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Finolex Cables Ltd.

BSE: 500144 | NSE: FINCABLES | Series: NA | ISIN: INE235A01022 | SECTOR: Cables - Telephone

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

To,

The Members,

The Directors are pleased to present their 50th Annual Report and Audited Accounts for the year ended 31st March, 2018,

FINANCIAL RESULTS

Rs. In Million

STANDALONE

CONSOLIDATED

2017-2018

2016-2017

2017-2018

2016-2017

INCOME

Revenue From Operations (Net)

28,842.3

26,707.5

28,842.3

26,707.5

Other Income

1,274.0

1,002.1

811.8

593.5

Total

30,116.3

27,709.6

29,654.1

27,301.0

EXPENDITURE

Material Costs

21,032.9

19,527.7

21,032.9

19,527.7

Employee Benefit Expenses

1,354.6

1,191.9

1,354.6

1,191.9

Finance Costs

14.4

42.9

14.4

42.9

Depreciation, Amortization and impairment

438.0

480.3

438.0

480.3

Other Expenses

2,231.6

2,273.6

2,046.8

2,028.6

Total

25,071.5

23,516.4

24,886.7

23,271.4

Profit before share of Net profit of Investments accounted for using equity method and tax

4,767.4

4,029.6

Share of Net Profits of an Associate and Joint Ventures accounted for using equity Method

5,044.8

4,193.2

724.0

1,007.3

Profit Before Tax

5,044.8

4,193.2

5,491.4

5,036.9

Tax Expenses:

Current Tax

1,316.6

1,080.7

1,316.6

1,080.7

Deferred Tax

146.2

(46.3)

873.7

(46.3)

Total Tax

1,462.8

1,034.4

2,190.3

1,034.4

Profit After Tax

3,582.0

3,158.8

3,301.1

4,002.5

Total Other Comprehensive Income for the year

134.7

37.7

131.8

24.7

Total Comprehensive Income for the year

3,716.7

3,196.5

3,432.9

4,027.2

GLOBAL ECONOMIC SCENARIO

The global economy witnessed an upswing in economic activities and trade led by investment recovery in advanced nations, improvement in emerging Europe, sustained momentum in emerging Asia and signs of recovery among commodity exporting countries. The year saw a broad-based recovery across majority of the countries globally resulting in global economy recording its fastest growth since 2011 at 3.8% in 2017. Growth amongst both the Advanced Economies and Emerging Market and Developing Economies was strong at 2.3% and 4.8% respectively compared to 1.7% and 4.4% respectively achieved in 2016. Going forward, it is expected that the current favorable market sentiment along with accommodative financial conditions and partial recovery in commodity prices will continue to buoy the global economic activity, with growth expected at 3.9% in both 2018 and 2019.

INDIAN ECONOMIC SCENARIO

In the Indian context the economic activity during the FY 201718 witnessed a slowdown mired by short-term challenges in the form of fading impact of demonetisation and trade activity slowdown ahead of Goods and Services Tax (GST) implementation. Resultantly, the GDP grew 6.6% in FY 2017-18 compared to 7.1% in FY 2016-17. However, recent developments in the country in the form of FDI liberalization to attract investments, Insolvency and Bankruptcy Code to assist banks address NPA issues, Real Estate (Regulation and Development) Act to bring in more transparency in the real estate sector strengthen the outlook both in the near and mid term.

GST is one major revolutionary move that will enable the country to overcome the issues of multiple taxation, tax evasion and parallel economy, while bringing in more efficiency in movement of goods and services across the country. Though the initial implementation of GST saw some challenges in the form of delays in refund of input credit tax and challenges to small and medium enterprises to keep up with the regulatory issues, over the long run it is expected to be beneficial. Another important initiative was the Rs. 2.11 lakh crore recapitalisation plan for stressed public sector banks to enable them improve balance sheet health and resume lending, necessary to boost economic activities. The impact of all these is already beginning to reflect with the country’s ease of doing business ranking improving by 30 spots to 100th position, indirect taxpayer base increasing by 50% to 34 lakh businesses and a credit rating upgrade from Moody’s Investors Services to Baa2.

