Your Directors are pleased to present the 30th Annual Report together withthe Audited Accounts for the Financial Year ended March 31 2018.
1. EXTRACTS OF THE ANNUAL RETURN
I. Registration and Other Details
|Corporate Identity Number (CIN) ||L34102UP1988PLC010141 |
|Name of the Company ||Insilco Limited |
|Registration Date ||19th October 1988 |
|Category/Sub category of the Company ||Limited by Shares and having share capital |
|Address of the Registered Office and Contact Details ||A-5 UPSIDC Industrial Area P.O. Bhartiagram Gajraula Uttar Pradesh-244 223 India |
| ||Contact Details : |
| ||Contact No. : 09837923893 09837823893 |
| ||Fax No. : (05924) 252348 |
| ||Email : Insilco@evonik.com |
| ||Website : www.insilcoindia.com |
|Whether Listed Company if yes name of the Stock Exchange where listed ||Yes at Bombay Stock Exchange Limited (BSE) |
|Scrip ID at BSE ||500211 |
|Name Address and Contact details of Registrar and Transfer Agent ||MCS Share Transfer Agent Limited |
| ||F-65 1st Floor Okhla Industrial Area Phase I |
| ||New Delhi 110020 |
| ||Contact Details : |
| ||Contact No. : (011) 41406149-52 |
| ||Fax No. : (011) 41709881 |
| ||E-mail : email@example.com |
II. Principal Business Activity of the Company
Business activity contributing 10% or more of the total turnover of the Company.
|Name and Description of main products/services ||NIC Code of the Product/ Service ||% to total turnover of the Company |
|Precipitated Silica ||20116 ||100% |
III. Particulars of Holding Subsidiary and Associate Companies
|Name & Address of the Company ||CIN/GLN ||Holding/Subsidiary/Associate ||% of Shares held ||Applicable Section |
|Evonik Degussa GmbH Rellinghauser Strasse ||Not Applicable ||Holding ||73.11 ||2(46) |
|1-1145128 Essen Germany || || || || |
Your Company does not have any Subsidiary or Associate Company.
IV. Shareholding Pattern (Equity Share Capital Breakup as Percentage of Total Equity)
i) Category-wise Shareholding
| ||No. of Shares held at the beginning of the year ||No. of Shares held at the end of the year || |
|Category of Shareholder ||Demat ||Physical ||Total ||% of Total Shares ||Demat ||Physical ||Total ||% of Total Shares ||% Change during the year |
|(A) Promoters Foreign || || || || || || || || || |
|Bodies ||11357645 ||34495670 ||45853315 ||73.11 ||45853315 ||0 ||45853315 ||73.11 ||0.00 |
|Corporate || || || || || || || || || |
|Total Share holding of Promoter (A) ||11357645 ||34495670 ||45853315 ||73.11 ||45853315 ||0 ||45853315 ||73.11 ||0.00 |
|(B) Public shareholding || || || || || || || || || |
|(1) Institutions || || || || || || || || || |
|(a) Mutual Funds/ UTI ||0 ||14060 ||14060 ||0.02 ||0 ||14060 ||14060 ||0.02 ||0.00 |
|(b) Financial Institutions/ Banks ||330 ||23350 ||23680 ||0.04 ||330 ||23350 ||23680 ||0.04 ||0.00 |
|(c) Foreign Institutional Investors ||0 ||0 ||0 ||0.00 ||0 ||0 ||0 ||0.00 ||0.00 |
|Sub-Total (B)(1) ||330 ||37410 ||37740 ||0.06 ||330 ||37410 ||37740 ||0.06 ||0.00 |
|(2) Non- institutions || || || || || || || || || |
|(a) Bodies Corporate || || || || || || || || || |
|(i) Indian ||2364504 ||82880 ||2447384 ||3.90 ||2229881 ||82280 ||2312161 ||3.69 ||(0.21) |
|(ii) Overseas ||165080 ||0 ||165080 ||0.26 ||165080 ||0 ||165080 ||0.26 ||0.00 |
|(b) Individuals || || || || || || || || || |
|(i) Individual shareholders holding nominal share capital up to Rs 1 lakh ||7447011 ||2633027 ||10080038 ||16.08 ||7674245 ||2556947 ||10231192 ||16.31 ||0.23 |
|(ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh ||4063275 ||0 ||4063275 ||6.48 ||3992840 ||0 ||3992840 ||6.37 ||(0.11) |
|(c) Any Other || || || || || || || || || |
|(i) Non Resident Indians ||66858 ||1270 ||68128 ||0.11 ||121362 ||1270 ||122632 ||0.20 ||0.09 |
|(ii) Trust ||40 ||0 ||40 ||0.00 ||40 ||0 ||40 ||0.00 ||0.00 |
|Sub-Total (B)(2) ||14106768 ||2717177 ||16823945 ||26.83 ||14183448 ||2640497 ||16823945 ||26.83 ||0.00 |
|Total Public Shareholding (B)= (B)(1)+(B)(2) ||14107098 ||2754587 ||16861685 ||26.89 ||14183778 ||2677907 ||16861685 ||26.89 ||0.00 |
|GRAND TOTAL (A)+(B) ||25464743 ||37250257 ||62715000 ||100 ||60037093 ||2677907 ||62715000 ||100 ||0.00 |
ii) Shareholding of promoters
| ||Shareholding at the beginning of the year ||Shareholding at the end of the year || |
|Share holders Name ||No. of Shares ||% of total shares of the Company ||% of Shares Pledged / encumbered to total shares ||No. of Shares ||% of total shares of the Company ||% of Shares Pledged / encumbered to total shares ||% change in shareholding during the year |
|Evonik Degussa GmbH ||45853315 ||73.11 ||0.00 ||45853315 ||73.11 ||0.00 ||0.00 |
iii) Change in Promoters' Shareholding:
There was no change in the promoters' Shareholding during the Financial Year 2017-18.As on 31st March 2017 the dematerialized shares of promoter were 11357645out of a total shareholding of 45853315. By 31st March 2018 the entireshareholding was converted into dematerialsed mode.
iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters andHolders of GDRs and ADRs):
The shareholding pattern of top ten shareholders (other than Directors Promoters andHolders of GDRs and ADRs) is attached as Annexure 1.
v) Shareholding of Directors and Key Managerial Personnel:
Directors or Key Managerial Personnel did not have any shareholding inthe Company during the Financial Year 2017-18.
Your Company did not have any secured loans unsecured loans or deposits at thebeginning of the year and at the end of the year.
VI. Remuneration of Directors and Key Managerial Personnel:
A. Remuneration to Managing Director and Whole-time Director
(Amount in Rs.)
| ||Name of Managing Director (MD)/ Whole-time Director |
|Particulars of Remuneration ||Mr. Brijesh Arora (MD) ||Total |
|1 Gross salary || || |
|(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act 1961 ||6048640 ||6048640 |
|(b) Value of perquisites u/s 17(2) of Income-tax Act 1961 ||489233 ||489233 |
|(c) Profits in lieu of salary under section 17(3) of Income-tax Act 1961 ||- ||- |
|2 Stock Option ||- ||- |
|3 Sweat Equity ||- ||- |
|4 Commission || || |
|a. As % of profit ||- ||- |
|b. Other specify ||- ||- |
|5 Other please specify ||- ||- |
|Total (A) ||6537873 ||6537873 |
|Ceiling as per the Act1 ||16800000 ||16800000 |
1 Remuneration paid is within the limit calculated as per provisionsof Section II Part II of Schedule V of the Companies Act 2013 which does not include(i) contribution to PF superannuation fund or annuity fund to the extent either singly orput together are not taxable under the Income-tax Act 1961 (ii) Gratuity payable at arate not exceeding half a month's salary for each completed year of service and (iii)encashment of leave at the end of the tenure.
