Seya Industries Ltd.
|BSE: 524324||Sector: Industrials|
|NSE: SRIMANORG||ISIN Code: INE573R01012|
|BSE LIVE 15:40 | 22 Sep||447.45||
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|Mkt Cap.(Rs cr)||1,101|
|Mkt Cap.(Rs cr)||1100.73|
Seya Industries Ltd. (SRIMANORG) - Director Report
Company director report
We are delighted to present the 26th Annual Report and the Audited Financial statementsfor the financial Year Ended March 31 2016
During the period under review the Company has issued and allotted unlistedNon-Convertible Redeemable Preference Shares in accordance with the provisions of Section42 55 62 of the Companies Act 2013 ("the Act").
Rs. in Lakhs
Your Company has complemented its Silver Jubilee celebrations by commensurate SilverJubilee Performance!! Competing and surpassing its own performance with determination toachieve its vision of being a Global Leader in manufacturing of Speciality Chemicals theSilver Jubilee year was felicitated by All-time-high share price of Rs.157.50 at BSE witha blockbuster 106% increase in Prof t after Tax.
Your Company has delivered a strong performance with steady growth in proftabilitywhile recording progress on several strategic initiatives including expansion plans evenamidst extremely challenging backdrop for the chemical industry in wake of sharp declinein the global crude oil prices and related petrochemical intermediates and slow recoveryin key emerging Markets.
Your Company clocked double-digit growth of 11% (YOY) in revenues which stood atRs.27712 Lakhs compared to PY Rs.24831 Lakhs trajected by volume growth of 15% despitedecline in crude oil prices and related petrochemical intermediates considerably reducingrealisation of all products. Amplified operating margins and strong growth in volumes wasequipoised by lower realisation steering to temperate growth in absolute revenuesModernisation and Upgradation initiatives taken by your Company to improve operatingefficiency abetted 47% growth in Earnings (Profit) Before Interest Depreciation Tax& Amortisation (EBIDTA) to Rs.5009 Lakhs from Rs.3417 Lakhs (PY). The traction fromnewly introduced products has been instrumental in healthy trajectory in the SpecialityChemicals segment resulting in commendable growth in volumes and higher contribution inthe overall product mix. Export markets supported the momentum with procurement of highvolumes on the back of high visibility thereby maintaining the spread.
Profit Before Tax stood at Rs.2644 Lakhs whereas Profit after Tax was at Rs.2678Lakhs up 93% and 106% respectively (YOY) breaking the ground of reduced realisations onaccount of lowering of crude oil prices and contributing to whopping Earnings Per Share atRs.24.35 on enhance capital compared to Rs.11.85 per Share (PY).
Your Directors are please to recommend a dividend of Rs.1 per share (10%) on theOrdinary Shares of the Company amounting to Rs.132.39 Lakhs including Dividend Tax. TheDividend payment is subject to approval of members at the ensuing Annual General Meeting.
Management Discussion & Analysis and Corporate Governance Reports
Pursuant to Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 ("Listing Regulations") Management Discussion & Analysisand the Corporate Governance Report are presented in a separate section form ing part ofthe Annual Report.
Capacity Expansion New Projects & Diversification
During the year in retrospect your company has undertaken modernisation and upgradationProject of its Nitro Chlorobenzene manufacturing plant at a Capital outlay of Rs.6552Lakhs which has resulted in Increase in Raw material efficiency Improvement productquality Reduction in Utilities consumption Increase in ease of operation and moreoverincrease in Capacity of Nitro Chlorobenzenes from 15000 TPA to 33000 TPA. This expansionwill further enhance the profitability by contributing to the Top & Bottom line.
Last year your Company had announced setting-up of a Greenfield project to beself-reliant for most of its Raw materials Reduce Cost of Energy Diversify intoSpecialised High Value & High Margin products Value addition to By-Products byreusing the same for manufacturing of high margin products and expansion in capacity ofits captive use products. With a Capital Outlay of Rs.73458 Lakhs and having so farincurred Rs.31533 Lakhs this phase of expansion shall phoenix up the Bottom and Top-lineof the Company and shall make it achieve leading and dominant position in SpecialityChemicals globally for all its products.
Credit Rating agencies have upgraded the ratings to A- (A Minus) ratings for the longterm loan facilities availed by the company and A2 for short-term facilities enjoyed bythe Company.
Your Company obeys to austere guiding principles to efficiently manage its workingcapital level and maintain its debt at a reasonable level. The long term debt of yourCompany increased during the year due to borrowing of Long Term Loans for UpgradationModernisation and Set-up of additional facility of Nitro Chlorobenzenes expanding yourCompany's footprint from 15000 TPA to 33000 TPA which resulted in modest increase inInterest cost on additional term borrowings. Depreciation increased due to capitalisationof the Continuous Nitration facility despite this your Company's enhanced financials havetractioned advancement of financial parameters. Your Company endures its emphasis toeffectively manage its cash lows through prudent regulators to reduce the overall interestcosts. Robust Cash low Repayment of Term loan and Effective management of working capitalhave leveraged Debt/Equity ratio at 0.40x with a Net Debt/ EBITDA of 1.92x propoundingmuch more financial flexibility for Upcoming Projects.
