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Insilco Ltd.

BSE: 500211 Sector: Industrials
NSE: INSILCO ISIN Code: INE901A01011
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OPEN 26.65
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VOLUME 37720
52-Week high 36.65
52-Week low 21.00
P/E 405.00
Mkt Cap.(Rs cr) 152
Buy Price 0.00
Buy Qty 0.00
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Insilco Ltd. (INSILCO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 29th Annual Report together with the AuditedAccounts for the Financial Year ended March 31 2017.

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 M/s. 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 : helpdeskdelhi@mcsregistrars.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 of the Company CIN/GLN Holding/Subsidiary/Associate % of Shares held Applicable Section
Evonik Degussa GmbH Not Applicable Holding 73.11 2(46)

Your Company does not have any Subsidiary or Associate Company.

IV. Share Holding Pattern (Equity Share Capital Breakup as Percentage of Total Equity)

i) Category-wise Share Holding

No. of Shares held at the beginning of the year No. of Shares held at the end of the year
S. No. Category of Shareholder Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year
(A) Promoters
(1) Foreign
(a) Bodies Corporate 0 45853315 45853315 73.11 11357645 34495670 45853315 73.11 0.00
Total Share holding of Promoter (A) 0 45853315 45853315 73.11 11357645 34495670 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 2542830 82880 2625710 4.19 2364504 82880 2447384 3.90 (0.29)
(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 8608906 2673157 11282063 17.99 7447011 2633027 10080038 16.08 (1.92)
(ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh 2697183 0 2697183 4.30 4063275 0 4063275 6.48 2.18
(c) Any Other
(i) NRIs 52639 1270 53909 0.09 66858 1270 68128 0.11 0.02
(ii) Trust 0 0 0 0 40 0 40 0.00 0.00
Sub-Total (B)(2) 14066638 2757307 16823945 26.83 14106768 2717177 16823945 26.83 0.00
Total Public Shareholding (B)(B)(1)+(B)(2) 14066968 2794717 16861685 26.89 14107098 2754587 16861685 26.89 0.00
GRAND TOTAL (A)+(B) 14066968 48648032 62715000 100 25464743 37250257 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 thepromoters’ Shareholding during the Financial Year 2016-17.

iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters andHolders of GDRs and ADRs): The shareholding pattern of top ten shareholders (otherthan Directors Promoters and Holders of GDRs and ADRs) are attached as Annexure 1.

v) Shareholding of Directors and Key Managerial Personnel: Directors orKey Managerial Personnel did not have any shareholding in the Company during the FinancialYear 2016-17.

V. Indebtedness

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

S. No. Particulars of Remuneration Mr. Frank Heinz Lelek (MD)1 Mr. Brijesh Arora (JMD & MD) Total
1 Gross salary
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act 1961 - 5916878 5916878
(b) Value of perquisites u/s 17(2) of Income-tax Act 1961 - 277001 277001
(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) - 6193879 6193879
Ceiling as per the Act2 18433333 168000004 18643333

1. Mr. Frank Heinz Lelek was appointed as MD w.e.f. 1st March 2015 and he opted not toreceive any remuneration. Mr. Lelek resigned as MD of the Company w.e.f. 19th June 2016.He continued as Non-executive Director of the Company till 4th August 2016 and on 4thAugust 2016 he resigned from the Board and other Committee positions of the Company.

2. Ceiling has been calculated per annum pursuant to the provisions of Section IV PartII of Schedule V of the Companies Act 2013 which does not include contribution to PFsuperannuation fund or annuity fund to the extent either singly or put together are nottaxable under the Income-tax Act 1961 Gratuity payable at a rate not exceeding half amonth’s salary for each completed year of service and encashment of leave at the endof the tenure.

3. On pro-rate basis for his tenure as MD. This limit is decided after passing specialresolution.

4. Pursuant to Notification of Ministry of Corporate Affairs dated 12th September 2016.This limit is decided after passing special resolution.

B. Remuneration to Other Directors

i. Sitting fee to Independent Directors

(Amount in Rs.)

Name of Independent Directors
Mr. Dara Mr. Guido Ms. Sonia Total
Particulars of Remuneration Phirozeshaw Mehta Johannes Christ5 Prashar6 Remuneration
1. Independent Directors
a. Fee for attending Board & Committee Meetings 370000 200000 250000 820000
b. Commission - - - -

ii. Remuneration to Non-executive Non-independent Directors (Amount in Rs.)

