You are here » Home » Companies » Company Overview » Insilco Ltd

Insilco Ltd.

BSE: 500211 Sector: Industrials
NSE: INSILCO ISIN Code: INE901A01011
BSE 00:00 | 12 Aug 7.12 0.54
(8.21%)
OPEN

6.60

HIGH

7.50

LOW

6.45

NSE 05:30 | 01 Jan Insilco Ltd
OPEN 6.60
PREVIOUS CLOSE 6.58
VOLUME 62762
52-Week high 11.11
52-Week low 6.01
P/E
Mkt Cap.(Rs cr) 45
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.60
CLOSE 6.58
VOLUME 62762
52-Week high 11.11
52-Week low 6.01
P/E
Mkt Cap.(Rs cr) 45
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Insilco Ltd. (INSILCO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 33rd Annual Report together withthe Audited Accounts for the Financial Year ended March 31 2021.

1. 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 31.03.2021 Year Ended 31.03.2020
Gross Turnover - 577.47
Less: Excise duty - -
Turnover (net of excise duty) - 577.47
Other Income 47.11 53.51
Total Expenditure (excluding excise duty) (603.50) (705.48)
Profit/(Loss) before Depreciation & Exceptional Items (556.39) (74.50)
Depreciation (20.04) (28.28)
Profit/(Loss) for the year before exceptional items (576.43) (102.78)
Exceptional items - -
Profit/(Loss) before tax (576.43) (102.78)
(Provision for)/Release of Taxation (0.76) (1.95)
Profit/(Loss) after tax (577.19) (104.73)
Other comprehensive income/(loss) 5.65 (2.86)
Total comprehensive income/(loss) for the year (571.54) (107.59)

B. Results of Operations

As you would be aware the plant operations of your company continues to be suspendedsince October 26 2019 due to refusal of "Consent to Operate" by Uttar PradeshPollution Control Board (UPPCB) vide its orders dated October 22 2019. The Companyfiled Fresh Applications by applications of even date dated November 21 2019 for Consentto Operate however the same were dismissed by the UPPCB vide order dated February4 2020. The Company has challenged the aforestated orders by separate appeals underSection 28 of the Water (Prevention & Control of Pollution) Act 1974 and Section 31of the Air (Prevention & Control of Pollution) Act 1981 respectively before theSpecial Secretary Department of Environment Forest and Climate Uttar Pradesh againstthe orders of UPPCB. The hearing on the matter faced delays due to nationwide lockdown andconsequent restrictions announced by the Government of India and the shift in governmentpriority to handle the COVID-19 Pandemic coupled with the non-availability of the SpecialSecretary who has been deputed by the state government on an alternate COVID-19 role.

After much delay the matter was finally heard and the Special Secretary vide its orderdated December 4 2020 dismissed the appeals filed by the Company and stated that "the Appellant has the option of presenting its proposal to the Hon'ble Tribunalthrough the Joint Committee following the recommendations of the Joint Committee incompliance with the order of the Hon'ble National Green Tribunal. The above orders havebeen issued in compliance with the order of the Hon'ble National Green Tribunal."

The Board of your Company after due consideration unanimously agreed not to pursue thematter any further due to reasons as mentioned under (6) below.

Despite suspension of operations of the Company the employees were regularly paidtheir full salaries. However in view of the situation subsequent to the order of theSpecial Secretary the Company offered a Voluntary Retirement Scheme in December 2020which not seen favourable by the employees and thereafter offered another VoluntaryRetirement Scheme in January 2021 ("VRS 2021") to its employees tomitigate the expenses and conserve cash. The VRS 2021 was accepted by 82 employeesconstituting around 80% of the Company's total employee strength. The Company had retainedservices of a minimum number of employees for conducting the bare minimum requirement ofmaintaining the assets and undertaking statutory compliances as required.

As reported last year your company lost all its customer base subsequent to suspensionof plant operations since 26th October 2019.

Sales of Precipitated Silica during the year were Nil (previous year 9391 MT). TheProduction during the year was Nil (previous year 8314 MT).

Your Company achieved a sales turnover of Rs. Nil during the year as compared to Rs.577 million in the previous year. The Company recorded a loss before depreciation andexceptional items of Rs. 556.39 million as compared to loss before depreciation andexceptional items of Rs. 74.50 million in the previous Financial Year. The Company hadreserves of Rs. 215 Million as on 1st April 2020. The total comprehensive lossfor the Financial Year 2020-21 was Rs. 572 Million.