B. Remuneration to Other Directors
(Amount in Rs.)
|Particulars ||Fee for attending Board & Committee Meetings ||Commission ||Others please specify ||Total |
|I. Independent Directors || || || || |
|1 Mr. Dara Phirozeshaw Mehta ||500000 ||- ||- ||500000 |
|2 Ms. Sonia Prashar ||340000 ||- ||- ||340000 |
|Total (I) ||840000 ||- ||- ||840000 |
|II. Other Non-executive Directors || || || || |
|1 Ms. Meng Tang ||- ||- ||- ||- |
|2 Mr. Harish Kumar Kanaiyalal Davey2 ||- ||- ||- ||- |
|3 Mr. Christian Schlossnikl ||- ||- ||- ||- |
|4 Mr. Sanjeev Taneja3 ||- ||- ||- ||- |
|Total (II) ||- ||- ||- ||- |
|Total (I + II) (B) ||840000 ||- ||- ||840000 |
|Overall ceiling as per the Companies Act 2013 ||The ceiling for independent directors are such sum as may be decided by the Board of directors thereof which shall not exceed one lakh rupees per meeting of the Board or committee thereof. The ceiling for other non-executive directors are 1% of the net profits of the Company calculated as per Section 198 of the Companies Act 2013. |
|Total Managerial Remuneration (A + B) ||7377873 |
D. Remuneration to Key Managerial Personnel other than MD/Manager/WTD
(Amount in Rs.)
|Particulars of Remuneration ||Key Managerial Personnel || |
| ||Ms. Shivangi Negi (CFO) ||Mr. Sarvesh Kr. Upadhyay (Company Secretary) ||Total |
|1 Gross salary || || || |
|(a) Salary as per the provisions contained in Section 17(1) of the Income-tax Act 1961 ||1265880 ||1112400 ||2378280 |
|(b) Value of perquisites under section 17(2) of Income-tax Act 1961 ||67871 ||6055 ||73926 |
|(c) Profits in lieu of salary under section 17(3) of Income-tax Act 1961 ||- ||- ||- |
|2 Stock Option ||- ||- ||- |
|3 Sweat Equity ||- ||- ||- |
|4 Commission || || || |
|a. As % of profit ||- ||- ||- |
|b. Other specify ||- ||- ||- |
|5 Other specify ||- ||- ||- |
|Total (A) ||1333751 ||1118455 ||2452206 |
VII. Penalties / Punishment / Compounding of Offences: There was no penalty /punishment / compounding fee imposed on the Company / Directors / any other officer of theCompany under the provisions of the Companies Act 2013.
2 Mr. Davey ceased to be a Director w.e.f. 10th July 2017due to his unfortunate death.
3 Mr. Sanjeev Taneja was appointed as an Additional Director w.e.f. 1stFebruary 2018.
2. NUMBER AND DATES OF MEETINGS OF THE BOARD AND ATTENDANCE OF THE DIRECTORS
The Board duly met 5 times in the Financial Year 2017-18 on 16th May 201718th July 2017 5th September 2017 4th December 2017 and1st February 2018. The attendance of the Directors in the Board meetings isgiven in clause no. 2.3(C) of Corporate Governance Report.
3. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors' state that;
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with a proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year and ofthe profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and (f) the directors had devised proper systems to ensure compliances withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
4. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDINGCRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF DIRECTORSETC.
Pursuant to Section 178(1) of the Companies Act 2013 and Clause 19 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as the "Listing Regulations") the Board ofDirectors has constituted a Nomination and Remuneration Committee. A Nomination andRemuneration Policy of the Company has also been laid down and approved by the Nominationand Remuneration Committee and the Board. The said policy lays down the criteria for theappointment of Directors Key Managerial Personnel and Senior Management Personnel. Thesaid policy also specifies the appointment and remuneration including criteria fordetermining qualification term/tenure positive attributes independence of Directorscriteria for performance evaluation of Executive and Non-executive Directors (includingIndependent Directors) removal policy on Board diversity Directors and Officers'Insurance and other matters as prescribed under the provisions of the Companies Act 2013and the Listing Regulations. The said policy of the Company is attached as Annexure-2to this report.
5. SECRETARIAL AUDIT
Nityanand Singh & Co. a firm of Company Secretaries having its address at 14 2ndFloor Arjun Nagar Safdarjung Enclave New Delhi - 110029 has conducted the SecretarialAudit of the Company for the Financial Year 2017-18. The Secretarial Audit Report issuedby the said firm is attached to this report as Annexure-3.
6. EXPLANATION OR COMMENTS BY THE BOARD ON QUALIFICATIONS RESERVATIONS ADVERSEREMARKS OR DISCLAIMERS MADE BY STATUTORY AUDITOR AND SECRETARIAL AUDITOR IN THEIRRESPECTIVE REPORTS
The reports of Statutory Auditor and Secretarial Auditor do not contain anyqualifications reservations adverse remarks or disclaimers.
7. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THECOMPANIES ACT 2013
During the year the Company had not entered into any transaction of loan guarantee orinvestment under Section 186 of the Companies Act 2013.
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Particulars of Contracts or arrangements with related parties are given in form AOC 2which is attached as Annexure-4 to this report.
Pursuant to the provisions of the Companies Act 2013 and Clause 23 of the ListingRegulations the Board has laid down a policy on dealing with related party transactionsand the same is available on the website of the Company at the following link:http://www.insilcoindia.com/policies.htm.
9. THE STATE OF THE COMPANY'S AFFAIRS
A. Financial Highlights
The summarized results for the year rounded off to Rupees in millions are givenbelow:
|Particulars ||Year Ended 31.03.2018 ||Year Ended 31.03.2017 |
|Gross Turnover ||888.04 ||957.85 |
|Less: Excise duty ||(22.17) ||(91.43) |
|Turnover (net of excise duty) ||865.87 ||866.42 |
|Other Income ||39.77 ||66.90 |
|Total Expenditure (excluding excise duty) ||(886.05) ||(855.68) |
|Profit before Depreciation & Exceptional Items ||19.59 ||77.64 |
|Depreciation ||(19.17) ||(17.17) |
|Profit/ (Loss) for the year before exceptional items ||0.42 ||60.47 |
|Exceptional items ||- ||(4.16) |
|Profit/(Loss) before tax ||0.42 ||56.31 |
|(Provision for)/Release of Taxation ||3.22 ||(7.24) |
|Profit/(Loss) after tax ||3.64 ||49.07 |
|Other comprehensive income ||1.65 ||(2.63) |
|Total comprehensive income for the year ||5.29 ||46.44 |
B. Results of Operations
Sales of Precipitated Silica during the year were 15207 MT (previous year 14939 MT).The Production during the year was 14857 MT (previous year 15023 MT).