Name of Non-executive Non-independent Directors
Particulars of Remuneration Dr. Mustafa Siray7 Mr. Frank Heinz Lelek8 Ms. Meng Tang Mr. Harish K. K. Davey9 Mr. Christian Schlossnikl10 Total Remuneration
1. Independent Directors
a. Fee for attending Board & Committee Meetings - - - - - -
b. Commission - - - - - -

C. Overall managerial remuneration and ceiling11

(Amount in Rs.)
Total Managerial Remuneration 6193879
Overall Ceiling as per the Act 18643333

D. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (Amount in Rs.)

S. No. Particulars of Remuneration Key Managerial Personnel
Ms. Shivangi Negi (CFO) Mr. Sarvesh Kr. Upadhyay (Company Secretary) Total
1 Gross salary
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act 1961 1117200 965400 2082600
(b) Value of perquisites u/s 17(2) of Income-tax Act 1961 56459 36058 92517
(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) 1173659 1001458 2175117

5. Mr. Christ resigned as Director w.e.f. 4th August 2016.

6. Ms. Prashar was appointed as Independent Director w.e.f. 4th August 2016.

7. Dr. Siray resigned as Director w.e.f. 30th June 2016.

8. Mr. Lelek’s designation was changed from MD to Non-executive Director w.e.f.19th June 2016. He continued as Non-executive Director till 4th August 2016 and on 4thAugust 2016 he resigned from the Board and other Committee positions of the Company.

9. Mr. Davey was appointed as Non-executive Non-independent Director w.e.f. 4th August2016.

10. Mr. Schlossnikl was appointed as Non-executive Non-independent Director w.e.f. 4thAugust 2016. 11. This does not include sitting fee as prescribed under the Companies Act2013.

VII. Penalties / Punishment / Compounding of Offences: There was no penalty /punishment / compounding fee imposed on the Company / Directors / any other officer of theCompany.

2. NUMBER OF MEETINGS OF THE BOARD

The Board duly met 5 times in Financial Year 2016-17 on 5th May 2016 4thAugust 2016 26th September 2016 11th November 2016 and 7thFebruary 2017.

3. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors’ state that;

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with 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 this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(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 with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

4. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATIONINCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OFDIRECTORS ETC.

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 as "Listing Regulations") the Board of Directors hasconstituted a Nomination and Remuneration Committee. A Nomination and Remuneration Policyof the Company has also been laid down and approved by the Nomination and RemunerationCommittee and the Board. The said policy lays down the criteria for the appointment ofDirectors Key Managerial Personnel and Senior Management Personnel. The said policy alsospecifies the appointment and remuneration including criteria for determiningqualification term/tenure positive attributes independence of Directors criteria forperformance evaluation of Executive and Non-executive Directors (including IndependentDirectors) removal policy on Board diversity Directors and Officers’ Insurance andother matters as prescribed under the provisions of the Companies Act 2013 and ListingRegulations. The said policy of the Company is attached as Annexure-2 to thisreport.

5. SECRETARIAL AUDIT

M/s. Nityanand Singh & Co. a firm of Company Secretaries having their address at14 2nd Floor Arjun Nagar Safdarjung Enclave New Delhi - 110029 hasconducted the Secretarial Audit of the Company for the Financial Year 2016-17. TheSecretarial Audit Report issued by 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

(i) BY STATUTORY AUDITOR

The members are informed that there are following qualification made by StatutoryAuditor in the report of internal control over financial reporting. The said qualificationand comments of the Board on the same are as follows:

Qualification in the report of internal control over financial reporting

The Company’s internal control system with respect to production cost records andrelated process i.e. Input Output Ratio Linkage to Bill of Materials with consumption andupdation of manual records related to production were not operating effectively whichcould potentially result in material misstatement in consumption of raw materials and ofcarrying values of inventory in the books of account and inadequate disclosures in thefinancial statements.

Comments by the Board

The aforesaid qualification pertains to report on Internal Control over FinancialReporting and it does not have any impact on financials and accordingly there is noqualification in audit report in respect of financial statements. Further the Company isunder process to improve its controls with respect to production cost records and relatedprocess.

