all other applicable provisions of the Companies Act 2013 and theirappointment meets the requirements of Section 141(3)(g) of the Companies Act 2013. Theyhave further confirmed their independent status and arm's length relationship withthe Company. The Company submits its Cost Audit Report with the Ministry of CorporateAffairs within the stipulated time period.
Secretarial Auditors :
The Board of Directors on the recommendation of the Audit Committee hadappointed M/s Mamta Binani & Associates practising Company Secretaries to conductsecretarial audit of the Company for the financial year 2018-19. The Secretarial AuditReport for the Financial Year ended 31st March 2019 is annexed herewith and marked as "Annexure- F". The Report is self-explanatory and do not call for any comments.
Further the Board on the recommendation of the Audit Committee hadappointed M/s Mamta Binani & Associates Practicing Company Secretaries to conductSecretarial Audit of the Company for the financial year 2019-20. There are no auditqualifications adverse remarks or disclaimer in the respective reports of the StatutoryAuditors and Secretarial Auditors for the year under review.
None of the Auditors of the Company has reported any fraud as specifiedunder the second proviso of Section 143(12) of the Companies Act 2013 (including anystatutory modification(s) or re-enactment(s) thereof for the time being in force).
Secretarial Standards :
The applicable Secretarial Standards i.e. SS-1 and SS-2 relating toMeetings of the Board of Directors' and General Meetings'respectively have been duly followed by the Company.
Statements in this Report particularly those which relate toManagement Discussion & Analysis describing the Company's objectivesprojections estimates expectations or predictions may be forward lookingstatements' within the meaning of applicable laws or regulations. Actual resultscould however di3er materially from those expressed or implied. Important factors thatcould make a di3erence to the Company's operations include global and domesticdemand-supply conditions 3nished goods prices raw materials and fuels cost &availability transportation costs changes in Government regulations and tax structureeconomic developments within India and the countries with which the Company has businesscontacts and other factors such as litigation and industrial relations.
We wish to place on record our appreciation for the continued supportand co-operation received by the Company from the Government of India State GovernmentsFinancial Institutions Banks Dealers Customers and last but not the least from ourShareholders.
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