To the Members,
The Directors are pleased to present the 64 Annual Report together with
the audited financial statements of HeidelbergCement India Ltd. (the Company) for the
financial year ended 31 March 2023 (FY23).
THE YEAR IN RETROSPECT
The year started when global uncertainties were rife. Barely had the
pandemic receded, and the war between Russia and Ukraine broke out in February 2022
leading to a worldwide surge in inflation. Consequently, the central banks across
economies led by the US Federal Reserve responded with synchronized interest rate hikes to
curb inflation. The rate hike by the US Fed drove capital into the US markets causing the
US Dollar to appreciate against most of the currencies. This led to the widening of the
Current Account Deficits and increased inflationary pressures in net importing economies.
Prices of food products, fuels and fertilizers rose sharply. Many developing countries are
under severe economic stress on account of combination of multiple factors such as weaker
currencies, higher import prices, rising cost of living and a stronger dollar making debt
service obligations more expensive.
For India, 2022 marked the 75 year of India's Independence. Despite
facing formidable challenges, India stands tall and steadfast, emerging as a beacon of
resilience in the global economy. The Indian economy after its encounter with the pandemic
not only staged a full recovery but also marched ahead and became the world's
fifth-largest economy. India's GDP grew by 7% in FY23 compared to revised estimate of 9.1%
for the previous financial year. India's economic growth in FY23 was led by private
consumption and capital formation which has led to employment generation as can be
witnessed from declining urban unemployment rate and faster net registrations with
Employees' Provident Fund Organization. Foreign exchange reserve levels are comfortable
and external debt is low. Yet in FY23, India also faced the challenge of reining in
inflation. Measures taken by the Central Government and RBI, along with declining trend in
global commodity prices, have finally brought the retail inflation within RBI's tolerance
limit. Further support to economic growth will come from the expansion of public digital
platforms and path-breaking measures such as PM GatiShakti, the National Logistics Policy,
and the Production-Linked Incentive schemes to boost manufacturing output. The
fundamentals of the Indian economy are sound as it enters its 'Amrit Kaal', the
25-year journey towards its centenary as a modern, independent nation.
FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS
During FY23, the Company produced 4.32 million tonnes of cement
compared to 4.75 million tonnes during the financial year ended 31 March 2022 (FY22), a
decrease of 9.0%. Cement sales during the year were 4.39 million tonnes compared to 4.78
million tonnes in FY22, a decrease of 8.1%.
A snapshot of the Company's financial performance for FY23 vis-a-vis
FY22 is as under:
(INR in Millions)
Particulars |
FY23 |
FY22 |
Revenue from Operations |
22,381.0 |
22,969.6 |
Other Income |
452.9 |
490.7 |
Total Revenue |
22,833.9 |
23,460.3 |
Earnings before Interest, Tax, Depreciation
and Amortization (EBITDA)- |
2,941.4 |
4,836.2 |
Including other income |
|
|
Depreciation and Amortization |
1,123.1 |
1,120.5 |
Finance Cost |
460.6 |
364.4 |
Profit before Tax |
1,357.7 |
3,351.3 |
Total Tax expense |
366.0 |
828.7 |
Net Profit for the year |
991.7 |
2,522.6 |
After brief slowdown in economy there has been unprecedented revival of
growth across all sectors. Demand and consumption have gone up increasing the inflation
that has impacted raw materials, fuels and packaging costs. In line with the global
indexes and owing to demand and production mismatch, domestic prices of various
commodities have also shot up. For cement industry, Coal is a major fuel. The supply
constraints in coal led to its significantly reduced availability, decline in quality and
sudden surge in prices. Your Company has mitigated quality risk by constantly changing its
fuel mix and the supply risks by entering into long term contracts with local companies
exploring new mines, continuous participation in e-auctions etc. Despite intermittent
stoppages of power plants due to lack of demand, your Company was able to source adequate
quantity of flyash to ensure continuity of operations.
Following the increasing trend in commodity prices, crude oil was no
exception. Consequently, diesel prices soared to new heights which had cascading effect on
logistics and packaging costs. Outbound and Inbound movement of cement and raw materials
also posed a challenge on account of shortage of trucks. Your Company managed the
situation by inducting new transporters and managing its Rail-road mix.