Your Company achieved a sales turnover of Rs. 888 million during the year as comparedto Rs. 958 million in the previous year. The sales turnover during the year includesexcise duty of Rs. 22 million as compared to Rs. 91 million in previous year. The exciseduty of Rs. 22 million is for 3 months (April 17 to June 17) as it was discontinuedeffective 1st July 2017 upon implementation of the Goods and Service Tax (GST)in India whereas Rs. 91 million is for 12 months (April 16 to March 17). GST is notconsidered as part of sales turnover. The sales turnover (net of excise duty) during theyear is Rs. 865.87 million as compared to Rs. 866.42 million in previous year. The Companyrecorded a profit before depreciation and exceptional items of Rs. 19.59 million ascompared to profit of Rs. 77.64 million in the previous Financial Year. The Company hadreserves of Rs. 380 Million as on 1st April 2017. The total comprehensiveincome for the Financial Year 2017-18 was Rs. 5 Million.
The Company is endeavoring to increase its turnover and profit. The Company is lookingfor optimum utilization of its assets and other resources so that the journey ofprofitable growth is continued. With the support of Evonik we continue to make efforts tooptimize energy utilization manufacture high quality products improve plant safetyimprove efficiency and higher capacity utilization. We are providing quality productapplication and technical support and overall service to the Customers.
C. Future Outlook
The financial year 2017-18 has been a year marked with both excitement and challengesfor the Indian economy. Structural changes have been made in the indirect tax system bythe introduction of Goods and Service Tax (GST). The effect of demonetization andimplementation of Goods and Service Tax seems to be over now and it is expected that itwill boost the economy. Organized players like us would be long term beneficiaries of thesame. GST data shows significant rise in the number of taxpayers. The GDP growth forFinancial year 2018-19 is expected in the range of 7% to 7.5%. The Indian economy isimproving and showing potential for growth.
Your Company continues to enjoy a high standing with its customers because of itsquality value added services and strong technical support from parent Company. Besidesit is actively considering the installation of a "Propane LPG project" at itsplant to reduce the energy costs and is pursuing all growth opportunities to improve theresults. The quality conscious customers are showing faith in our quality products. TheCompany is actively trying to increase its customer base. It has added some new customersand also regained some lost customers. However the future growth of the Company willdepend upon our ability to optimize our costs by making our products more competitiveincreasing capacity utilization optimal product mix efficiency improvement and thewillingness of customers to pay a premium for our high quality products. There areinherent opportunities available for the Company in the target industries such as TyresAutomotive Components Mechanical Rubber Goods Footwear Battery SeparatorsAgrochemicals Food and Feed. The silica applications in all these industries are growingrapidly. The Company is continuously improving safety plant condition efficiency andyield. The Company is actively pushing growth opportunities to use the unutilizedproduction capacity and improve product mix.
Evonik India Private Limited (EIPL) is handling the marketing and salespromotions of the products of the Company in India Bangladesh and Srilanka. Until 30thJune 2017 EIPL was getting a commission of 2% on the net sales of Insilco Limited withinIndia excluding sales made through dealers/distributors in India though EIPL wasresponsible for the sales of dealers/distributors in India. EIPL was also responsible forthe sales in Bangladesh and Srilanka however they were not eligible for any commissionon the same. W.e.f. 1st July 2017 EIPL has become eligible for commission of3.25% on the net sales of Insilco Limited within India including sales throughdealers/distributors in India. Commission for sales in Bangladesh and Srilanka has beenintroduced at the rate of 1.5% and 1% respectively with effect from 1st July2017.
The Board has approved capital expenditures for Propane LPG Project DistributedControl System roof of Dryer Chamber Autoclave Weighing System and FirefightingEquipments etc. Our parent Company Evonik is providing technical support whereverrequired.
These financial statements are the first financial statements of the Companyunder Indian Accounting Standard (IND AS) as per the Companies (Indian AccountingStandards) Rules 2015. The financial statements up to the year ended 31stMarch 2017 were prepared in accordance with the accounting standards notified under theCompanies (Accounting Standard) Rules 2006 (as amended) and other relevant provisions ofthe Act.
Please refer to note 38 of the audited financial results for the financial year2017-18 for an explanation of how the transition from previous GAAP to Ind AS has affectedthe Company's financial position financial performance and cash flows.
10. TRANSFER TO RESERVES
The Company had reserves of Rs. 380 Million as on 1st April 2017. The totalcomprehensive income for the Financial Year 2017-18 was Rs. 5 Million. Therefore theclosing balance of the reserves and surplus as on 31st March 2018 amounted toRs. 385 Million.
No dividend is recommended considering the operational performance of the Company.
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATEAND THE DATE OF REPORT
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the Financial Year of the Company to whichthe financial statements relate and the date of this report.
13. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
The details of conservation of energy technology absorption foreign exchange earningand outgo during the year are as follows:
A. Conservation of Energy
Your Company always emphasizes on conservation of Energy and Natural Resources. TheCompany is giving priority to energy conservation measures including a regular review ofenergy generation consumption and effective control on utilization of energy.
The Company has reduced product change over time in the production process and improvedenergy efficiency. During the financial year 2017-18 the Board has approved a switch inthe source of energy from High Speed Diesel to propane-LPG system for drying activity byimplementing propane-LPG system at the Gajraula Plant of the Company. This will result ina significant cost reduction.
Due to plant upgradation system fuel efficiency has improved and overall energyconsumption (Power & HSD) has reduced per ton of Silica.
B. Technology Absorption
1. The effort made towards technology absorption
The technology for manufacture of various grades of Precipitated Silica has beensupplied by the parent Company Evonik Degussa GmbH Germany. We believe that it isimportant that in future we can offer an even broader technology support/base to meet ourcustomers' growing long-term needs. The modification of process equipment and productsare carried out to meet changes in market requirements and to improve operationalefficiency.
2. Benefits derived from the above efforts
Focus on value added products technical support to customers optimum utilization ofresources for production and higher yield.
3. Technology imported during the last three years
The Company has not imported any technology during the last three years reckoned fromthe beginning of the Financial Year.
4. Expenditure on Research and Development
The Company has not incurred any expenditure on Research and Development.
C. Foreign Exchange earnings and outgo
The Foreign Exchange earnings in terms of actual inflows during the year and theForeign Exchange outgo during the year in terms of actual outflows were as follows:
(Rs. in 000)
|Total Foreign Exchange used and earned ||Year ended 31st March 2018 ||Year ended 31st March 2017 |
|a) Total Foreign Exchange earned ||8671 ||3939 |
|b) Total Foreign Exchange used ||10104 ||9152 |
14. STATEMENT ON RISK MANAGEMENT POLICY
The Board of Directors has developed and implemented a Risk Management Policy for theCompany. The Company has taken proper initiatives to mitigate risks. In the opinion of theBoard there are following risks which could threaten the existence of the Company:
1. Risk of HSD (Diesel) prices going up substantially.
2. Loss of Market Share if our product rates are significantly higher than competitors.
3. Environmental Risk if more stringent norms are introduced by government for chemicalindustries near the Ganga River.
The Board has also taken certain steps to minimize the same and its current status aregiven below:
(i) Risk of HSD (Diesel) prices going up substantially; and
(ii) Loss of Market Share if our product rates are significantly higher than those ofcompetitors
Current Status of Action Taken :
To minimize the aforesaid risk the Board had earlier approved to switch the source ofenergy from High Speed Diesel to Coal for drying activity by implementing a Coal Fired HotAir Unit at Gajraula Plant of the Company. Accordingly the following activities werecompleted in respect of the Coal project:
1. NOC for Coal Project has been received from UPPCB Lucknow.
2. Basic & Extended basic engineering of tube bundle is completed.
3. Required information for HAZOP safety analysis has been provided to Evonik and it isunder evaluation.
Meanwhile on 18th July 2017 the Board resolved to explore other sources ofenergy for the drying activity in the manufacturing process besides the Coal Project toreduce existing cost of energy. Accordingly after evaluation by Evonik Germany theinstallation of propane-LPG system was approved by the Board of Insilco on 4thDecember 2017. In this regard the Company has received approval from Petroleum &Explosives Safety Organisation (PESO) Ministry of Commerce & Industry. The Companyhad applied to Uttar Pradesh Pollution Control Board (UPPCB) for a No ObjectionCertificate in December 2017. The Company is also in the process of obtaining approvalsfrom other appropriate authorities.