Reserves & Surplus
The Reserves at the beginning of the year were Rs.5414 Lakhs and the Reserves at theend of the year are Rs.7809 Lakhs. During the period under review no amount istransferred to General Reserves.
The Company has neither accepted nor renewed any deposits during the year under review.The Company does not have any deposits which are not in compliance with the requirementsof Chapter V of the Act.
The Company's Information Technology (IT) infrastructure is continuously reviewed andrenewed in line with the development in technology and its requirements.
Directors and Key Managerial Personnel Directors
In Accordance with the provision of the Act and the Articles of Association of theCompany Mr. Asit Kumar Bhowmik is liable to retire by rotation and being eligible offeredhimself for reappointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theSection 149(6) of the Act and Regulation 16 of the Listing Regulations. In the opinion ofthe Board they fulfil the conditions of independence as specified in the Act and theRules framed there under and are independent of the management.
The brief resume and other details relating to the Director who is proposed to beappointed / re-appointed as required to be disclosed under Regulation 36(3) of ListingRegulations is mentioned in the explanatory Statement annexed to the Notice of 26th AnnualGeneral Meeting.
Key Managerial Personnel (KMP)
Mr. Ashok G Rajani Managing Director and Ms. Manisha Solanki Company Secretary arethe KMP as per the definition under Section 2(51) and Section 203 of the Act.
Performance evaluation of Board its committees and of Director's
The Board recognise the Importance of reviewing and improving upon its performance. Forthis purpose they discuss the effectiveness of the functioning of the Chairman ExecutiveDirectors and other Directors and to agree ways in which performance can be furtherimproved looking at the likely needs in future.
A structured questionnaire was prepared after taking into consideration various aspectof the Board's functioning composition of the Board and its committees cultureexecution and performance of specific duties obligation and governance.
The Performance evaluation of the Chairman and Non-independent Directors was carriedout by the Independent Directors. The Board of Directors expressed their satisfaction withevaluation process of Board.
Familiarization Programme for Independent Directors
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industries.
The Details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company and related matters are putup on the website of the Company under the link http://www.seya.in/wp-content/uploads/2011/06/Fam iliarization-Program_for-Independent- Directors-Seya.pdf
The Company has adopted governance guidelines on Board effectiveness. The governanceguidelines cover aspects related to composition and role of the Board Chairman andDirectors Board diversity definition of independence Directors' term retirement ageand committees of the Board. It also covers aspects relating to nomination appointmentinduction and development of Directors Director Remuneration Code of Conduct BoardEffectiveness Review and mandates of Board committees.
Procedure for Nomination and Appointment of Directors
The Nomination and Remuneration (NRC) is responsible for developing competencyrequirements for the Board based on the industry and strategy of the Company. The Boardcomposition analysis reflects in-depth understanding of the Company including itsstrategies environment operations financial conditions and compliance requirements.
NRC conducts a gap analysis to refresh the Board on a periodic basis including eachtime a Director's appointment or re-appointment is required. The Committee is alsoresponsible for reviewing the profiles of potential candidates vis-a-vis the requiredcompetencies and meeting potential candidates prior to making recommendations of theirnomination to the Board. At the time of appointment specific requirements for theposition including expert knowledge expected is communicated to the appointee.
Policy on Directors' Appointment and Remuneration Including criteria for determiningQualifications Positive Attributes and Independence of a director
The Company has in place Remuneration Policy for the Directors KMP and other employeespursuant to the provisions of the Act and the Listing Regulations which is set out inAnnexure I which forms part of the Board' Report.
Meetings of the Board
The details of the number of meetings of the Board of Directors held during theFinancial Year 2015-16 forms part of the Corporate Governance Report.
Employee Stock Option
The Company has not issued any Employee Stock Options during the period under review.
Directors' Responsibility Statement
Based on framework of the internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and external consultant(s) including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed byManagement and the relevant Board Committees including the Audit & Risk ManagementCommittee the Board is of the Opinion that the Company's internal financial controls wereadequate and effective during the financial year 201516. Accordingly pursuant to Section134(5) of the Act the Board of Directors based on the representations received from theOperating Management and to the best of their knowledge and ability confirms that:
a. in the preparation of the Annual accounts for the financial year ended March 312016 the applicable accounting standards have been followed and that there are nomaterial departures;
b. they have in selection of the accounting policies consulted the StatutoryAuditors and have applied their recommendations consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Com pany as at March 31 2016 and of the profit of the Com pany for theyear ended on that date;
c. they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d. they have prepared annual accounts on a 'going concern basis.'
e. they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and are operating effectively; and
f. proper system has been devised to ensure compliance with provisions of allapplicable laws and that such systems are adequate and operating effectively.
