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HeidelbergCement India

BSE: 500292|NSE: HEIDELBERG|ISIN: INE578A01017|SECTOR: Cement - Major
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Directors Report Year End : Mar '18    Mar 17

To the Members,

The Directors are pleased to present the 59th Annual Report together with the audited accounts of the Company for the financial year ended 31st March 2018 (FY18).

THE YEAR IN RETROSPECT

The year 2017-18 was marked by a number of key structural initiatives for strengthening economy for sustainable growth in the future. While the first quarter of the year saw the impact of demonetisation tapering off, in the next quarter, introduction of the landmark Goods and Services Tax (GST) brought in some uncertainties as businesses adjusted to the new regime. From the third quarter onwards, we have been witnessing signs of growth.

After a gap of 14 years, Moody’s upgraded India’s sovereign rating to Baa2 with a stable economic outlook. India has also improved its ranking in the World Bank’s Doing Business Report (2018 edition) from 130 in 2017 to 100 among 190 countries.

The GDP fell from 7.1% in FY17 to 6.7% in FY18 as the economy had to cope with the lingering effects of demonetisation and businesses grappled with the nitty-gritty of GST. Rising global crude oil prices cast negative spell on the Indian economy and posed a risk to growth.

During FY18,the Cement industry in India witnessed revival backed by Government spending on infrastructure. The good monsoon ensured steady cement demand from the rural segment. However the demand from urban residential real estate segment remained subdued in comparison to FY17 due to elevated inventory levels and introduction of RERA in May 2017, which disrupted construction activity as the real estate developers went slow on launching new projects. Cement production grew at about 6 percent for the full year against a decline of about 1 percent last year. Over-capacity in the cement industry continues to impact the price and margins. At the end of March 2018, the overall installed cement manufacturing capacity stood close to about 465 million tonnes. Cement production during FY2017-18 was about 298* million tonnes compared to 280 million tonnes in the corresponding period indicating growth of about 6%.

* Source: Website of Office of Economic Adviser, Ministry of Commerce and Industry.

FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS

The Company adopted Indian Accounting Standards (Ind-AS) from 1st April 2016. The financial statements of the Company for the financial year ended 31st March 2018 as well as for 31 st March 2017 presented in this Annual Report are Ind-AS compliant.

During FY18, the Company reported its highest ever production and sales volume, sales revenue and EBITDA. During the year ended 31st March 2018, the Company produced 4.61 million tonnes of cement compared to 4.44 million tonnes in the year ended March 2017, an increase of 3.7%. Cement sales for the year were 4.65 million tonnes compared to 4.47 million tonnes in FY17, an increase of 4.0%. Net sales in FY18 were INR 18,894.7 million compared to INR 17,174.6 million in FY17, an increase of 10.0%. The net profit for FY18 was INR 1,331.8 million compared to INR 762.1 million in FY17.

A snapshot of the Company’s financial performance for the financial year ended 31st March 2018 vis-a-vis performance for the financial year ended 31 st March 2017 is as under: -

(Rs. in million)

Particulars

Financial Year ended 31 March 20181

Financial Year ended 31 March 2017

Income

Revenue from Operations (Net of Excise duty/GST)

18,894.7

17,174.6

Other Income

199.3

236.9

Total Revenue

19,094.0

17,411.5

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)- Including other income

3,832.9

3,025.5

Depreciation and Amortization

1,011.7

991.5

Finance Cost

744.5

897.7

Profit before Tax

2,076.7

1,136.3

Total Tax expense

744.9

374.2

Net Profit for the year

1,331.8

762.1

During FY18, international coal prices were up by about 15% y-o-y. In order to curtail the impact of rising fuel prices the Company maximized usage of petcoke which led to savings of around 9% compared to coal, despite about 30% price increase in international petcoke. The Company altered its fuel mix carefully balancing the use of local fuels to optimise the overall cost.

Prices of other raw materials viz., laterite, iron-ore, sweetener etc., also increased due to mining and environmental issues.

The Company had to rigorously work upon development of reliable supplier base and churning, whenever necessary, for cost optimization. The Company procured natural gypsum through e-auction route and achieved cost reduction of 18% despite the uptrend witnessed in international price of gypsum.