The country is also making significant investment in infrastructure to sustain its growing economy. In its Union Budget FY 2018-19, the government has made a total allocation of Rs. 5.97 lakh crore for infrastructure development, which is nearly three fold rise from the levels in 2014. The government has also envisaged plans to build integrated logistics supply chain through developing 50 economic corridors, 35 multimodal logistics parks at 15 locations and ten intermodal stations. Apart from these the government plans to build 100 smart cities, target to reduce carbon emission by adding 175 GW of renewable power generating capacity by 2022, focus on Make in India, and building digital infrastructure to ensure fixed line broadband access to 50% of household by 2022 are all heading the country towards an unmatched development.

With these positive developments in the Indian economy, IMF forecasts the country’s GDP to grow by 7.4% in FY 2018-19 and then pick up momentum to 7.8% in FY 2019-20.

OPERATIONS

OVERALL: Sales net of duties were Rs 28,151.2 million as against Rs 24,448.4 million in the previous year with a 15% revenue growth. Growth was across all product lines. In volume terms Electrical Cables saw a growth of 5% and Communication Cables grew by 35%.

Total Income for the year under review was higher at Rs. 30,116.3 million (previous year Rs. 27,709.6 million) representing a growth of 9% over the previous year. Your Company has recorded a Net Profit Before Tax of Rs. 5,044.8 million as against Rs. 41 93.2 million in the previous year - a growth of 20.3%.

Highlights of the performance are discussed in detail in the Management Discussion and Analysis Report (MDAR) attached as Annexure A to this Report.

EXPORTS: The market conditions overseas continue to be difficult and hence FOB value of exports for the year was lower than the previous year at Rs 274.9 million (Previous year’s export value of Rs. 316.1 million).

FINANCE

The short-term debt programs of your Company continue to be rated by CRISIL. Since the last few years, these have been accorded the highest ratings that CRISIL issues (A1 ). CRISIL has also retained the AA /stable rating for the Company’s long term non-convertible debentures - during the year, however, no debentures were issued. As on date of this report, your Company continues to remain debt free.

Financial costs have been contained to the minimum required levels. The Company continues to meet all its financial commitments in a timely manner.

FIXED DEPOSITS

Your Company has stopped accepting deposits from the year 2003 and accordingly, no fixed deposits have been accepted during the year under review.

DIVIDEND

Your Directors have pleasure in recommending a dividend on equity shares of 200%. The amount thereof per equity share will be Rs.4/-. The total dividend outgo (including dividend tax) will be Rs. 736.3 million.

Payment of Dividend is subject to the approval of the members at the ensuing Annual General Meeting.

NEW PRODUCTS & EXPANSION

As you are aware, your Company ventured into newer product segments such as LED based lamps, low duty switchgear, fans and water heaters over the previous two years. During the year under review, your Company expanded both its market reach as well as the product offerings in each of these new segments. Several new models were launched during the year, covering multiple price and feature points. The volume growth has been encouraging across all new products and at the same time customer feedback to the products in terms of appearance, quality perception and price/performance expectations has been very positive. Simultaneously, your Company has realigned the field sales force into separate verticals (cables, lighting, switch/ mcb, and fans/water heaters) to better address market needs.

Your Company announced its decision to enter the “Conduit Pipe” line of business last year - work on the manufacturing plant has commenced and is expected to be complete by December 2018.

As part of its expansion strategy, your Company is in the process of acquiring approx. 40 acres of land near Vadodara. This site would be used for future expansion needs of the Company.

JOINT VENTURES, SUBSIDIARIES AND ASSOCIATES

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014, the statement containing salient features of the financial statements of the Company’s Joint Ventures / Associates (in form AOC-1) is attached to this Report as Annexure I.