The Company is also continuing a system of tracking of its vendor's raw material costto correlate the prices of the Company's purchases with them.
(iii) Environmental Risk if more stringent norms are introduced by government for thechemical industry near the Ganga River
We are presently complying with all the existing pollution control norms and water/airconsent conditions.
The introduction of any new more stringent norms if any is beyond the control of thecompany and it is impossible to comment on likely impact or mitigation measure at thisstage for these risks.
In this regard the shareholders are hereby informed about the following:
The members are hereby further informed that there was a case pending in the Hon'bleNational Green Tribunal (NGT) for cleaning of river Ganga. The NGT has pronounced itsdetailed judgement dated 13th July 2017 in the said matter. The completedetails of this matter is given below in point no. 15 i.e. "Ganga Cleaning Matterwith NGT".
Water and Air Consent
The Company has already received electronic approval in May 2018. The physical copy ofthe consent orders alongwith detailed conditions are yet to be received.
The Board has also approved a Risk Management Policy which is available on the websiteof the Company at the following path: http://www.insilcoindia.com/policies.htm .
15. GANGA CLEANING MATTER PENDING IN THE NATIONAL GREEN TRIBUNAL
The members are hereby informed that your Company received a letter from Uttar PradeshPollution Control Board (UPPCB) dated 27th January 2017 calling upon it toappear before the National Green Tribunal (NGT) on 6th February 2017 in thematter of M. C. Mehta Vs. Union of India and Others (Original Application No. 200/2014)i.e. matter of cleaning of Ganga. The said letter was issued to various industrial unitslocated near the Bagad River. On 6th February 2017 NGT issued a show causenotice to all the industrial units at Gajraula on the ground of pollution includingInsilco Limited and asked as to why they should not be directed to shut down their unitsforthwith. The Company had filed its detailed reply with NGT.
However the matter was not heard and on 24th April 2017 the NGT formed aspecial high power inspection team consisting of various high level government officials(hereinafter referred as Joint Inspection Team') and directed them to visitIndustries in Gajraula Industrial Area on 25th April 2017 and to report theirobservations on 26th April 2017 to NGT. The Joint Inspection Team visited 13industries in Gajraula and submitted their observations verbally to the NGT on 26thApril 2017. The NGT passed its order dated 26th April 2017 on the basis of theverbal observations explained to the NGT. For Insilco Limited the order of NGT dated 26thApril 2017 inter-alia stated that Insilco is using fresh water for dilution of treatedeffluent which is impermissible. Insilco is prescribed with the limit of Sodium AbsorptionRatio (SAR). Since Insilco has to maintain that ratio rather than treating the sameappropriately it is diluted by adding fresh water and with Magnesium Sulphate so that itdoes not exceed the prescribed limit. This is practically a fraud being played.Similarly the said order included various negative comments for other industries inGajraula.
Based on these observations the NGT ordered the shut down of all the 13 unitsincluding Insilco Limited in Gajraula Industrial Area. NGT has given an option to them tocome up with future plans of compliance for resuming operability of the Company and inthis regard the matter was scheduled to be heard on 8th May 2017.
The shareholders are hereby informed that the aforesaid order of the NGT dated 26thApril 2017 was not on the merits and that our plant at Gajraula has always been in fullcompliance with the applicable pollution norms.
The report of the Joint Inspection Team was uploaded on the website of CentralPollution Control Board on late evening of 4th May 2017.
The observations of the said report for Insilco were that:
1. The industry generates effluent having high Total Dissolved Solid ("TDS");
2. The unit should opt for Zero Liquid Discharge (ZLD);
3. The unit should adopt recovery of salt (Na2SO4) with any appropriate system andexplore possibilities of re-use of treated water at nearby industries; and
4. The unit should stop using fresh water dilution for reducing SAR in order to complywith the consent condition.
The report recommended that (i) the unit shall stop using fresh water dilution forreducing the SAR in order to comply with the consent condition; (ii) the treated water maybe used at nearby industries so that the overall stress on the ground water in the area isreduced. This approach shall be through MoU and consent of UPPCB.
Insilco Limited filed its reply in the NGT on 5th May 2017 along with areply to the observations/recommendations made in the report of the Joint Inspection Team.The reply of Insilco Limited filed with NGT inter alia included the following pointsreply to the observations of the said report:
1. That no TDS limit has been prescribed for Insilco Limited in the water consentconditions and all such applicable conditions of consent to operate are being compliedwith.
2. That Insilco Limited does not fall within the Red Category of Industries of CentralPollution Control Board (CPCB) / Ministry of Environment and Forest (MOEF) and is also notincluded in the 17 categories of highly / seriously polluting industries identified byCPCB and MOEF such as Pharmaceuticals Chlor Alkali Fertilizers
Pesticides Petrochemicals Large Power Plants Cement Aluminum Zinc Copper Iron& Steel Large Pulp & Paper Distillery Sugar Oil Refinery Dye and dyeintermediate and Tannery. That the CPCB as per the advice of NGT has come out with ZLDrequirement for industries and ZLD is prescribed only for 5 industries i.e. DistilleryTannery Textiles Pharmaceuticals and Dye and Dye Intermediaries. Insilco Limited doesnot fall under these prescribed industries and hence the requirement of ZLD is notapplicable on Insilco.
3. That for recovery of salt (Na2SO4) with any appropriate system and exploring thepossibilities of re-use of treated water Insilco Limited has reached out to variousrecognized scientific institutions of the country including Delhi TechnologicalUniversity (DTU) (Formerly known as Delhi College of Engineering); The Indian Institute ofTechnology (IIT) Kanpur; and the Department of Chemical Engineering Malaviya NationalInstitute of Technology Jaipur for availing of their assistance and expertise in findingsome techno-commercial viable method for the following:
i. Reducing Sodium Sulphate to the maximum extent possible and recover the same forother uses in terms of the suggestion made in the Report;
ii. Reduce water consumption in the manufacturing process in terms of the suggestionmade in the Report; and
iii. Recycle and reuse of treated water in terms of the suggestion made in the Report.
4. That Insilco is complying with the conditions of water consent including conditionswith respect to SAR.
This matter was heard on 8th May 2017. The Company pleaded that therecommendations with regard to ZLD were not practical for our plant and pollutionauthority should prescribe some appropriate method. After the hearing the Plant of theCompany was allowed to resume operations subject to the following directions:
1. The industry would pay a sum of INR 1.5 Million voluntarily and it is only uponpayment of that amount to the Central Pollution Control Board (CPCB) that it would bepermitted to operate.
