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Company Information

Home » Market » Company Information

Greenlam Industries Ltd.

Jan 25
1775.55 +1.20 (+ 0.07 %)
 
VOLUME : 411
Prev. Close 1774.35
Open Price 1776.05
TODAY'S LOW / HIGH
1698.80
 
 
 
1782.05
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
790.00
 
 
 
2024.90
Jan 25
1776.45 +2.55 (+ 0.14 %)
 
VOLUME : 3521
Prev. Close 1773.90
Open Price 1771.00
TODAY'S LOW / HIGH
1712.20
 
 
 
1788.30
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
790.00
 
 
 
1997.40
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Market Cap. ( ₹ ) 4287.71 Cr. P/BV 7.48 Book Value ( ₹ ) 237.60
52 Week High/Low ( ₹ ) 1997/790 FV/ML 5/1 P/E(X) 58.13
Bookclosure 12/08/2021 TTM EPS ( ₹ ) 41.89 Div Yield (%) 0.28
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2018-03 

Directors' Report

FOR THE FINANCIAL YEAR 2017-18

Dear Shareholders,

The Directors have the pleasure in presenting the 5th Annual Report on the business and operations of the Company along with the Audited Financial Statements of the Company for the financial year ended March 31, 2018.

Financial Highlights

(RS, in Lacs)

Particulars

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Profit before Finance Cost, Depreciation & Amortisation Expenses and Tax Expenses*

13,875.93

12,556.89

15,052.93

14,084.39

Less: a) Finance Costs

1,597.69

2,544.74

1,805.22

2,854.94

b) Depreciation & Amortisation Expenses

3,312.37

3,339.70

3,595.27

3,664.29

Profit before Tax

8,965.87

6,672.45

9,652.44

7,565.16

Less: Provision for taxation

3,046.18

2,391.53

3,190.71

2,598.11

Less: Non-controlling Interest

-

-

1.11

1.18

Profit for the year

5,919.69

4,280.92

6,460.62

4,965.87

Add: Other Comprehensive Income (Net of taxes)

(104.16)

(114.97)

(225.69)

19.39

Total Comprehensive Income (Net of taxes)

5,815.53

4,165.95

6,234.93

4,985.26

Add: Balance brought forward from previous years

12,859.24

9,483.79

12,586.86

8,392.10

Amount available for appropriation

18,674.77

13,649.74

18,821.79

13,377.36

Appropriations:

Dividend paid on Equity Shares

362.05

241.36

362.05

241.36

Tax paid on distribution of dividend

73.70

49.14

73.70

49.14

Transferred to General Reserve

500.00

500.00

500.00

500.00

Balance carried to Balance Sheet

17,739.02

12,859.24

17,886.04

12,586.86

* Including Other Income

Operations and State of Affairs of the Company

During the financial year 2017-18, your Company posted a moderate growth of 6.06% (GST adjusted growth of ~8.58%) in total income to RS,1,07,395.87 lacs as against RS,101,257.80 lacs in the previous year and a robust growth of 38.28% in net profit to RS,5,919.69 lacs from RS,4,280.92 lacs in the previous year. This performance needs to be viewed against the backdrop of a challenging business environment, namely, uncertainty around GST rates, weak real estate sales and subdued consumer sentiments. The building material sector witnessed multiple disruptions in the sales due to divergence of the GST rates and the challenges in its implementations at distributors, dealers and retailers level.

Laminates and allied products constitutes around 85% of our sales and in financial year 2017-18, sales grew by 8.0% to RS,90,033 lacs (GST adjusted sales grew by ~11.1 %). The veneer and allied products contributes 15% to our total sales and sales grew by 17.3% to RS,16,044 lacs in financial year 2017-18. In the engineered wooden flooring business your Company clocked sales of RS,2,624 lacs for financial year 2017-18, growing by 44.8%. In the engineered wooden door sets business, sales grew by 33.2% to stand at RS,1,608 lacs. Your Company reduced operating losses for both the doors and floors business by 45% to RS,7.96 Crores.

During the financial year 2017-18, your Company recorded a growth of 4.52% in export turnover from RS,33,790.29 lacs to RS,35,316.88 lacs and export incentive decreased from RS,3,537.11 lacs to RS,2,001.14 lacs.