Your Company has put in place a robust Supplier's Code of Conduct that
is being strictly adhered to while scouting and registering new suppliers. We have in
place strong annual supplier evaluation and feedback process for major suppliers to ensure
continuous improvement. The Company continues to focus on improving its operating
efficiencies and minimising costs to improve overall operational and financial
performance.
Your Company relentlessly strives to transit from grey to green by
reducing the carbon footprint. As a proponent of sustainability, we ensured uninterrupted
supply of Flyash, Red mud and various other by-products of other industries to reduce
usage of natural resources. A state-of-the-art Alternate Fuels project, which was
commissioned in the last quarter of FY22, stabilised during the year and made its
contribution towards sustainable operations. The Company has also commissioned 5.5 MW
Solar Power Plant in its mining area at Damoh, Madhya Pradesh during FY23.
DIVIDEND
The Board has recommended dividend of INR 7 per share (70%) for FY23,
subject to the approval of the shareholders in the ensuing AGM (Dividend paid during FY22
was INR 9 per share). The proposed dividend for FY23 will absorb INR 1586.3 million.
Therefore, in accordance with the provisions of Companies (Declaration and Payment of
Dividend) Rules, 2014, the Board has proposed to withdraw an amount of INR 594.6 million
from the accumulated profits of the past financial years.
In accordance with the provisions of the Income Tax Act, 1961 the
aforesaid dividend will be taxable in the hands of shareholders but liable for Tax
Deduction at Source (TDS) by the Company at the applicable rates.
Dividend Distribution Policy
Regulation 43A of SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015, requires top 1000 listed companies based on market
capitalization to formulate a Dividend Distribution Policy. In compliance with the said
requirement, the Board of Directors had formulated a Dividend Distribution Policy and the
same is posted on the Company's website. The web-link to access the said policy is as
follows:
https://www.mycemco.com/sites/default/files/PDF/Policies/HCIL_Dividend_Distribution_Policy.pdf
Unclaimed Dividends
The respective due dates on which unclaimed amounts of dividends
pertaining to the prior years will be transferred to 'Investor Education and Protection
Fund' (IEPF), constituted by the Ministry of Corporate Affairs, are given below:
Sr. No. |
Financial Year |
Dividend Per Share (INR) |
Date of declaration |
Date of transfer to IEPF |
1 |
FY2016-17 |
2.00 |
22 September 2017 |
28 October 2024 |
2 |
FY2017-18 |
2.50 |
21 September 2018 |
27 October 2025 |
3 |
FY2018-19 |
1.00 (Interim) |
25 October 2018 |
30 November 2025 |
4 |
FY2018-19 |
3.00 (Final) |
19 September 2019 |
24 October 2026 |
5 |
FY2019-20 |
1.50 (Interim) |
23 November 2019 |
28 December 2026 |
6 |
FY 2019-20 |
6.00 (Final) |
18 September 2020 |
21 October 2027 |
7 |
FY 2020-21 |
8.00 |
27 September 2021 |
01 November 2028 |
8 |
FY2021-22 |
9.00 |
08 September 2022 |
12 October 2029 |
ENVIRONMENTAL SUSTAINABILITY
Natural resources have been the foundation of every modern-day progress
and are critical for our manufacturing processes as well. We are conscious that containing
the environmental impact of manufacturing processes needs significant and systemic
measures. We, therefore, follow a three-pronged approach to fulfil our commitment towards
sustainability: Prevention, Mitigation and Compensation. Committed to deliver on our
Sustainability Goals 2030, we strive to excel in environment protection by reducing our
footprints on water, air and land, and simultaneously drive a circular economy by reducing
waste, recycling and reusing the materials. We remain committed to engage and deliver in
the following key domain areas:
Driving Economic Strength & Innovation
Achieving excellence in Occupational Health and Safety
Reducing our Environment Footprint
Enabling Circular Economy
Being a Good Neighbour
Ensuring Compliance and Transparency
All plants of the Company are ISO 14001 (Environment Management System)
certified. The Company consumed ~34.95% of fly ash in producing PPC cement and ~53.33% of
slag in producing PSC cement thus reducing limestone consumption, preserving limestone
reserves for posterity. During FY23 the Company generated 59064 Mega Watt (MW) of power
from Waste Heat Recovery Power Plant at Narsingarh. During FY23, the Company commissioned
5.5 MW Solar Power Plant in its mining area at Damoh, Madhya Pradesh and generated 9419
Mega Watt (MW) of power. We have also invested in alternative fuels feeding system,
another green initiative which has increased the usage of alternative fuels in kiln.