FINOLEX J-POWER SYSTEMS PRIVATE LIMITED

As part of infrastructural development, the power sector is an extremely important component. Various measures have been announced by the Power Ministry to reform and grow this sector The demand push for EHV cables is witnessed in many states which are eying for faster development and many tenders have been floated by State Utilities in the current financial year

The JV has registered itself with most of the private power companies and participates in tenders floated by them.

While the level of tender participation has improved, the tender conclusion process is still very slow and the JV is awaiting the results in many tenders that it has participated in. At the end of 2017-18, the JV had an order backlog of approximately Rs 400.00 million.

The JV’s 400kV Extra High Voltage Cable has now been certified. Currently, this is the only Indian Company to be certified at this voltage grade. This would be extremely helpful in future tender participation, giving the JV a prime mover advantage.

It is currently estimated that the JV will gradually be profitable to achieve break even and will need financial support in the form of equity infusion until then. While the long term outlook of the JV is positive, in the short term, there has been an erosion of net worth in the JV. Taking a prudent view of the same, an amount of Rs 184.8 million has been recognized as a diminution in the value of investment. During the year, your Company injected equity of Rs 159.2 million, taking the Company’s participation up to Rs 1337.7 million at the end of FY 2017-18.

CORNING FINOLEX OPTICAL FIBER PRIVATE LIMITED

During the financial year ended on 31st March, 2018, the JV clocked sales of Rs. 2,372.6 million (previous year Rs. 2,015.9 million) and was profitable, with a profit after tax of Rs. 113.1 million.

With consumer demand increasing for mobile data services and e commerce, it is hoped that the fiber penetration in India will improve. Further, Government initiatives such as Bharat Net and Digital India have been adding to the buoyancy to demand. Demand for better quality and feature rich products is on the increase and the JV expects to capitalize on the same. Your Company’s participation in the JV’s equity at the end of FY 201718 remains at Rs. 17.5 million.

EMPLOYEES

Your Company recognizes the importance of a motivated and skilled human resource. Your Company endeavors to create a challenging and favorable work environment that encourages entrepreneurial behavior, innovation and the drive towards business excellence. Several skilled based training programs were conducted during the year with the help of external consultants, especially for the staff in Sales and Marketing functions. Your Company is also in the process of revamping its hiring and appraisal processes in line with benchmarked practices in industry.

Industrial relations continued to be cordial during the year

The Company had 1828 permanent employees on its rolls as on 31st March, 2018 (previous year 1748 permanent employees as on 31st March, 2017).

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

In terms of provisions of Section 197(12) of Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure E to this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure F to this Report.

KEY MANAGERIAL PERSONNEL

The following persons continued as Key Managerial Personnel during the year 2017-18:

Name

Title

Mr. D K Chhabria

Executive Chairman

Mr. Mahesh Viswanathan

Deputy Managing Director and Chief Financial Officer

Mr. R G D’Silva

Company Secretary & President (Legal)

CORPORATE GOVERNANCE

Your Company is in full compliance with the Corporate Governance guidelines as set out in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”) and is committed to good corporate governance laying a strong emphasis on transparency, accountability and integrity. All Directors and Senior Management employees have confirmed in writing their adherence to the Company’s Code of Conduct.

A separate report on Corporate Governance (Annexure B) is provided together with a Certificate from the Statutory/ Secretarial Auditors of the Company regarding compliance with conditions of Corporate Governance as Annexure C, as mandated under SEBI LODR Regulations, 2015. There is no qualification, reservation or adverse remark or disclaimer made by the auditor in his report. A Certificate of the Chief Executive Officer and Chief Financial Officer of the Company in terms of Regulation 17(8), Part B Schedule II of SEBI LODR Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is also annexed.

