Your Directors hereby present the 47th Annual Report of yourCompany together with audited financial statements for the year ended on March 312020.
Your Company's financial performance during the year ended March312020 as compared to previous financial year is summarized below:
fINR in lalchel
|Particulars ||2019-20 ||2018-19 |
|Period ||12 months ||12 months |
|Revenue from Operations ||157899.91 ||209053.33 |
|Other Income ||678.33 ||1312.81 |
|Profit / (Loss) before Tax ||(1349.81) ||(1848.11) |
|Tax Credit / (Expense) ||397.55 ||601.38 |
|Profit / (Loss) for the year ||(952.26) ||(1246.73) |
|Other Comprehensive Income ||(21.14) ||(31.06) |
|Total Other Comprehensive Income for the year ||(973.40) ||(1277.79) |
|Retained Earnings || || |
|Opening Balance ||50948.56 ||53074.36 |
|Add: || || |
|Total comprehensive income for the year ||(973.40) ||(1277.79) |
|Less: || || |
|Dividends including dividend tax ||(424.00) ||(848.01) |
|Closing Balance ||49551.16 ||50948.56 |
|EPS (Basic?) ||(5.41) ||(7.09) |
|EPS (Diluted?) ||(5.41) ||(7.09) |
During the year under review total revenue from operations of yourCompany was ? 15789991 Lakhs as compared to ? 209053.33 Lakhs during previousfinancial year with an approx. 24.5% decrease in the total revenue as compared to previousyear. Your Company's Loss before Tax in financial year 2019-20 is ? 1349.81 Lakhs ascompared to a Loss before tax of ? 1848.11 Lakhs in previous year and the TotalComprehensive Income for the financial year 2019-20 was ? (973.40) Lakhs as compared to ?(1277.79) Lakhs in the previous year.
The Company incurred losses during the financial year ending on March31 2020 on account of provisions for certain exceptional items that the Company wasrequired to make in respect of its leasehold properties and litigations and also due toslowdown in economy generally. The economic slowdown was worsened by the imposition ofrestrictions and lockdown in the month of March throughout the country due to spread ofCovid-19.
The outbreak of COVID-19 is expected to have a significant adverseimpact on the global economy. The Indian economy is expected to shrink in FY 2020-21 witha higher contraction in the first quarter.
As the Covid-19 pandemic has spread across India since March 2020 andthe Govt. of India had announced a nationwide lockdown on March 24 2020. the Company hadtemporarily suspended all its manufacturing operations in Gujarat located at MoxiNandesari Katol and Dahej in Gujarat.
Due to the complete lockdown and the resultant slowdown in operationsdemand and sales the demand for Company's products remains muted as of now and this willhave an impact on the profitability for the relevant period.
Your Company is having an active focused approach to ensure minimalimpact to during this crisis. An increase in receivables is expected for a temporaryperiod resulting in higher utilization of working capital limits. The liquidity situationis under control and Company has implemented policies to control and reduce alldiscretionary fixed costs and all nonessential recruitment has been halted.
It is expected that prices of crude and other key raw material willstabilize in the coming year. In the coming year we foresee a shift from mass mobilitydue to social distancing which should help promote the sales of two-wheelers and helmets.We expect a slower recovery in the four-wheeler segment. Consumer spending on healthcarepackaged goods and household goods like washing machines water/air purifiers are expectedto increase post lockdown and our product portfolio is well positioned to cater to theseapplications.
Your Company is constantly monitoring all related risks and accordinglycorrective measures and mitigating steps are planned out wherever necessary.
Keeping in view performance of the Company and losses for the yearended March 31 2020 as also the impact of the social and economic slowdown owing to theCovid -19 pandemic the Board has recommended that no dividend be distributed for the yearended March 31 2020. The Board feels this is in the best interest of your Company and itsshareholders in the given situation.
TRANSFER TO RESERVES
The Company is not required to transfer any amount to its reserves andaccordingly no amount is transferred to reserves during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS
As required by Regulation 34(2) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) a Management Discussionand Analysis Report forms part of this Report and is annexed hereto.
A review of the performance and future outlook of the Company and itsbusinesses as well as the state of the affairs of the business along with the financialand operational developments have been discussed in detail in the Management Discussionand Analysis Report which forms part of this Report.
CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS
As required under Regulation 34 of the Listing Regulations a Cash FlowStatement forms part of the Annual Report. The Company does not have any subsidiaries andhence is not required to publish Consolidated Financial Statements.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNELAppointments/Re-appointments
1. During the year under review:
Following directors were re-appointed by passing Special Resolution atthe 46th Annual General Meeting of the Company held on August 08 2019.
|Name and designation of the Director ||Date and tenure of re-appointment ||Resolution No. |
|Mr. Sanjiv Vasudeva MD & CEO ||w.e.f March 01 2019 for a period of three years. ||4 |
|Ms. Ryna Karani Woman Independent Director ||w.e.f May 16 2019 for a period of three years. ||5 |
|Mr. Anil Shankar Independent Director ||w.e.f August 112019 for a period of three years. ||6 |
2. A special resolution no. 7 was also passed for regularizing andcontinuing appointment of Mr. Jal Patel who has crossed 75 years of age as perrequirement of Regulation 17(1A) of the SeBi (Listing Obligations and DisclosureRequirements) Regulations 2o15 and in accordance with the provisions of SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018.
3. During the year 2019-20 no other appointment has been made exceptas stated above. However the term of appointment of Mr. Nitankumar Duggal as Whole-timeDirector expires on August 30 2020 and it is proposed to reappoint him as a Whole-timeDirector for a further period of 3(three) years vide Resolution no. 5 of the Noticeconvening
0 Retirement by rotation.
Mr. Sanjiv Vasudeva Managing Director and CEO of the Company whoretires by rotation and being eligible offers himself for re-appointment in terms of theArticles of Association of the Company.
During the year Mr. Jit Teng Tan resigned as the Alternate Director toMr. Stephen Mark Harrington with effect from July 152019.
The policy on Director's appointment and remuneration includingcriteria for determining qualifications positive attributes independence of Directorand also remuneration for key managerial personnel and other employees forms part of theCorporate Governance Report annexed here to.
MEETINGS OF BOARD OF DIRECTORS OF THE COMPANY
During the financial year under review the Board of Directors duly metfive times. The details of the Board meetings with regard to their dates and attendance ofeach of the Directors thereat have been set out in the Corporate Governance Report.
DECLARATION BY INDEPENDENT DIRECTORS
Mr. Jal R. Patel Mr. Anil Shankar and Ms. Ryna Karani were theIndependent Directors of the Company as on March 31 2020.
The Board of Directors of the Company hereby confirms that all theIndependent Directors duly appointed by the Company have given the certificate statingthat they meet the criteria of independence as provided under section 149(6) of the Act.
Pursuant to the provisions of the Act and the Listing Regulations theformal annual evaluation has been carried out by the Board of its own performance and thatof its committees Chairman of the Board and individual Directors through oral assessmentas well as collective feedback. The Board members were requested to evaluate theeffectiveness of the Board dynamics and relationships information flow decision-makingof the Directors relationship to stakeholders Company performance Company strategy andthe effectiveness of the whole Board and its various committees.
Independent Directors were evaluated on the following performanceindicators:
Ability to contribute to and monitor our Corporate Governancepractices;
Ability to contribute by best practices to addresstop-management issues;
Ability to actively contribute towards positive growth of theorganization;
Ability to create positive image of the Company and help thecompany wherever possible;
Commitment to the fulfillment of a Director's obligationsand fiduciary responsibilities including participation in Board and committee meetings
Your Directors have expressed their satisfaction over the evaluationprocess.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134(3)(c) and 135(5) of the Actthe Board of Directors of the Company confirms that:
i) in the preparation of the annual accounts for the financial yearended March 312020 the applicable accounting standards have been followed along withproper explanation relating to material departures;
ii) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of financialyear and of the profit / loss of the Company for that period;
iii) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis;and
v) they had laid down internal finance controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems were adequate and operatingeffectively.
The Audit Committee of the Board of Directors comprises of allIndependent Directors with Mr. Jal R. Patel as Chairman Mr. Anil Shankar and Ms. RynaKarani as its members. The terms of reference of the Audit Committee details of meetingsheld during the year and attendance of members are set out in the Corporate GovernanceReport.