Contracts & Arrangements with Related Parties
All related party transactions entered into were on an arm's length basis and in theordinary course of business and were in compliance with the applicable provisions of theAct and the Listing Regulations. Further there were no transactions with related partieswhich qualifies as material transactions under the Listing Regulations. The policy onmateriality of related party transactions and dealing with related party transactions asapproved by the Board may be accessed on company's website at the link
The details of the transactions with related parties are provided in the accompanyingfinancial statements.
Corporate Social Responsibility (CSR)
The CSR Committee has formulated and recommended to the Board a CSR Policy indicatingthe activities to be undertaken by the Com pany as approved by the Board.
The CSR activities are being undertaken by your Company through various Implementingagency with area specific need and focus to reach out to marginalised and deprived sectionof the society and bridge the gap between the haves and have nots by promotion of buildinghealth livelihood and education. The interventions of some implementing agency werespread across India while some concentrated in the state of Andhra Pradesh. During FY2015-16 your Company has spent Rs.15.66 Lacs on CSR activities against the requirementof Rs.14.55 Lacs being 2% of average of the net profits for the preceding three years.
The Company's overall CSR initiative focuses on the following sectors and issues:
Poverty alleviation livelihood enhancement and infrastructure supportincluding programs on agriculture growth animal husbandry development and promotion ofsocial enterprises.
Education and vocational skill development
Environment sustainability by investing in bio-diversity natural resourcemanagement awareness and environment education and mitigation of climate change impact.
Health Care nutrition sanitation and safe drinking water.
Responding to any disasters depending upon where they occur and its ability torespond to meaningfully.
The CSR Policy is available on the Company's website. The Annual Report on CSRactivities is enclosed as Annexure - II
Material changes and commitments if any affecting the financial position of theCompany
No material changes and commitments affecting the financial Position of the Companyoccurred between the end of the financial year to which this financial statement relatesand on the date of this report.
Significant and material orders
No significant and material orders were passed by the Regulators / Courts / Tribunalsimpacting the Company's going concern status and future Operations.
Internal Financial Control
Internal Financial control systems of the Company are commensurate with its size andthe nature of its operations these have been designed to provide reasonable assurancewith regard to recording and providing reliable financial and operational informationcomplying with applicable accounting standards and relevant status safeguarding assetsfrom unauthorised use executing transactions with proper authorisation an ensuringcompliance of corporate policies. The Company has well defined delegation of power withauthority limits for approving revenue as well as expenditure both capital and revenue.
The Company's internal audit function monitors and assesses the adequacy andeffectiveness of the internal financial control. The Audit Committee deliberated with themembers of management considered the systems as laid down and met the internal auditorsand statutory auditors to ascertain inter alia their views on the internal financialcontrol systems. The Audit Committee has satisfied itself of the adequacy andeffectiveness of the internal financial control system as laid down and kept the Board ofDirectors informed.
M/s. Jagiwala and Co. Chartered Accountants Mumbai Statutory Auditor of the Companyholds office till the conclusion of the ensuing Annual General Meeting and being eligibleare recommended for re-appointment on the terms and conditions recommended by the Auditand Risk Management Committee to the Board of Directors. Pursuant to the provisions ofSection 139 of the Act and the Rules framed thereunder it is proposed to appoint M/s.Jagiwala And Co. as the statutory auditors of the Company from the conclusion offorthcoming AGM till the conclusion of 27th AGM to examine and audit the accounts of theCompany for the financial year 2016.
Further the Report of the Statutory Auditors along with notes to schedules is enclosedto this Report. The observations made in the Auditor's Report are self-explanatory andtherefore do not call for any further comments.
The Board has appointed M/s. Hemant Shah & Associates Cost Accountants as the CostAuditor for the Financial Year 2015-16. M/s. Hemant Shah & Associates have beenappointed as Cost Auditor of the Company for the Financial Year 2016-17 and approval ofmembers is being sought for ratification of their remuneration.
In terms of Section 204 of the Act and Rules made there under M/s. Dipali Kapadia& Associates Practising Company Secretary have been appointed as Secretarial Auditorof the Company. The Report of the Secretarial Auditors is enclosed as Annexure - III tothis report. With Respect to comment on CFO your Directors would like to place on recordthat the Board had appointed one candidate as CFO however before company could assesshis skills and knowledge he left the organisation due to some personal reasons. This iscrucial position which requires proper due diligence before appointing anyone on thisposition there has been a delay in appointing CFO. Interviews are in process and the Company shall appoint CFO very soon. At present responsibility of CFO is carried out by theManaging Director of the Company.
Audit & Risk Management Committee
The Company has an Audit & Risk Management committee comprising Mr. Anand TaggarsiMr. Ashok G Rajani and Ms. Kalpana Tirpude. The Board has accepted the recommendationsmade by the Audit & Risk Management Committee from time to time.