As per the Consolidated Financial Statements, total income and the profit after tax for the financial year 2017-18 stood at RS,1,15,735.78 lacs and RS,6,460.62 lacs respectively.

During the financial year 2017-18, your Company intensified its efforts in the area of product integration and market penetration. Your Company continued to expand its export markets for Laminates, Veneers, Engineered Wooden Flooring and Engineered Wooden Door sets.

The overall performance of the Company during financial year 2017-18, amid a challenging economic scenario, vindicates the effectiveness of the initiatives undertaken by the Greenlam Management so as to better exploit business opportunities.

Dividend

Your Directors recommend a final dividend of H2.50 per equity share (previous year H1.50 per equity share) on the Company's 2,41,36,374 equity shares of H5.00 each for the financial year 2017-18. The final dividend on the equity shares, if declared as above, would entail an outflow of RS,603.41 lacs towards dividend and RS,124.03 lacs towards dividend tax, resulting in a total outflow of RS,727.44 lacs.

Outlook and Expansion

The Company's outlook remains favourable on account of its product integration capabilities, growing brand popularity and the continuous support from its employees, shareholders, creditors, consumers, distributors, dealers and lenders. The Company's vision is to be a one-stop solution for all decorative surface products (in its field of operation). The Company's pan-India distribution network ensures easy availability of products in almost every part of India. The Company has a presence in over 100 countries, either directly or through its overseas subsidiaries.

The Goods and Services Tax Act ("GST") was effected on July, 2017, the biggest tax reform in Indian history, potentially bringing all indirect taxes under a uniform tax structure that will eventually create a level playing field boosting the competitiveness and build a strong case in favour of organized and tax-compliant players like us. Renewed demand in the housing sector and a growing share of the organised sector as consumers increasingly choose branded over generic products is likely to drive demand in the coming years. Implementation of GST and RERA were good moves and the upcoming E-way bill indicates that the organised laminates industry is poised for growth in the near future.

During the financial year 2017-18, the expanded capacity for Laminates at the unit of the Company situated at Nalagarh, Himachal Pradesh to manufacture an additional 2 million laminate sheets per annum has become operational w.e.f. June 05, 2017. With this addition, the total installed capacity for laminate has become 14.02 million laminate sheets per annum. The said expansion has the potential to generate revenue of RS,120.00 crores per annum on full capacity utilization.

In view of the above, your Directors are confident of achieving significantly better results in the coming year. Credit Rating

CARE Ratings Ltd. has reaffirmed the credit rating "CARE A ; Stable" in respect of long term bank facilities of RS,237.00 crores and upgraded the credit rating for short term bank facilities of RS,260.00 crores to "CARE A1 " (Revised from "CARE A1").

Subsidiaries and its Performance

Your Company has six overseas subsidiaries viz. Greenlam Asia Pacific Pte. Ltd., Singapore, Greenlam America, Inc., USA, Greenlam Asia Pacific (Thailand) Co., Ltd., Thailand, Greenlam Holding Co., Ltd., Thailand, PT. Greenlam Asia Pacific, Indonesia and Greenlam Europe (UK) Ltd., UK.

Greenlam Asia Pacific Pte. Ltd., Singapore, is engaged in the business of trading of high-pressure decorative laminates and allied products. Greenlam America, Inc., USA, is engaged in the marketing and distribution of high-pressure laminates and allied products in North America and South America.

Further, two Thai step-down subsidiaries Greenlam Asia Pacific (Thailand) Co., Ltd. and Greenlam Holding Co., Ltd. are engaged in the business of marketing and distribution of high-pressure laminates in Thailand while the Indonesian step-down subsidiary PT. Greenlam Asia Pacific is engaged in the manufacturing of promotional material i.e. catalogues, sample folders, chain sets, wall hooks and A4 size samples. Further, UK step-down subsidiary Greenlam Europe (UK) Limited is engaged in the business of marketing and distribution of high-pressure laminates and allied products, engineered wooden flooring and engineered wooden door sets in United Kingdom.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, statement containing salient features of standalone financial statements of subsidiaries in Form AOC-I is attached as "Annexure-I"

