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EQUITY - MARKET SCREENER

Srikalahasthi Pipes Ltd(Merged)
Industry :  Steel - Medium / Small
BSE Code
ISIN Demat
Book Value()
513605
INE943C01027
329.3349615
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
SRIPIPES
5.67
939.34
EPS(TTM)
Face Value()
Div & Yield %
35.46
10
2.98
 

As on: Mar 29, 2024 05:53 PM

Dear Shareholders,

Your Directors take pleasure in presenting the 29th Annual Report on the business and operations of the Company, together with the audited financial statements for the Financial Year ended 31st March, 2021.

STATE OF COMPANY’S AFFAIRS:

FINANCIAL HIGHLIGHTS Rs. in Lakhs
Particulars 2020-21 2019-20
Revenue from operations 1,50,258.53 1,66,290.16
Other income 5,633.71 6,369.32
Total Revenue 1,55,892.24 1,72,659.48
Earnings Before Interest, Depreciation, Taxation & Amortisation (EBITDA) 23,722.39 32,388.92
Finance Costs 4,555.96 4,620.06
Depreciation 4,624.24 4,116.71
Profit/(Loss) Before Taxation 14,542.19 23,652.15
Less: Tax including Deferred Tax 4,176.96 4,884.53
Profit/(Loss) After Taxation 10,365.23 18,767.62

DIVIDEND:

Your directors recommend payment of dividend of Rs.6/- (60%) per equity share of Rs.10/- each for the financial year ended 31st March, 2021 (previous year Rs.7.00 per share) amounting to Rs.2801.90 lakhs. The dividend payout is subject to approval of the members at the ensuing Annual General Meeting.

RESERVES:

During the year under review, the Company proposes to transfer Rs.5,000 lakhs to the General Reserve.

SHARE CAPITAL

The paid up equity share capital of your Company as on 31 March 2021 was Rs.46.70 Crores. There was no fresh issue of capital during the year under review. The Company has neither issued shares with differential voting rights, sweat equity shares, nor has it granted any stock options.

REVIEW OF OPERATIONS:

During the FY 2020-21, your Company has produced 2,37,156 MT of Ductile Iron Pipes, which is lower by 56,335 MT compared to the FY 2019-20. The Company has lost production during entire April’20 due to shutdown of the plant following nationwide lockdown imposed by the Central Government to contain the spread of Covid19 pandemic. Though, production has started in a phased manner from 1st week of May, 2020, due to absenteeism consequent to the nationwide lockdown, plant could not be operated at full capacity till August, 2020, which has resulted in lower production during the year under review compared to FY 2019-20. Your directors are pleased to inform that your Company has come out of the clutches of the Pandemic, restoring normalcy from September, 2020 and the plant has been operating at full capacity.

Your Company continues to play a constructive role in the nation building movement by contributing to water supply and infrastructure development in the country, which are the thrust areas of the Government. During the FY 2020-21, your Company’s Ductile Iron Pipes of about 6,500 KM have been used for transportation of potable water and sewerage under its brand name "SRIPIPES" for various prestigious water projects across the country, thus increasing its market share further.

Production at a glance:

Product

2020-21

2019-20

% of Change

Prod. Sales * Prod. Sales * Prod. Sales
Ductile Iron Pipes (MT) 2,37,156 2,46,973 2,93,491 2,85,848 -19.19 -13.60
Liquid metal from MBF (MT) 2,58,978 2,59,925 2,99,477 2,98,326 -13.52 -12.87
LAM Coke (MT) 1,68,499 1,78,375 1,67,240 1,75,101 0.75 1.87
Cement (MT) 81,788 82,554 60,654 60,719 34.84 35.96

During the year under review, your Company has reported

ProfitBefore Tax (PBT) of Rs. 145.42 Crores, which is lower by 38.52% compared to FY 2019-20. The decline in the profitability of your Company is largely attributable to reduced production on account of Covid-19 pandemic. Your Company has registered a reduction of about 19.25% in revenue from Ductile Iron Pipes at Rs.1,127.15 Crores as compared to Rs.1,395.60 Crores achieved during the FY 2019-20. The EBITDA of the Company was also lower at Rs.237.22 Crores and the Profit After Tax (PAT) being Rs.103.65 Crores compared to Rs. 323.89 Crores and Rs.187.67 Crores, respectively, achieved during the FY 2019-20.