C. Future Outlook

As reported last year your company lost all its customer base subsequent to suspensionof plant operations since 26th October 2019. The relocation of themanufacturing facility to another site is not financially viable given the cost ofrelocation and intense competition in the market place.

Due to the long suspension of the operations of the Company and the no possibility ofresuming normal operations in the foreseeable future the Company had ceased to be a goingconcern. The unaudited financial results for the quarter ending December 31 2020 approvedby the Audit Committee and subjected to limited review by the statutory auditors of theCompany had been prepared on the basis that the Company was not a going concern. ThePromoter shareholders had informed the Company that they were not willing to make anyfurther investment into the Company for this purpose and there were no other sources offunds for the same.

The Board of your Company looked at the situation in detail and took note that therewas no availability of business prospects nor any long-term financial resources thatpresents a financially viable alternative to carry on the business activities of theCompany or to resume the operations of the Company in the foreseeable future.

Considering the limited resources of your Company and other complications associatedwith the current pandemic situation it appears that the option of sale of assets (whichincludes land building plant & machinery) might not be possible to achieve in ashort time. In the light of all the above it appears that voluntary liquidation of theCompany could be considered the best way forward to realise the assets of the Company inquick and efficient manner and distribute the proceeds thereof to the shareholders of theCompany. The Board has therefore decided to lay the proposal for Voluntary liquidation tothe members for its approval also approved the appointment of Ernst & Young LLP toprovide support to Insilco Limited in the Winding Down and Voluntary Liquidation of theCompany.

2. TRANSFER TO RESERVES

The Company had reserves of Rs. 215 Million as on 1st April 2020. The totalcomprehensive loss for the Financial Year 2020-21 was Rs. 572 Million. Therefore theclosing balance of the Reserves and Surplus as on 31st March 2021 amounted toRs. (357) Million.

3. DIVIDEND

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

4. OPERATIONS AT PLANT

The operations of the plant of your Company at Gajraula continue to remain suspended ason the date of this report due to the reasons as mentioned.

5. STATEMENT ON RISK MANAGEMENT POLICY

The operations of the Company have been suspended with effect from October 26 2019 onaccount of refusal of consent to Operate from the Uttar Pradesh Pollution Control Boardand the Appeal preferred to the Appellate Authority has also been rejected. Accordinglyrisks pertaining to the efficiency of plant operations plant costs and market share areno longer applicable.

The Risk Management Policy is available on the website of the Company at the followingpath: https:// w w w . i n s i l c o i n d i a . c o m / P d f /Risk%20Management%20Policy.pdf

6. (A) UPDATE ON GANGA CLEANING MATTER & REFUSAL OF CONSENT TO OPERATE BY

UPPCB

As you would be aware the plant operations of your company since October 26 2019 dueto refusal of "Consent to Operate" by Uttar Pradesh Pollution Control Board(UPPCB) vide its orders dated October 22 2019. The Company filed Fresh Applications byapplications of even date dated November 21 2019 for Consent to Operate however thesame were dismissed by the UPPCB vide order dated February 4 2020. The Company haschallenged the aforestated orders by separate appeals under Section 28 of the Water(Prevention & Control of Pollution) Act 1974 and Section 31 of the Air (Prevention& Control of Pollution) Act 1981 respectively before the Special SecretaryDepartment of Environment Forest and Climate Uttar Pradesh against the orders of UPPCB.The hearing on the matter faced delays due to nation-wide lockdown and consequentrestrictions announced by the Government of India and the shift in government priority tohandle the COVID-19 Pandemic coupled with the non-availability of the Special Secretarywho has been deputed by the state government on an alternate COVID-19 role.

After much delay the matter was finally heard and the Special Secretary vide its orderdated

December 4 2020 dismissed the appeals filed by the Company and stated that "theAppellant has the option of presenting its proposal to the Hon'ble Tribunal through theJoint Committee following the recommendations of the Joint Committee in compliance withthe order of the Hon'ble National Green Tribunal. The above orders have been issued incompliance with the order of the Hon'ble National Green Tribunal."

The Board deliberated on the matter and also considered that the Company required todraw ground water to carry out its normal manufacturing activity (as and when permitted).Such abstraction of ground water was permissible only after a no objection certificate("NOC") was issued by the Ground Water Authority and the earlier NOC issued bythe Ground Water Authority for such extraction had expired on December 2019.

