Vinay Cements Ltd Directors Report

Dear Members,

Your Directors have pleasure in submitting their thirty fourth (34^th) report along with the Audited Financial Statements of the Company for the financial year ended March 31, 2020.

FINANCIAL HIGHLIGHTS

The financial performance of the Company for the year under review is as under-

Particulars		Amount ( Rs. in Lakhs)
	FY 19-20	FY 18-19
Gross Revenue	1,075.95	1,265.63
Less: Excise Duty	-	-
Net Revenue	1,075.95	1,265.63
Profit before interest, depreciation and tax (EBITDA)	183.10	755.72
Add: Finance Income	435.55	1,023.22
Less: Finance Cost	3,858.86	4,134.22
Profit/(Loss) before depreciation and tax (PBDT)	(3,240.21)	(2,355.28)
Less: Depreciation	142.74	116.30
Profit/(Loss) before tax (PBT)	(3,382.95)	(2,471.58)
Provision for current tax	-	-
Provision for deferred tax	-	-
Prior year tax charge (written back)	-	-
Profit/(Loss) after tax (PAT)	(3,382.95)	(2471.58)
Other comprehensive Income/(Loss)	(0.29)	0.20
Profit/(Loss) after tax (PAT)	(3,412.81)	(2471.37)

OPERATIONS AND BUSINESS PERFORMANCE

Your Company recorded net revenue of Rs.1,075.95 lakhs in the FY 2019-20, which has decreased by 15% as compared to the net revenue of Rs. 1,265.63 lakhs in the FY 2018-19.

Earnings before Interest, Depreciation and Taxes (EBIDTA) for the FY 2019-20 has decreased by 76% to Rs. 183.10 lakhs as compared to Rs.. 755.94 lakhs in the FY 2018-19. During the financial year under review, the Company posted a net loss of Rs. 3,412.81 lakhs as compared to net loss of Rs. 2,471.37 lakhs in the FY 2018-19.

The operations of the Company were impacted in the last month of the financial year 2019-20 due to temporary shutdown of plant following nationwide lockdown by the Government of India in view of COVID-19 pandemic.

DIVIDEND

Due to losses during the year, your Directors did not recommend any dividend for the FY 2019-20.

NATURE OF BUSINESS

The Company continues to be engaged in the same line of business during the financial year 2019-20. There have been no material changes or commitments, affecting the financial position of the Company between the end of the financial year and the date of this report.

BOARD OF DIRECTORS AND MEETINGS

The Board meetings are convened on a quarterly basis and as and when required. During the year under review, the Board of Directors of the Company met four times in its meetings held on 7-5-2019; 31-7-2019; 15-10-2019 and 6-2-2020. The Board meetings are conducted in due compliance with; and following the procedures prescribed in the Companies Act, 2013 and applicable Secretarial Standards

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Shri Dharmender Tuteja (DIN:02684569) shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. He has furnished requisite declaration in Form DIR-8 pursuant to Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014 to the effect that he is not disqualified from being appointed as a Director of the Company.

Shri Sudhir Singhvi, Chief Financial Officer (CFO) and Smt. Rita Dedhwal, Company Secretary, continued to hold their respective offices as Key Managerial Personnel (KMP) during the year under review.

Shri George Chacko, Manager had resigned from the position of Manager with effect from February 6, 2020 and Shri Sunil Aggarwal was appointed as a Manager and KMP of the Company in his place on the same date. The Board places on record its appreciation for the valuable advice and guidance of Shri George Chacko during his tenure as Manager of the Company. The Board has approached the members of the Company for appointment of Shri Sunil Aggarwal as the Manager of the Company in terms of section 196, 197 and 203 of the Companies Act, 2013.

During the year under review, Shri R.Vaidyanathan, Shri Naveen Jain and Shri Vikram Dhokalia, being the Independent Directors have given their declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

The Independent Directors have also held separate meeting wherein they inter alia reviewed the performance of the Non-Independent Directors, Chairman and the Board as a whole.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provisions of section 134(3)(c) of the Companies Act, 2013, your Directors do hereby confirm that:-

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss of the Company for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis; and

v. 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.

NOMINATION AND REMUNERATION POLICY

In terms of the Companies Act, 2013, your Board has formulated the Nomination and Remuneration Policy of the Company which lays down the constitution and role of the Nomination and Remuneration Committee. The policy has been framed with the objective –

(a) to ensure that appointment of directors, key managerial personnel and senior managerial personnel and their removal are in compliance with the applicable provisions of the Companies Act, 2013.