FUTURE PROSPECTS:

Although Covid-19 pandemic has impacted the execution of Phase I of expansion plans envisaged during the FY 2019-20 to install new MBF, additional Hot Blast Stoves, Raw material handling system, though delayed, has reached to the stage of completion of the said project. However, due to 2nd wave of the pandemic, the proposed capital shutdown for the commissioning of new blast furnace may get slightly delayed for mobilization of resources required for the shutdown. Post commissioning, the capacity of mini blast furnace will be increased from 3,00,000 TPA to 5,00,000 TPA. Further, in connection with augmenting the production capacity of DI Pipes to 4,00,000 TPA in line with blast furnace production capacity, facilities like additional Annealing Furnace, new induction furnace in place of existing induction furnace 3, relocation of rework bay and 1200 dia production facilities have been completed and other facilities like zinc coating machine for finishing line 3, new induction furnace in place of existing induction furnace 2, upgradation of converter will be taken up during the capital shutdown for commissioning of new blast furnace. Upon completion of these facilities, the capacity of DI Pipe Plant will also be increased to 4,00,000 TPA. The Company is having comfortable order book for supply of Ductile Iron pipes. During this Covid-19 situation, safe and hygienic water supply is most important for the Government. Ductile Iron pipe is the safest and most suitable pipe for transportation of water not only in urban cities but also in rural India. The Company is hopeful that Central and State Governments will continue to give priority and remain committed in respect of ongoing and future water supply, sewerage and irrigation and other projects in the country. With enhanced production capacity, the company should be able to serve more customers and will command more market share.

AMALGAMATION WITH ELECTROSTEEL CASTINGS LIMITED:

The Company and Electrosteel Castings Limited are under the control of common promoter group and both the Companies are engaged in the same line of business, i.e., manufacture and sale of ductile iron pipes and both have common economic objective and strategic goals. Considering various advantages of amalgamation, viz., operational synergies, greater efficiency and economical operations for future growth of the combined entities, efficient utilization of capital, superior deployment of brand promotion, sales strategies and creation of a consolidated and diversified base for future growth with a wider presence in the Ductile Iron Pipe segment, prevention of cost duplication, administrative and operational rationalization and promote organizational efficiencies, the Board of Directors of the Company, at its meeting held on 5th October, 2020, had approved the proposal and the Scheme of amalgamation of the Company with Electrosteel Castings Limited.

Subsequently, the Scheme application was filed by the Company under Regulation 37 of Listing Regulations, 2015 with both National Stock Exchange of India Limited and BSE Limited and the same have been reviewed by the exchanges and the observation letters were forwarded to SEBI by both the exchanges. SEBI having scrutinized the Scheme application had accorded its approval for the proposed Scheme of Amalgamation. Both the exchanges have issued their respective Observation/No-Objection Letters, dated 25 February, 2020, for the aforesaid proposed Scheme of amalgamation. Further, the Company has received the approval of Competition Commission of India for the proposed Scheme.

Upon receiving the aforesaid Observation/No-Objection

Letters, the Company had filed its application with National

Company Law Tribunal (‘NCLT’), Amaravathi Bench at Hyderabad, where the initial hearing was held on 19th March, 2021. NCLT, Amaravati Bench, vide order dated 30 April, 2021, has directed that the meetings of shareholders and creditors be held on 16 June, 2021 for, inter alia, approving the Scheme. In view of the various circulars issued by Ministry of Corporate Affairs and taking into consideration the prevailing Covid-19 pandemic situation, the Company is in the process of holding the said meetings through Video Conference/Other Audio Visual Means.

Application filed by Electrosteel Castings Limited before the NCLT, Cuttack Bench, is pending for hearing and order.

CREDIT RATING:

India Ratings & Research has assigned its rating for the Company’s long term borrowing programmes and fund based working capital facilities with IND AA-/RWN and rating IND A1+/RWN for the Company’s non-fund based working capital facilities and Commercial Paper. The Company has withdrawn the ratings assigned by CARE Ratings Limited (‘CARE’) for the long-term bank facilities as "CARE A+; Stable" and for short-term bank facilities as "CARE A1+".

CHANGES IN DIRECTORS/KEY MANAGERIAL PERSONNEL:

Resignation of Independent Directors:

During the year under review, Mr X.J.J. Abraham and Mrs S. Hemamalini, Independent Directors, have resigned from their directorships with effect from close of working hours of 9th and 10th September, 2020, respectively, due to health reasons and pre-occupation with other commitments, respectively. Your Directors place on record their sincere appreciation for the active participation and valuable contributions rendered to the Company by them during their association with the Company.