As required under Rule 8(1) of the Companies (Accounts) Rules, 2014, the Board's Report has been prepared based on Standalone Financial Statements. During the financial year 2017-18, the net contribution of all the subsidiaries to the Company's consolidated total income, profits before tax (PBT) and profits after tax (PAT) is 7.21%, 7.11% and 8.37% respectively. The standalone turnover, PBT and PAT of each subsidiary are given in Form AOC-I.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statements would be placed on the website of the Company at www. greenlamindustries.com. Further, as per provisions of the said Section, audited Annual Accounts of each of the subsidiary companies would also be placed on the website of the Company at www.greenlamindustries. com. Shareholders interested in obtaining a copy of the Annual Accounts of the subsidiary companies may write to the Company Secretary at the Company's corporate office or may send a mail at investor.relations@greenlam. com.

In terms of the Regulation 46(2)(h) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the policy for determining material subsidiaries is placed on the website of the Company at www. greenlamindustries.com.

Consolidated Financial Statements

Pursuant to Section 129(3) of the Companies Act, 2013, the Consolidated Financial Statements of the Company prepared in accordance with the Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and Accounting Standard (AS)-21 on Consolidated Financial Statements is provided in the Annual Report.

Transfer to General Reserve

The Directors in their meeting held on May 28, 2018 proposed to transfer H500.00 lacs to the General Reserve.

Directors

Your Company has received declarations from all the Independent Directors viz. Mr. Vijay Kumar Chopra [DIN: 02103940], Ms. Urvashi Saxena [DIN: 02021303] and Ms. Sonali Bhagwati Dalal [DIN: 01105028] confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Saurabh Mittal [DIN: 00273917], Managing Director & CEO of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

During the financial year 2017-18, there was no change in the composition of Board of Directors of the Company. None of the Directors of your Company is disqualified under the provisions of Section 164(2) (a)&(b) of the Companies Act, 2013. However, the name of Ms. Sonali Bhagwati Dalal, Independent Director of the Company was published by the Ministry of the Corporate Affairs (MCA) on its website in the list of disqualified directors under Section 164(2) of the Companies Act, 2013. Subsequently, a petition was filed by her before the Hon'ble High Court of Delhi and the Hon'ble High Court of Delhi has stayed the impugned list of Disqualified Directors to the extent it includes her name. Further, to avail the Condonation of Delay Scheme (CODS), 2018, she has filed an appeal before the National Company Law Tribunal (NCLT) for revival of the concerned defaulting company and the same is pending for disposal. In view of the pendency of the said appeal before NCLT, the Hon'ble High Court of Delhi has vide its order dated May 07, 2018 has extended the stay till disposal of the said appeal by MCA.

Changes in Share Capital

During the year under review, there was no change in the Share Capital of the Company.

Key Managerial Personnel

The details of the Key Managerial Personnel of the Company are provided as under:

Sl. No.

Name

Designation

1.

Mr. Saurabh Mittal

Managing Director & CEO

2.

Ms. Parul Mittal

Whole-time Director

3.

Mr. Ashok Kumar Sharma

Chief Financial Officer

4.

Mr. Prakash Kumar Biswal

Company Secretary & Asst. Vice President - Legal

During the financial year 2017-18, there was no change in the Key Managerial Personnel of the Company. The designation of Ms. Parul Mittal was changed w.e.f. May 25, 2017 from 'Director-Design & Marketing' to 'Whole-time Director' of the Company.

Meetings of the Board

Four (4) Board Meetings were held during the financial year ended March 31, 2018. The details of the Board Meetings with regard to their dates and attendance of each of the Directors thereat have been provided in the Corporate Governance Report.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(3) & (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors in their meeting held on March 23, 2018 have evaluated the Performance of Non Independent Directors, Chairperson of the Company after considering the views of the Executive and Non-Executive Directors, Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Company's Management and the Board. The Nomination and Remuneration Committee has also carried out evaluation of performance of every Director of the Company. On the basis of evaluation made by the Independent Directors and the Nomination and Remuneration Committee and by way of individual and collective feedback from the Non-Independent Directors, the Board has carried out the Annual Performance Evaluation of the Directors individually as well as evaluation of the working of the Board as a whole and Committees of the Board.