(b) to set out criteria for the evaluation of performance and remuneration of directors, key managerial personnel and senior managerial personnel;

(c) to adopt best practices to attract and retain talent by the Company; and

(d) to ensure diversity of the Board of the Company.

The policy specifies the manner of effective evaluation of performance of Board, its committees and individual directors to be carried out either by the Board or by the Nomination and Remuneration Committee and review its implementation and compliance.

The said Nomination and Remuneration Policy of the Company on Directors appointment and remuneration can be accessed at web address www.dalmiacement.com.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS

During the financial year under review, the formal annual evaluation of the performance of the Board, its committees and individual Directors was carried by the Independent Directors, Nomination and Remuneration Committee and the Board of Directors in accordance with the Companies Act, 2013.

The Boards functioning was evaluated on various aspects, including inter-alia the structure of the Board, meetings of the Board, functions of the Board, effectiveness of Board processes, information and functioning.

The Committees of the Board were assessed on inter-alia the degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The Directors were evaluated on various aspects such as attendance and contribution at Board/Committee meetings and guidance/support to the Management outside Board/Committee meetings.

The performance of Non-Independent Directors, Board as a whole and the Chairman was evaluated in a separate meeting of Independent Directors. Similar evaluation was also carried out by the Nomination and Remuneration Committee and the Board. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

Based on the feedback of the Directors and on due deliberations of the views and counter views, the evaluation was carried out in terms of the Nomination and Remuneration Policy.

NOMINATION AND REMUNERATION COMMITTEE

As on March 31, 2020, the Nomination and Remuneration Committee of the Board comprises of Shri Dharmender Tuteja, Shri Naveen Jain and Shri Vikram Dhokalia as members as on March 31, 2020.

The Committee met in its meeting held on 6-2-2020 during the financial year under review.

STAKEHOLDERS RELATIONSHIP COMMITTEE

Pursuant to the provisions of section 178(5) of the Companies Act, 2013, the Stakeholders Relationship Committee of the Board comprises of Shri Dharmender Tuteja and Shri Naveen Jain as members as on March 31, 2020. The Committee did not meet during the financial year under review.

AUDIT COMMITTEE

As on March 31, 2020, the Audit Committee of the Board comprises of Shri Dharmender Tuteja, Shri R.Vaidyanathan, Shri Naveen Jain and Shri Vikram Dhokalia as members.

During the financial year under review, the Committee met four times on 7-5-2019; 31-7-2019; 15-10-2019 and 6-2-2020.

INVESTMENTS, LOANS AND GUARANTEES

The particulars of investments made by the Company and the details of loans given by the Company are furnished in note no 3 and note no 7 of the attached standalone financial statements for the year ended March 31, 2020. The particulars of guarantee given during the year under review are furnished in note no-39 of the said financial statements.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal control systems commensurate with the size of its operations. The Company has requisite policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control systems are subjected to regular reviews, self-assessments and audits and based on such reviews, your Company believe that these systems provide reasonable assurance that internal financial controls are designed effectively and are operating as intended.

SUBSIDIARIES

The Company has two subsidiaries as on March 31, 2020. There has been no material changes in the nature of business of these subsidiaries.

Pursuant to first proviso to section 129(3), a statement containing the salient features on the financial position of the Companys Subsidiaries, i.e. RCL Cements Limited and SCL Cements Limited, for the year ended March 31, 2020 in Form AOC-1 is attached as Annexure-I to this report.

The financial statements of the Company/its subsidiaries and the consolidated financial statements of the Company including all other documents required to be attached thereto, are placed at the web address-www.dalmiacement. These documents will also be available for inspection on all working days, during business hours, at the registered office of the Company and any member desirous of obtaining a copy of the same may write to the Company Secretary.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Companies Act, 2013 read with the Indian Accounting Standards (Ind AS), this Annual Report includes consolidated financial statements for the financial year 2019-20 which have been prepared based on audited financial statements of all subsidiaries.

RELATED PARTY TRANSACTIONS

All Related Party Transactions entered during the FY under review are on arms length basis and in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013.

Details of contracts/arrangements/transactions with related parties, as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are provided in Annexure-II in Form AOC-2 and forms part of this Report.