Risk management policy of the Company promotes a proactive approach in reportingevaluating and resolving risks associated with the business. Mechanisms for identificationand prioritisation of risks include risk survey business risk environment scanning andinputs from the Materiality Assessment Report and focused discussions in Risk Managementworkshops.
Identified risks are used as one of the key inputs for the development of strategy andbusiness plan.The respective risk owner selects a series of actions to align risks withthe Company's risk appetite and risk tolerance levels to reduce the potential impact ofthe risk should it occur and/or to reduce the expected frequency of its occurrence.
Mitigation plans are finalised owners are identified and progress of m itigationactions are m onitored and reviewed.The risk assessm ent update is provided to the Audit& Risk Management Committee (ARMC) on periodical basis. ARMC is appointed by the Boardand com prises Directors and executives from the Com pany and is chaired by an IndependentDirector. ARMC assists the Board of Directors in overseeing the Company's risk managementprocesses and controls.
Whistle Blower Policy and Vigil Mechanism
In accordance with the provisions of Section 177 (9) of the Act and Regulation 22 ofthe Listing Regulations your Company has a vigil mechanism which has been adopted in theform of Whistle Blower Policy. The policy has been formulated with a view to provide amechanism for Directors and employees of the Company to report genuine concerns. TheWhistle Blower Policy also provides for adequate safeguards against victimization ofpersons who use vigil mechanism and for direct access to the Chairman of the AuditCommittee in appropriate or exceptional cases. The Whistle Blower Policy is uploaded onthe website of Company i.e. www.seya.in
Share Registrar and Transfer Agents
The Company's Registrar & Transfer agents for shares are M/s. Universal CapitalSecurities Private Limited (RTA). RTA is duly registered with SEBI. The contact details ofRTA are mentioned in the Report of Corporate Governance.
Investors are requested to address their queries if any to RTA; however in case ofdifficulties as always they are welcome to contact the Company's' Investor ServicesDepartment the contact particulars of which are contained in the Report of CorporateGovernance.
Consolidated Financial Statements
There being no subsidiaries and associates companies disclosure requirements pursuantto Regulation 33 & 34 of the Listing Regulation are not applicable.
Subsidiaries / Joint Ventures / Associate Companies
As on March 31 2016 the Company did not have any subsidiary join venture orassociate company. Since the Company doesn't have any subsidiary a policy on materialsubsidiary has not been formulated.
Particulars of Loans Guarantees or Investments under Section 186 of the Companies Act2013 during FY 2015-16
During the period under review the Company has not given any loans guarantees or Madeinvestments under Section 186 of the Companies Act 2013.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The Particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed pursuant to the provisions ofSection 134 of the Act read with Companies (Accounts) Rules 2014 are provided inAnnexure - IV to this Report.
Research and Development
The Company recognizes the need to have well equipped R&D facilities to meetcustomer requirements and developing cutting edge products. Detailed report on Researchand Development carried out by your Companies given as an Annexure IV of this report.
Human Resources Management
Your company considers human resources as the main assets of the Company. Your companycontinuously focus on training requirements of its employee on a continuing basis. With aview to increase the productivity the management periodically organises various trainingprogrammes and lectures which boosts and motivates the employee to give their best to theorganisation.
During the year under review your Company's industrial relations at all manufacturingand other locations have remained amicable. All these efforts are concentrated onattracting and retaining the best talent in the industry as people are at the centre ofyour Company's growth.
Particulars of Employees
The Information required under Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given asAnnexure V to this Report.
None of the Company's Employees were covered by the disclosure requirement pursuant tothe provisions of Section 197 of the Companies Act 2013 read with Rules 5 (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Statement of Company's Affairs
The statement of Company's affairs is given under the heading 'Five Years Glory' andvarious other headings in this Report and in the Management Discussion and Analysis Reportannexed to the Directors' Report.
All the insurable interests of your Company including inventories buildings plant andmachinery are adequately insured against risk of fire and other risks.
Environment Health and Safety
Employee's Health Safety and Environmental protection are core business values withinyour Company. The Company's Management believes that environment and safety of all itsstakeholders including those who associated with the projects sites and manufacturingfacilities is of prime importance. We believe that it's our responsibility to protect itsemployees property and environment in which it operates. As your Company deals inChemicals it has to make sure that the highest degree of safety measures is maintained inorder to avoid any risk at the workplace. It strives towards excellence and align itsgrowth path to make tomorrow safer cleaner greener and more sustainable. Your Company iscommitted to maintain its operations and workplace free from incidents and significantrisk to the health and safety of its stake holders through improved engineering practicesstrong channels of communication safety awareness robust checking systems and soundtraining practices. Your Company has well-equipped Occupational Health Centers at all itsmanufacturing locations to monitor health of employees on regular basis. It also monitorsemployees for any indications of lifestyle or work-style related diseases and providescounselling. Your Company regularly monitors the occupational health of employees workingin designated hazardous areas with respect to exposure to hazardous chemicals andprocesses.