The Company had sought legal advice and understood that:

a. The probability of a successful appeal to the National Green Tribunal("NGT") was very bleak based on review of similar cases decided in the past.

b. Assuming that the matter could be finally decreed in favour of the Company anappeal might be made to the Supreme Court – time taken for the processing the appealmight be around 2 years.

c. Assuming further that the Company becomes successful in its appeal it would requirea NOC by the Ground Water Authority – which could entail its own challenges giventhat the Gajraula site area is classified as an "over exploited area".

The Board after due deliberations and considering the recommendations of the AuditCommittee unanimously agreed not to pursue the appeal with the National Green Tribunalany further.

(B) WRIT PETITION FILED BEFORE THE HON'BLE

HIGH COURT OF JUDICATURE AT ALLAHABAD

The members are hereby informed that a Writ Petition being WP(C) No. 9669 of 2021 hasbeen filed before the Hon'ble High Court of Judicature at Allahabad on March 1 2021. Thesaid Writ Petition has been preferred by the Company for quashing / setting aside LetterNo. 489 dated July 1 2020 Letter No. 940 dated July 24 2020 and Letter No. 1865 datedDecember 22 2020 (together called the Impugned Letters) issued by the Uttar Pradesh StateIndustrial Development Authority (UPSIDA / Authority) wherein UPSIDA inter alia hasimposed the following conditions for issuing the No Objection Certificate (NOC) for thepurpose of establishment of a propane-mounted installation of 2 x 72 cubic metres watercapacity (LPG Project) at the Company's factory at Gajraula:

(i) Demand for a transfer levy of INR

80900103.70/- (Rupees Eight Crores Nine Lacs One Hundred and Three and Seventy PaisaOnly) due to change in the shareholding pattern in the Company (Transfer Levy).

(ii) Maintenance Charges up to May 29 2020 amounting to INR 6028397.65/-(RupeesSixty Lacs Twenty-Eight Thousand Three Hundred and Ninety-Seven and Sixty-Five Paisa Only)with interest of INR 8895.15/-(Rupees Eight Thousand Eight Hundred and Ninety-Five andFifteen Paisa Only) (Maintenance Charges).

(iii) Lease rent up-to March 31 2021 of INR

10097/- (Rupees Ten Thousand and Ninety-Seven Only) plus 18% GST of INR 1817.50/-(Rupees One-Thousand Eight Hundred and Seventeen and Fifty Paisa Only) (Lease Rent).

The aforesaid Letters also imposed certain new terms and conditions on the Companywhich inter alia include:

(i) Execution of a fresh lease deed with UPSIDC. Fresh lease deed will entailadditional liability towards stamp duty & registration charges on the Company.

(ii) Revision of lease rent for the next 60 (Sixty) years i.e. INR 682223.05 perannum for the first 30 remaining years and then INR

1364445 for the balance 30 years.

(iii) Restriction on the Company from transferring controlling interest for a period of5 (Five) years from July 1 2020.

The said Writ Petition was listed before the Hon'ble Court on March 18 2021 whereinUPSIDA has been granted 6 (Six) weeks-time to file its counter affidavit and the next dateof hearing is in the week commencing May 24 2021.

7. 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) In view of matter described in note 33 of Financial statements the Board ofDirectors are of the view that there are no realistic alternatives for resumption of theCompany's operations and accordingly use of the going concern basis of accounting in thepreparation of the financial statements is considered inappropriate and the financialstatements for the year ended March 31 2021 have not been prepared on a going concern.The Company's management has assessed carrying value of assets and liabilities and basedon current estimates adjustments have been made in the books of account year ended March31 2021 (refer note 36 of financial statements). A detailed explanation is given inclause no 1(C) of the Director's Report under the heading "Future Outlook".

(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.

8. EXPLANATION OR COMMENTS BY THE BOARD ON QUALIFICATIONS RESERVATIONS ADVERSEREMARKS OR DISCLAIMERS MADE BY STATUTORY AUDITOR AND SECRETARIAL AUDITOR IN THEIRRESPECTIVE REPORTS

The Statutory Auditors in their reports on financial statements and internal financialcontrols for the financial year 2020-21 have given qualified opinion and the response ofyour directors with respect to it is as follows:

The matters mentioned in 3 4 of the said Auditors Report and in paragraph 8 and 10 ofthe Report on the Internal Financial Controls with reference to financial statements inAnnexure A to the Auditors Report have been explained in detail in clause no. 1(C) of theDirectors' report under the heading "Future outlook" clause no. 6(A) and 6(B)of Directors' report under the heading "Update on ganga cleaning matter & refusalof consent to operate by UPPCB" and "Writ Petition Filed Before The Hon'ble HighCourt Of Judicature At Allahabad" respectively clause no. 31 of Directors' reportunder the heading "Material orders by governing authorities" note no. 33 noteno. 35 and note no. 36 of the financial statements.