(ii) BY THE COMPANY SECRETARY IN PRACTICE IN HIS SECRETARIAL AUDIT REPORT

The members are hereby informed that Secretarial Audit Report was a qualified report.The qualification and comments of the Board on the same are as follows:

Qualification

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards Listing Agreements etc. as mentioned in theSecretarial Audit Report except as following:

Regulation 31(2) of the SEBI (Listing Regulations And Disclosure Requirements)Regulations 2015 implemented with effect from December 1 2015 mandates that listedentities should ensure that 100% of shareholding of promoter(s) and promoter group is indematerialized form and the same is maintained on a continuous basis in the mannerspecified by SEBI.

Comments by the Board

The promoter of the Company i.e. Evonik Degussa GmbH started the process ofdematerlisation of their holding. As on 31st March 2017 out of 45853315equity share 11357645 equity shares have been converted into dematerialized form.

The Board of your Company is following up this matter with promoters and it is expectedthat soon Regulation 31(2) of the Listing Regulations will be complied with.

The previously mentioned non-compliance of Regulation 31(2) of the SEBI (ListingRegulations and Disclosure Requirements) Regulations 2015 is also part of CorporateGovernance Certificate as qualification. The above Comments of the Board on non-complianceof Regulation 31(2) should also be taken as comments on the qualification recorded inCorporate Governance Certificate.

As on the date of signing of this Directors’ Report 2495670 equity shares werepending for Demat.

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:www.insilcoindia.com ? Investors ? Policies

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 31.03.2017 Year Ended 31.03.2016
Gross Turnover 961 803
Other Income 33 28
Total Expenditure (including excise duty) (952) (799)
Profit before Depreciation & Exceptional Items 42 32
Depreciation (21) (13)
Profit/ (Loss) for the year before exceptional items 21 19
Exceptional items (4) -
Profit/(Loss) before tax 17 19
(Provision for)/Release of Taxation (7) (4)
Profit/(Loss) after tax 10 15

B. Results of Operations

Sales of Precipitated Silica during the year were 14939 MT as against 12304 MT in theprevious year. The Production during the year was 15023 MT (previous year 12028 MT).

Your Company achieved a sales turnover of Rs. 961 Million during the year as comparedto Rs. 803 Million in the previous year and recorded a profit before depreciation andexceptional items of Rs. 42 Million as against a profit of Rs. 32 Million in the previousFinancial Year. The Company had reserves of Rs. 281 Million as on 1st April2016. The profit for the Financial Year 2016-17 was Rs. 10 Million.

The Company is endeavored to increase its turnover and increase its profit. The Companyis looking for optimum utilization of its assets and other resources so that 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 Indian economy is improving and showing potential for growth. The Company continuesto enjoy a high standing with its customers because of its quality value added servicesand strong technical support from parent Company. Besides it is actively considering thechange of source of energy at its plant to reduce the energy costs and pursuing all growthopportunities to improve the results. The quality conscious customers are showing faith inour quality products. The Company has also managed to gain few lost customers and it isactively trying to increase its customer base. However the future growth of the Companywill depend upon our ability to optimize our costs by making our products morecompetitive increasing capacity utilization efficiency improvement and the willingnessof Customers to pay premium for our high quality products. There are also concerns withrespect to ongoing matter of cleaning of river Ganga which is explained in detail underpoint no. 15 of this Directors’ Report. Based on the legal opinion obtained in thismatter the Company believes that it will come out of this matter successfully. There areinherent opportunities available for the Company in the target industries such as TyresAutomotive Components Mechanical Rubber Goods Footwear Agrochemicals and Food. Thesilica applications in all these industries are growing rapidly. The Company iscontinuously improving safety plant condition efficiency and yield. The Company isactively pushing growth opportunities to use the unutilized production capacity andimprove product mix.

10. TRANSFER TO RESERVES

The Company had reserves of Rs. 281 Million as on 1st April 2016. The profitfor the Financial Year 2016-17 was Rs. 10 Million. During the year the Company has takena forward cover contract against a firm commitment. On this forward cover hedging reserveof INR 1 Million has been created and transferred to reserves. Therefore the closingbalance of the reserves and surplus as on 31st March 2017 amounted to Rs. 290Million.

11. DIVIDEND

No dividend is recommended considering the operational performance of the Company.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEENTHE END OFTHE FINANCIALYEARTOWHICHTHE FINANCIAL STATEMENTS RELATE AND THEDATE 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 the 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 regular review ofenergy generation consumption and effective control on utilization of energy.

We have reduced product change over time in production process and improved energyefficiency.