We have embraced a culture of conservation, and integrated
environmental parameters into our growth aspirations by adopting state-of-the-art
technological interventions, innovative production techniques, resource optimization
measures and sustainable mining practices. Through a series of well-calibrated pre and
post mining measures, the Company strives to reverse the operational impact and at the
same time add value to the economy and community. In our mining operations we lay special
emphasis on soil management, pollution control, biodiversity conservation, maintaining
water balance, and promoting safe mining practices. Post mining, the land is reclaimed
through back-filling and afforestation by planting trees like Rain Tree, Baniyan, Arjun,
Golden Bamboo, Pilkhan (timber), Neem, Indian Rosewood etc. Some of the mined areas have
been developed into large water reservoirs that have become a boon for the villagers since
the harvested rainwater not only recharges the ground water leading to significant
improvement in water table of the area but also serves their irrigation needs. As a result
of these actions, Patharia limestone mines is consistently getting five Star Rating from
Indian Bureau of Mines (IBM) ever since the concept of five Star Rating was introduced by
IBM.
ENRICHING BIODIVERSITY
Development of green belt in the plants and mines provides several
benefits to the environment and the society at large in terms of release of oxygen,
absorption of carbon dioxide and prevention of soil erosion. The green cover extends to
over 38% of the factory area. Water bodies too have been developed to support plantation.
These water bodies and trees are home to a variety of flora and fauna. The enriched
biodiversity provides shelter to numerous species of animals and birds indirectly helping
in improving the happiness quotient of our employees. To increase the green cover, we are
continuously motivating our business associates to plant trees in their region under our
friends of Earth programme. It is a step towards our commitment to make the
world a better place to live for our generations to come.
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
education, rural infrastructure development and healthcare facilities. By promoting local
participation, the company strengthens its bond with local communities. During FY23 the
Company has spent INR 78.50 million on various CSR activities / projects exceeding the
obligations pursuant to Section 135 of the Companies Act, 2013.
The transformation of rural schools in Damoh, Jhansi and Ammasandra in
association with the Education Department has always been a top priority. Through this
initiative, the basic infrastructure of 10 government schools was upgraded, benefiting
over 3,000 students and 95 teachers. Extensive repair and renovation work was carried out
in some schools while in few others existing classrooms were upgraded into digital
classrooms. Scholarships were given to meritorious students to facilitate their higher
education. Educational kits and uniforms were also distributed to students. We are working
in close coordination with the District Women and Child Development Departments of Damoh
and Ammasandra to transform Anganwadi centers into model Anganwadi centers. We believe in
entrepreneurial ability of rural youth and endeavor to make them self-reliant by
developing their skills. Quality training that covers various areas of trade is
tremendously beneficial. To guarantee this, we have partnered with the "Centre for
Entrepreneurship Development (CEDMAP)," supported by the Madhya Pradesh Government.
These courses build skills in many trades, like beautician, sewing and stitching, computer
operations, motor driving etc. These courses are run on a regular basis, and participants
are enrolled for three-months course. A certificate of completion is also provided to all
the students. These courses are being conducted at our skill development centers known as
"Sakshamta Vikas Kendras" in Jhansi and Damoh. During FY23, training was
imparted to 240 rural youth.
We organize health check-up camps at regular intervals to meet
communities' general and specific needs. Under our healthcare program, our mobile medical
van team has regularly organized rural healthcare camps. To promote cattle farming as an
additional source of rural livelihood, the Company has engaged BAIF Institute to provide
facilities such as cattle rearing, vaccination, artificial insemination etc., to the
villagers in Damoh. The Company has also taken steps for upgradation of rural veterinary
hospitals.
The Company continued to extend its support towards development of
infrastructure in the vicinity of its plants and mines viz., construction of concrete
roads, drainage facilities, availability of potable water, solar lights, cremation
grounds, public toilets, bus stand shelters etc.
The Report on CSR activities in the format prescribed by the Ministry
of Corporate Affairs is annexed herewith as 'Annexure - A'.
OCCUPATIONAL HEALTH & SAFETY
Occupational health and safety is a core value for our Company and
safety is at the center of everything that we do. We strive to create a healthy and safe
working environment for our employees, contractors and other stakeholders.