CORPORATE SOCIAL RESPONSIBILITY (CSR’)

During the year, your Company had approved a total expenditure of Rs.56.0 million towards CSR activities for free medical care through multispecialty hospitals, mobile hospital facilities in rural area, support to NGO activities like desilting in rural Maharashtra, promoting education and related activities, help needy children suffering from H1B diabetes, medical facilities to backward class women for their delivery and gynecological problems, knee replacement, cataract and dialysis for needy people, improvement of health care at rural areas, improvement in school infrastructure and provision of sewage treatment facility at places where the Company’s Plants are located and contribution to National Mission for Clean Ganga “Namami Gange”. While the above amount was approved in 2017-18, the actual spend in the year 2017-18 was Rs 46.0 million and the balance amount is to be spent in the year 2018-19.

The annual report on CSR activities of the Company for the year under review is set out in Annexure J forming part of this report.

DIRECTORS

Mr Sumit N Shah (DIN: 00036387), Additional Director ceased at the last Annual General meeting held on 28th September, 2017. Mr S B (Ravi) Pandit (DIN: 00075861) aged about 68 years being an Independent Director, ceased upon resignation due to his other commitments. The Board places on record its deep appreciation of the valuable contribution made by these Directors during their tenure on the Board of Directors of the Company,

Mr D K Chhabria, Executive Chairman will be completing his term of appointment on 30th June 2018. The Board of Directors at its meeting held on 28th May, 2018 has approved his reappointment for a period of five years. The terms and conditions of his reappointment are being put up to the members for approval. Accordingly, suitable resolution which appears in the Notice of ensuing Annual General Meeting has been proposed for consideration.

Similarly, Mr Mahesh Viswanathan, Deputy Managing Director and Chief Financial Officer will be completing his term of appointment on 30th June 2018. The Board of Directors at its meeting held on 28th May, 2018 has approved his reappointment for a period of five years. The terms and conditions of his reappointment are also being put up to the members for approval. Accordingly, suitable resolution which appears in the Notice of ensuing Annual General Meeting has been proposed for consideration.

In accordance with the provisions of the Companies Act, 2013 and the relevant Rules framed thereunder and of the Articles of Association of the Company:

(a) Mrs Namita V Thapar (DIN: 05318899) retires by rotation at the ensuing Annual General Meeting and, though eligible does not wish to offer herself for re-appointment.

(b) Similarly, Mr Mahesh Viswanathan (DIN: 02780987), who retires by rotation at the ensuing Annual General meeting and, being eligible offers himself for reappointment.

The Board recommends the reappointments of Mr D K Chhabria as a whole time Director designated as “Executive Chairman” and of Mr Mahesh Viswanathan as a whole time Director designated as “Deputy Managing Director & Chief Financial Officer”.

The requisite details regarding the proposals for reappointments of Mr D K Chhabria as Executive Chairman and of Mr Mahesh Viswanathan as Deputy Managing Director & Chief Financial Officer are set out in the Explanatory Statement attached to and forming a part of the Notice of ensuing Annual General Meeting of the Company.

COMPLIANCE UNDER THE COMPANIES ACT, 2013

Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules of 2014, your Company complied with the requirements. The details of such compliances are enumerated below:

1. Extract of annual return: An extract of the Annual Return in Form MGT9 as on March 31, 2018 is enclosed as Annexure D to this Report.

2. Number of meetings of the board: The Board met on 5 occasions during the year. Details of the meetings are furnished in the Report on Corporate Governance which is attached as Annexure B to this Report.

3. Directors’ responsibility statement: Pursuant to Sections 134(3)(c) and134(5) of the Companies Act, 2013, (the “Act”), the Directors, to the best of their knowledge and belief and according to the information and explanations provided to them, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed and no material departures have been made from the same;

(b) t he Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

4. Remuneration and nomination policy: The Board of Directors has framed the policy which lays down a framework in relation to Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Executives of the Company including the criteria for determining qualifications, selection and appointment. Further details are provided in the Corporate Governance Report which is attached as Annexure B to this Report.

