Your Directors present the 44th Annual Report of the Company along with the auditedfinancial statements for the year ended 31st March 2017.
1. Financial Highlights
| || ||(Rs. Lakhs) |
| ||2016-17 ||2015-16 |
|Revenue from operations ||13868.87 ||15723.40 |
|Operating Profit ||1066.04 ||1537.03 |
|Exceptional Item ||0.00 ||(1491.67) |
|Interest ||28.99 ||45.09 |
|Profit before Tax ||1037.05 ||0.27 |
|Provision for Tax ||(360.24) ||(0.15) |
|Profit after Tax ||676.81 ||0.12 |
|Other Comprehensive Income (Net of Tax) ||(23.84) ||(9.48) |
|Total Comprehensive Income ||652.97 ||(9.36) |
|Deficit brought forward ||(2233.67) ||(2224.31) |
|Deficit carried to Balance sheet ||(1580.71) ||(2233.67) |
On account of accumulated losses your Directors do not recommend any dividend for thefinancial year ended 31st March 2017.
In the fiscal year 2016-17 the new recently released Index for Industrial Production(IIP) witnessed an increase of 5% (the increase as per the old Index was less than 1%).The new Index where the base year is 2011-12 and the basket of goods has been changed isexpected to be more representative of the growth of the sector. In line with the new IIPthe auto industry registered a growth of 5.6% over previous year. The 3-wheeler segmentreported a decline in sales mainly due to sharp drop in exports which was affected due topolicy changes in the overseas markets. The growth in commercial vehicles segment wasaffected by the uncertainty in the policy on emission norms and scarcity of liquidity. Asyou know your Companys sales are primarily to these two segments of the market. Assuch your Companys sales decreased by 12% and consequently operating profitdecreased by 31%. While the long term outlook for the auto industry is positive the shortterm outlook remains uncertain.
4. Material changes and commitments after the end of financial year
There have been no material changes and commitments affecting the financial positionof the Company which occurred between the end of the financial year and date of thisreport.
5. Particulars of loans guarantees or investment
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 ("Act") are given in the notes forming part ofthe financial statements.
6. Human Resources
Employee relations were cordial. Your Directors place on record their appreciation forcontribution made by all employees of your Company. As on 31st March 2017 there were 141employees. During the year a new productivity-enhancing wage agreement was concluded withthe workers union at Chakan Plant.
The Company follows best practices in hiring and on-boarding of employees. The Companyadopts fair and transparent performance evaluation processes. In order to improve theorganizational efficiency and employee engagement various process change initiatives wereundertaken during the year. Your Company believes in conducting its business in a highlytransparent and ethical way. To ensure this and also to improve skill levels employeesparticipate in various training programmes and complete mandated e-learning courses.
Your Company is committed to creating a healthy working environment that enablesemployees to work without fear of prejudice gender bias and sexual harassment. TheCompany believes that all employees have a right to be treated with dignity and has zerotolerance towards violation of its Code of Conduct and Sexual Harassment Policy. TheCompany has a Policy on Sexual Harassment which is widely disseminated. During the yearunder review no complaint of sexual harassment has been received by the ComplianceCommittee.
7. Conservation of energy technology absorption foreign exchange earnings andoutgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 are set out in Annexure 1 to this Report.
8. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 form part of the Annual Report.
Having regard to the first proviso to Section 136(1) of the Act the Annual Reportexcluding the aforesaid information is being sent to the Members of the Company. The saidinformation is available for inspection at the registered office of the Company duringworking hours and any Member interested in obtaining such information may write to theCompany Secretary and the same will be furnished on request. The full annual reportincluding the aforesaid information is available on the website of the Companywww.sekuritindia.com.
9. Public Deposits
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the balancesheet.
10. Directors and Key Managerial Personnel
In accordance with the Companies Act 2013 and Articles of Association of the CompanyMr. Anand Mahajan (Director Identification No.00066320) Director retires by rotation andbeing eligible offers himself for re-appointment.
None of the Director or Key Managerial Personnel has any pecuniary relationships ortransactions vis--vis the Company other than sitting fees & salaries.
11. Directors appointment and remuneration
The Nomination and Remuneration Committee has laid down the criteria forDirectors appointment and remuneration. These are set out in the Nomination andRemuneration policy annexed as Annexure 3 to this Report.