The day at the plants begins with safety gate meetings wherein
important safety aspects are discussed along with safety prayer and pledge. To improve the
Happiness
Quotient among the workmen, people are encouraged to share jokes during
their daily gate meeting and enter plant after having taken the safety pledge. We believe
that it's the Smiles that will take us Miles.
Safety conversations and safety zones are effectively used for employee
engagement and nurturing safety culture in all aspects of operations. Safety zones have
been created at all plants with cross functional teams.
The Heidelberg Materials Group's cardinal norms, guidelines, standards,
and legal requirements along with stipulations under ISO 45001 - Occupational Health and
Safety Management System are being strictly adhered to at all the plants. Employees were
imparted safety induction trainings, refresher courses and job specific trainings like
scaffolding safety, working at height and in confined space etc.
th th
National Safety week was celebrated from 4 -11 March 2023 in a grand
manner across all plants to improve the safety awareness. A schedule of twenty-four most
critical safety hazards relevant to the cement industry has been compiled. Each month, a
safety theme is taken up and its key aspects are deliberated so as to firmly ingrain the
importance of the activity and build a conscious driven safety culture in the
organization. Truck Drivers were also imparted training on defensive driving techniques.
Monitoring of the workplace for noise, particulate matter, free silica and illumination
level is being done as per the regulatory norms. All plants are ISO 45001 certified.
AWARDS AND ACCOLADES
The Company continues to pursue excellence in all areas of its
operations as evident from the recognition in the form of awards and honours.
Jhansi Plant received Safe Workplace Gold Award 2022" from
Apex India Foundation.
Jhansi Plant received 'Energy Efficient Unit' award by Confederation of
Indian Industry.
Diamond Patharia Limestone Mines received Amrit Kalash
Puraskar from Indian Bureau of Mines, Jabalpur.
Diamond Patharia Limestone Mines received 1 prize in
Safety Management Plan and 2 prize in Awareness of Swachhata and
Supervision from Directorate General Of Mines Safety, Jabalpur.
CORPORATE GOVERNANCE
The essence of Corporate Governance lies in promoting and maintaining
integrity, transparency, and accountability. The Company believes in creating and
nurturing relationships based on trust and transparency with all its stakeholders. The
governance framework enjoins the highest standards of ethical and responsible conduct. All
Directors and employees consider governance as their personal responsibility and 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 reinforced the governance regime in India. The
Company is compliant with the corporate governance requirements as prescribed under the
said Regulations. 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. In terms of Regulation 34(3) read with Schedule V of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Corporate
Governance Report pertaining to FY23 forms part of this Annual Report. Pursuant to the
provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, a certificate from M/s. Nityanand Singh & Co., a firm of Company Secretaries in
Practice, confirming compliance with the conditions of Corporate Governance is also
annexed to the Corporate Governance Report. A certificate furnished by Mr. Joydeep
Mukherjee, 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 31
March 2023 is annexed as'Annexure-B' to this Report.
Management Discussion and Analysis Report is also given as an addition
to this Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The maiden Business Responsibility and Sustainability Report (BRSR), as
stipulated under Regulation 34(2)(f) of SEBI Listing Regulations, describing the
initiatives taken by the Company from Environment, Social and Governance (ESG) perspective
forms part of this Annual Report.
DIRECTORS
Change of Whole-time Director
Mr. Sushil Kumar Tiwari retired from the position of Whole-time
Director of the Company with effect from close of business hours on 09 June 2022. The
Board places on record its appreciation for the valuable services rendered by Mr. Tiwari
during his tenure as Whole-time Director of the Company.
Based on the recommendation of Nomination and Remuneration Committee,
the Board of the Directors had approved the appointment of Mr. Vimal Kumar Jain (DIN:
09561918) as Whole-time Director of the Company for a term of three years from 10 June
2022 to 09 June 2025 in place of Mr. Sushil Kumar Tiwari. The shareholders of the Company
at the last AGM held on 08 September 2022 had also approved the appointment Mr. Vimal
Kumar Jain as Whole-time Director of the Company.
Change of Managing Director
The Board of Directors of the Company at its meeting held on 13
February 2023 deliberated on the request of Mr. Jamshed Naval Cooper (DIN-01527371) with
respect to his retirement from the position of Managing Director and relieving him prior
to the end of his third term. The Board after considering the request of Mr. Cooper,
accepted his resignation and decided to relieve him from the position of Managing Director
with effect from close of business hours on 31 March 2023. The Board has placed on record
its appreciation for the valuable services and support provided by Mr. Cooper as Managing
Director of the Company.