5. Board evaluation: Pursuant to the relevant provisions of Companies Act, 2013, the independent directors at their meeting dated 28th May 2018, without the participation of the non-independent directors and Management, considered and evaluated the Board’s performance, performance of the Chairman and other non-independent directors. The evaluation was performed taking into consideration the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Board of Directors expressed its satisfaction with the evaluation process.

6. Particulars of loans, guarantees or investments under section 186 of the companies act, 2013: During the year, an investment of Rs. 159.2 million was made in the equity of the Company’s Joint Venture - M/s Finolex J-Power Systems Private Limited.

7. Contracts or arrangements with related parties: All transactions entered into by the Company with related parties were in the ordinary course of business and on an arm’s length basis. Each of these transactions was reviewed by the Audit Committee prior to being entered into and where necessary, was approved by the Board of Directors and the Members. In respect of transactions of a repetitive nature, an omnibus approval was obtained from the Audit Committee and Members where necessary. At every quarterly meeting, the Audit Committee reviews the transactions that were entered into during the immediately preceding period. Details of related party transactions have been disclosed under Note 32 to the financial statements. Details of the same are also reproduced in Form AOC 2 which is attached as Annexure F to this Report. The Company’s Policy on transactions with related parties as approved by the Board is also available on the website of the Company at www.finolex.com.

8. Material changes and commitments affecting the financial position of the company which have occurred between 31st march, 2018 and 28th may, 2018 (date of this report): There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (31st March, 2018) and date of this Report (28th May, 2018)

9. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the company: There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company and the Company’s operations in the future.

10. Adequacy of internal financial controls with reference to the financial statements: Having regard to Rule 8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statements of the Company are as follows:

Your Company maintains appropriate systems of internal control including monitoring procedures. These internal control systems ensure reliable and accurate financial reporting, safeguarding of assets, keeping constant check on cost structure and adhering to management policies. The internal controls are commensurate with the size, scale and complexity of the Company’s operations and facilitate timely detection of any irregularities and early remedial steps against factors such as loss from unauthorized use and disposition. Company policies, guidelines and procedures provide for adequate checks and balances which are meant to ensure that all transactions are authorized, recorded and reported correctly. The internal controls are continuously assessed and improved / modified to meet changes in business conditions, statutory and accounting requirements

Constant monitoring of the effectiveness of controls is ensured by periodical audits performed by an in-house internal audit team as well as assignments entrusted to M/S Ernst & Young. Both these teams in their respective assignments test and review controls, challenge business processes for their robustness and benchmark practices in line with industry norms.

The Audit Committee regularly meets and reviews the results of the various internal control audits both with the Auditors as well as with the respective Auditees. The Audit Committee is apprised of the findings as well as the corrective actions that are taken. Periodical meetings between the Audit Committee and the Company Management also ensure the necessary checks and balances that may need to be built into the control system.

11. Risk management policy: Your Company has set up a Risk Management Committee of the Board of Directors which comprises Dr H S Vachha, Mr Sanjay K Asher, Mr D K Chhabria and Mr Mahesh Viswanathan. More details of the risks faced by the Company are available in the Management Discussion & Analysis Report which is attached as Annexure A to this Report.

12. Vigil mechanism / whistle blower policy: As required under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Boards and its Powers) 2014 and Regulation 22 of the SEBI LODR Regulations, the Company has adopted a policy on vigil mechanism / whistle blower. The policy provides direct access to the Chairman of the Audit Committee in case any employee should choose to report or bring up a complaint. Your Company affirms that no one has been denied access to the Chairman of the Audit Committee and also that no complaints were received during the year. Brief details about the policy are provided in the Corporate Governance Report which is attached as Annexure B to this Report. Also, the policy is available at the Company’s website at www.finolex.com.

13. Prevention of sexual harassment policy: The Company has in place a policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, one complaint was received about a contract employee, wherein the Internal Complaints Committee of the Company had conducted the inquiry and on acceptance of misconduct by the respondent his services were terminated by the concerned contractor.