During the year under review the Board has accepted allrecommendations of Audit Committee and accordingly no disclosure is required to be made inrespect of non-acceptance of any recommendation of the Audit Committee by the Board.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Directors are regularly informed during meetings of the Board andits Committees on the activities of the Company its operations and issues faced by thepetrochemicals industry. The details of familiarization programs provided to the Directorsof the Company are available on the Company's website www.ineosstyrolutionindia.com.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
The Company did not have any subsidiary companies associate companiesor Joint venture during the year under review. SIGNIFICANT AND MATERIAL ORDERS PASSEDBY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and operations of the Company.
The Company has not accepted any deposit within the meaning ofSections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules 2014during the year under review.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The Company has not granted any other loans or made any investments orprovided any guarantees or security to the parties covered under Sections 185 and 186 ofthe Act.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Sections 124 and 125 of the Act theunpaid and unclaimed dividend pertaining to the year ended on December 31 2012 which waslying in the Company's separate unpaid dividend account and remaining unclaimed for aperiod of seven years was transferred to the Investor Education and Protection Fund.
Pursuant to the provisions of Section 124(5) and 124(6) of the Actread with the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 ("lEPF Rules") and amendments thereto allshares on which dividend has not been paid or claimed for seven consecutive years or moreshall be transferred to the demat account of the lEPF authority.
Your Company observes high standards of Corporate Governance in allareas of its functioning with strong emphasis on transparency integrity andaccountability. As required under the Listing Regulations a detailed report on CorporateGovernance along with the CEO and CFO certificate and a compliance certificate thereonfrom a practising Company Secretary forms part of this report as Annexure - I.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of Section 135 of the Act theCompany has constituted a 'Corporate Social Responsibility (CSR) Committee' and has alsoframed a CSR Policy. The details of the policy composition of the committee CSRinitiatives CSR spending during the year etc. have been provided as Annexure - II tothis report as required under the Companies (Corporate Social Responsibility Policy)Rules 2014.
The amount required to be spent on CSR activities during the year endedMarch 31 2020 in accordance with the provisions of Section 135 of the Act was INR 127.59Lacs and your Company had spent an amount of INR 90.73 Lacs as per details as providedabove.
Your Company looks for appropriate and need worthy projects forallocation of the funds on a continuous basis. The Company had identified two such schoolbuilding projects at Katol and Dahej for this year. However both those projects were tobe executed in collaboration with local panchayats/government authorities. The localauthorities have taken
longer than the expected time for finalizing the project roadmap(including role responsibilities of each participant stages of the project etc.) and dueto these delays the amounts allocated for the said projects have remained unspent.Additionally certain expenses were lesser than the amounts budgeted by the NGOs. Acombination of these factors has resulted in CSR spend being lesser by INR 36.86 lakhsthan the prescribed amount for the year 2019-20.
The Company considers CSR as a part of its corporate philosophy andwill strive to ensure that the amounts are adequately spent to ensure compliance in truespirit.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors KMPs andemployees as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given inAnnexure - Ill to this Report. Details of employee remuneration as required underprovisions of section 197(12) of the Act read with Rule 5(2) and 5(3) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 form part of thisReport. However the reports and accounts are being sent to the shareholders excluding theaforesaid remuneration. Any shareholder interested in inspection of the documentspertaining to the above information or desiring a copy thereof may write to the CompanySecretary.
RISK MANAGEMENT POLICY
The details of the Risk Management Policy adopted by the Board ofDirectors and details of the Risk Management Committee of the Board of Directors arementioned in the Corporate Governance Report.
PARTICULARS OF CONTRACTS AND AGREEMENTS MADE WITH RELATED PARTIES
All related party transactions which were entered into during the yearunder review were on arm's length basis and in the ordinary course of business. There wereno materially significant related party transactions entered into by the Company with thePromoters Directors or the Key Managerial Personnel who may have a potential conflictwith the interests of the Company.
The particulars of contracts or arrangements with related partiesreferred to in Section 188(1) of the Act in the prescribed Form AOC-2 is provided as Annexure-IVforming part of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
A statement highlighting details of the conservation of energytechnology absorption and foreign exchange earnings and outgo in accordance with Section134(3)(m) of the Act read with the Companies (Accounts) Rules 2014 is annexed hereto asAnnexure - V and forms part of this report.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the statutoryauditors under Section 143(12) of the Act and rules framed thereunder either to theCompany or to the Central Government.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TILL THEDATE OF THE REPORT
There have been no material changes which have occurred between theend of financial year till the date of this report affecting the financial position of theCompany.