There was no fraud reported by the Auditor to the Audit Committee or to the Boardpursuant to Section 143(12) of the Companies Act 2013.

The report of Secretarial Auditor does not contain any qualifications reservationsadverse remarks or disclaimers except an observation with regard to composition of Boardcaused due to the resignation of Mr. Brijesh Arora Managing Director w.e.f. 10th December2020 and the vacancy caused due to his resignation was yet to be filled till closure ofthe financial year ending on 31.03.2021.

Your Company at its meeting held on April 30 2021 appointed Mr. Paremal NarayananVinod as Managing Director with effect from May 1 2021. Mr. Paremal is currently on theBoard of your Company and has agreed to a nil remuneration from the Company. Mr. Paremalis also the Managing Director of Evonik India Private Limited. The said appointment of Mr.Paremal is subject to the approval of the members and such other statutory approvals thatmay be required in this connection.

9. ANNUAL RETURN

The Annual Return as required under Section 92 and Section 134 of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 isavailable on the Company's website at the following link: www.insilcoindia.comwww.insilcoindia.com —> Investors —> Annual Return. Investors arerequested to please refer the same.

Also an extract of the Annual Return in Form MGT-9 is attached (Annexure – 1) asa part of this report.

10. NUMBER AND DATES OF MEETINGS OF THE

BOARD AND ATTENDANCE OF THE DIRECTORS

The Board duly met 10 times in the Financial Year 2020-21 on 12th May 202023rd June 2020 13th August 2020 15th October 2020 2ndNovember 2020 10th December 2020 22nd January 2021 10th February2021 24th March 2021 and 30th March 2021. The attendance of theDirectors in the Board meetings is given in clause no. 2.3(C) of Corporate GovernanceReport.

11. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING

CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF DIRECTORSETC.

Pursuant to Section 178(1) of the Companies Act 2013 and Regulation 19 of Securitiesand Exchange 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 remuneration criteria for Director Senior ManagementPersonnel and other employees including criteria for determining qualificationterm/tenure positive attributes independence of Directors criteria for performanceevaluation of Executive and Non-executive Directors (including Independent Directors)removal policy on Board diversity Directors' and Officers' Insurance and other mattersas prescribed under the provisions of the Companies Act 2013 and the Listing Regulations.

Pursuant to Section 178(4) of the Companies Act 2013 the said nomination andremuneration policy of the Company is available on the website of the Company at thefollowing link: http:// www.insilcoindia.com —> Investors —> Policies—> Nomination and Remuneration Policy.

12. SECRETARIAL AUDIT

As required under Section 204(1) of the Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andRegulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 M/s APK & Associates Practicing Company Secretaries having its address at 53-AShyam Vihar-II Goyla Road Najafgarh New Delhi-110043 has conducted the SecretarialAudit of the Company for the Financial Year 2020-21. The Secretarial Audit Report issuedby the said firm is attached to this report as Annexure-2.

13. PARTICULARS OF LOANS GUARANTEES OR

INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013

During the year under review the Company had not entered into any transaction of loanguarantee or investment under Section 186 of the Companies Act 2013.

14. PARTICULARS OF CONTRACTS OR

ARRANGEMENTS WITH RELATED PARTIES

During the financial year the Company has entered into various transactions withrelated parties. All the related party transactions entered during the Financial Year2020-21 were in ordinary course of the business and were on an arm's length basis. Interms of the Act no material related party transactions were entered during the FinancialYear by the Company. All related party transactions are placed before the Audit Committeefor review and approval. The quarterly disclosures of transactions with related partiesare made to the Audit Committee for its review. As required under the Companies Act 2013and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Audit Committee has granted Omnibus approval for appropriate related partytransactions in accordance with the criteria laid down for the purpose. The disclosure ofrelated party transactions as required under Section 134(3)(h) of the Companies Act 2013in Form AOC 2 is not applicable on the Company for the financial year under review.Members may refer to

Note no. 25 to the financial statement which sets out related party disclosures for thefinancial year ended 31st March 2021.

Pursuant to the provisions of the Companies Act 2013 and Regulation 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 —> Investors —> Policies —> Related PartyTransaction Policy.