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 andproducts are 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 last three years

The Company has not imported any technology during last three years reckoned from thebeginning 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 earning in terms of actual inflows during the year and the ForeignExchange 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 2017 Year ended 31st March 2016
a) Total Foreign Exchange earned 3939 5140
b) Total Foreign Exchange used 9152 7556

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 stringent norms introduced by government for chemical industrynear the Ganga River.

The Board has also taken certain steps to minimize the same and its current status aregiven below:

1. Risk of HSD (Diesel) prices going up substantially

Current Status of Action Taken :

To minimize the aforesaid risk the Board had approved to switch the source of energyfrom High Speed Diesel to Coal for drying activity by implementing the Coal Fired Hot AirUnit at Gajraula Plant of the Company. Basic Engineering was completed. The hazard andoperability study (HAZOP) for coal fired hot air generator had been submitted to EvonikGermany for evaluation. Meanwhile the Company is also analyzing/evaluating alternatesource of energy. Based on current position there is strong view that based onfeasibility of alternate options coal project will be dropped.

2. Loss of Market Share if our product rates are significantly higher thancompetitors

Current Status of Action Taken:

To minimize the aforesaid risk the Board had already approved to switch the source ofenergy from High Speed Diesel to Coal for drying activity by implementing the Coal FiredHot Air Unit at Gajraula Plant of the Company. Basic engineering for the same is beingdone with the help of Evonik Industries AG. Hazard and Operability (HAZOP) analysis hasbeen done and is being analyzed by Evonik Industries AG.

The Company is also evaluating alternate source of energy for drying activity.

The Company is also continuing a system of tracking of its vendor’s raw materialcost to correlate the prices of Company’s purchase with them.

3. Environmental Risk if stringent norms introduced by government for chemicalindustry near the Ganga River

Current Status of Action Taken:

Central Pollution Control Board has identified 17 categories of Industries which arehighly polluted in the river Ganga Basin. We are not a highly polluted industry as per thenotified list. The Company has also got the Annual air consent from Uttar PradeshPollution Control Board (UPPCB) which is valid till Dec 2017. The Company has applied forwater consent for 2016 and 2017 which is pending due to the following reasons:

• Insilco received a letter dated 16th September 2016 from UPPCBimposing one of the condition as "Zero discharge of polluted water from thefactory".

• As this condition was unfair Insilco vide its letter dated 30thSeptember 2016 replied to the above said letter of UPPCB and requested with reasonsthereof for not imposing such condition.

• We are expecting some correspondence in this regard soon.

The Company had also applied for approval of UPPCB for implementing Coal Fired Hot AirUnit at Gajraula Plant for which No Objection Certificate (‘NOC’) has alreadybeen received.

The members are hereby further informed that there was a case pending in Hon’bleNational Green Tribunal (NGT) for cleaning of river Ganga. The NGT as passed its detailedjudgment dated 13th July 2017 in the said matter. The complete details of thismatter is given below point no. 15 i.e. "Ganga Cleaning Matter with NGT".

The Risk Management Policy of the Company is available on the website of the Company atthe following path: www.insilcoindia.com ? Investors ? Policies.

15. GANGA CLEANING MATTER PENDING WITH NATIONAL GREEN TRIBUNAL

The members are hereby informed that your Company received a letter from Uttar PradeshPollution Control Board (UPPCB) dated 27th January 2017 for appearing beforeNational Green Tribunal (NGT) on 6th February 2017 in the matter of M. C. MehtaVs. Union of India and Others (Original Application No. 200/2014) i.e. matter of cleaningof Ganga. The said letter was issued to various industrial units located near Bagad River.On 6th February 2017 NGT issued a show cause notice to all the industrialunits at Gajraula on the ground of pollution including Insilco Limited and asked as to whythey should not be directed to shut down their units forthwith. The Company had filed itsdetailed reply with NGT.

However the matter was not heard and on 24th April 2017 the NGT formed aspecial high power inspection team and directed them to visit Industries in GajraulaIndustrial Area on 25th April 2017 and to report their observations on 26thApril 2017 to NGT. The said Committee visited 13 industries in Gajraula andsubmitted their observations verbally with the NGT on 26th April 2017. The NGTpassed its order dated 26th April 2017 on the basis of verbal observationexplained before the NGT.

For Insilco Limited the order of NGT dated 26th April 2017 inter-aliastated that Insilco is using fresh water for dilution of treated effluent which isimpermissible. Insilco is prescribed with the limit of Sodium Absorption Ratio (SAR).Since Insilco has to maintain that ratio rather than treating the same appropriately itis diluted by adding fresh water and with Magnesium Sulphate so that it does not exceedthe prescribed limit. This is practically a fraud being played. Similarly the saidorder stated various negative comments for other industries in Gajraula.

