Your directors take pleasure in presenting the 45th annual report of your Companytogether with audited financial statements for the year ended on 31 March 2018.
The financial performance of your Company for the year ended 31 March 2018 ishighlighted below:
| || ||(INR in Lakhs) |
|Particulars ||2017-18 ||2016-17 |
|Period ||12 months ||12 months |
|Revenue from Operations ||195068.55 ||166918.41 |
|Other Income ||691.72 ||406.76 |
|Profit before Tax ||10313.10 ||10029.59 |
|Tax Expense ||(3690.56) ||(3101.61) |
|Profit for the year ||6622.54 ||6927.98 |
|Other Comprehensive Income ||(28.94) ||(44.58) |
|Total Other Comprehensive Income for the year ||6593.60 ||6883.40 |
|Retained Earnings || || |
|Opening Balance ||47327.39 ||41290.62 |
|Add: || || |
|Total comprehensive income for the year ||6593.60 ||6883.40 |
|Less: || || |
|Dividends including dividend tax ||(846.63) ||(846.63) |
|Transfer to General Reserve ||- ||- |
|Depreciation transfer for fixed assets ||- ||- |
|Closing Balance ||53074.36 ||47327.39 |
|EPS (Basic) ||37.66 ||39.40 |
|EPS (Diluted) ||37.66 ||39.40 |
The above figures are extracted from the financial statements of the Company as perIndian Accounting Standards (Ind AS).
INDIAN ACCOUNTING STANDARDS
The Company has adopted Ind AS with effect from 01 April 2016 with the transitionaldate as 01 April 2015 pursuant to the Ministry of Corporate Affairs notification dated 16February 2015 notifying the Companies (Indian Accounting Standards) Rules 2015.Accordingly the financial statements for the year ended 31 March 2018 have been preparedin accordance with the Companies (Indian Accounting Standards) Rules 2015 prescribedunder section 133 of the Act and other recognized accounting practices and policies to theextent applicable.
Growth across all segments in line with the market has resulted in increase in overallsales turnover of your Company to INR 1951 crores from INR 1669 crore in the previousyear. Your Company observed growth momentum and positive sentiments in the core industriesnamely automotive household & electronics distribution. The Company's total income(including other income) was placed at INR 1958 crore for the financial year 2017-18.
Your Company's Profit before Tax (PBT) in financial year 2017-18 is INR 103 crores ascompared to INR 100 crores in previous year. Profit after Tax (PAT) in financial year2017-18 is INR 66 crores as compared to INR 69 crores in previous year. Increase in rawmaterial prices impacted profit however partially offset by better cost control.
Considering the performance and to appropriately reward the Members while conservingresources to meet future financial requirements the board of directors recommends adividend of INR 4/- per equity share of INR 10 each (40%). This dividend is subject to theapproval of the Members at the forthcoming annual general meeting and if approved Memberswhose name appear on the register of Members on 02 August 2018 will be entitled todividend. In the previous year the Company paid a dividend of INR 4/- per equity share ofINR 10/- each of the Company.
TRANSFER TO RESERVES
The Company is not required to transfer any amount to its reserves. Hence no amount istransferred to reserves during the year under review.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
The Company does not have any subsidiary companies associate companies or jointventure during the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and operations of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review:
1. Mr. Anil Shankar was appointed as an independent director by the shareholders of theCompany at their annual general meeting held on 10 August 2017 for a period of three yearseffective from 12 August 2016.
2. Mr. Jal R. Patel was re-appointed as an independent director by the shareholders ofthe Company at their annual general meeting held on 10 August 2017 for a period of threeyears effective from 01 January 2018.
3. Mr. Nitankumar Duggal was appointed as an additional director and was designated aswhole-time director for a period of three years from 31 August 2017 for which approval wasaccorded by the shareholders of the Company through postal ballot dated 27 October 2017.
4. Mr. Sanjeev Madan was appointed as Chief Financial Officer (CFO) on recommendationof nomination and remuneration committee effective from 29 January 2018.
At the 45th annual general meeting following appointments / re-appointments are beingproposed:
1. Mr. Sanjiv Vasudeva who retires by rotation and being eligible offers himself forre-appointment in terms of the Articles of Association of the Company. A brief profile ofMr. Sanjiv Vasudeva is given separately in the notice convening AGM. Your directorsrecommend his appointment for your approval.