EXTRACTS OF ANNUAL RETURN

The extract of the annual return in Form MGT-9 in compliance with sub-section (3) of section 92 of the Companies Act 2013 read with Rule 12 of the Companies (Management & Administration) Rules 2014 is attached and marked as Annexure-III and forms part of this report.

PARTICULARS OF EMPLOYEES

During the year under review, there was no employee in the Company who was in receipt of remuneration in excess of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. However, a statement showing names and other particulars of the top ten employees in terms of remuneration drawn is attached as Annexure IV.

HUMAN RESOURCES

HR practices of your Company aim to enhance the capability of the organization through creating performance and result driven culture, employee value proposition and supporting operations through effective systems and processes. The Company continued to invest in creating progressive human resources practices to create value for its customers, stakeholders and investors.

STATUTORY AUDITORS

M/s. S.R Batliboi & Co. LLP, Chartered Accountants, the retiring Statutory Auditors will be completing their term of ten years by the conclusion of the ensuing Annual General Meeting (AGM) of the Company.

On the recommendation of the Audit Committee, the Board recommends to the shareholders of the Company, the appointment of Deloitte Haskins & Sells (Firm Regn. No. 015125N) as the Auditors of the Company to hold office for a term of five years commencing from the conclusion of ensuing AGM till the conclusion of sixth subsequent AGM of the Company in accordance with Section 139 of the Companies Act, 2013

During the FY under review, the Auditors have not reported any matter pursuant to provisions of section 143(12) of the Companies Act, 2013.

REPORT OF STATUTORY AUDITORS

The Statutory Auditors of your Company have mentioned one qualification in their report with regard to non recoverability of certain loans given to its subsidiaries. The clarification in respect to this qualification is mentioned in note no. 36 of the notes to accounts of standalone financial statements which is self-explanatory and clarifies to the qualification made by Statutory auditors in their report. Your Directors believe that there is no impairment in the carrying and value of such investments and all the loans are fully recoverable. They also drew attention towards uncertainty related to going concern status of the Company which is explained in note no. 37 of the said financial statements and is self explanatory.

The Auditors have emphasised on one matter referring to note no. 27 (b) of the notes to accounts of the standalone financial statements and consolidated financial statements which pertains to the dispute between two major group of shareholders of the holding company which is currently sub-judice. However, Auditors have mentioned in their report that that the Company is confident of improvement in its financial health based on its financial projections and continued support from its intermittent holding company i.e. Dalmia Cement (Bharat) Limited.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with all the applicable Secretarial Standards (SS) issued by the Institute of Company Secretaries of India from time to time and approved by the Central Government.

ORDERS PASSED BY REGULATORS

No orders have been passed by the regulators or courts or tribunals impacting the status of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

During the FY under review, no activity was undertaken by the Company for conservation of energy/technology absorption and the Company reported nil foreign exchange earnings/outgoings.

PUBLIC DEPOSITS

During the FY under review, the Company has not accepted any deposits from the public/member under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is committed to ensuring that all are treated with dignity and respect. The Human Resource in collaboration with other functions, ensure protection against sexual harassment of women at workplace and for the prevention and redressal of complaint in this regard.

In line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, an Anti-Sexual Harassment Policy has been put in place and Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. During the financial year 2019-20, no complaint has been received by ICC.

HEALTH, SAFETY AND ENVIRONMENT

Health and safety of employees and clean environment receive utmost priority at all locations of your Company. It has already implemented EHS System and provided safe working environment at its plants and mines. Use of personal protective equipment by employees have become compulsory and training programs on Health, Safety and Occupational Health are being conducted on a continuous basis. Our endeavor is to make all our plants safe plants and keep all its employees healthy.

In view of the COVID-19 pandemic, your Company has adhered to the lockdown directions and has taken all such steps as are required to ensure health & safety of Companys people including work from home, social distancing, hygiene practices and deep cleaning of premises at Companys various locations as per the directions from the Central & State Governments and local bodies.

INDUSTRIAL RELATIONS

The industrial relations during the year under review remained harmonious and cordial.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the assistance and co-operation extended by the Government authorities, financial institutions, banks, customers, vendors, dealers and members during the year under review. Your Directors also wish to place on record its deep sense of appreciation for the committed services by the Companys executives, staff and workers.