Based on such observation the NGT ordered shut down of all the 13 units includingInsilco Limited in Gajraula Industrial Area and NGT has given option to them to come upwith future plan of compliance for resuming operability of the Company and in this regardthe 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 merits and our plant at Gajraula has always been in full compliancewith the applicable pollution norms.

The report of the said Committee was uploaded on the website of Central PollutionControl Board on late evening of 4th May 2017.

The observations of the said report for Insilco was 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 reuse 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 NGT on 5th May 2017 alongwith reply tothe observations/recommendations made in the report of the said Committee. The reply ofInsilco Limited filed with NGT inter-alia included the following brief reply to theobservations of the said report:

1. That no TDS limit has been prescribed for Insilco Limited in the water consentconditions and all such applicable condition is being complied with.

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 PesticidesPetrochemicals Large Power Plants Cement Aluminum Zinc Copper Iron & SteelLarge Pulp & Paper Distillery Sugar Oil Refinery Dye and dye intermediate andTannery. That the CPCB as per the advice of NGT has come out with ZLD requirement forindustries and ZLD is prescribed only for 5 industries i.e. Distillery Tannery TextilesPharmaceuticals and Dye and Dye Intermediaries. Insilco Limited do not fall under theseprescribed industries and hence requirement of ZLD is not applicable 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 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 thatrecommendations with regard to ZLD is not practical for our plant and pollution authorityshould prescribe some appropriate method. After the hearing the Plant of the Company wasallowed to resume operations subject to 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 the Insilco deposited INR1.5 Million with Central Pollution Control Board on 9th May 2017 and restartedits production from late evening of 9th May 2017.

As directed by the NGT in its order dated 8th May 2017 the special highpower inspection team visited the plant of Insilco at Gajraula. The existing fullcompliance status along with the measures taken for improvement were explained by theplant management to the inspection team. However as on the date of the signing of thisreport the report of said inspection team has not yet been received by the Company. TheNGT on 13th July 2017 pronounced its detailed judgement in this matter whereit has given certain specific directions with respect to Bagad River (drain) besidesgeneral directions which are 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 Environmental (Protection) Act 1986.

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 Company states that it has complied with the current applicable pollution norms.But it is possible that the pollution authorities may come up with fresh requirements forcompliance which will have to be examined and considered if received.

16. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Board of Directors of the Company has also laid down a policy on prevention ofsexual harassment at 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: www.insilcoindia.com ? Investors ? Policies.

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.

However the Company has suo moto provided few televisions for improving theinfrastructure of one of the nearby School.

18. STATEMENT ON ANNUAL EVALUATION OF THE BOARD COMMITTEES AND INDIVIDUAL DIRECTORS

The Board has laid down the manner and criteria of evaluation of 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 is aligned withthe SEBI circular dated 5th January 2017 on ‘Guidance Note on BoardEvaluation’. The evaluation includes various criteria including performanceknowledge roles 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 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 ethicspolicy.

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. The copy of the said policy is available on the website of the Company at thefollowing path: www.insilcoindia.com Investors Policies

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

Mr. Frank Heinz Lelek resigned as Managing Director of the Company with effect fromclosing of working hours of 19th June 2016 due to some other assignment inEvonik Industries AG. Consequent to the same he also ceases to exist as whole-time keymanagerial personnel. Mr. Frank Heinz Lelek continued as Director (non-executive) of theCompany till closure of working hours of 4th August 2016 and resigned from thatdate. The Board placed on records its deep appreciation for the valuable services renderedto the Company by Mr. Frank Heinz Lelek during his tenure as its Managing Director andDirector respectively.

Dr. Mustafa Siray has resigned as Director of the Company with effect from closing ofworking hours of 30th June 2016 due to his retirement from the Evonik Group.The Board placed on record its deep appreciation for the valuable support and guidanceprovided by Dr. Mustafa Siray during his tenure.

Mr. Guido Johannes Christ has also resigned as Director of the Company with effect fromclosing of working hours of 4th August 2016 due to his retirement. The Boardplaced on record its deep appreciation for the valuable support and guidance provided byMr. Guido Johannes Christ during his tenure.