Appointment of Independent Director:

Upon the recommendation of Nomination and Remuneration Committee, the Board has approved the appointment of Dr Mohua Banerjee as an Additional Director (independent) of the Company for a period of five years with effect from 16th November, 2020, subject to the approval of the shareholders of the Company. Your Company has received a notice under Section 160 of the Companies Act, 2013 from a shareholder of the Company, signifying his intention to propose the name of Dr Mohua Banerjee, for appointment as an Independent Director of your Company in the ensuing Annual General Meeting.

An affirmation had been received from Dr Banerjee that she is not debarred or disqualified from being appointed as Director of companies/holding the office of director pursuant to any order of the SEBI, Ministry of Corporate Affairs or any such statutory authority. Brief profile Mohua Banerjee and requisite consents, disclosures and declarations received from her have been given in the Notice of the ensuing Annual General Meeting, for the perusal of the shareholders.

Re-appointment of director:

Mr Ashutosh Agarwal retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

In compliance with Regulation 36(3) of the Listing Regulations and Secretarial Standard-2 on General Meetings, brief resume and other information of all the Directors proposed to be re-appointed are given in the Notice of the ensuing Annual General Meeting.

Appointment of Chief Executive Officer:

Upon the recommendation of Nomination and Remuneration Committee, the Board has approved the appointment of Mr S.N. Goswami as Chief Executive Officer of the Company with effect from 6th August, 2020.

There were no other changes in the Board and the Key Managerial Personnel during the year under review.

Independent Directors:

The Company has received declarations from the Independent Directors confirming that they meet with the criteria of independence as prescribed both under subsection (6) of Section 149 of the Companies Act, 2013 and under SEBI’s Listing Regulations, 2015, as amended from time to time.

Further, in terms of Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014, as amended, the Board of Directors state that in the opinion of the Board, Dr Mohua Banerjee, who has been appointed as an Additional Director (Independent), is a person of integrity and possesses relevant expertise and experience. Further, Dr Banerjee has successfully qualified the online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.

The Board of Directors of your Company confirms that plans are in place for orderly succession for appointment to the board of directors and senior Management and they are reviewed every year.

CORPORATE GOVERNANCE:

Your Company ensures to evolve and follow the corporate governance guidelines and best practices to enhance long term shareholder value. Your Company considers it an inherent responsibility to disclose timely and accurate information regarding its operations as well as governance of the Company.

A separate section on Corporate Governance and the certificate from the Practicing Company Secretary confirmingcompliance of Corporate Governance norms as stipulated in Regulation 34 read along with Schedule V of the SEBI Listing Regulations, forms part of this Report at Annexure I.

INTERNAL FINANCIAL CONTROLS & ADEQUACY:

The Company has an adequate system of internal controls in place. It has documented policies and procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting and monitoring of operations, and protecting assets from unauthorized use or losses, compliances with regulations. The Company has continued its efforts to align all its processes and controls with global best practices.

The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed. The framework on Internal Financial Controls over Financial Reporting has been reviewed by the Internal and Statutory auditors.

The Company’s internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control stated in the guidance note on audit of internal control over financial reporting issued by the Institute of Chartered Accountants of India.

The Audit committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements wherever needed to strengthen the same.

MANAGEMENT DISCUSSION AND ANALYSIS:

In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), discussion on state of Company’s affairs has been covered as part of the Management Discussion and Analysis (MDA) in a separate section vide Annexure II to this Report.

RISK MANAGEMENT POLICY:

The Company has a well to identify and evaluate business risks, which protects and adds value to the organization by minimizing adverse effect on the business of the Company. The major risks identified by the functions are systematically addressed through mitigating actions on a continuous basis. The risks are evaluated, quantified & prioritized and mitigation plans are reviewed & monitored at various stages. The major risks connected with the business, their likely bearing on the performance of the Company and their mitigation are covered under Risks and Concerns Section of the Management Discussion and Analysis, which forms part of this report.