The Company was also able to reduce fly ash cost by 21 % through optimization of logistics at Damoh and Jhansi Plants. Increase in global crude prices impacted cost of packaging bags. However the Company was able to mitigate the impact to a large extent through reverse e-auctioning mechanism. The best practices and processes of the Heidelberg Cement Group, coupled with Continuous Improvement Program, ensured resource and energy optimization. Modifications and improvisations across pyro processes and milling operations resulted in reduced thermal and electrical energy consumption. Owing to various modifications, debottlenecking, process optimisation and equipment upgradation, we secured an increased kiln and mill throughput.

The Waste Heat Recovery-based Power Generation Plant during FY18 generated 69,448 Mega Watt of power which was about 40% of the total power requirement of Narsingarh plant, resulting in equivalent reduction in grid power leading to substantial savings in power cost. The clinker manufacturing plants of the Company viz., Narsingarh and Ammasandra Plants were enrolled by the Bureau of Energy Efficiency(BEE) under ‘Perform, Achieve and Trade Scheme’(PAT) which aims at enhancing energy efficiency of the industrial units. Both the plants were able to achieve the targets set by BEE for reducing specific energy consumption under PAT Cycle 1(target year 2014-15 against energy consumption in baseline year 2009-10). These units have been granted 20,586 Energy Saving Certificates, which can either be used for meeting obligations of the PAT Cycle 2 in case of any shortfall in achieving the target or available for monetization in the market.

The Company proactively changed its systems and processes as well as provided training to its Customers and Vendors assisting them to smoothly transit into the GST regime. The benefit of reduction in indirect taxes on account of implementation of GST was passed on to the customers. Consistent good quality of the product has enabled the Company to meet expectations of its discerning customers thereby sustaining the image of its flagship brand “mycem”. Brand visibility enabled the Company to increase sales volume by 4% despite the challenging demand supply situation owing to shortage of sand in Uttar Pradesh. To strengthen its bond with channel partners, the Company conducted a number of events, training programs and conferences. Effective coordination among production, quality control, marketing, logistics and customer support teams ensured supply of quality products and unmatched service to the customers.

TRANSFER TO DEBENTURE REDEMPTION RESERVE

The Company had issued Non-Convertible Debentures aggregating to I NR 3700 million carrying interest of 10.4% per annum on 16th December 2013. It is proposed to transfer, an amount of INR 134.1 million (previous year INR134.2 million) out of the profits for the financial year ended 31st March 2018 to the Debenture Redemption Reserve (DRR) to meet the obligations towards the redemption of debentures commencing from 16th December 2019.

During the year the credit rating in respect of the aforesaid debentures has been reaffirmed as “IND AA ” (with stable outlook) by India Ratings and Research Pvt. Ltd.

REPAYMENT OF EXTERNAL COMMERCIAL BORROWINGS

The Company had borrowed USD 125 million in nine tranches from January 2011 to October 2012 by way of External Commercial Borrowings (ECB) for the purpose of financing its Damoh-Jhansi expansion project. Each tranche of ECB was repayable after a period of five years from the date of its draw down. During FY2017-18, the eighth and ninth tranche aggregating to USD 20 million were repaid. Thus entire ECB of USD 125 million stands repaid.

DIVIDEND

The Board of Directors is pleased to recommend a dividend of INR 2.50 per equity share of INR 10 each (25%) for FY 201718 for approval of the members at the ensuing AGM. The dividend outgo will be INR 683.0 million (inclusive of a dividend tax of INR 116.5 million).

Dividend Distribution Policy

Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, requires the top 500 listed companies based on the market capitalization to formulate a Dividend Distribution Policy. In compliance with the said requirement, the Board of Directors had formulated a Dividend Distribution Policy in FY17 and the same is posted on the Company’s website. The web-link to access the said policy is as follows: http://mycemco.com/sites/default/files/HCIL%20Dividend%20Distribution%20Policy.pdf

Unclaimed dividend for FY2016-17: Total unclaimed dividend for FY2016-17 as on 31 March 2018 stood at INR 2.3 million. The shareholders whose dividend will remain unclaimed at the expiry of seven years from the date of transfer to ‘Unpaid Dividend Account’ i.e., until 28th October 2024 will be transferred to ‘Investor Education and Protection Fund’.