Based on the recommendation of Nomination and Remuneration Committee,
the Board of Directors had approved the appointment of Mr. Joydeep Mukherjee
(DIN-06648469) as new Managing Director for a term of three years from 01 April 2023 to 31
March 2026 in place of Mr. Jamshed Naval Cooper.
The Board also recommended the resolutions to be passed by the
shareholders for appointment of Mr. Joydeep Mukherjee as Managing Director of the Company,
which were duly passed by the shareholders through postal ballot on 27 April 2023.
Retirement by rotation
Ms. Soek Peng Sim, Director retires by rotation at the ensuing AGM and
being eligible has offered herself for reappointment. Her brief profile is given in the
Notice of AGM. The Board hereby recommends her reappointment.
Declaration of Independent Directors
Mr. Ramakrishnan Ramamurthy and Ms. Jyoti Narang, Independent Directors
on the Board have submitted declarations to the Company that they fulfill the criteria of
independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation
16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Board of Directors, based on the declarations received from the
Independent Directors after duly verifying the veracity of such declarations, hereby
confirms that the Independent Directors fulfill the conditions of independence specified
in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are
independent of the management of the Company.
DISCLOSURES UNDER COMPANIES ACT, 2013
Number of Board Meetings: During FY23, four Board Meetings were
held. The details of the same are given in the Corporate Governance Report.
Composition of Audit Committee: The Audit Committee of the Company
as on 31 March 2023 comprised three members namely, Ms. Jyoti Narang (Chairperson of the
Committee), Mr. Ramakrishnan Ramamurthy and Ms. Soek Peng Sim.
Board Evaluation: In accordance with the provisions of the
Companies Act, 2013 and the 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, Corporate Social
Responsibility Committee, Stakeholders Relationship Committee and Risk Management
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, formulated 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 salient features of the
Policy have been provided in Corporate Governance Report. The said Policy has been posted
on website of the Company and the weblink to access the said policy is as follows:
https://www.mycemco.com/sites/default/files/PDF/Policies/Nomination_and_Remuneration_Policy.pdf
The Board has also adopted a Board Diversity Policy which
requires the Board to ensure appropriate balance of skills, experience and diversity of
perspectives in its own composition.
Annual Return: The Annual Return of the Company for FY22 already
filed with the Ministry of Corporate Affairs (MCA) and the draft Annual Return for FY23
are available on the website of the Company and the weblink to access the same is as
follows:
https://www.mycemco.com/financial-results
After the filing of Annual Return for FY23 with MCA, the aforesaid
draft version of the Return will be replaced with the final version.
Key Managerial Personnel: Details of Key Managerial Personnel of
the Company are given below:
Mr. Joydeep Mukherjee, Managing Director (with effect from 01 April
2023);
Mr. Jamshed Naval Cooper, Managing Director (up to 31 March 2023);
Mr. Vimal Kumar Jain, Whole-time Director (with effect from 10 June
2022);
Mr. Sushil Kumar Tiwari, Whole-time Director (up to 09 June 2022);
Mr. Anil Kumar Sharma, Chief Financial Officer; and
Mr. Rajesh Relan, Sr. Vice President- Corporate Affairs & Company
Secretary.
LOANS, GUARANTEES, SECURITY, AND INVESTMENTS
During FY23, the Company has not given any loan, guarantee or security
pursuant to the provisions of section 186 of the Companies Act, 2013.
The Loan of INR 1500 million which was given to Zuari Cement Limited (a
fellow subsidiary) in FY21 was fully repaid by Zuari Cement Limited on the respective due
dates in FY23. As on 31 March 2023, there is no outstanding loan appearing in the
Financial Statements of the Company.
During FY23, the Company has not made any investment or issued any
guarantee or provided any security.
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 FY23:
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 impacting the going concern status and the Company's operations in
future.