NOMINATION & REMUNERATION POLICY:

The Board has adopted a Nomination and Remuneration Policy recommended by Nomination and Remuneration Committee in terms of the provisions of Section 178 of the Act. The Nomination and Remuneration Policy is available at the Company’s website http://www.srikalahasthipipes. com/static-files/pdf/policies/Nomination%20and%20 Remuneration%20Policy.pdf.

The Nomination and Remuneration Committee of the Company is in compliance with the provisions of Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the terms of reference to the Committee include :-

• To guide the Board in relation to appointment, retention and removal of Directors, Key Managerial Personnel and Senior Management.

• To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.

• To recommend to the Board on remuneration payable to the Directors and Key Managerial Personnel.

• Recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.

• Devise a policy on Board diversity.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

Your Company understands its social responsibility and remain focussed to support those from the socially and economically backward groups and remain focussed to improve the quality of life of the various communities.

In this process, your Company has identified several corporate social responsibility initiatives relating to Social Empowerment & Welfare, Village development, Health Care, Education and animal welfare during the year and initiated various activities in neighbouring villages around plant locations.

The Board has adopted a Corporate Social Responsibility Policy (CSR Policy), in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 read with section 134 (3) and 135 (2) of the Companies Act, 2013, including the contents of the CSR Policy, composition of the Committee and other particulars, is at Annexure III to this Report.

During the FY 2020-21, the Company has spent Rs.387.85 lakhs as against Rs.386.39 lakhs which was required to be spent, towards various CSR activities viz. promotion of education, village development, medical health and animal welfare, which are covered in detail in the Report on CSR, which forms part of this report. Further, the unspent CSR amount of Rs.5.04 lakhs relating to FY 2019-20, which was earmarked for the purpose of animal welfare and protection, has been remitted by the Company in a separate "Unspent Corporate Social Responsibility Account" and the entire amount has been spent towards the intended project during the FY 2020-21.

Your Company continues to stay focussed on initiatives that would auger well for the overall development of the communities and make a difference in the quality of living of the underprivileged.

WHISTLE BLOWER MECHANISM (POLICY):

The Company has a vigil mechanism named Whistle Blower Policy / Vigil Mechanism wherein, Employees/ Directors/Stakeholders of the Company are free to report any unethical improper activity, actual or suspected fraud or violation of the Company’s Code of Conduct. The Policy provides for adequate safeguard against victimization of employees who avail the mechanism and also provides direct access to the Chairman of the Audit Committee. During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company’s website at http://www.srikalahasthipipes.com/ static-files/pdf/policies/Whistle%20Blower%20Policy.pdf

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY:

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made there-under, your Company has constituted Internal Complaints Committee (ICC). While maintaining the highest governance norms, the Company has zero tolerance for sexual harassment at workplace. During the year 2020-21, the Company has not received any complaint of sexual harassment.

BOARD EVALUATION:

The Board of Directors carry out an annual evaluation of its performance, and the performance of its Committees as well as individual Directors. The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The criteria for the performance evaluation of the Board of Directors includes aspects such as its composition and structure, and the effectiveness of its processes, information flowand functioning. The criteria for the performance evaluation of individual Directors includes aspects, such as the Director’s contribution to the Board of Directors and Committee meetings, including preparation on the issues to be discussed as well as meaningful and constructive contribution and inputs during meetings. In addition, the Chairperson is evaluated on the key aspects of his/her role.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.

In a separate meeting of independent directors, performance of non-independent directors, performance of the Board as a whole, performance of the Committee(s) of the Board and performance of the Chairman was evaluated, taking into account the views of other directors. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

FAMILIARISATION PROGRAMME:

All the Board members of the Company are provided every opportunity to familiarize themselves with the Company, its management, its operations and industry perspective on a regular basis. They are made to interact with senior management personnel and proactively provided with relevant news, views and updates on the Company and sector. All the information/documents sought by them is/are also shared with them for enabling a good understanding of the Company, its various operations and the industry.

The Company organised an online presentation to the independent directors during which the Senior Management team apprised the directors on the detailed operational aspects. The Directors were also apprised on key aspects of operations and market trend and the Company’s performance and its future projects.

The details of programmes for familiarisation for Independent Directors are posted on the website of the Company at www.srikalahasthipipes.com

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year 2020-21 are given in the Corporate Governance Report which forms part of this report.