The criteria for evaluation are outlined below:

a. For Independent Directors:

- Knowledge and Skills

- Professional conduct

- Duties, role and functions

- Compliance with Code of Business Ethics and Code of Conduct of the Company

- Rendering independent and unbiased opinion and judgements

- Attendance and active participation in meetings of Board and Committees of the Board and Members of the Company

- Assistance in implementing corporate governance practices

- Updating of skills and knowledge

- Information regarding external environment

- Raising of concerns, if any, to the Board

- Study of agenda in depth prior to Meeting

- Contribution towards the formulation and implementation of strategy for achieving the goals of the Company

b. For Executive & Non-Executive Directors:

- Performance as Team Leader/Member

- Evaluating Business Opportunity and analysis of Risk Reward Scenarios

- Professional Conduct and Integrity

- Sharing of Information with the Board

- Attendance and active participation in the Board and Committee of the Board and Meetings of Members of the Company

- Whether difference of opinion was voiced in the meeting

- Whether Executive Directors were able to answer the queries raised by Independent Directors

- Compliance with Code of Business Ethics and Code of Conduct of the Company

- Assistance in implementing corporate governance practices

- Independent view on key appointments and strategy formulation

- Review of integrity of financial information and risk management

- Updating of skills and knowledge

- Information regarding external environment

- Raising of concerns, if any, to the Board

- Assistance in formulation of statutory and non-statutory policies for the Company

- Ensures implementation of decisions of the Board

- Ensures compliance with applicable legal and regulatory requirements

- Alignment of Company's resources and budgets to the implementation of the organization's strategic plan

- Creativity and innovations in creating new products

- Understanding of the business and products of the Company

c. For Committees of the Board:

- Adequate and appropriate written terms of reference

- Volume of business handled by the committee set at the right level?

- Whether the committees work in an 'inclusive' manner

- Effectiveness of the Board's Committees with respect to their role, composition and their interaction with the Board

- Are the committees used to the best advantage in terms of management development, effective decision, etc.

- Attendance and active participation of each member in the meetings

- Review of the action taken reports and follows up thereon

d. For Board of Directors as a whole:

- Setting of clear performance objectives and how well it has performed against them

- Contribution to the testing and development and strategy

- Contribution to ensuring robust and effective risk management

- Composition of the board and its committees appropriate with the right mix of knowledge and skills sufficient to maximize performance in the light of future strategy

- Effectiveness of inside and outside Board relationship

- Responding to the problems or crises that have emerged

- Relationship between Board and its Committees and between committees themselves

- Communication with employees and others

- Updating with latest developments in regulatory environments and the market in which the Company operates

- Role and functioning of the Board on the matters pertaining to financial reporting and internal controls

- Contribution of the Board for ensuring that the Company adheres to the statutory and regulatory compliances as applicable to the Company

The Directors expressed their satisfaction with the evaluation process.

Audit Committee

As on March 31, 2018, the Audit Committee of the Company comprises of three Independent Directors with Mr. Vijay Kumar Chopra as Chairman and Ms. Urvashi Saxena and Ms. Sonali Bhagwati Dalal as members and one promoter Director Mr. Saurabh Mittal, Managing Director & CEO of the Company. The Committee, inter alia, reviews the Internal Control System and Reports of Internal Auditors and Compliance of various Regulations. The brief terms of reference of the Committee and the details of the Committee meetings are provided in the Corporate Governance Report. The Committee also reviews the Financial Statements before they are placed before the Board.

Nomination and Remuneration Committee

As on March 31, 2018, the Nomination and Remuneration Committee comprises of two Independent Directors with Mr. Vijay Kumar Chopra as Chairman and Ms. Urvashi Saxena as member and also one Non-Executive Director Mr. Shiv Prakash Mittal as member. The Committee, inter alia, identifies persons who are qualified to become directors and who may be appointed in senior management. The brief terms of reference of the Committee and the details of the Committee meetings are provided in the Corporate Governance Report.