12. Annual evaluation of performance by the Board
The Board on recommendation of the Nomination and Remuneration Committee has adopteda framework for performance evaluation of the Board its committees individual directorsand the chairperson through a survey questionnaire. The survey questionnaire broadlycovers various aspects of the board functioning composition of Board and its committeesculture execution and performance of specific duties obligation and governance. Furtherthe Independent Directors at their separate meeting held during the year reviewed theperformance of the Board its Chairman and Non-Executive Directors and other items asstipulated under the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations").
13. Declaration given by independent directors
The Company has received necessary declarations from Independent Directors pursuant toSection 149(7) of the Act confirming that they meet the criteria of independence as underSection 149(6) of the Act and Regulation 16 of the Listing Regulations.
14. Familiarisation programme for Independent Directors
The Companys familiarisation programme for Independent Directors providesorientation and training at the time of joining to enable them to understand theoperations business and other details of the Company. Details of the familiarisationprogramme for Independent Directors are available on the website of the Companywww.sekuritindia.com. The Independent Directors are regularly briefed on the developmentsthat are taking place in the Company and its operations.
15. Number of meetings of the Board
The Board meets at regular intervals to review the Companys business and todiscuss strategy and plans. A tentative annual calendar of the meetings is circulated tothe Directors in advance to enable them to plan their schedule and to ensure effectiveparticipation.
During the year five board meetings were held. The maximum interval between themeetings did not exceed the period prescribed under the Act and the Listing Regulations.
16. Committees of the Board
In accordance with the Act and the Listing Regulations the Board has constituted thefollowing Committees:
- Audit Committee
- Nomination and Remuneration Committee
- Stakeholders Relationship Committee
- Corporate Social Responsibility Committee
- Share Transfer Committee
Details of the Committees along with their constitution and other details are providedin the "Corporate Governance Report".
17. Directors Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained your Directors make the following statements in terms of Section134(3)(c) of the Act i. that in the preparation of the annual financial statements foryear ended 31st March 2017 the applicable accounting standards have been followed alongwith proper explanations relating to material departures if any; ii. that such accountingpolicies have been selected and applied consistently and judgments and estimates have beenmade that are reasonable and prudent so as to give a true and fair view of the state ofaffairs of the Company at the end of the financial year on 31st March 2017 and of theprofit of the Company for the year ended on that date; iii. that proper and sufficientcare has been taken for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act 2013 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; iv. that the annual financialstatements have been prepared on a going concern basis; v. that properinternal financial controls are in place and that such internal financial controls areadequate and are operating effectively; vi. that systems to ensure compliance with theprovisions of all applicable laws are in place and that such systems are adequate and areoperating effectively.
With reference to the point number (v) the Board believes that the Company has soundInternal Financial Controls ("IFC") commensurate with the nature and size of itsbusiness. However the business is dynamic and IFC are not static and evolve over time asthe business technology and fraud environment changes in response to competitionindustry practices legislation regulation and current economic conditions. There willtherefore be gaps in the IFC as business evolves. The Company has a process in place tocontinuously identify such gaps and implement newer and / or improved controls whereverthe effect of such gaps would have a material effect on the Companys operations.
18. Related Party Transactions
All related party transactions entered during the financial year were on an armslength basis. The Company has obtained necessary approvals towards the related partytransactions as prescribed by the Act and the Listing Regulations.
The policy on related party transactions as approved by the Board is available on thewebsite of the Company www.sekuritindia.com.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Act in prescribed Form AOC-2 is annexed as Annexure 4 to thisReport.
19. Corporate Social Responsibility
In accordance with Section 135 of the Act a Corporate Social Responsibility (CSR)Committee of the Board has been constituted to monitor the CSR policy and the programmesand to ensure that they are in line with the Act and the Rules made thereunder. The CSRpolicy and initiatives taken during the year in the format prescribed under the Companies(Corporate Social Responsibility Policy) Rules 2014 are annexed as Annexure 5 to thisReport.