The employees are continuously educated and trained to improve their awareness andskills. Environment Health and Safety (EHS) targets assigned to each division to reduceresource consumption and are regularly monitored through an EHS scorecard which isreviewed at monthly business review meetings. All the manufacturing locations of yourCompany have a well-defined Environment Management System. It follows well mappedprocedure in order to select projects assess impacts on society and environment andmitigate any adverse impacts. EHS initiatives have been strengthened further due toformation of a core group for exchange of knowledge and standardising of systems andprocedures. This core group also assess the Plants' Safety and Environment protectionimprovement activities. Periodic audits were conducted by the core group to ensurecompliance with the statutory requirements.
Special emphasis is given on resource conservation and process innovations to convertwaste streams into saleable products and minimise use of water in processing. Your Companyproactively fulfils the environmental requirements of customers by delivering productsthat match international standards. Your Company continues to focus on proper treatment ofeffluents and reduction of pollution as a part of its Green and ecofriendly initiatives.This has made your Company a safe and healthy place to work.
Your Company is signatory to the 'Responsible Care' initiatives and Responsible carelogo holding organisation. Management System at all manufacturing plants and corporateoffice have been assessed and are equivalent to ISO 9001 ISO 14001 & OHSAS 18001. Allraw materials and products within supply chain framework of your Company are transportedin a secure manner for the safety of its customers carriers suppliers distributors andcontractors. Your Company takes utmost care during transportation and ensures that it complies with all the regulations.
All safety statutory requirements like licenses mock drills under emergency conditionsand testing of manufacturing equipments etc. are being complied with. Requirements ofenvironmental acts and regulations are complied with. Effluent treatment of waste streamsand suppression of fugitive emissions through sprinklers is also carried out effectively.Massive tree plantation has been undertaken to improve the greenery all around the plant.
Electronic copies of the Annual Report and Notice of the 26th Annual General Meetingare sent to all the Members whose email addresses are registered with the Company forcommunication purposes. For members who have not registered their email addressesphysical copies of the Notice and Annual Report are sent in the permitted mode. Membersrequiring physical copies can send a request to the Company.
Prevention of Sexual Harassment at Workplace
You Company has zero tolerance towards any act which may fall under the ambit of SexualHarassment at work place and has adopted a Policy on prevention prohibition and redressalof sexual harassment at work place in line with the provisions of Sexual Harassment ofWomen at workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules.
The following is the summary of the Complaints received and disposed-off during thefinancial year 2015-16:
The Securities and Exchange Board of India (SEBI) has by its notification datedSeptember 2 2015 issued the (Listing Obligations and Disclosure Requirements)Regulations 2015 with an aim to consolidate and streamline the provisions of the ListingRegulations for different segments of capital markets to ensure better enforceability. TheRegulations became effective from December 1 2015 and have replaced the ListingAgreements. Accordingly all listed entities were required to enter into the ListingAgreement within Six (6) months from the effective date. The Company has entered intoListing Agreement with BSE Limited during the month of February 2016.
Pursuant to the Listing Regulations the following policies were approved and adoptedby the Board:
Policy on determination of Materiality for disclosure of events of information.
Policy for preservation of documents to classify documents in two categoriesviz. documents which needs to be preserved permanently and documents which need to bepreserved for not less than 8 years after completion of relevant transactions.
Archival Policy to determine the period for which information is required tobe disclosed on the Company's Website.
Extract of the Annual Return
Pursuant to Section 92(3) of the Act and Rules 12(1) of the Companies (Management andAdministration) Rules 2014 extract of annual return in form MGT-9 is enclosed as AnnexureVI to this Report.
The Notes forming part of the Accounts are self-explanatory or to the extentnecessary have been dealt with in the preceding paragraphs of the Report.
The Silver Jubilee Year has been overwhelming for the Company with robust growth andincrease in Profitability tractioned by the newly introduced forward integrated products
Buoyance by an Optimistic economic landscape in Speciality Chemicals your Company isconfident of delivering value-led growth through its customised Speciality Chemicalsportfolio steered by customer acceptance resulting in increased volumes gearing increasecapacity utilisation. Your Company will continue to accelerate its momentum given therelative stability in the global prices of crude oil improved sentiment in both domesticand international markets and its foray into diversified speciality chemical segmentsfurther improving its operational efficiency along with cost reduction.
Specialty chemical industry is a knowledge driven industry. In India it has beengrowing rapidly at 1.2-1.3x of GDP growth rate. Domestic demand of specialty chemicals isexpected to follow an accelerated growth path driven by the strong growth outlook for enduse industries. This along with increased adoption of specialty chemicals and newer usagesshall propel the growth further which is evident from the contribution of 95% of the saidsegment to the total revenue of the Company.
Your Directors wish to express their gratitude and appreciation to all of the Company'semployees at all its locations who through their competence tremendous personal effortsas well as their collective dedication have contributed to the Company's performance.