To strengthen the Board the Board had appointed Mr. Harishkumar Kanaiyalal Davey as anAdditional Director (Non-Executive Non-Independent Director) of the Company with effectfrom 4th August 2016. Mr. Harishkumar Kanaiyalal Davey was holding the office of anAdditional Director upto the date of next AGM which was held on 26th September 2016. Inthe said AGM the Shareholders of the Company appointed Mr. Harishkumar Kanaiyalal Daveyas a Director of the company liable to retire by rotation. Mr. Harishkumar KanaiyalalDavey was a Chemical Engineer and possessed a Master’s Degree in MarketingManagement. He was an Alumni of Kellog school of Business (Executive Education) and ISB.Mr. Davey had approximately 36 years of rich and versatile experience. He had worked as acountry manager for Eastman Chemical Company and in 1996 he took on the position ofManaging Director for South Asia as well as the Director of Corporate Development and hadworked in both India and the United States of America. 2010 onwards he had held theposition of President of Strategy & Business Development at Reliance IndustriesLimited where he was responsible for evaluating global mega trends and their impact asgrowth drivers with the aim of generating sustainable profitable growth. In February2016 he was appointed as President of Region India of Evonik Group and took over asManaging Director of Evonik India Private Limited from April 2016.

To strengthen the Board the Board has also appointed Mr. Christian Schlossnikl as anAdditional Director (Non-independent Non-Executive) of the Company with effect from 4thAugust 2016. Mr. Christian Schlossnikl was holding the office of an Additional Directorupto the date of next AGM which was held on 26th September 2016. In the saidAGM the Shareholders of the Company appointed Mr. Christian Schlossnikl as a Director ofthe company liable to retire by rotation. Mr. Christian Schlossnikl is Master of BusinessAdministration (University of Krems) Postgraduate course of Business Administration andLaw (Technical University of Vienna) and has done a course of Plastics Technology(Montanistic University of Leoben). Mr. Christian Schlossnikl has approx. 30 years ofversatile experience with expertise in production and engineering. He is serving Evoniksince 2001 in various important roles and currently designated as Senior Vice PresidentProduction and Engineering Silica at Evonik Resource Efficiency GmbH. Before Evonik hehas served various corporates with functional area including head of project fortechnological and market possibilities of new cellulosic products global search forcooperation partners and technical director for production of Polyester films and sheets.

To strengthen the Board the Board has also appointed Ms. Sonia Prashar as anAdditional Director (Independent Non-executive Director) of the Company with effect from 4thAugust 2016. Ms. Sonia Prashar was holding the office of an Additional Director upto thedate of next AGM i.e. 26th September 2016. In the said AGM the Shareholders ofthe Company appointed Ms. Sonia Prashar as a Director (Independent Non-executive Director)of the Company for a non-rotational term of upto 5 consecutive years. Ms. Sonia Prashar isa Graduate in Science and a Bachelor of Education from Delhi University. She is also aGraduate in the German Language from the Goethe Institute. Ms. Prashar has approximately21 years of rich experience and has been working in the Indo-German Chamber of Commerce(IGCC) since 1996. She is currently designated as Deputy Director General of IGCC. Beforethis position she has served IGCC as Director - Marketing & Trade Fairs. She plays akey role in promoting collaborations and constructive communication between Indian andGerman Companies to develop effective partnership with each other.

To fill the position of Managing Director and whole time key managerial personnel Mr.Brijesh Arora was promoted and appointed as Managing Director of the Company with effectfrom 4th August 2016 subject to approval of Shareholders by way of Specialresolution. The Shareholders of the Company in their meeting held on 26thSeptember 2016 appointed Mr. Brijesh Arora as Managing Director of the Company for aperiod of 5 years w.e.f. 4th August 2016. Before the appointment of Mr. BrijeshArora as Managing Director he was positioned as Whole-time Director designated as JointManaging Director of the Company with effect from 1st March 2015. Mr. BrijeshArora is Master of Business Administration and Alumnus of the Indian Institute ofManagement Calcutta (IIMC)’s Senior Management Program (SMP). He has also doneChartered Accountancy Course from the Institute of Chartered Accountants of India (ICAI)Master of Financial Analysis (MFA) from Institute of Chartered Financial Analyst (ICFAI)Company Secretary course from Institute of Company Secretaries of India (ICSI). He hassuccessfully completed Executive Development Programme-Advanced (EDP Advanced module) ofEvonik. Mr. Brijesh Arora is having approx. 25 years of rich experience in differentfields of Business Management Controlling Finance Accounts Legal and Compliances. Mr.Brijesh Arora is associated with the Company for more than 10 years at different seniorpositions.