Following directors resigned / retired from their office of directorship in theCompany:
Mr. Bhupesh P. Porwal resigned as chief financial officer (CFO) and whole-time directorof the Company effective from 01 September 2017. The board thanked him for providingvaluable guidance to the Company during his tenure.
Key Managerial Personnel
Mr. Sanjiv Vasudeva managing director and chief executive officer Mr. NitankumarDuggal whole-time director Mr. Sanjeev Madan chief financial officer and Mr. HareshKhilnani company secretary head legal and compliance were the key managerialpersonnel of the Company as on 31 March 2018.
MEETINGS OF BOARD OF DIRECTORS OF THE COMPANY
During the financial year under review the board of directors duly met four times. Thedetails of the board meetings with regard to their dates and attendance of each of thedirectors thereat have been set out in the report on corporate governance.
DECLARATION BY INDEPENDENT DIRECTORS
Mr. Jal R. Patel Mr. Anil Shankar and Ms. Ryna Karani were the independent directorsof the Company as on 31 March 2018.
The board of directors of the Company hereby confirms that all the independentdirectors duly appointed by the Company have given the declaration to the effect that theymeet the criteria of independence as provided under section 149(6) of the Act.
Pursuant to the provisions of the Act and the Listing Regulations the formal annualevaluation has been carried out by the board of its own performance and that of itscommittees chairman of the board and individual directors through oral assessment as wellas collective feedback. Board members were requested to evaluate the effectiveness of theboard dynamics and relationships information flow decision-making of the directorsrelationship to stakeholders company performance company strategy and the effectivenessof the whole board and its various committees.
Independent directors were evaluated on the following performance indicators:
Ability to contribute to and monitor our corporate governance practices;
Ability to contribute by best practices to address top-management issues;
Ability to actively contribute towards positive growth of the organization;
Ability to create positive image of our Company and help our Company whereverpossible;
Commitment to the fulfillment of a director's obligations and fiduciaryresponsibilities including participation in board and committee meetings
Your directors have expressed their satisfaction over the evaluation process.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134(3)(c) and 135(5) of the Act the board ofdirectors of the Company confirms that:
i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of financial year and of the profit ofthe Company for that period;
iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis;
v) they have laid down internal finance controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.
The audit committee consists of all independent directors with Mr. Jal R. Patel aschairman and Mr. Anil Shankar and Ms. Ryna Karani as members. The terms of reference ofthe audit committee details of meetings held during the year and attendance of membersare set out in the corporate governance report.
During the year under review the board has accepted all recommendations of auditcommittee and accordingly no disclosure is required to be made in respect ofnon-acceptance of any recommendation of the audit committee by the board.
The Company has not accepted any deposit within the meaning of section 73 and 74 ofthe Act read with the Companies (Acceptance of Deposits) Rules 2014 during the year underreview.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Particulars of loans guarantees and investments covered under Section 186 of the Actform part of the notes to the financial statements provided in this annual report.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of section 124 and 125 of the Act the unpaid and unclaimeddividend pertaining to the year ended on 31 December 2010 which was lying in the Company'sseparate unpaid dividend account and remaining unclaimed for a period of seven years wastransferred to the Investor Education and Protection Fund.
Pursuant to the provisions of Section 124(5) and 124(6) of the Act read with theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 ("IEPF Rules") and amendments thereto all shares on which dividendhas not been paid or claimed for seven consecutive years or more shall be transferred tothe demat account of the IEPF authority.
Your Company observes high standards of corporate governance in all areas of itsfunctioning with strong emphasis on transparency integrity and accountability. Asrequired under the Listing Regulations a detailed report on corporate governance alongwith the auditors' certificate thereon forms part of this report as Annexure I.A detailed review of the operations performance and future outlook of the Company and itsbusinesses is given in the management discussion and analysis report which forms part ofthis report.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of section 135 of the Act the Company hasconstituted a Corporate Social Responsibility (CSR) Committee' and has also framed aCSR Policy. The details of the policy composition of the committee CSR initiatives CSRspending during the year etc. have been provided as Annexure - II to this reportas required under the Companies (Corporate Social Responsibility Policy) Rules 2014.