Your Directors acknowledge with sincere gratitude the co-operation and assistanceextended by the Banks Suppliers Vendors Customers and all the Central and StateGovernment authorities and all other Business associates.
The Board also takes this opportunity to express its deep gratitude for the continuedco-operation and support received from its valued shareholders.
For & on behalf of the Board of Directors
ASHOK G RAJANI
Chairman & Managing Director
Mumbai August 13 2016
ANNEXURE - I
Criteria for determining Qualifications Positive attributes and Independence ofDirectorsand Nomination Remuneration and Evaluation Policy for Directors Key ManagerialPersonnel and Others
Criteria for determining qualifications positive attributes and independence ofDirectors
The Nomination and Remuneration Committee (NRC) has formulated the criteria fordetermining qualifications positive attributes and independence of Directors in terms ofprovisions of the Companies Act 2013 ("the Act") and SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 ("Listing Regulations").
Independence: A Director will be considered as an 'Independent Director' if he / shemeet with the criteriafor 'Independent Director' as laid down in the Act and the ListingRegulations.
Qualifications: A transparent Board nomination process is in place that encouragesdiversity of thought experience knowledge perspective age and gender. It is alsoensured that the Board has an appropriate blend of functional and industry expertise.While recommending the appointment of a Director the NRC considers the manner in whichthe function and domain expertise of the individual will contribute to the overallskill-domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act theDirectors on the Board of the Company are also expected to demonstrate high standards ofethical behavior strong interpersonal and communications kills and soundness of judgment.Independent Directors are also expected to abide by the 'Code for Independent Directors'as outlined in Schedule IV to the Act.
A. Nomination Remuneration and Evaluation Policy for Directors Key ManagerialPersonnel and Others
The Nomination Remuneration and Evaluation policy (the Policy) is in compliance withSection 178 of the Act read along with the applicable rules thereto and the ListingRegulations
The Main objectives of the policy are as follows:
1.1. Ensuring that the level and composition of remuneration is reasonable andsufficient to attract remain and motivate to run the Company successfully.
1.2. Ensuring that relationship of remuneration to performance is clear and meetsthe performance benchmarks.
1.3. Ensuring that remuneration involves a balance between fixed and incentives payreflecting short and long term performance objectives appropriate to the working of theCompany and its goals.
1.4. To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
1.5. To achieve a balance of merit experience and skills amongst its DirectorsKey Managerial Personnel and Senior Management.
This Policy applies to the Board of Directors ("the Board") Key ManagerialPersonnel ("the KMP") and the Senior Management personnel of Seya IndustriesLtd.
This policy sets out guiding principles for the remuneration and nomination committeefor recommending to the Board the remuneration of the Directors Key Managerial Personneland other employees of the Company.
3.1. "Director" means a Director appointed to the Board of the Company.
3.2. "Key Managerial Personnel"
3.2.1. The Chief Executive Officer or the Chairman or the Managing Director or theManager
3.2.2. The Company Secretary
3.2.3. The Whole Time Director
3.2.4. The Chief Financial Officer and
3.2.5. Such other officer as may be prescribed under the Companies Act 2013
3.3. "Nomination and Remuneration Committee" means the committeeconstituted by the Company's Board in accordance with the provisions of the Act 2013 andListing Regulations.
3.4. "Senior Management" mean personnel of the Company who are members ofits core management team excluding the Board of Directors. This would also include allmembers of management one level below the executive directors including all functionalheads.
4.1. The Board is ultimately responsible for the appointment of Directors and KeyManagerial Personnel.
4.2. The Board has delegated responsibility for assessing and selecting thecandidates for the role of Directors Key Managerial Personnel and the Senior Managementof the Company to the Nomination and Remuneration committee which makes recommendations& nominations to the Board.
5. Role of Nomination and Remuneration committee:
5.1. Reviewing the structure size and composition (including the skills knowledgeand experience) of the Board on regular intervals and making recommendations on anyproposed changes to the Board to complement the Company's corporate strategy with theobjective to diversify the Board;
5.2. Identifying individuals suitably qualified to be appointed as the KMPs or inthe senior management of the Company;
5.3. To formulate a criteria for determining qualifications positive attributesand independence of a Director.
5.4. To carry out evaluation of Director's performance and recommend to the Boardappointment / removal based on his / her performance.
5.5. making recommendations to the Board on the remuneration payable to theDirectors / KMPs / Senior Officials so appointed/reappointed;
5.6. to make recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract;
5.7. ensure that level and composition of remuneration is reasonable andsufficient relationship of remuneration to performance is clear and meets appropriateperformance benchmarks
5.8. To devise a policy on Board Diversity;
5.9. To develop a succession plan for the Board and to regularly review the plan;
6.1. The Committee shall consist of minimum three (3) nonexecutive directorsmajority of them being independent.
6.2. Minimum two (2) members shall constitute a quorum for the committee meeting.
6.3. Membership of the Committee shall be disclosed in the Annual Report.
6.4. Terms of Committee shall be continued unless terminated by the Board ofDirectors.
7.1. Chairman of the Committee shall be Independent Director.
7.2. Chairman of the Company shall be appointed as a member of the Committee butshall not be a chairman of the Committee.