Stakeholders' Relationship Committee

As on March 31, 2018, the Stakeholders' Relationship Committee comprises of one Non-Executive Director Mr. Shiv Prakash Mittal as Chairman and one Executive Director Mr. Saurabh Mittal as member. The Committee, inter alia, reviews the grievance of the security holders of the Company and redressal thereof. The brief terms of reference of the Committee and the details of the Committee meetings are provided in the Corporate Governance Report.

Vigil Mechanism

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a 'Whistle Blower Policy' to establish Vigil Mechanism for directors and employees to report genuine concerns has been framed. The policy is revised from time to time to realign it with applicable regulations or organisations suitability. The latest policy is available on the website of the Company. This policy provides a platform to disclose information, confidentially and without fear of reprisal or victimization, where there is reason to believe that there has been serious malpractice, fraud, impropriety, abuse or wrong doing within the Company. The Company ensures that no personnel have been denied access to the Audit Committee.

Risk Management

During the financial year 2015-16, your Company appointed an Independent Agency to identify the various risks pertaining to different businesses and functions of the Company and to assist the Company in framing and implementing the Risk Mitigation Programme.

Your Company has adopted a mechanism to identify, assess, monitor and mitigate various risks associated with key business operations. Major risks elements associated with the businesses and functions of the Company have been identified and are being addressed systematically through mitigating actions on a continuing basis. In the meetings of Audit Committee held during the financial year 2017-18, the Committee members have reviewed identified risk elements and have expressed their satisfaction over the risk mitigation measures adopted by the Company.

Statement in respect of adequacy of Internal Financial Controls with reference to the Financial Statements

The Directors had laid down Internal Financial Controls procedures to be followed by the Company which ensure compliance with various policies, practices and statutes in keeping with the organization's pace of growth and increasing complexity of operations for orderly and efficient conduct of its business. The Audit Committee of the Board, from time to time, evaluated the adequacy and effectiveness of internal financial control of the Company with regard to:-

1. Systems have been laid to ensure that all transactions are executed in accordance with management's general and specific authorization. There are well-laid manuals for such general or specific authorization.

2. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of Financial Statements in conformity with Generally Accepted Accounting Principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the timely preparation of reliable financial information.

3. Access to assets is permitted only in accordance with management's general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted.

4. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to differences, if any.

5. Proper systems are in place for prevention and detection of frauds and errors and for ensuring adherence to the Company's policies.

Corporate Social Responsibility

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link https://www.greenlamindustries.com/pdf-file/CorporateSocialResponsibilityPolicy.pdf

The composition of the CSR Committee is provided in the Annual Report on CSR activities. The Average Net Profits of the Company for the last three financial years is H56,64,32,894.81 and accordingly the prescribed CSR expenditure during the year under review shall not be less than H1,13,28,657.90 (i.e. 2% of the Average Net Profits of the Company for the last three financial years). The Annual Report on CSR activities is annexed as "Annexure II" to this Report.

Policy on Nomination and Remuneration

The summary of Remuneration Policy of the Company prepared in accordance with the provisions of Section 178 of the Companies Act, 2013 read with Part D of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the Corporate Governance Report. The Remuneration Policy is approved by the Board of Directors and is uploaded on the website of the Company. The web link to the Remuneration Policy is as under: https://www. greenlamindustries.com/pdf-file/Remuneration-Policy. pdf

Particulars of contracts or arrangements with related parties

Related party transactions that were entered into during the financial year 2017-18, were on arm's length basis and were in ordinary course of business. The particulars of material related party transactions which were entered into on arm's length basis are provided in Form AOC-2 as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 which is annexed herewith as "Annexure-III". There are no materially significant related party transactions made by the Company which may have potential conflict with the interest of the Company. The Board has approved a policy for material related party transactions which has been uploaded on the Company's website. The web-link to the Policy on Related Party Transactions as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is as under: https://www.greenlamindustries.com/pdf-file/Related_ Party_Transaction_Policy.pdf

Directors' Responsibility Statement

In terms of the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Directors state that:

a) In preparation of the annual accounts for the financial year ended March 31, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b) The Directors have selected such Accounting Policies as listed in Note 1 to the Financial Statements and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year as on March 31, 2018 and of the profits of the Company for that period;

c) The Directors have taken proper and sufficient care for 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) The Directors have prepared the annual accounts on a going concern basis;

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

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

Material Changes

There have been no material changes and commitments affecting the financial position of the Company since the close of financial year i.e. since March 31, 2018 and the date of this report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.