14. Business Responsibility Report (BRR): As mandated by Securities and Exchange Board of India (SEBI), India’s top 500 listed entities based on market capitalisation on the BSE and NSE are required to submit a ‘Business Responsibility Report’ (BRR) along with their Annual Report for 2017-18. This Report is required to be in line with ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ (NVGs), as released by the Ministry of Corporate Affairs in July 2011. Finolex Cables Ltd. presents its BRR, in line with the NVGs and the BRR requirement of SEBI. The business responsibility report on BRR of the company for the year under review is set out in Annexure K forming part of this report .

AUDITORS

M/s Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No.1 1 7366W / W100018), Auditors of the Company, hold office until conclusion of the Fifty-Fourth Annual General Meeting of the Company to be held in the financial year 2022-23, provided that their appointment shall be subject to ratification at every Annual General meeting if so required under the Act, and being eligible, offer themselves for such ratification of their appointment.

The Audit Committee and the Board of Directors have recommended ratification of the appointment of the Auditors for the financial year 2018-19. Necessary resolution is being placed before the Members for approval.

COST AUDIT

As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) rules of 2014 as amended from time to time, your Company has been carrying out an audit of cost records every year. In respect of the financial year 2017-18, at the previous Annual General Meeting, members had approved of the appointment of M/S Joshi Apte & Associates as Cost Auditor at a remuneration of Rs.5.0 lacs plus GST, as applicable, and reimbursement of out of pocket expenses. Their work will commence shortly and their report would be filed with MCA on or before the due date.

The Cost Audit Report for the financial year 2016-17 was filed prior to its due date in September 2017.

SECRETARIAL AUDIT

In accordance with the provisions of Section 204 of the Companies Act, 2013, and the rules made thereunder, M/S SVD & Associates, a firm of Company Secretaries in practice, was appointed to conduct the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark or disclaimer made by them in their Report, except that the Company has not filed Form IEPF III. FORM IEPF III can be filed only by attaching specific order(s) of the Court or Tribunal or Statutory Authority restraining transfer of subject shares referred to therein. The relevant cases pertain to the years 1996 and prior thereto and the Company is in the process of tracing out the relevant files and Court orders for doing the needful.

Their Report is attached as Annexure H to this Report.

SECRETARIAL STANDARDS

The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from 1st October 2017. The Company is in compliance with the revised secretarial standards

LISTING OF SECURITIES

Your Company’s equity shares are listed on the two premier stock exchanges of the country namely BSE Limited and National Stock Exchange of India Limited. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company has not issued any Non-Convertible Debentures (“NCDs”) in financial year 2017-18 and no NCDs are outstanding as on 31st March, 2018.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report as Annexure I.

PARTICULARS OF EMPLOYEES

Information as required under the provisions of the Companies Act, 2013 (the “Act”) read with Rule 5 sub rules (2 and 3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the “Rules”) forms part of this Report. However, as per the provisions of Section 136(1) of the Act, the Report and Accounts are being sent to the members, excluding the statement of particulars of employees under the Rules of the Act. Any shareholder desirous of obtaining a copy of the said statement may write to the Company Secretary & President (Legal) at the Registered office of the Company,

CAUTIONARY STATEMENT

Statements in this Directors’ Report and Annexures may contain forward looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied. Various factors including commodity prices, cyclical demand, changes in Government regulations, tax laws, general economic development could all have a bearing on the Company’s operations and would impact eventual results.

ACKNOWLEDGEMENTS

Your Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial institutions for their continued support and cooperation. Your Directors warmly acknowledge the trust and confidence reposed in your Company by its channel partners, dealers, customers and construction organizations in supporting its business activities and growth. Your Directors express their gratitude to the other business associates for their unstinting support. Your Directors value the commitment and contribution of the employees towards the Company. Last but not the least, your Directors are thankful to the Members for extending their constant trust and for the confidence shown in the Company.

For and on behalf of the Board of Directors

Place: Pune D.K. Chhabria

Dated: 28th May 2018 Executive Chairman

Director’s Report