7.3. In the absence of the Chairman the members of the committee present at themeeting shall choose one amongst them to act as chairman.
7.4. Chairman of the Committee meeting could be present at the Annual generalmeeting of the Company or may nominate some other member to answer the shareholdersqueries.
8. Frequency of the Meetings:
The meeting of the committee shall be held at such regular intervals as may berequired.
9. Committee Member's interests:
9.1. A member of the committee is not entitled to be present at the meeting whenhis or her own remuneration is discussed at a meeting or when his or her performance isbeing evaluated.
9.2. The Committee may invite such executives as it considers appropriate to bepresent at the meetings of the Committee.
The Company Secretary of the Company shall act as a Secretary to the committee
11.1. Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.
11.2. In case of equality of votes the Chairman of the meeting will have a castingvote.
12. Term / Tenure:
12.1. Managing Director / Whole time Director
The Company shall appoint or re-appoint any person as its Managing Director or wholetime director for a term of not exceeding five years at a time. No re-appointment shall bemade earlier than one year before the expiry of term.
12.2. Independent Director:
12.2.1. An Independent Director shall hold office for a term upto five consecutiveyears on the Board of the Company and will be eligible for re appointment on passing of aspecial resolution by the Company and disclosure of such appointment in Board's Reportshall be made.
12.2.2. No Independent Director shall hold office for more than two consecutiveterm of upto maximum of 5 years each but such independent Director shall be eligible forappointment after expiry of three years of ceasing to become an Independent Director.
12.2.3. Provided that an independent Director shall not during the said period ofthree years be appointed in or be associated with the Com pany in any other capacitywhether directly or indirectly
12.2.4. At the time of appointment of Independent Director it should be ensuredthat number of Boards on which such Independent Director serves is restricted to Sevenlisted companies as an Independent Director and three listed companies as an IndependentDirector in case such person is serving as a whole time director of a listed company orsuch other number as may be prescribed under the Act.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.
14. Appointment of Directors / KMPs / Senior Management Personnel:
Enhancing the com petencies of the Board and attracting as well as retaining talentedemployees for the role of KMP / a level below KMP are the basis for the Nomination andRemuneration Committee to select a candidate for appointment to the Board. Whenrecommending a candidate for appointment the Nomination and Remuneration committee hasregard to:
14.1 assessing the appointee against a range of criteria which includes but not belim ited to qualifications skills regional and industry experience background and otherqualities required to operate successfully in the position with due regard for thebenefits from diversifying the Board;
14.2 the extent to which the appointee is likely to contribute to the overalleffectiveness of the Board work constructively with the existing directors and enhancethe efficiencies of the Company
14.3 the skills and experience that the appointee brings to the role of KMP/SeniorOfficial and how an appointee will enhance the skill sets and experience of the Board as awhole;
14.4 the nature of existing positions held by the appointee including directorshipsor other relationships and the impact they may have on the appointee's ability to exerciseindependent judgment;
14.5 Personal Specification:
Degree holder in relevant disciplines;
Experience of Management in diverse organization;
Excellent interpersonal Communication and representational skills;
Demonstrable leadership skills;
Commitment to high standards of ethics personal integrity and probity;
Commitment to the promotion of equal opportunities community cohesion andhealth and safety in the workplace;
Having continuous professional development to refresh knowledge and skills.
15.1 Ensure that there is an appropriate induction & training program in placefor new Directors and reviewing its effectiveness;
15.2 Ensure that on appointment to the Board Non-executive Directors receive aformal letter of appointment in accordance with the guidelines provided under the Act;
15.3 Identify and recommend Directors who are to be put forward for retirement byrotation.
15.4 Determine the appropriate Size diversity and composition of the Board;
15.5 Setting a formal and transparent procedure for selecting new Directors forappointment to the Board;
15.6 Evaluate the performance of the Board members and Senior Management in thecontext of the Company's Performance from business and Compliance prospective;
15.7 Make recommendation to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract.
15.8 Recommend any necessary changes to the Board.
15.9 Considering any other matters as may be requested by the Board;
15.10 to consider and determine the Remuneration Policy based on the performanceand also bearing in mind that the remuneration is reasonable and sufficient to attractretain and motivate members of the Board and such other factors as the Committee shalldeem appropriate all elements of the remuneration of the members of the Board.
15.11 to approve the remuneration of the Senior Management including key managerialpersonnel of the Company maintaining a balance between fixed and incentive pay reflectingshort and long term performance objectives appropriate to the working of the Company.