ENVIRONMENTAL SUSTAINABILITY

The Company is committed and aligned with Heidelberg Cement Group’s Sustainability Commitments 2030 covering water, air, land, occupational health and safety, circular economy, people and communities. In line with these commitments, the Company is taking initiatives for environment protection and conservation.

Sustained commitment over the years towards conserving the water resources has led to the Company being certified as 6.37 times Net Water Positive by an independent certifying agency, TUV SUD. During FY17 all the cement plants of the Company withdrew 1,093,332 kilo litres of water from various sources and harvested 6,965,000 kilo litres of water. This implies that the Company has given back 6.37 times water than it consumed. This distinction was achieved through the commitment of all employees and a multidimensional approach including diversion of rain water to reservoirs, installation of water harvesting systems, revival of bore-wells, controlling seepages and educating everyone on water conservation measures.

The Company has also achieved significant reduction of carbon footprint to 517 kg of CO2/ton of cement produced. Clinker incorporation factor of 62% has been achieved through utilisation of fly ash and other additives, thus preserving natural limestone reserves for the future generations. The company’s waste heat recovery power plant at Narsingarh unit generated power from the waste heat of clinker lines and helped in preserving the fossil fuel. The emphasis is also on taking new initiatives for recycling and reusing waste materials as alternate fuels in kilns thus promoting green and clean environment.

All the plants of the Company are ISO 14001 (Environment Management System) certified.

ENRICHING BIODIVERSITY

The Company preserves and enhances biodiversity across all its plants and mines. The Company has developed green belt covering about 38% of the factory area and created water bodies covering large areas. These water bodies and trees are home to a variety of flora and fauna. The enriched bio diversity provides shelter to thousands of parrots and numerous other bird species.

MAKING A DIFFERENCE THROUGH CSR

The Company continued to contribute to the economic and social development of the local communities in the regions where it has presence by focusing on healthcare, education, community development, and other related activities. By promoting local participation, the company strengthens its bond with local communities. The feeling of ownership that is being generated among the beneficiaries of the CSR assets is ensuring their judicious use and upkeep. During FY18 the Company has spent INR 14.75 million on various CSR activities / projects exceeding the obligations pursuant to Section 135 of the Companies Act, 2013.

Industry requires skilled manpower and the best source for this is large pool of unskilled, unemployed rural youth. The Company conducted diverse training programmes to enhance the skills of the unemployed youth at its well-equipped training and development centre at Jhansi having classrooms and conference rooms. The open area of the training centre is being developed for imparting training on agricultural techniques, horticulture and growing herbal plants.

The company facilitates education of children of nearby villages through the schools being supported by it. In order to improve the infrastructure of nearby schools, the Company provided classroom furniture to them. In order to promote education, meritorious students were rewarded with scholarships. Free books and utility kits were also distributed in many schools. The Company also sponsored sports’ meets in nearby villages wherein students from many schools participated. The Company installed solar panels for lighting in the girls’ hostel at Narsingarh.

The Company’s Central India plants are situated in water scarce Bundelkhand region. While free water is provided to villages near the Narsingarh plant throughout the year, during extreme summer when water resources ran dry, the Company deployed water tankers to provide water to other villages also. Construction of a check-dam was initiated near Satpara mines to ensure water storage during monsoons which will thereafter be available for nearly 6 to 7 months to nearby villagers for cultivation and domestic needs. The Company also dug bore wells and built water tanks in certain localities to meet the water demand during summers. The Company also organised free health check-up camps, provided mobile medical services and distributed medicines in the nearby villages.

The Company continued to extend its support towards development of infrastructure in the vicinity of its plants and mines. It also constructed concrete roads and culverts for safe, speedier and smoother connectivity and thus facilitated villagers to overcome the commuting problems faced by them.

The Report on CSR activities together with brief outline of CSR Policy of the Company is annexed herewith as ‘Annexure - A’.