15. MATERIAL CHANGES AND COMMITMENTS

AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THEFINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND 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.

16. CONSERVATION OF ENERGY TECHNOLOGY

ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO

A. Conservation of Energy

Since the operations of the Company have been suspended with effect from October 262019 on account of refusal of Consent to Operate from the Uttar Pradesh Pollution ControlBoard and the Appeal preferred to the Appellate Authority has also been rejected allprojects pertaining to energy conservation have also been suspended including the "Propane-LPG"project to reduce energy cost which was envisaged to act as an alternate to High SpeedDiesel (HSD) in the manufacturing process.

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 Operations GmbH (formerly known as Evonik DegussaGmbH) Germany.

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:

Total Foreign Exchange used and earned Year ended 31st March 2021 Year ended 31st March 2020
a) Total Foreign Exchange earned - 36591
b) Total Foreign Exchange used 5854 11875

17. 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. An Internal Complaints Committee has also been formed by theBoard of Directors to look into the complaints received if any. During the year underreview the Company did not receive any complaint under the said policy. The said policyis available on the website of the Company at the following link: http://www.insilcoindia.com —> Investors —> Policies —> Prevention ofSexual Harassment Policy. The Company has complied with provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.

18. IMPACT of COVID-19 on Financials

Due to COVID-19 pandemic there is no major impact on the business of the Company as ourplant operations had already been suspended since October 26 2019 due to refusal ofConsent to operate by UP Pollution Control Board (UPPCB). The Company does not have anyoutstanding debt or other financing agreements. The Company have adequate digitizedsystems which ensured us to have smooth internal financial reporting and control in thissituation.

19. CORPORATE SOCIAL RESPONSIBILITY (CSR) OF

THE COMPANY

The Company is not covered under the provisions of CSR i.e. Section 135 of theCompanies Act 2013 and accordingly not required to comply with the requirements ofSection 135 of the Companies Act 2013.

20. WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(10) of the Companies Act 2013 and Regulation22 of the Listing Regulations the Company has established a "Whistle BlowerPolicy" for employees to report to the management instances of unethical behavioractual 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 is operatingeffectively. This Policy outlines the procedures for reporting handling investigatingand deciding on the course of action to be taken in case inappropriate conduct is noticedor suspected.

This Policy also provides for adequate safeguards against victimization ofdirector(s)/employee(s) who avail of the mechanism and also provides for direct access tothe Chairman of the Audit Committee in exceptional cases. During the year the Company hasnot received any complaint through such mechanism. A copy of the said policy is availableon the website of the Company at the following path: http:// www.insilcoindia.com—> Investors —> Policies —> Whistle Blower Policy.

21. 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 evaluation includes variouscriteria including performance knowledge roles and responsibilities etc.

Pursuant to the provisions of the Companies Act 2013 the Nomination and RemunerationCommittee has decided that the Board will evaluate its Committees and the Nomination andRemuneration Committee would evaluate the Board and Individual Directors. The evaluationas aforesaid has been done in the meeting of the Nomination and Remuneration Committee andin the Board Meeting. After evaluation the performances of the Board its committees andIndividual Directors were found upto the mark and was satisfactory.

The Independent Directors had met separately without the presence of Non-IndependentDirectors and the members of management and discussed inter-alia the performance ofNon-Independent Directors and the Board as a whole and the performance of the Chairman ofthe Company after taking into consideration the views of Executive and Non-ExecutiveDirectors.

The performance evaluation of the Independent Directors have been done by the entireBoard excluding the Director being evaluated on the basis of performance and fulfilmentof the independence criteria as specified under the Companies Act 2013 and the ListingRegulations.

22. CHANGE IN THE NATURE OF BUSINESS IF ANY

During the year your Company has not changed the nature of its business.

23. DIRECTORS & KEY MANAGERIAL PERSONNEL

(KMP)

Change in Directors and KMP

Mr. Sanjeev Taneja resigned as Director of the Company with effect from closing ofworking hours of 13th August 2020 due to his other pre-occupations andexpiration of his tenure as a President of India Region & Managing Director of EvonikIndia Private Limited. The Board placed on records its deep appreciation for the valuableservices rendered to the Company by Mr. Sanjeev Taneja during his tenure as a Director ofthe Company.

Mr. Brijesh Arora had tendered his resignation as Managing Director and as an employeeof the Company with effect from 10th December 2020. His resignation wasaccepted by the Board and he ceased to be Managing Director of the Company w.e.f. 10thDecember 2020.The Board placed on record its deep appreciation for his contributionto the Company during his tenure.