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

Directors retiring by rotation

In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Ms. Meng Tang shall retire by rotation at the ensuing AGM ofthe Company and being eligible offer herself for re-appointment. The Board recommends herre-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 & model rolesrights responsibilities 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: www.insilcoindia.com ? Investors ? Notes

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 is appointed as Managing Director and disclosure in this regardpursuant to above provisions are given in the Corporate Governance Report attached to thisreport at Clause no. 3.2(D)(a)(ii).

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 2016-17 was 14.56 : 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 2016 of Director and KMPs aregiven below alongwith current designations i.e. designation as on the date of approval ofthis report.

Name Current Designation % increase (w.e.f. 1st April 2016)
Mr. Brijesh Arora Managing Director12 12.00%
Ms. Shivangi Negi CFO 13.22%
Mr. Sarvesh Kumar Upadhyay Company Secretary 12.23%

12. The designation of Mr. Brijesh Arora was "Joint Managing Director" as on1st April 2016 i.e. on the date of annual increment.

Mr. Brijesh Arora was promoted and appointed as Managing Director w.e.f. 4th August2016 at a remuneration of Rs. 5517530/- per annum.

d. Percentage increase in the median remuneration of employees

The percentage increase in the median remuneration of employees in the Financial Year2016-17 was 9.66%.

e. No. of permanent employees on the rolls of the Company

As on 31st March 2017 your Company had 116 permanent employees on the rollsof the Company. The same does not include contractual employees and 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 2016-17 Comments
Average percentage increase in the salaries of employee other than Managerial Personnel 10.10% -
Average percentage increase in salary of Managerial Personnel (Mr. Brijesh Arora - Managing Director) 12.00% Mr. Brijesh Arora was appointed as Joint Managing Director with effect from 1st March 2015. An increment of 12.00% was given w.e.f. 1st April 2016. Thereafter Mr. Brijesh Arora was promoted and appointed as Managing Director w.e.f. 4th August 2016 at a remuneration of Rs. 5517530/-.

g. Policy compliance affirmation

The remuneration to Directors and KMP is as per the nomination and remuneration policyof the Company.

23. STATEMENT PURSUANT TO CLAUSE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014

During the year there was no employee of the Company:

• who was employed throughout the Financial Year 2016-17 and was in receipt ofremuneration for that financial year of not less than Rs. 12000000/-; or

• who was employed for a part of the Financial Year 2016-17 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 2016-17 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 2016-17

S. No. Name (In Alphabetical Order) Designation
1 Mr. Anurag Srivastava Senior Manager - Human Resource & Administration
2 Mr. Ashok Kumar Pandey General Manager - Procurement & Supply Chain
3 Mr. Brijesh Arora Managing Director
4 Dr. Madan Gopal Sinha Dy. General Manager - Works & Plant Head
5 Mr. Manoj Kumar Senior Manager - Information Technology
6 Ms. Poonam Jhingan Executive Assistance
7 Mr. Pradeep Kumar Senior Manager – Environment Safety Health and Quality (ESHQ)
8 Mr. Rajeev Agarwal Senior Manager - Controlling
9 Mr. Sandeep Kumar Gupta Senior Manager - Engineering
10 Ms. Shivangi Negi Chief Financial Officer

24. AUDITORS

The members are hereby informed that M/s. S.R. Batliboi & Co. LLP CharteredAccountants (Firm Registration No. with ICAI – 301003E/E300005) the existing Auditorwas appointed for their 2nd term of five years from the conclusion of 28thAnnual General Meeting till the conclusion of 33rd Annual General Meeting(subject to ratification of their appointment by the members at every Annual GeneralMeeting). However M/s. S.R. Batliboi & Co. LLP have now expressed their unwillingnessto be re-appointed as Auditor of the Company after the conclusion of 29thAnnual General Meeting.

The members are further informed that the Company approached to M/s. Price Waterhouse& Co Chartered Accountants LLP (Firm Registration No. with ICAI –304026E/E300009) who have expressed their willingness to act as Auditor of the Companyif appointed and have provided the requisite documents as required under the Act.

Pursuant to the provisions of the Companies Act 2013 the appointment of M/s. PriceWaterhouse & Co Chartered Accountants LLP (Firm Registration No. with ICAI –304026E/E300009) is proposed for their first term of five consecutive years from theconclusion of 29th Annual General Meeting until the conclusion of 34thAnnual General Meeting of the Company.