EXTRACT OF ANNUAL RETURN
The extracts of annual return in Form MGT-9 as required under Section92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules2014 forms part of this report as Annexure - VI.
The Company has also placed a copy of the annual return on its websiteand the same is available on www.ineosstyrolutionindia.com.
Your Company recognizes and embraces the importance of a diverse Boardin its success. We believe that a truly diverse Board will leverage differences inthought perspective knowledge regional and industry experience age ethnicity raceand gender which will help retain our competitive advantage. The Board of Directors hasadopted the 'Board Diversity Policy' which sets out the approach to diversity of theBoard. The Board diversity policy is available on our websitewww.ineosstyrolutionindia.com.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate system of internal controls in place. Ithas documented procedures covering all financial and operating functions. These controlshave been designed to provide a reasonable assurance with regard to maintaining of properaccounting controls monitoring of operations protecting assets from unauthorized use orlosses compliances with regulations and for ensuring reliability of financial reporting.The Company has continued its efforts to align all its processes and controls with globalbest practices in these areas as well.
The Audit Committee of the Board of Directors comprising ofIndependent Directors regularly reviews the audit plans significant audit findingsadequacy of internal controls compliance with accounting standards as well as reasons forchanges in accounting policies and practices if any.
ENVIRONMENTAL HEALTH SAFETY AND PROTECTION
Your Company gives highest importance to Safety Health and Environment(SHE) and encourages and promotes safety awareness in true letter and spirit as anintegral part of its work culture.
Process Safety Management (PSM) is an integral part of all changestaking place in the process. Onsite emergency plans have been reviewed and updated by alldivisions. Periodic mock drills are conducted at various divisions and reports indicateimproved preparedness of employees.
To further strengthen the safety of overall operations and to promote apositive safety culture and transparency your Company has introduced site specificbehavioral based safety (BBS) process at all its manufacturing locations and substantiallyinvested for the improvement of process safety.
Apart from employees the contractors and workmen are also givenexhaustive training on safety first-aid and firefighting. The Company has appointed andtrained safety stewards to promote safety in all divisions. A green belt in and around allfactory premises has been maintained to enhance eco-friendliness.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy on prevention of sexual harassment atworkplace in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and rules framed thereunder and InternalComplaints Committees have also been set up at all locations to redress complaintsreceived regarding sexual harassment. During the year no complaint with allegations ofsexual harassment was received by the Company.
The statutory auditors of the Company M/s. Price Waterhouse CharteredAccountants LLP Chartered Accountants (Firm registration number: 012754N/N500016)('PwC') were appointed as the statutory auditors of the Company from the conclusion of43rd Annual General Meeting until the conclusion of 47th Annual General Meeting of theCompany and their tenure expires at the conclusion of this AGM.
In line with the INEOS group's decision to globally appoint Deloitte asauditors in place of the retiring auditors PwC it is proposed to consider the appointmentof M/s. Deloitte Haskins & Sells Chartered Accountants Ahmedabad as the auditors inplace of PwC for a period of 5 years i.e. from the conclusion of the 47th AGM till theconclusion of the 52nd AGM in 2025. The Audit Committee and the Board have considered andrecommended the appointment of M/s. Deloitte Haskins Sells as statutory auditors of theCompany.
M/s. Deloitte Haskins & Sells has confirmed its eligibility andconsented to act as Auditors of the Company. The Company has sought necessary eligibilitycertificate and consent letters from them in terms of Section 141 of the Act to act asstatutory auditors of the Company.
All other details related to the proposed appointment form part of theNotice convening the AGM.
The observations made by the auditors in their report read with therelevant notes to the financial statements for the year ended March 312020 areself-explanatory and are devoid of any reservation qualification or adverse remarks.
M/s Devesh Pathak & Associates Practising Company SecretariesVadodara were appointed to conduct the secretarial audit of the Company for the financialyear 2019-20 in terms of the requirements of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 framed thereunder. The secretarial audit report received from M/s. Devesh Pathak & Associates isannexed as Annexure - VII.