20. Risk Management and internal financial controls
Your Company recognizes that managing risk is an integral part of good managementpractice and an essential element of good corporate governance. It aims to have a commonformalized and systematic approach for managing risk and implementing risk managementprocess across the Company. The Company ensures effective communication and management ofrisk across all risk categories. The Company has identified elements of risk which maythreaten the existence and financial position of the Company and are set out inManagement Discussion and Analysis.
The Companys internal financial control systems are commensurate with the natureof its business financial statements and the size and complexity of its operations. Theseare routinely tested and certified by Statutory as well as Internal Auditors. Significantaudit observations and follow up actions thereon are reported to the Audit Committee.
21. Whistle-Blower Policy and Vigil Mechanism
Your Company has adopted and disseminated its Whistle-Blower Policy to provide a secureenvironment and encourage employees to report unethical unlawful or improper practicesacts or activities and to prohibit any adverse personnel action against those who reportsuch practices in good faith.
The Whistle-Blower Policy is available on the website of the Companywww.sekuritindia.com.
22. Auditors a. Statutory Auditors
M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N /N500016) Statutory Auditors of your Company retire at the conclusion of the ensuingAnnual General Meeting. As per the Act M/s. Price Waterhouse Chartered Accountants LLPare not eligible for re-appointment as Statutory Auditors of the Company. The Board ofDirectors places on record their appreciation for services rendered by M/s. PriceWaterhouse Chartered Accountants LLP as Statutory Auditors of the Company.
The Board of Directors of your Company recommend the appointment of M/s. Kalyaniwalla& Mistry LLP (Registration No.104607W / W100166) as Statutory Auditors of the Companyfor a term of five years to hold office from the conclusion of the 44th Annual GeneralMeeting until the conclusion of 49th Annual General Meeting subject to ratification oftheir appointment by the Members at every Annual General Meeting of the Company. In termsof Regulation 33(1)(d) of the Listing Regulations M/s. Kalyaniwalla & Mistry LLP havealso confirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
M/s. Kalyaniwalla & Mistry LLP have confirmed their eligibility and willingness forthe appointment. A resolution seeking their appointment has been included in the Noticeconvening the Annual General Meeting.
b. Cost Auditor
The Company has appointed Mr. G. Thangaraj Cost Accountant as Cost Auditor to auditthe cost accounting records maintained by the Company for the financial year ending 31stMarch 2018. A resolution seeking Members ratification for remuneration payable tothe Cost Auditor forms part of the Notice of the Annual General Meeting of the Company andsame is recommended for your consideration and ratification.
c. Secretarial Auditor
The Company had appointed M/s. V. N. Deodhar & Co. Company Secretaries toundertake Secretarial Audit of the Company for the financial year ended 31st March 2017.The Secretarial Audit Report for the financial year ended 31st March 2017 is annexed asAnnexure 6 to this Report.
23. Comments on Auditors Report
There are no qualifications reservations or adverse remarks or disclaimers made byM/s. Price Waterhouse Chartered Accountants LLP Statutory Auditors in theirAuditors Report and by M/s. V. N. Deodhar & Co. Company Secretaries in theirSecretarial Audit Report.
The Auditors have not reported any incident of fraud to the Audit Committee of theCompany during the financial year ended 31st March 2017.
24. Significant and Material Orders Passed by the Regulators or Courts or Tribunalsimpacting the going concern status of the Company
There has been no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Companys operations. All ordersreceived by the Company during the year are of routine in nature which have no significant/ material impact.
25. Extract of Annual Return
An extract of Annual Return in the prescribed form MGT-9 is annexed as Annexure 7 tothis Report.
26. Management Discussion & Analysis and Corporate Governance Report
In terms of the Regulation 34(2)(e) of the Listing Regulations the CorporateGovernance Report with the Auditors Certificate thereon and the ManagementDiscussion and Analysis are annexed and form part of this Report.
Your Directors take this opportunity to acknowledge with sincere gratitude the supportof its esteemed customers the strength it derives from its association with Compagnie deSaint-Gobain and its subsidiaries the continued support and co-operation from its Bankersand the loyalty of the Companys Dealers Suppliers and valued Shareholders.
| ||On behalf of the Board of Directors || |
| ||Anand Mahajan ||A. Dinakar |
| ||Director ||Managing Director |
|Mumbai 26th May 2017 || || |