2. The industry will comply with all the recommendations and directions contained inthe Joint Inspection Report immediately and without delay and default.
3. In regard to Zero Liquid Discharge (ZLD) and whether the dilution of 1/1 should bepermitted the industry would put forward it case before the Joint Inspection Team whichwill offer its comments and place the Report before the Tribunal.
4. The industry will obtain positively the permission from the CGWA now without anydelay.
5. The Joint Inspection Team shall place complete and comprehensive Report includingthe source quantum and quality of the ground water that is being extracted.
6. The inspection report should be submitted before the Tribunal within two weeks fromthe date of order (i.e. 8th May 2017).
The order dated 8th May 2017 also stated that if the industry fails tocomply with these directions it should be liable to be closed without any further notice.
Pursuant to the order of NGT dated 8th May 2017 Insilco deposited INR 1.5Million with Central Pollution Control Board on 9th May 2017 and restarted itsproduction from late evening of 9th May 2017.
As directed by the NGT in its order dated 8th May 2017 the Joint InspectionTeam visited the plant of Insilco at Gajraula on 23rd May 2017. The existingfull compliance status along with the measures taken for improvement were explained by theCompany to the inspection team. However as on the date of the signing of this report theCompany is yet to receive the report of the Joint Inspection Team. The NGT on 13thJuly 2017 pronounced its detailed judgement in this matter where it has given certainspecific directions with respect to Bagad River (drain) besides general directions whichare as follows:
a) The Bagad river (drain) inclusive of Mahua should be cleaned dredged andmaintained as a river or storm water drain.
b) All the 12 industries located in the catchment area of this drain which are highlypolluting should be put under strict surveillance by the UPPCB as well as the JointInspection Team.
c) The Joint Inspection Team has already been directed to inspect these industries toconform with appropriate conditions for permitting and operating all these functions.
d) These industries have been directed to comply with the conditions of the consentorder and directions issued by the Joint Inspection Team under the provisions of the Water(Prevention and Control of Pollution) Act 1974 and the Environmental (Protection) Act1986.
e) In the event of these industries not complying with such directions they shall beliable to be closed without any further notice.
f) The Joint Inspection Team and the UPPCB shall submit compliance report in relationto these industries before the Tribunal upon regular intervals.
The detailed judgement of the NGT dated 13th July 2017 can be accessed atthe website of NGT at the following link:http://www.greentribunal.gov.in/judge_courtI.aspx. It can be searched through partyname' or date of judgement' or bench judgement i.e. court-I'.
The Company has also filed a Caveat before the NGT so that no inspection reports can betaken on record / no orders be passed in the matter without service of report on theCompany and nothing be done in this regard without giving an opportunity to the Company ofbeing heard.
After the above judgement dated 13th July 2017 the following importantdevelopments/correspondence have taken place:
The Company had received a letter dated 13th November 2017 fromCentral Pollution Control Board based on inspection of special high power committeeasking for appropriate reason/clarification about high TDS effluent discharge.
Insilco had replied to the said letter stating that Insilco has been complying with theconditions under issued water consent order by UPPCB. We have further stated that no TDSlevel for the effluent discharge has been prescribed for the unit of Insilco and insteadInsilco's unit is required to maintain SAR limit which is being complied with along withall other conditions of water consent issued by UPPCB.
We had also shared the steps taken to improve Insilco's infrastructure.
The Company had received a letter dated 12th January 2018 from UPPCBintimating various observations of joint inspection team which had inspected Insilco'sfactory at Gajraula on 23rd May 2017 pursuant to the order of Hon'ble NGT dated8th May 2017.
The observations were as follows:
1. The Unit required to recalculate the dosing of magnesium sulphate to meet the SARstandard.
2. In a time bound manner the unit shall discontinue the present chemical addition (10Tons of MgSO4) and further dilution of ground water (1800 to 2000 KLD) to meet theprescribed SAR value (26). Instead unit may switch over to complete ZLD (Zero LiquidDischarge technology) system to save ground water and wastage of chemicals forneutralization. Presence of Fluoride (5 to 6 mg/1) also indicates that rather thandilution ZLD may be the only option for achieving and continuity of the unit.
3. Presence of inorganic pollutants in the storm water indicates poor operation andmaintenance of the plant and suspected partial diversion of effluent or negligent handlingof sludge by the unit which may require further investigation.
4. The Unit shall operate STPs continuously.
5. Closure of the unit may be considered if the unit failed to provide the time boundaction plan for achieving ZLD.
Insilco had replied to the said letter on 19th January 2018. Point wise summaryof the reply is as follows:
1&2. Insilco has appointed Indian Institute of Technology Roorkee' (IIT-R)to carry on R & D activity for "investigation of a few alternative remedies tomitigate the high sulphate / high Total Dissolved Solid (TDS) in wastewater of our plantand suggestion for economical viable solution with its capex cost and operating cost.These observations will be addressed after the receipt of final report of IIT-R.
Insilco's letter also explained to UPPCB that SAR was imposed specifically on the unitof Insilco pursuant to the order of Hon'ble Supreme Court with which Insilco has beencomplying along with other applicable pollution norms and consents.
3. Insilco had mentioned that it has also been getting the samples at EffluentTreatment Plant (ETP) outlet (from V-notch) tested by a third party on a regular basis andthe value of fluoride remains in the range of 1 to 1.5 mg/l. The IIT-R had also taken thesample for their testing and their interim report concludes Fluoride values as 1.6 mg/l infinal discharge. Insilco had requested UPPCB that if required they could collect thesample again which could be sent to testing to any independent agency or IIT-R.
4. Insilco had said that for the best interest of the Company and environment it willoperate its STPs.
5. Insilco had stated that it had appointed IIT-R to carry on R & D activity for"investigation of a few alternative remedies to mitigate the high sulphate / highTotal Dissolved Solid (TDS) in wastewater of our plant and suggestion for economicalviable solution with its capex cost and operating cost. After reports on the same byIIT-R options of ZLD could be explored.
Insilco had further explained to UPPCB that on Insilco's industry ZLD could not beachieved and the reasons of the same given were as follows:
Central Pollution Control Board's (CPCB's) in one of its guidelines hasinstructed all pollution control boards and other departments that the ZLD requirement ispossible only for the few specified industries and Insilco is not falling intothose specified industries. Insilco in its letter also said that CPCB has also concludedthat for other highly water consuming/polluting industry ZLD is not techno economicallyviable and CPCB has only suggested water conservation and minimization procedure.
Insilco Limited is not in the list of 17 categories of highly / seriouslypolluting industries identified by CPCB
Detailed judgement of Hon'ble NGT dated 13th July 2017 in the matterof M. C. Mehta vs. Union of India (Original Application no. 200/2014) of which InsilcoLimited is one of the respondent has inter-alia categorically instructed pollutionauthorities that ZLD would not be applied to the industrial units straight away and itshall be on a case to case basis particularly with reference to the load of effluent beingdischarged quality of effluents etc. This should have reference to the financialviability as well.
Insilco had also said that it had received an NOC from Central Ground Water Authority(CGWA) for Ground Water Abstraction.
Insilco had also shared the steps taken to improve Insilco's infrastructure.
Further requirement to achieve ZLD is a highly energy intensive process and byadopting ZLD the carbon Foot print will be increased which is against our National ClimateChange Policy.
The Company has received electronic approval in response to its application for renewalof air and water consent. Physical approval of air and water consent along with detailedconditions to operate is yet to be received.