OCCUPATIONAL HEALTH & SAFETY

Way above its business priorities, occupational health and Safety (OH&S) remained Company’s foremost priority. “Every employee must return home smiling to his family”. Driven by this philosophy, we endeavour to provide a safe and healthy work environment. The day begins with safety gate meetings wherein important safety aspects are discussed along with safety prayer and pledge. To build and grow the Happiness Quotient among the workmen, people are encouraged to share a joke post the safety pledge. We believe that it’s the “Smiles that will take you Miles”.

Various measures taken at the plants and mines to embed strong safety culture led to reduction in Lost Time Incidents Frequency Rate (LTIFR) from 0.21 in FY17 to 0.2 in FY18. However we regret to inform that we lost a young man deployed by our contractors while performing a task at our Imlai plant for which he had no prior authorization.

Top Management’s commitment to safety is pivotal and crucial for harmonizing employees’ safe behavior at the workplace. Safety Leadership training programmes were organized for top management, plant heads and HODs at all plants for implementing best safety practices. Employees including contract workmen were imparted safety induction trainings, refresher courses and job specific trainings like scaffolding safety, working at height, confined space etc. A schedule of twelve most critical safety hazards relevant to our industry has been compiled. Safety themes were announced every month and all the aspects were dwelt upon throughout the month so as to instill the same firmly in the minds of the workmen. Drivers and helpers were also imparted training on defensive driving techniques. All plants are OHSAS 18001 certified. OH&S monitoring of the workplace for noise, particulate matter, free silica and illumination level is being done as per the regulatory norms.

AWARDS AND ACCOLADES

The Company continues to pursue excellence in all areas of its operations, and the same being recognized in the form of awards and honours.

- ’Ammasandra Plant was awarded a certificate and trophy titled ‘Utthama Suraksha Puraskara’ in recognition of its high standards of safety performance and management System from Karnataka Chapter of National Safety Council.

- Yerekatte Limestone Mines in Karnataka was awarded First Prize in the categories of ‘Mineral Benefication’ and ‘Environmental Monitoring’ and Second Prize for ‘Overall Performance’ during the Mines Environment & Mineral Conservation Week Awards 2017-18 from the Indian Bureau of Mines.

- Jhansi Plant received the ‘Energy Efficient Unit’ award in the cement sector from Confederation of Indian Industry at the 18th National Awards for Excellence in Energy Management.

- Diamond Patharia Limestone Mines received a certificate in recognition for the initiatives taken under ‘Swachh Bharat Mission 2018’ from the Indian Bureau of Mines.

- Diamond Patharia Limestone Mines continues to be accredited with Five Star Rating* by the Ministry of Mines, Government of India. The accreditation certificate was given by Shri Haribhai Parthibhai Chaudhary, Hon’ble Minister of State for Mines.

* “Star Rating of Mines” is a scheme of the Ministry of Mines, Government of India, to recognise the performance of mines by giving them rating ranging from one to five stars. Under the scheme, mines bearing major minerals are evaluated on the parameters relating to sustainable development in accordance with sustainable development framework designed by Ministry of Mines and validated by Indian Bureau of Mines.

CORPORATE GOVERNANCE

The Company has always strived to build sustainable relationship with its stakeholders based on trust and transparency. As a result, its governance framework has earned a reputation of being ethical and responsible. All the Directors and employees consider it their personal responsibility to conduct themselves in accordance with the Code of Conduct set out by the organization.

The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have further reinforced the governance regime in India. The Company remains fully compliant with the corporate governance requirements as prescribed under the said regulations. Pursuant to the provisions of the listing regulations, a certificate from M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice, confirms compliance with conditions of Corporate Governance and forms an integral part of this Report. The Company has also ensured compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India pursuant to Section 118(10) of the Companies Act, 2013.

A certificate furnished by Mr. Jamshed Naval Cooper,

Managing Director and Mr. Anil Kumar Sharma, Chief Financial Officer in respect of the financial statements and the cash flow statement for the financial year ended 31st March 2018 is annexed as Annexure ‘B’ to this Report.

Management Discussion and Analysis Report is also given as an addition to this Report.

BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a Business Responsibility Report forms part of this Annual Report.