Insurance

Our Company's properties, including building, plant, machineries and stocks, among others, are adequately insured against risks.

Public deposits

During the period under review, the Company did not invite or accept any deposits from the public in terms of Chapter V of the Companies Act, 2013.

Listing of shares

The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 538979 and on National Stock Exchange of India Limited (NSE) with scrip symbol GREENLAM. The Company confirms that the annual listing fees to both the stock exchanges for the financial year 2018-19 have been duly paid.

Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

Details of Loans granted, Guarantees given and Investments made during the year under review, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Financial Statements of the Company forms part of this Annual Report.

Auditors and their Report (a) Statutory Auditors:

In compliance with the Companies (Audit and Auditors) Rules, 2014, M/s. D. Dhandaria & Company, Chartered Accountants, has been appointed as Statutory Auditors of the Company till the conclusion of 6th Annual General Meeting (AGM), as approved by the members at their 1st Annual General Meeting held on October 30, 2014. The Statutory Auditors' Report on the Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2018 form part of this Annual report.

(b) Secretarial Auditors:

The Board of Directors of the Company at their meeting held on February 06, 2018 appointed Ms. Suhita Mukhopadhyay, Practicing Company Secretary of M/s. L. G. Corp Law having office at D-12 LGF, Lajpat Nagar, New Delhi-110024 for conducting the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial

Audit Report in Form MR-3 for the financial year ended March 31, 2018, is annexed herewith as "Annexure-IV".

(c) Cost Auditors:

Your Company was not required to appoint Cost Auditor for the financial year ended March 31, 2018.

(d) Internal Auditor:

Mr. Rakesh Kumar Budhiraja, President-Internal Audit of the Company, has been appointed as Internal Auditor of the Company to carry out internal audit of Branches, offices and manufacturing Units of the Company. The Audit Committee quarterly reviews the Internal Audit report.

Response to Auditors' Remarks

There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors or by the Secretarial Auditor in their Statutory Audit Report and Secretarial Audit Report, respectively and hence, no explanation or comments of the Board is required in this matter.

Extract of Annual Return

The extract of Annual Return required under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, is provided in Form MGT-9 as "Annexure-V" to this report.

Corporate Governance Report

A detailed Report on Corporate Governance for the financial year 2017-18 pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with an Auditors' Certificate on compliance with the conditions of Corporate Governance is annexed to this report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the financial year 2017-18, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given as a separate statement in the Annual Report.

CEO and CFO Certification

Pursuant to Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015, the CEO and CFO certification as specified in Part B of Schedule II thereof is attached with the Annual Report. The Managing Director & CEO and the Chief Financial Officer also provide quarterly certification on

Financial Results while placing the Financial Results before the Board in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Code of Conduct for Directors and Senior Management Personnel

The Code of Conduct for Directors and Senior Management Personnel is posted on the Company's website. The Managing Director & CEO of the Company has given a declaration that all Directors and Senior Management Personnel concerned affirmed compliance with the code of conduct with reference to the financial year ended on March 31, 2018. Declaration is attached with the Annual Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure-VI".

Particulars of employees

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as "Annexure-VII".

Fraud Reporting

There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.

Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

No case was filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 during the year under review.

Details of significant and material orders passed by the regulators/courts/tribunals impacting the going concern status and the Company's operations in future

During the period under review, there were no significant and material orders passed by any regulator/ court/tribunal impacting the going concern status and the Company's operations in future.

Acknowledgement

Your Directors place on record their sincere thanks and appreciation for the continuing support of financial institutions, consortium of banks, vendors, clients, investors, Central Government, State Governments and other regulatory authorities. Directors also place on record their heartfelt appreciation for employees of the Company for their dedication and contribution.

For and on behalf of the Board of Directors

Shiv Prakash Mittal

Place: New Delhi Non-Executive Chairman

Date: May 28, 2018 [DIN: 00237242]