The Board believes that the Company has a strong case in its favour as the Companycontinues to comply with all the current pollutions norms applicable to it as per consentletter. However it may be possible that the pollution authorities may come up with freshrequirement(s) for compliance in the conditions of consent letter which will then have tobe examined and considered.
16. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Board of Directors of the Company has laid down a policy on prevention of sexualharassment at the workplace. A Complaint Committee has also been formed by the Board ofDirectors to look into the complaints received if any. During the year the Company didnot receive any complaint under the said policy. The said policy is available on thewebsite of the Company at the following link: http://www.insilcoindia.com/policies.htm .
17. CORPORATE SOCIAL RESPONSIBILITY (CSR) OF THE COMPANY
Pursuant to the provisions of Section 135 of the Companies Act 2013 CSR policy doesnot apply to your Company. Accordingly your Company has not formed CSR Committee.
18. STATEMENT ON ANNUAL EVALUATION OF THE BOARD COMMITTEES AND INDIVIDUAL DIRECTORS
The Board has laid down the manner and criteria of evaluation of the Board of its ownCommittees and Individual Directors in which annual evaluation of the Board Committees ofthe Board and Individual Directors would be evaluated. The said criteria are aligned withthe SEBI circular dated 5th January 2017 on Guidance Note on BoardEvaluation'. The evaluation includes various criteria including performance knowledgeroles and responsibilities etc.
The Board of Directors has evaluated its Committees Individual Directors (i.e.Executive and Non-executive Director) and the Board itself. After evaluation the Boardfound their performances upto the mark and satisfactory. The Nomination and RemunerationCommittee has also evaluated the individual performance of each Director and found itsatisfactory.
19. WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(10) of the Companies Act 2013 and Clause 22of the Listing Regulations the Company has established a "Whistle BlowerPolicy" for employees to report to the management instances of unethical behaviouractual or suspected fraud or violation of the Company's code of conduct or ethics policy.The said mechanism is available to all the employees of the Company and operatingeffectively. During the year the Company has not received any complaint through suchmechanism. A copy of the said policy is available on the website of the Company at thefollowing path: http://www.insilcoindia.com/policies.htm.
20. CHANGE IN THE NATURE OF BUSINESS IF ANY
During the year your Company has not changed the nature of its business.
21. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)
Sad demise of Mr. Harishkumar Kanaiyalal Davey
With huge regret the Shareholders are hereby informed of the sad demise of Mr. Daveyon 10th July 2017. Mr. Davey joined the Board on 4th August 2016. Inhis short tenure Mr. Davey made a significant contribution to the sound management of thebusiness of the Company. The unexpected passing away of Mr. Davey will be an irreparableloss to the Company and all the directors and the employees of the Company convey deepsympathy sorrow and condolences to his family.
We bid farewell to our esteemed Director with deep mourning and gratitude.
Change in Directors and KMP
To strengthen the Board the Board had appointed Mr. Sanjeev Taneja as an AdditionalDirector (Non-Executive Non-Independent Director) of the Company with effect from 1stFebruary 2018. Mr. Sanjeev Taneja will hold office as an Additional Director up to thedate of 30th AGM. In the said AGM the Shareholders of the Company willconsider the appointment of Mr. Sanjeev Taneja as a Director of the company liable toretire by rotation.
Mr. Sanjeev Taneja has approximately 30 years of rich and versatile experience whichincludes extensive experience in the specialty chemicals sector. Mr. Taneja started hiscareer in 1987 as Production & Technical Manager for Degussa A.G. Germany (part ofthe Evonik Group). Thereafter he has served various key positions in Evonik. W.e.f. 1stJanuary 2018 Mr. Taneja has been assigned with the responsibility as President of IndiaRegion & Managing Director of Evonik India Private Limited. Before his currentresponsibilities in India he was working as Vice President South Asia Resource EfficiencySegment in Evonik Industries. Extensive qualifications of Mr. Taneja include (i) MBA fromUniversity of South Alabama USA (ii) Chemical Process Engineering Degree from Universityof Applied Sciences Germany and (iii) INSEAD advanced management program.
Term of Independent Directors
The date of commencement of first term of five consecutive years of the belowIndependent directors are given below along with date of approval by Shareholders:
|S. No. ||Name of Independent Directors ||Date of starting first term ||Date of approval in AGM |
|1 ||Mr. Dara Phirozeshaw Mehta ||1st April 2014 ||14th August 2014 |
|2 ||Ms. Sonia Prashar ||4th August 2016 ||26th September 2016 |
Mr. Dara Phirozeshaw Mehta was appointed as an Independent Director in the 26thAnnual General Meeting held in the year 2014 to hold office for a period of 5 consecutiveyears effective from 1st April 2014 i.e. until 31st March 2019. Interms of Section 149 of the Companies Act 2013 (Act') an Independent Director iseligible for re-appointment on passing of a Special Resolution. Mr. Dara PhirozeshawMehta being eligible and offering himself for re-appointment is proposed to be appointedas an Independent Director for a 2nd term of 5 years with effect from 1stApril 2019.
In the opinion of the Board Mr. Dara Phirozeshaw Mehta fulfils the conditionsspecified in the Act and rules made thereunder for his re-appointment as an IndependentDirector of the Company and is independent of the management. As per the performanceevaluation conducted during his 1st term by the Board (excluding Mr. DaraPhirozeshaw Mehta) his performance was satisfactory as an Independent Director of theCompany. The Board and its allied Committees have benefitted from his relevantspecialization and expertise. Details on his attendance of various Board and CommitteeMeetings held during the last financial year are included in the Corporate GovernanceReport of the Annual Report.
The Board of Directors of your Company recommends the Resolution in relation to theappointment of Mr. Dara Phirozeshaw Mehta as an Independent Director for the approval bythe shareholders of the Company as a Special Resolution.
Directors retiring by rotation
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Christian Schlossnikl shall retire by rotation at theensuing AGM of the Company and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment to the members of the Company in the ensuing AGM.
Statement on declaration given by Independent Directors
The members are informed that Independent Directors have given a declaration that theymeet the criteria of independence as provided in sub-section 6 of the Section 149 of theCompanies Act 2013.
The Board of the Company also confirms that the Independent Directors fulfill thecriteria of being Independent Director as specified under the provisions of the CompaniesAct 2013.
Familiarization program for Independent Directors
The Company follows an induction programme for orientation and training of Directors atthe time of their joining so as to provide them with an opportunity to familiarizethemselves with the Company its operations business philosophy and model roles rightsresponsibilities of Independent Directors in the Company and Policies/Rules andRegulations of the Company.
Thereafter the Company continues with periodic familiarization process of IndependentDirectors to keep them upto date with the developments in the Company. The details of suchfamiliarization programme is also displayed on the website of the Company at the followinglink: http://www.insilcoindia.com/notes.html.