DIRECTORS

There was no change in the Board of Directors during the financial year ended 31st March 2018. Mr. Juan-Francisco Defalque (DIN: 07318811) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for re-appointment. His brief profile is given in the Notice of AGM. The Board recommends his re-appointment by the members at the ensuing AGM.

Independent Directors: Mr. P.G. Mankad (DIN: 00005001), Mr. S. Krishna Kumar (DIN: 01785323) and Mr. Pradeep V. Bhide (DIN: 03304262) were appointed as Independent Directors by the members for a term of five years from 1 stApril 2014 up to 31st March 2019 in the 55th Annual General Meeting held on 19th June 2014 and they continue to be on the Board of Directors. All the independent directors have submitted declarations to the Company that they fulfil the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DISCLOSURES UNDER COMPANIES ACT, 2013

Number of Board Meetings: During the financial year ended 31st March 2018, four board meetings were held. The details of the same are given in the Corporate Governance Report.

Composition of Audit Committee: The Company has an Audit Committee comprising four members namely, Mr. S. Krishna Kumar (Chairman of the Committee), Mr. P.G. Mankad, Mr. P.V. Bhide and Ms. Soek Peng Sim. Other details about the said Committee are given in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Board Evaluation: In accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, that of the directors individually and that of all the Committees constituted by it, namely, the Audit Committee, Nomination and Remuneration Committee, CSR Committee and the Stakeholders’ Relationship Committee. The manner in which the performance evaluation has been carried out has been explained in the Corporate Governance Report.

Policy for appointment and remuneration of directors: The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a ‘Nomination and Remuneration Policy’. The policy inter alia lays down the criteria for determining qualifications, attributes and independence of potential candidates for appointment as directors and determining their remuneration. The said policy is annexed as Annexure ‘C’ to this Report. The Board has also adopted a ‘Board Diversity Policy’ which requires the Board to ensure appropriate balance of skills, experience and d iversity of perspectives in its own com position.

Extract of Annual Return: The extract of the Annual Returnin the prescribed form, MGT - 9 is annexed herewith as Annexure ‘D’.

Key Managerial Personnel: No changes took place in the Key Managerial Personnel (KMP) during the financial year ended 31st March 2018. The following persons continue to be the KMP of the Company:-

- Mr. Jamshed Naval Cooper, Managing Director;

- Mr. Sushil Kumar Tiwari, Whole-time Director;

- Mr. Anil KumarSharma, Chief Financial Officer; and

- Mr. Rajesh Relan, Legal Head & Company Secretary.

General: The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions with respect to these items during the financial year ended 31st March 2018:

- Details relating to deposits covered under Chapter V of the Companies Act, 2013.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of stock options or sweat equity shares.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company’s operations in future.

- Loans, investments, guarantees and securities in terms of Section 186 of the Companies Act, 2013.

INTERNAL FINANCIAL CONTROLS

The Company has in place various internal controls, policies and procedures to ensure orderly and efficient conduct of its business. Standard Operating Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for all critical processes across its operations. The internal financial controls are tested for operating effectiveness through management’s ongoing monitoring and review processes, and independently by the internal auditors. In our view the internal financial controls are adequate and are operating effectively.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and based on the assessment of the management, the Board of Directors makes the following statements in terms of Section 134 of the Companies Act, 2013:

(a) that in the preparation of the accounts for the financial year ended 31 st March 201 8 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2018 and of the profit of the Company for the financial year ended on that date;

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

(d) that the financial statements for the financial year ended 31st March 2018 have been prepared on a ‘going concern’ basis;

(e) that proper internal financial controls were in place and that such internal financial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All the transactions entered into between the Company and its related parties during the financial year ended 31 st March 2018 were in the ordinary course of business and on an arm’s length basis. The particulars of such transactions have been disclosed in the notes to accounts of the Balance Sheet presented in the Annual Report. During the year under review, the Company has not entered into any related party transaction exceeding the threshold limit provided under the Companies Act, 2013/Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A statement of all the related party transactions is placed before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions.