The amount required to be spent on CSR activities during the year ended 31 March 2018in accordance with the provisions of section 135 of the Act was INR 141.74 lakhs and yourCompany had spent INR 112.00 lakhs. The said amount was spent on the CSR activitiesundertaken by your Company mostly in the vicinity of its plants as well as aroundVadodara where the registered office and corporate office of your Company are located.The shortfall in the amount spent on CSR activities during the year on 31 March 2018 wasdue to lack of proper and need worthy sources for allocation of the funds.
The details of the remuneration policy adopted by the board of directors of yourCompany are mentioned in the corporate governance report.
A statement of disclosure of remuneration pursuant to section 197 of the Act read withrule 5(1) and rule 5(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided as Annexure III forming part of thisreport.
RISK MANAGEMENT POLICY
The details of the risk management policy adopted by the board of directors and detailsof the risk management committee of the Company are mentioned in the corporate governancereport.
EXTRACT OF ANNUAL RETURN
The extracts of annual return in Form MGT-9 as required under section 92(3) of the Actread with rule 12 of the Companies (Management and Administration) Rules 2014 forms partof this report as Annexure - VI
PARTICULARS OF CONTRACTS AND AGREEMENTS MADE WITH RELATED PARTIES TRANSACTIONS
All related party transactions which were entered into during the year under reviewwere on arm's length basis and in the ordinary course of business. There were nomaterially significant related party transactions made by the Company with the promotersdirectors and key managerial personnel which may have a potential conflict with theinterests of the Company at large.
The particulars of contracts or arrangements with related parties referred to insection 188(1) of the Act in the prescribed Form AOC - 2 is provided as Annexure IV forming part of this report.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the statutory auditors under section143(12) of the Act and rules framed thereunder either to the Company or to the centralgovernment.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TILL THE DATE OF THEREPORT
There have been no material changes which have occurred between the end of financialyear till the date of this report affecting the financial position of the Company.
Your Company recognizes and embraces the importance of a diverse board in its success.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge regional and industry experience age ethnicity race and gender which willhelp us retain our competitive advantage. The board of directors has adopted theBoard Diversity Policy' which sets out the approach to diversity of the board. Theboard diversity policy is available on our website www.ineosstyrolutionindia.com.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate system of internal controls in place. It has documentedprocedures covering all financial and operating functions. These controls have beendesigned to provide a reasonable assurance with regard to maintaining of proper accountingcontrols monitoring of operations protecting assets from unauthorized use or lossescompliances with regulations and for ensuring reliability of financial reporting. TheCompany has continued its efforts to align all its processes and controls with global bestpractices in these areas as well.
The Audit committee of the board of directors comprising independent directorsregularly reviews the audit plans significant audit findings adequacy of internalcontrols compliance with accounting standards as well as reasons for changes inaccounting policies and practices if any.
ENVIRONMENTAL HEALTH SAFETY AND PROTECTION
Your Company gives highest importance to Safety Health and Environment (SHE) andencourages and promotes safety awareness in true letter and spirit as an integral part ofits work culture.
Process Safety Management (PSM) is an integral part of all changes taking place in theprocess. Onsite emergency plans have been reviewed and updated by all divisions. Periodicmock drills are conducted at various divisions and reports indicate improved preparednessof employees.
To further strengthen the safety of overall operations and to promote a positive safetyculture and transparency your Company has introduced site specific behavioral basedsafety (BBS) process at all its manufacturing locations and substantially invested for theimprovement of process safety.
Apart from employees the contractors and workmen are also given exhaustive training onsafety first-aid and fire fighting. The Company has appointed and trained safety stewardsto promote safety in all divisions. A green belt in and around all factory premises hasbeen 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 at workplace inline with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and rules framed thereunder and complaints committeehas also been set up to redress complaints received regarding sexual harassment. Duringthe year no complaint with allegations of sexual harassment was received by the Company.
The statutory auditors of the Company M/s. Price Waterhouse Chartered Accountants LLPChartered Accountants (Firm registration number: 012754N/N500016) were appointed as thestatutory auditors of the Company from the conclusion of 43rd annual general meeting untilthe conclusion of 47th annual general meeting of the Company.
The Company has received necessary eligibility certificate and consent under Section141 of the Act to act as statutory auditors of the Company.