22. DISCLOSURES RELATED TO REMUNERATION OF DIRECTORS AND KMPs
a. Corporate Governance - Disclosures as per provisions of Schedule V Part II SectionII (B)(iv)(IV)
Mr. Brijesh Arora was appointed as Managing Director w.e.f. 4th August 2016and disclosure in this regard pursuant to above provisions are given in the CorporateGovernance Report attached to this report at Clause no. 3.2(D)(a).
b. Ratio of Remuneration of each Director to median remuneration of employees
Ratio of remuneration of Mr. Brijesh Arora to median remuneration of employees duringthe Financial Year 2017-18 was 15.61 : 1.
c. Percentage increase in remuneration of each Director and KMP
The annual increment of remuneration of employees is done every year w.e.f. 1stApril. The annual increment w.e.f. 1st April 2017 of Director and KMPs aregiven below in % alongwith current designations i.e. designation as on the date ofapproval of this report.
|Name ||Director/KMP ||% increase (w.e.f. 1st April 2017) |
|Mr. Brijesh Arora ||Managing Director ||16.0% |
|Ms. Shivangi Negi ||KMP (Chief Financial Officer) ||12.3% |
|Mr. Sarvesh Kumar Upadhyay ||KMP (Company Secretary) ||14.6% |
d. Percentage increase in the median remuneration of employees
The percentage increase in the median remuneration of employees in the Financial Year2017-18 was 8.2%.
e. No. of permanent employees on the rolls of the Company
As on 31st March 2018 your Company had 109 permanent employees on the rollsof the Company. The same does not include trainees.
f. Average percentage increase already made in the salaries of employee other than themanagerial personnel in the Financial Year and its comparison with the percentage increasein the managerial remuneration and justification thereof and exceptional circumstances forincrease in the managerial remuneration if any
|Particulars ||Financial Year |
| ||2017-18 |
|Average percentage increase in the salaries of employee other than Managerial Personnel ||10.2% |
|Average percentage increase in salary of Managerial Personnel (Mr. Brijesh Arora - Managing Director) ||16.0% |
g. Policy compliance affirmation
The remuneration of the Directors and KMP is as per the nomination and remunerationpolicy of the Company.
23. STATEMENT PURSUANT TO CLAUSE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF
MANAGERIAL PERSONNEL) RULES 2014
During the year there was no employee of the Company:
who was employed throughout the Financial Year 2017-18 and was in receipt ofremuneration for that financial year of not less than Rs. 10200000/-; or
who was employed for a part of the Financial Year 2017-18 and was in receipt ofremuneration at a rate which was not less than Rs. 850000/- per month; or
who was employed throughout or part of the Financial Year 2017-18 and was inreceipt of remuneration in that Financial Year in the aggregate or as the case may beat a rate which in the aggregate is in excess of that drawn by the Managing Director orWhole-time Director and holds by himself or along with its spouse and dependent childrennot less than two percent of the equity shares of the Company.
Top ten employees in terms of remuneration drawn during the Financial Year 2017-18
|S. No. ||Name (In Alphabetical Order) ||Designation (as on 31st March 2018) |
|1 ||Mr. Anurag Srivastava ||Senior Manager - Human Resource & Administration |
|2 ||Mr. Ashok Kumar Pandey ||Vice President - Procurement & Supply Chain |
|3 ||Mr. Brijesh Arora ||Managing Director |
|4 ||Dr. Madan Gopal Sinha ||General Manager - Works & Plant Head |
|5 ||Mr. Manoj Kumar ||Dy. General Manager - Information Technology |
|6 ||Mr. Pradeep Kumar ||Senior Manager Environment Safety Health and Quality (ESHQ) |
|7 ||Mr. Rajeev Agarwal ||Senior Manager - Controlling |
|8 ||Mr. Sandeep Kumar Gupta ||Senior Manager Engineering |
|9 ||Mr. Sarvesh Kumar Upadhyay ||Company Secretary |
|10 ||Ms. Shivangi Negi ||Chief Financial Officer |
The members are hereby informed that Price Waterhouse & Co Chartered AccountantsLLP (Firm Registration No. with ICAI 304026E/E300009) was appointed as StatutoryAuditor for the first term of 5 years in the 29th AGM to hold the office fromthe conclusion of the 29th AGM until the conclusion of the 34th AGMof the Company. Pursuant to the provisions of Section 139 of the Companies Act 2013 thesaid appointment was subject to ratification by members at every AGM.
The members are also hereby informed about an appeal of PW India firms (including PriceWaterhouse & Co Chartered Accountants LLP) before the Securities Appellate Tribunal(SAT). The members are hereby informed that the Securities and Exchange Board of India(SEBI) had announced the outcome (Order) of its enquiry into audit of Satyam ComputerServices Limited (Satyam) carried out by one of the Price Waterhouse (PW) India firms(which was undertaken following disclosure in 2009 of a management led fraud) on the 10thof January 2018. The audit of Satyam itself was not carried by Price Waterhouse & CoChartered Accountants LLP the auditors of Insilco Limited. SEBI in its Order imposed arestriction on PW Audit firms [including Price Waterhouse & Co Chartered AccountantsLLP] from undertaking statutory audit and other certification work for listed companiesand intermediaries registered with SEBI for a period of 2 years against which the PW Indiafirms have filed an appeal before the SAT. The SAT recognizing the legal principleinvolved vide its Order dated 15th February 2018 has allowed PW India firms tocontinue statutory audits and other related certification work for its existing clientsuntil March 2019 or until final disposal of the matter by SAT whichever is earlier. Inview of the above order our Statutory Auditor is eligible to conduct audit for thefinancial year 2018-19. However SAT may pass orders against PW firms before 31stMarch 2019. Based on legal opinion received by the statutory auditor the Board of Insilcoare of the view that Price Waterhouse & Co Chartered Accountants LLP will be able toserve as statutory auditor of Insilco Limited for the year ending 31st March2019 as SAT will be under obligation to protect interest of the companies for whom PWfirms are already acting as statutory auditor as per the well-established principles oflaw.
25. COST AUDITOR/MAINTENANCE OF COST RECORDS
Maintenance of Cost Records for the Financial Year 2017-18
Pursuant to the provisions of the Companies (Cost Records and Audit) Rules 2014 dated30th June 2014 as amended vide notification dated 31st December2014 in the Financial Year 2017-18 the Company is required to maintain cost records. TheBoard has appointed JSN & Co. Cost Accountant (Registration No. 000455) formaintenance of Cost Records of the products of the Company for the Financial Year ended 31stMarch 2018. The certificate of Cost records if any of the Company will be presentedbefore the Audit Committee/Board in due course of time.
The contact details of JSN & Co. Cost Accountant (Registration No. 000455) aregiven below:
Address : M-11 Shastri Nagar Near Inderlok Metro Station Delhi - 110052
E-mail : firstname.lastname@example.org
Mobile : 9868271940 8076381794 9599575690
Maintenance of Cost Records for the Financial Year 2016-17
The Company was required to maintain cost records for the Financial Year 2016-17. TheBoard had appointed Ajay Ahuja & Associates (Registration No. 101142) for maintenanceof Cost Records of the products of the Company for the Financial Year ended 31stMarch 2017. The report/certificate of Mr. Ajay Ahuja was placed before the Board in itsmeeting dated 5th September 2017.
26. PRACTISING COMPANY SECRETARY
Nityanand Singh & Co. Practicing Company Secretary having its office at142nd Floor Arjun Nagar Safdarjung Enclave New Delhi-110029 are the presentpractising Company Secretary of the Company.
27. AUDIT COMMITTEE
Pursuant to the provisions of Section 177 of the Companies Act 2013 and the ListingRegulations the Board has constituted an Audit Committee. The composition of the AuditCommittee was as follows:
| || ||As on 31st March 2018 |
|S. No. ||Name of the Director ||Designation in Audit Committee |
|1 ||Mr. Dara Phirozeshaw Mehta ||Chairman |
|2 ||Ms. Sonia Prashar ||Member |
|3 ||Mr. Sanjeev Taneja ||Member |
The Board of Directors of the Company has accepted all the recommendations made by theAudit Committee.