The Company has in place a Policy on Related Party Transactions and a framework for the purpose of assessing the basis of determining the arm’s length price of relevant transactions. The said policy and the framework are annually reviewed by the Audit Committee and the Board of Directors. The same have been posted on the Company’s website. The web-link to access the said policy and framework is as follows: http://mycemco.com/sites/default/files/Related%20Party%20Transaction%20Policy.pdf

RISK MANAGEMENT

One of the factors that distinguish a company’s journey to create sustainable value for its shareholders is its ability to manage the business risks. Many risks exist in the operating environment and may emerge from time to time. The Risk Management processes of the Company ensure that the risks are identified well in time and addressed pro-actively.

The business risks have been classified under the broad heads - strategic, operational, financial and legal & compliance risks. The Company’s Risk Management Policy lays down a bottom-upprocess comprising risk identification, analysis and evaluation, treatment and controlling. Risk owners identify and analyse all risks in their area of operations. The business risks are reviewed by the Senior Management and thereafter evaluated by the Audit Committee and the Board of Directors on a quarterly basis.

VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has established a vigil mechanism / whistle blower policy to deal with the instances of unethical behaviour, fraud, conflict of interest, mismanagement and violation of the Code of Conduct. The details of the vigil mechanism are given in the Corporate Governance Report and the same has been posted on the Company’s website. The web link to access the said policy is as follows: http://mycemco.com/sites/default/files/HCIL%20Whistle%20Blower%20Policy.pdf

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company continues to remain compliant with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which aims to protect women at workplace against any form of sexual harassment and prompt redressal of any complaint. During FY18, the Company received a complaint of sexual harassment against an employee of the Company, which was dealt with in accordance with the provisions of the said Act.

AUDITORS

In accordance with the provisions of Section 139(1) of the Companies Act, 2013 the members had at the 58th Annual General Meeting (AGM) held on 22nd September 2017appointed S.N. Dhawan & Co. LLP., Chartered Accountants, as statutory auditors of the Company up to the conclusion of the 63rd AGM (FY2017-18 to FY2021 -22). It is proposed to pay remuneration of INR 4.5 million to S.N. Dhawan & Co. LLP., for carrying-out audit for FY2018-19. A resolution for obtaining approval of the members for payment of the abovementioned remuneration to the statutory auditors is included in the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members.

The observations of the Auditors in their report on Accounts read with the relevant notes are self-explanatory. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

COST AUDIT

The Company is maintaining cost records in accordance with provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder.

The Cost Audit for the financial year ended 31st March 2017 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as required Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for the financial year ended 31st March 2018 is also being conducted by the said firm and the Report will be filed within the stipulated time.

In accordance with Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 the Board of Directors has on the recommendation of the Audit Committee, appointed M/s. R.J. Goel & Co., Cost Accountants as Cost Auditor of the Company for the financial year 2018-19 on a remuneration of INR 250,000. Pursuant to Section 148(3) of the Companies Act, 2013, a resolution seeking member’s ratification for the remuneration payable to M/s. R.J. Goel & Co., Cost Accountants is included in the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members.

SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice as Secretarial Auditor for carrying out secretarial audit of the Company for the financial year ended 31st March 2018 in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is annexed herewith as Annexure ‘E’. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PARTICULARS OF EMPLOYEES

The particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 shall be provided on request. In accordance with the provisions of Section 136 of the Act, the Board’s Report and the financial statements for the financial year ended 31st March 2018 are being sent to the members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. If any member desires to have a copy of the same, he may write to the Company Secretary in this regard.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, forming part of this Report are annexed as Annexure ‘ F’.

ACKNOWLEDGEMENTS

We are thankful to various agencies of the Central and State Government(s) for their continued support and co-operation.Your Directors are thankful to all stakeholders including Customers, Bankers, Suppliers, Distributors, Dealers, and Contractors for their continued assistance, cooperation and support. The Directors wish to place on record their sincere appreciation to all employees for their commitment and continued contribution to the Company. The Directors are grateful for the confidence, faith and trust reposed by the shareholders in the Company.

For and on behalf of the Board

Place: Gurugram P.G. Mankad

Date: 24th May 2018 Chairman

Source : Dion Global Solutions Limited
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