The Company is required to maintain the cost records as specified bythe Central Government under sub-section (1) of section 148 of the Companies Act 2013 andaccordingly such accounts and records are prepared and maintained by the Company.
Pursuant to Section 148 of the Companies Act 2013 the Board ofDirectors based on the recommendation of the Audit Committee has appointed M/s. KailashSankhlecha and Associates (Firm's registration no. 100221) Cost Accountants as CostAuditors of the Company for the Financial Year 2019-20 for conducting the audit of thecost records maintained by the Company for the various products as mandated by the CentralGovernment at a remuneration as mentioned in the notice convening the annual generalmeeting of the Company.
A resolution seeking members' ratification for the remuneration payableto the Cost Auditors for the Financial Year 202021 forms part of the notice of the 47thAnnual General Meeting of the Company and the same is recommended for your considerationand approval.
M/s. Kailash Sankhlecha and Associates have given their consent to actas Cost Auditors and confirmed that their appointment is within the limits of the Section139 of the Companies Act 2013.
They have also certified that they are free from any disqualificationsspecified under Section 141 of the Companies Act 2013. The Audit Committee has alsoreceived a certificate from the Cost Auditor certifying their independence and arm'slength relationship with the Company.
As per the provisions of Section 177(9) of the Act read with clause22(1) of the Listing Regulations the Company is required to establish an effective vigilmechanism for Directors and employees to report genuine concerns. The Company has a policyfor prevention detection and investigation of frauds and protection of whistleblowers("Whistleblower Policy") in place and the details of the Company's WhistleblowerPolicy are provided in the Corporate Governance Report annexed hereto.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Our employees are the most valuable assets of the Company. We encourageinnovation meritocracy and the pursuit of excellence. The human resource developmentfunction of the Company is guided by a spirit of corporate team building and dedicationtowards strengthening the Company's systems thereby improving efficiencies and registeringgrowth. All personnel continue to have a healthy cordial and harmonious approach inproblem solving and enhancing Company value at all levels. Despite uncertain economicconditions the enthusiasm and unstinting efforts of the employees have enabled theCompany to maintain leadership in its business areas. The industrial relations during theyear remained cordial.
The Company has drawn up a comprehensive human resource strategy("Human Resource Strategy") which addresses key aspects of human resourcedevelopment such as:
Code of conduct and fair business practices.
A fair and objective performance management system linked to theperformance of the businesses.
Creation of a common pool of talented managers across theorganization with a view to increasing their mobility through inter-company job rotation.
Evolution of performance based compensation packages to attractand retain talent within the organization.
Development of comprehensive training programs to impart andcontinuously upgrade the industry / function specific skills etc.
EMPLOYEE BENEFIT MEASURES UNDERTAKEN DURING THE YEAR
In order to achieve a highly streamlined and productive organization atransparent and uniform HR policy with a well- defined reporting structure and clear rolesand responsibilities has been put in place.
Necessary trainings based on identified needs have been set-up acrossall functions by the respective heads of departments to enhance the knowledge andcompetencies of our employees and these keep getting updated and upgraded on a continuousbasis. Other initiatives including an improvement of the working environment theautomation of HR processes including the outsourcing of the payroll processor and theinstallation of a new attendance system have been implemented. Initiatives on improvingemployee engagement have been implemented with primary focus on employee health andfitness like health checkups sporting events fruit days with birthday/festivalcelebrations.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Company has complied with all the applicable provisions ofmandatory Secretarial Standards 1 and 2 issued by the Institute of Company Secretaries ofIndia during the year under review.
CODE OF CONDUCT
The Company has suitably laid down the Code of Conduct for all Boardmembers and senior management personnel of the Company. The declaration by CEO of theCompany relating to the compliance of aforesaid Code of Conduct forms part of the AnnualReport.
We thank our customers vendors dealers investors business partnersand bankers for their continued support during the year. We also place on record ourappreciation of the contribution made by our employees at all levels whose hard worksolidarity cooperation and support has helped the Company to sustain during these toughtimes.
| ||For and on behalf of the Board |
| ||Stephen Mark Harrington |
|June 25 2020 ||Chairman |
|Vadodara ||DIN:07131679 |