The observations made by the auditors in their report read with the relevant notes asgiven in the notes to the financial statement for the year ended 31 March 2018 are self-explanatory and are devoid of any reservation qualification or adverse remarks.
M/s. Devesh Vimal & Co. Practising Company Secretaries Vadodara were appointed toconduct the secretarial audit of the Company for the financial year 2017-18 requiredunder section 204 of the Act and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 framed thereunder. The secretarial audit report received from themis annexed as
Annexure - VII.
The board of directors on recommendation of the audit committee has appointed M/s.Kailash Sankhlecha and Associates (Firm's registration no. 100221) Cost Accountants ascost auditors of the Company for the financial year 2018-19 for conducting the audit ofthe cost records maintained by the Company for the various products as mandated by thecentral government at a remuneration as mentioned in the notice convening the annualgeneral meeting of the Company.
A resolution seeking member's ratification for the remuneration payable to the costauditors for the financial year 2018-19 forms part of the notice of the 45th annualgeneral meeting of the Company and the same is recommended for your consideration andapproval.
A certificate from M/s. Kailash Sankhlecha and Associates has been received confirmingtheir appointment as cost auditors of the Company if made would be in accordance withthe limits specified under section 141 of the Act and rules framed thereunder.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement highlighting details of the conservation of energy technology absorptionand foreign exchange earnings and outgo in accordance with section 134(3)(m) of the Actread with the Companies (Accounts) Rules 2014 is annexed hereto as Annexure - Vand forms part of this report.
As per the provisions of section 177(9) of the Act read with clause 22(1) of theListing Regulations the Company is required to establish an effective vigil mechanism fordirectors and employees to report genuine concerns. The Company has a policy forprevention detection and investigation of frauds and protection of whistleblowers("Whistleblower Policy") in place and the details of the whistleblower policyare provided in the report on corporate governance forming part of this report.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Our employees are the most valuable assets of the Company. We encourage innovationmeritocracy and the pursuit of excellence. The human resource development function of theCompany is guided by a spirit of corporate team building and dedication towardsstrengthening the Company's systems thereby improving efficiencies and registering growth.All personnel continue to have a healthy cordial and harmonious approach in problemsolving and enhancing Company value at all levels. Despite uncertain economic conditionsthe enthusiasm and unstinting efforts of the employees have enabled the Company tomaintain leadership in its business areas. The industrial relations during the yearremained cordial.
The Company has drawn up a comprehensive human resource strategy ("Human ResourceStrategy") which addresses key aspects of human resource development such as:
- Code of conduct and fair business practices.
- A fair and objective performance management system linked to the performance of thebusinesses.
- Creation of a common pool of talented managers across the organization with a view toincreasing their mobility through inter-company job rotation.
- Evolution of performance based compensation packages to attract and retain talentwithin the organization.
- Development of comprehensive training programs to impart and continuously upgrade theindustry / function specific skills etc.
EMPLOYEE BENEFIT MEASURES UNDERTAKEN DURING THE YEAR
In order to achieve a highly streamlined and productive organization a transparent anduniform HR policy with a well-defined reporting structure and clear roles andresponsibilities will be put in place. An employee survey together with a top leadershipworkshop was also conducted to assess the current cultures of INEOS group Companies inIndia and to identify an ideal common culture across the two entities for betterimplementation of the respective strategic initiatives.
Necessary trainings based on identified needs are being set-up across all functions bythe respective heads of departments to enhance the knowledge and competencies of ouremployees. 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 are in progress.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Company has complied with all the applicable provisions of secretarial standard 1and 2 issued by the Institute of Company Secretaries of India during the year underreview.
CODE OF CONDUCT
The Company has suitably laid down the code of conduct for all board members and seniormanagement personnel of the Company. The declaration by CEO of the Company relating to thecompliance of aforesaid code of conduct forms an integral part of this annual report.
We thank our customers vendors dealers investors business partners and bankers fortheir continued support during the year which made the Company grow successfully. We alsoplace on record our appreciation of the contribution made by our employees at all levels.Our consistent growth was made possible by their hard work solidarity cooperation andsupport. We also acknowledge our gratitude to M/s. INEOS Styrolution Holdings Ltd UnitedKingdom for their valuable assistance through their subsidiary companies.
| ||For and on behalf of the Board |
|18 June 2018 ||Stephen Mark Harrington |
|Vadodara ||Chairman |