The Audit Committee and the Board in their respective meetings held on 16thMay 2017 and 18th July 2017 respectively have approved the appointment of M/s.Price Waterhouse & Co Chartered Accountants LLP (Firm Registration No. with ICAI– 304026E/E300009) as Statutory Auditor of the Company subject to approval frommembers of the Company for their 1st term of 5 consecutive years i.e. from theconclusion of 29th Annual General Meeting until the conclusion of 34thAnnual General Meeting of the Company.

The Board recommends the resolution for approval by the Members. None of the DirectorsKey Managerial Personnel & their relatives is concerned or interested financially orotherwise in this resolution.

25. COST AUDITOR/MAINTENANCE OF COST RECORDS

Maintenance of Cost Records for the Financial Year 2016-17

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 2016-17 the Company is required to maintain cost records ofthe Company. The Board has appointed M/s. Ajay Ahuja & Associates (Registration No.101142) for maintenance of Cost Records of the products of the Company for the FinancialYear ended 31st March 2017. The Cost records of the Company will be presentedbefore the Audit Committee/Board in due course of time.

The contact details of M/s. Ajay Ahuja & Associates (Registration No. 101142) isgiven below:

• Address : 7/156 Ramesh Nagar New Delhi-110015

• E-mail : cmaajayahuja@gmail.com ajayahujaassociates@gmail.com

• Mobile : +91 9810326644

Maintenance of Cost Records for the Financial Year 2015-16

The Company was required to maintain cost records for the Financial Year 2015-16. TheBoard has appointed M/s. Ajay Ahuja & Associates (Registration No. 101142) formaintenance of Cost Records of the products of the Company for the Financial Year ended 31stMarch 2016. The report/certificate of Mr. Ajay Ahuja was placed before the Board in itsmeeting dated 4th August 2016.

26. PRACTISING COMPANY SECRETARY

M/s. Nityanand Singh & Co. Company Secretaries having their office at14 2ndFloor Arjun Nagar Safdarjung Enclave New Delhi-110029 are the present practisingCompany 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 2017
S. No. Name of the Director Designation in Audit Committee
1 Mr. Dara Phirozeshaw Mehta Chairman
2 Ms. Sonia Prashar Member
3 Mr. Harishkumar Kanaiyalal Davey Member

The Board of Directors of the Company 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 yourCompany’s subsidiary joint venture or associate company.

29. DEPOSITS

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.

32. OPERATIONS AT PLANT

The Plant operations had to be shut down a few times during the year due to lower salesorders.

33. GUIDING PRINCIPLES OF COLLABORATION : RESOURCE EFFICIENCY BUSINESS UNIT OF EVONIK

Insilco Limited is a part of 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. This culture helps us identify good ideas at an early stage of theirdevelopment and then quickly bring them to market in order to create added value to ourcustomers and Evonik. As a Company we are committed to provide our internal and externalcustomers products and services that always unequivocally meet the agreed qualitystandards. This is our declared goal and the measure of our actions.

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.

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 – orientedapproach.

39. CERTIFICATIONS AND RECOGNITIONS

Our plant at Gajraula is certified under the Environment Management Standard ISO14001-2004 and Quality Management Standard ISO 9001-2008. During the year recertificationaudit of the Environment Management Standard ISO 14001-2004 and Quality ManagementStandard ISO 9001-2008 was successfully completed. We have obtained HALAL & KOSHERcertificates during the year for Food Safety Management System. Apart from these we arealso HACCP and FSSAI certified Company for the Food Safety Management System.

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 of conditions of Corporate Governance as per provisions of ListingRegulations 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 provisions of the Listing Regulations a Management Discussions andAnalysis Report is enclosed as Annexure - 6 forming part of Annual Report.

42. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT: None

43. REPORTING OF FRAUD BY AUDITORS PURSUANT TO SECTION 143(12) OF THE COMPANIES ACT2013

There were no fraud reported by the Auditors to the Audit Committee or to the Board.

44. INDUSTRIAL RELATIONS

Your Company continued to enjoy cordial relations with all its employees. No man daywas lost due to any Industrial Dispute.

45. FORWARD-LOOKING STATEMENT

This Report including its annexures contains forward–looking statements thatinvolve risks and uncertainties. The actual results performance or achievements coulddiffer materially from those expressed or implied in such forward–looking 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.

46. ACKNOWLEDGEMENT

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 : Mumbai
Date : 18th July 2017