RELATED PARTY TRANSACTIONS:

All related party transactions (RPTs) entered into by the Company with its related parties during the year under review were on arms’ length basis and in the ordinary course of business and did not attract provisions of Section 188 of the Companies Act, 2013, thus disclosure in Form AOC-2 is not required. During the year 2020-21, as required under Section 177 of the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations, 2015, all RPTs were placed before Audit Committee for its approval.

A statement showing the disclosure of transactions with related parties as required by Ind AS 24 is given separately in this Annual Report under notes to financial statements.

There were no material transactions entered into with related parties, during the year under review, which may with the interests of the have had any potential conflict Company.

The Company has formulated a policy on "Related Party Transactions" and the process of dealing with such transactions, which are in line with the provisions of the Companies Act, 2013 and SEBI LODR. The same is available on the website of the Company http://www. srikalahasthipipes.com/static-files/pdf/policies/related-party-transaction-policy.pdf.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However, in terms of Section 136 of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said statement is available for inspection by the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee’s remuneration and other details in terms of subsection 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is forming part of this report vide Annexure IV.

Energy conservation, technology absorption and foreign exchange earnings and outgo:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure V and forms part of this report.

Annual Return:

Pursuant to Section 92(3), read with Section 134(3)(a) of the Act, a copy of the Annual Return of the Company as on the Financial Year ended 31 March, 2020, in Form No. MGT-7, can be accessed on the website of the Company, at http://www.srikalahasthipipes.com/investors/ compliancereports/annualreturn.aspx.

Further, pursuant to Section 92(3) of the Act, the Annual Return of the Company as on the Financial Year ended 31 March, 2021, will be duly uploaded on the website of the Company, at http://www.srikalahasthipipes.com/investors/ compliance-reports/annual-return.aspx,upon filing of the same with the Registrar of Companies, under Section 92(4) of the Act.

OTHER DISCLOSURES:

Particulars of information forming part of the Board’s Report pursuant to Section 134 of the Companies Act, 2013 and relevant Rules thereof, not covered elsewhere in the report are given hereunder:

1. The Company, as per its policy, has granted loans to employees aggregating Rs.39.32 lakhs during the year ended 31st March, 2021.

2. Particulars of Loans or investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this

Annual Report. These loans are primarily granted for effective utilization of surplus funds available with the Company.

3. There are no material changes or commitments occurring after 31st March, 2021, which may affect the financial position of the Company or may require disclosure.

4. During the year under review, there has been no change in the nature of business of the Company.

5. The Company did not have any subsidiaries, joint ventures and associate companies, which have ceased during the year.

6. The Company has not accepted deposits under Chapter V of the Companies Act, 2013.

7. The Company has not received any such orders from Regulators, Courts or Tribunals during the year, which may impact the going concern status or the Company’s operations in future.

8. The Company is in compliance with the Se cretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS - 1) and General Meetings (SS - 2).

9. Details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government – Not Applicable.

10. Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year - Not Applicable.

11. Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof -

Not Applicable.

12. Suspension of trading of Securities -Not applicable as none of the securities of the Company are suspended from trading.

STATUTORY AUDITORS:

M/s. Lodha & Co., Chartered Accountants (Firm Reg. No. 301051E), were appointed as Statutory Auditors of the

Company for a term of five years (subject to ratification by shareholders at every AGM, if required, under the prevailing law at that time) to hold office from the conclusion of 25th Annual General Meeting held in 2017 till the conclusion of 30th Annual General Meeting of the Company to be held in 2022.

The requirement to place the matter relating to appointment of the Auditors for ratification by the members at every Annual General Meeting is done away with vide notification dated 7th Ministry of Corporate Affairs. Accordingly, no resolution is of appointment of the Auditors, proposedforratification who were appointed in the Annual General Meeting held on 27th September, 2017. Further, the Notes on financial statements referred to in the Auditors’ Report are self- explanatory and do not call for any further comments.

The Auditors’ Report does not contain any qualification, reservation or adverse remark.

MAINTENANCE OF COST RECORDS AND AUDIT THEREOF:

The Company is required to maintain cost records for Cement & Steel (DI Pipes) for every Financial Year, as specified by the Central Government under Section 148(1) of the Act, and accordingly, such accounts and records are made and maintained in the prescribed manner.