INTERNAL FINANCIAL CONTROLS
The Company has in place relevant 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 critical processes
across all 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 annual accounts for the
financial year ended 31 March 2023 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 31 March 2023 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, 2013 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 31 March 2023 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 transactions entered between the Company and its related parties
during the financial year ended 31 March 2023 were in the ordinary course of business and
on an arm's length basis. The particulars of such transactions have been disclosed in
notes to the financial statements for FY23. During the year under review, the Company has
not entered in 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. Omnibus approvals are obtained for the
transactions which are foreseeable and are repetitive in nature. 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 reviewed by the Audit Committee and the Board of Directors from time to
time. The same have been posted on the Company's website. The web-link to access the said
policy and framework is as follows:
https://www.mycemco.com/sites/default/files/PDF/Policies/Related_Party_Transaction_Policy.pdf
RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management
Committee for reviewing and monitoring the risk management plan of the Company and
ensuring its effectiveness. 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-up process comprising risk identification, analysis
and evaluation, treatment and controlling. The Chief Risk Officer and the Risk owners
identify and analyse risks in their area of operations. The risks faced by the Company,
their impact and the mitigation measures are categorised as high, medium and low risks
which are then reviewed by the Senior Management and the critical ones are placed before
the Risk Management Committee / Board of Directors for review.
The Board provides oversight and reviews the Risk Management Policy.
The Board along with Risk Management Committee is responsible for framing, implementing
and monitoring the risk management plan of the Company. During the year under review,
Internal auditors, had also tested the Risk & Control Matrices for various processes
as a part of Internal financial control framework.
The details of the functioning of the Risk Management Committee and
frequency of its meetings are provided in Report on Corporate Governance forming part of
this Annual Report.
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. During FY23 no complaint was received
under the Vigil Mechanism. The details of the vigil mechanism are given in the Corporate
Governance Report and a copy of the same has been posted on the Company's website. The
weblink to access the same is as follows:
https://www.mycemco.com/sites/default/files/PDF/Policies/W.e.f.19.10.2021_HCIL_Whistle_Blower_Policy_English.pdf
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
The Company is 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 FY23, no complaint was received by the Company in this regard.
AUDITORS
In accordance with the provisions of Section 139(1) of the Companies
Act, 2013 the members at the 63 Annual General Meeting (AGM) of the Company held on 08
September 2022 had reappointed M/s. S.N. Dhawan & Co. LLP., Chartered Accountants, as
statutory auditors of the Company for second term to hold office up to the conclusion of
the 68 AGM i.e., for conducting statutory audits commencing from FY 2022-23 until FY
2026-27. The observations of the Auditors in their report on Financial Statements read
with the relevant notes are self-explanatory. The Independent Auditors' Report does not
contain any qualification, reservation or adverse remarks.
COST AUDIT
The Company is maintaining cost records in accordance with the
provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder. The
Cost Audit for FY22 was conducted by M/s. R.J. Goel & Co., Cost Accountants, Delhi.
The 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 FY23 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 FY24 on a remuneration of INR 2,75,000.
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
for FY24 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 31 March 2023 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-C'. The
Secretarial Audit Report does not contain any qualification, reservation, or adverse
remarks.
Secretarial Compliance Report: Under Regulation 24A of SEBI Listing
Regulations it is mandatory for listed companies to annually submit a Secretarial
Compliance Report to Stock Exchanges. M/s. Nityanand Singh & Co. has furnished
Secretarial Compliance Report for FY23. The said Report does not contain any
qualification, reservation, or adverse remarks. The said Report has been filed with Stock
Exchanges and has also been placed on website of the Company. The web link to access the
same is as under:
https://www.mycemco.com/sites/default/files/PDF/Secretarial_Compliance_Report/Financial_Year_2022-2023.pdf
PARTICULARS OF EMPLOYEES
The particulars of employees required pursuant to Section 197 of the
Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 form part of this Report and are annexed as
'Annexure-D'. In accordance with the provisions of Section 136 of the Act, the Board's
Report and the financial statements for the financial year ended 31 March 2023 are being
sent to the members and others entitled thereto, excluding the details to be furnished
under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014. However, the information required under aforesaid rule 5(2) 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, form part
of this Report and are annexed as'Annexure-E'.
ACKNOWLEDGEMENTS
Your Directors are thankful to all stakeholders including Customers,
Bankers, Suppliers, Dealers, and Contractors for their continued assistance, co-operation,
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. We are thankful to various agencies of the Central and State Government(s) for
their continued support and co-operation.
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For and on behalf of the Board |
Place: Bengaluru |
Ramakrishnan Ramamurthy |
Date: 29 May 2023 |
Chairman |
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