16. Remuneration of Directors Key Managerial Personnel and
(i) The guiding principal is that the level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate Directors Key ManagementPersonnel and other senior officials. The Directors Key Management Personnel and othersenior official's salary shall be based and determined on the individual person'sresponsibilities and performance and in accordance with the limits as prescribedstatutorily if any.
(ii) The Nominations & Remuneration Committee determines individual remunerationpackages for Directors KMPs and Senior Officials of the Company taking into accountfactors it deems relevant including but not limited to market business performance andpractices in comparable companies having due regard to financial and commercial health ofthe Company as well as prevailing laws and government/other guidelines. The Committeeconsults with the Chairman of the Board as and when it deems appropriate.
(iii) The Board on recommendation of Nomination and Remuneration Committee shall reviewand approve the remuneration payable to the Executive Directors of the Company within theoverall limits approved by the shareholders.
(iv) The Board on the recommendation of the Nomination and Remuneration Committeeshall also review and approve the remuneration payable to the Key Managerial Personnel ofthe Company. The remuneration payable to the Key Managerial Personnel and the SeniorManagement shall be as may be decided by the Board having regard to their experienceleadership abilities initiative taking abilities and knowledge base.
16.1. Remuneration to Executive Directors:
Basic Compensation (Fixed Salaries)
Basic compensation must be competitive and reflective of the individual's roleresponsibility and experience in relation to performance of day to day activities usuallyreviewed on an annual basis; (includes salary allowances and other statutory /non-statutory benefits which are normal part of remuneration package in line with marketpractices).
The Nomination and remuneration committee may in its discretion structure any portionof remuneration to link rewards to corporate and individual performance fulfillment ofspecified improvement targets or the attainment of certain financial or other objectivesset by the Board. The amount payable is determined by the committee based on performanceagainst predetermined financial and non-financial metrics.
The remuneration payable to the Directors shall be as per the Company's policy andshall be valued as per the Income Tax Rules.
16.2. Remuneration to Non-Executive Directors:
The Board on recommendation of Nomination and Remuneration Committee shall review andapprove the remuneration payable to the Non-Executive Directors of the Company within theoverall limits approved by the shareholders.
The Independent Directors shall not be entitled to any stock option and may receiveremuneration by way of fee for attending meetings of the Board or Committee thereof or forany other purpose as may be decided by the Board and profit related commission as may beapproved by the members.
16.3. Remuneration to other Employees:
Employees may be assigned grades according to their qualification and work experiencecompetencies as well as their roles and responsibilities in the organization. Individualremuneration shall be determined within appropriate grade and shall be based on variousfactors such as job profile skill sets seniority experience and prevailing remunerationlevels for equivalent jobs.
17. Evaluation / Assessment of Directors / KMPs / Senior
Management personnel of the Company:
17.1. The evaluation/assessment of the Directors KMPs and the senior officials ofthe Company is to be conducted yearly or at such intervals as may be considered necessaryand to satisfy the requirements of the Listing Regulations.
17.2. The following criteria may assist in determining how effective theperformances of the Directors/KMPs/Senior officials have been:
Leadership & stewardship abilities;
Contributing to clearly define corporate objectives & plans;
Communication of expectations & concerns clearly with subordinates;
Obtain adequate relevant & timely information from external sources;
Review & approval achievement of strategic and operational plansobjectives budgets;
Regular monitoring of corporate results against projections;
Identify monitor & mitigate significant corporate risks;
Assess policies structures & procedures;
Direct monitor & evaluate KMPs senior officials;
Review management's succession plan;
Assuring appropriate Board size composition independence structure;
Clearly defining roles & monitoring activities of committees;
Review of corporation's ethical conduct
Any other parameter which committee may feel appropriate from time to time toevaluate the performance of the Directors / KMPs / Senior Management Personnel.
17.3. Evaluation on the aforesaid parameters will be conducted by the IndependentDirectors for each of the Executive/ Non-Independent Directors in a separate meeting ofthe Independent Directors.
17.4. The Executive Director/Non-Independent Directors along with the IndependentDirectors will evaluate/ assess each of the Independent Directors on the aforesaidparameters. Only the Independent Director being evaluated will not participate in the saidevaluation discussion.
17.5. Positive Attributes:
In addition to the duties as prescribed under the Act the Directors on the Board ofthe Company are also expected to demonstrate high standards of ethical behavior stronginterpersonal and communication skills and soundness of judgment. Independent Directorsare also expected to abide by the 'Code for Independent Directors' as outlined in ScheduleIV to the Act.
18. Amendment to the Policy:
18.1. The Board of Directors on its own and / or as per the recommendation ofNomination and Remuneration Committee can amend this Policy as and when deemed f t.
18.2. In case of any amendment(s) clarification(s) circular(s) etc issued by therelevant authorities not being consistent with the provisions laid down under thispolicy then the such amendment(s) clarification(s) or circular(s) etc. shall prevailupon the provisions hereunder and this policy shall stand amended accordingly from theeffective date as laid down under the amendment(s) clarification(s) or circular(s) etc.