In terms of the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed (particulars of the Cost Auditor for 2020-21 shall be mentioned first) M/s. Narasimhamurthy & Co., Cost Accountants, Hyderabad as Cost Auditors, to conduct the cost audit of your Company for the financial year ending 31st March, 2022, at a remuneration as mentioned in the Notice convening the Annual General Meeting. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member’s ratification for the remuneration payable to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting. The Cost Audit Report of the Company for the Financial Year ended 31 March, 2020, as given by M/s Narasimhamurthy & Co., was filed in XBRL mode with the Ministry of Corporate Affairs within the stipulated due date.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules thereunder, Mr. S. Chidambaram, Company Secretary in Practice was appointed to conduct the secretarial audit of the Company for the FY 2020-21.

The secretarial audit report confirming compliance by Practicing Company Secretary to the applicable provisions of the Companies Act, 2013, SEBI LODR Regulations, 2015 and other applicable laws is appended at Annexure VI to this report and it does not contain any qualification, reservation or adverse remark.

INTERNAL AUDITORS:

In line with the provisions of Section 138 of the Companies Act, 2013, M/s. Chaturvedi & Co, Chennai were appointed by the Board as Internal Auditors of the Company for the FY 2020-21. The Audit Committee defines the scope of internal audit from time to time and also reviews the observations 2018issuedbythe of internal auditors and the action taken report submitted by the management on the observations at its meeting held every quarter and also suggests the management the improvements required in the systems followed by the Company.

GREEN INITIATIVE:

In support of "Green Initiative" taken by the Ministry of Corporate Affairs ("MCA") in the Corporate Governance" by allowing service of documents by a Company to its Members through electronic mode, the Company will continue to send various communications and documents like notice calling general meetings, audited financial statements, directors’ report, auditor’s report etc., in electronic form, to the email address provided by the Members to the Depositories or to the Company.

Your Company impresses upon its shareholders to contribute to this green initiative in full measure by registering their e-mail addresses, in respect of electronic holdings with the Depository through their concerned Depository Participant. Members whose e-mail ID is not registered with the Company/Depositories are requested to take necessary steps for registering the same so that they can also become a part of the initiative and contribute to the Green Movement.

ANNEXURES TO THE BOARD’S REPORT:

1. Corporate Governance Report is enclosed vide Annexure – I.

2. Pursuant to Regulation 34 of Listing Regulations, 2015, Management Discussion and Analysis Report is enclosed vide Annexure – II.

3. Pursuant to Section 135 (4) (a) of the Companies Act, 2013 read with Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on CSR activities in the prescribed format, forming part of the Director’s Report is enclosed vide Annexure – III.

4. Disclosure under Section 197 (12) read with Rule 5(1) of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014 is enclosed vide Annexure – IV.

5. Pursuant to Section 134 (3) (m) of the Companies Act, 2013, information relating to Conservation of Energy, Technology absorption and foreign exchange earnings and outgo is enclosed vide Annexure –V.

6. Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014, the Secretarial Audit Report is enclosed vide Annexure – VI.

7. Pursuant to Regulation 34 of Listing Regulations, 2015, Business Responsibility Report is enclosed vide Annexure VII.

DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms that:

I. In the preparation of annual accounts for the Financial Year ended 31st March, 2021, the applicable accounting standards have been followed and there has been no material departure.

II. The selected accounting policies were applied consistently and the Directors 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 as at 31st March, 2021 and of the profit of the Company for the financial year ended 31st March, 2021.

III. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. The annual accounts have been prepared on a going concern basis.

V. Sufficient internal financial controls have been laid down and such internal financial controls are adequate and were operating effectively, and VII. Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS:

Your Directors wish to convey their appreciation to all of the Company’s employees for their contribution towards the Company’s performance. Your Directors would also like to thank the shareholders, employee unions, customers, dealers, suppliers, bankers, Governments and all other business associates for their continuous support to the Company and their confidence in its management on behalf of the Board.

Your Directors also wish to place on record their appreciation for the valuable support received by your Company from Banks, Govt. Authorities, Customers, Auditors and other stakeholders. The Board thanks the employees at all levels for the dedication, commitment and hard work put in by them for Company’s achievements. Your Directors are grateful to the Shareholders/ Stakeholders for their confidence and faith reposed in the management of the Company.

Your Directors also place on record their sincere appreciation for the valuable guidance received from Mr Mayank Kejriwal, Managing Director and for his useful contribution, which is instrumental in shaping the progressive growth of your Company.

For and on behalf of the Board of Directors

R.K. Khanna

Chairman

(DIN:05180042)

Dated: 4th May, 2021