28. DISCLOSURE REGARDING SUBSIDIARIES JOINT VENTURE OR ASSOCIATE COMPANIES
The Company does not have any subsidiary joint venture or associate company. Duringthe year also there were no companies which have become or ceased to be your Company'ssubsidiary joint venture or associate company.
The Company has not accepted any deposits during the year pursuant to the provisions ofChapter V of the Companies Act 2013.
30. MATERIAL ORDERS BY GOVERNING AUTHORITIES
There were no significant or material orders passed by any governing authority of theCompany including regulators courts or tribunals which could affect the going concernstatus and the Company's operations in future.
31. ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH RESPECT TO THE FINANCIAL STATEMENT
The Company has laid down proper and adequate internal financial control with respectto internal financial statement. The same is explained in management and discussions andanalysis report under the heading "Internal Control System and their adequacy".
32. OPERATIONS AT PLANT
The Plant operations had to be shut down a few times during the year due to highinventory and low sales volume.
33. GUIDING PRINCIPLES OF COLLABORATION : RESOURCE EFFICIENCY BUSINESS UNIT OF EVONIK
Insilco Limited is a part of the Resource efficiency business unit of Evonik. Alloperations of Insilco Limited are carried out in accordance with the guiding principles ofcollaboration of Resource Efficiency which are as follows:
We pursue excellence by continuous development of people organization andprocesses.
We foster a culture of open frank and constructive communication.
We put the customer at the heart of our activities.
We base our interactions on mutual trust respect and acceptance.
We foster creativity and focus on innovation as the basis for our success.
We utilize all means of diversity for more thoughtful and complete elaborationof solutions.
We value initiative and acknowledge and learn from failure.
We act as exemplary role model and drive our activities through ethical andsustainable decisions.
We work safely to protect ourselves our colleagues and the environment.
34. VALUE CREATION FOR CUSTOMERS
In our diverse and globalized world it is becoming more and more important to gain abetter understanding of the requirements of our customers and end-customers. Changing ourperspective to view the world through the eyes of our customers allows us to see thingsdifferently and thus develop exceptional solutions. Our willingness to remain open to newthings and to think in a flexible manner is the key to our culture of learning andinnovation. As a Company we are committed to provide our internal and external customersproducts and services that always unequivocally meet the agreed quality standards.
We offer a complete package solution of product plus service. This is one of thereasons that many of our customers prefer to buy from us.
35. SOCIAL RESPONSIBILITY
Good governance demands adherence to social responsibility coupled with creation ofvalue in the larger interest of the general public. We are committed to continuouslyimproving our performance in the areas of environmental protection health and safety aswell as to the principles of sustainable development and responsible care. We continue tocontribute to society by appropriate means. We aim to enhance the quality of life of thecommunity in general and have a strong sense of social responsibility.
36. WE BELIEVE IN QUALITY AS A SUCCESS FACTOR
Within the scope of Total Quality Management (TQM) we are continuously striving toimprove the quality of our products services and processes.
Learning from the global best practices of our parent Evonik Industries we offer thesame to our customers. This is the most important factor that our customers value andcontinue to support us.
37. PROCUREMENT EFFICIENCY AND SUPPLY CHAIN
Procurement is an essential element in the value-chain. We regard intensivecross-functional collaboration within the Company as indispensable. We have integratedprocurement with the overall supply-chain function at the plant to make it more efficientand part of a cross-functional team at the plant.
During the financial year 2016-17 the availability of raw materials water and powersupply remained normal.
38. CUSTOMER ORIENTATION STARTS WITH TALENT DEVELOPMENT AND FAIRNESS
The key to any success is a motivated and committed workforce. With support from Evonikand Management of Insilco we have been conducting in-house skill development and trainingprogrammes. We also encourage our workforce to build a more customer-oriented approach.
39. CERTIFICATIONS AND RECOGNITIONS
Our plant at Gajraula is certified under the Environment Management Standard ISO14001-2004 and Quality Management Standard ISO 9001-2008. We have also obtained HALAL& KOSHER certificates during the year for Food Safety Management System. Apart fromthese we are also HACCP and FSSAI certified Company for the Food Safety ManagementSystem.
40. REPORT ON CORPORATE GOVERNANCE
Pursuant to the provisions of the Listing Regulations the following arefurnished forming part of this Directors' Report:
i. Report on Corporate Governance together with a Certificate from Practising CompanySecretary on compliance with the conditions of Corporate Governance as per provisions ofListing Regulations are attached as Annexure - 5 and 5.3 respectively.
ii. Certificate by Managing Director regarding compliance of Code of Conduct by themembers of Board and Senior Management as per provisions of Listing Regulations isattached as Annexure - 5.1.
iii. Certificate from Managing Director and Chief Financial Officer regardingcorrectness of the financial statements presented to the Board is attached as Annexure- 5.2.
41. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to the provisions of the Listing Regulations a ManagementDiscussions and Analysis Report is enclosed as Annexure - 6 forming part of AnnualReport.
42. COMPLIANCE OF SECRETARIAL STANDARDS
The Company has followed all the applicable compliances of the applicable SecretarialStandards.
43. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT: None
44. DISCLOSURE BY SENIOR MANAGEMENT OF CONFLICT OF INTEREST IF ANY
Pursuant to the provisions of regulation 26(5) of the Listing Regulations the SeniorManagement of the Company have made a disclosure to the Board of Director that they haveno personal interest in relation to all material financial and commercial transactionsthat may have a potential conflict with the interest of the Company at large.
45. REPORTING OF FRAUD BY AUDITORS PURSUANT TO SECTION 143(12) OF THE COMPANIES ACT2013
There was no fraud reported by the Auditor to the Audit Committee or to the Board.
46. INDUSTRIAL RELATIONS
Your Company continued to enjoy cordial relations with all its employees. No man daywas lost due to any Industrial Dispute.
47. FORWARD-LOOKING STATEMENT
This Report including its annexures contains forwardlooking statements thatinvolve risks and uncertainties. The actual results performance or achievements coulddiffer materially from those expressed or implied in such forwardlooking statements.Significant factors that could make a difference to the Company's operations includedomestic and international economic conditions affecting demand-supply and priceconditions changes in government regulations environmental regulations tax regimes andother statutes.
Your Board of Directors wish to thank and place on record their appreciation for theco-operation and support extended to the Company by the Government of India StateGovernment of Uttar Pradesh other local authorities Bankers Suppliers CustomersDistributors Employees and other Stakeholders which have been a constant source ofstrength to the Company. The Board of Directors also expresses its sincere gratitude toall the shareholders for their continuous support and trust they have shown in themanagement. The dedication and sense of commitment shown by the employees at all levelsduring the year deserve special mention.
Your Company is thankful to the parent Company Evonik Degussa GmbH Germany forcontinuously providing excellent management technical and marketing support.
|For & on behalf of the Board of || |
|Insilco Limited || |
|Sd/- ||Sd/- |
|Dara Phirozeshaw Mehta ||Brijesh Arora |
|Chairman of the Board ||Managing Director |
|DIN : 00041164 ||DIN : 00952523 |
|Place : Noida || |
|Date : 28th May 2018 || |