To strengthen the Board the Board on the recommendation of Nomination and RemunerationCommittee had appointed Mr. Paremal Narayanan Vinod in the category of Non-ExecutiveNon-Independent Director of the Company with effect from 13th August 2020. Mr.Paremal has been appointed as Additional Director and holds office up to the date ofensuing Annual General Meeting of the Company and is eligible for appointment. Theresolution for his appointment as a Director liable to retire by rotation placed forapproval of members. The Board of your Company at its meeting held on 30thApril 2021 appointed Mr Paremal as Managing Director of the Company with effect on 1stMay 2021 for a period of 2 years. Mr Paremal will not draw a remuneration from yourCompany. The said appointment is subject to approval of the members and other requiredstatutory approvals if any.

To strengthen the Board the Board on the recommendation of Nomination and RemunerationCommittee had appointed Mr. Gopalakrishnan Anantharaman Iyer in the category ofNon-Executive Non-Independent Director of the Company with effect from 10thDecember 2020. Mr. Iyer has been appointed as Additional Director and holds office up tothe date of ensuing Annual General Meeting of the Company and is eligible for appointment.The resolution for his appointment as a Director liable to retire by rotation is beingplaced for approval of members.

As required under Regulation 36 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a brief resume details of experience and otherDirectorships / Committee memberships/ Chairmanships held by the Directors in otherCompanies whose re-appointment is due in the forthcoming Annual General Meeting (AGM) ofthe Company forms part of the Notice convening the 33rd AGM.

Term of Independent Directors

The date of commencement of term of Independent directors are given below along withdate of approval by Shareholders:

First term

Second term

S. No. Name of Independent Directors Start date Date of approval in AGM Start Date Date of approval in AGM
1 Mr. Dara Phirozeshaw Mehta 1st Apr 2014 14th Aug 2014 1st Apr 2019 24th Jul 2018
2 Ms. Sonia Prashar 4th Aug 2016 26th Sept 2016

Proposed in the ensuing AGM.

Ms. Sonia Prashar was appointed as an Independent Director in the 28thAnnual General Meeting held in the year 2016 to hold office for a period of 5 consecutiveyears effective from 4th August 2016 until 3rd August 2021. In termsof Section 149 of the Companies Act 2013 (‘Act') an Independent Director iseligible for re-appointment on passing of a Special Resolution. Ms. Sonia Prashar beingeligible and offering herself for re-appointment subject to meeting the eligibilityconditions as on the date of appointment is proposed to be appointed as an IndependentDirector for a 2nd term of 5 years with effect from 4th August 2021.

20

In the opinion of the Board Ms. Sonia Prashar fulfils the conditions specified in theAct and rules made thereunder for her re-appointment as an Independent Director of theCompany and is independent of the management. As per the performance evaluation conductedduring her 1st term (excluding Ms. Sonia Prashar) her performance wassatisfactory as an Independent Director of the Company. The Board and its alliedCommittees have benefitted from her relevant specialization and expertise. Details on herattendance of various Board and Committee Meetings held during the last financial year areincluded in the Corporate Governance Report of the Annual Report. The Board of Directorsof your Company recommends the

Resolution in relation to the appointment of Ms. Sonia Prashar as an IndependentDirector for the approval by the 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 Ms. Meng Tang was liable to retire by rotation in the last AGMheld on 13th August 2020. Being eligible she offered herself forre-appointment and the members appointed her as a Director.

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 as well as Regulation 16 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

As required under Regulation 25 of the Listing Regulations the Independent Directorshave also confirmed that they meet the criteria of independence and are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgmentand without any external influence.

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 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andIndependent Directors are persons of integrity and possesses relevant expertise andexperience.

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: https://www.insilcoindia.com/Pdf/PDF-2020/Details%20-%20Familiarization%20Programmes%20w.e.f.%201%20April%202015.pdf

24. 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 2020-21 was 16.44:1 .

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 2020 of Director and KMPs aregiven below in % alongwith the designation as on the date of approval of this report.

Name Director/KMP % increase (w.e.f. 1st April 2020)
Mr. Brijesh Arora Managing Director 5.0%
Ms. Shivangi Negi KMP (Director Finance & Chief Financial Officer) 5.5%
Ms. Swati Surhatia * KMP (Company Secretary) 87.3%

* Ms. Swati Surhatia joined the company on 2nd March 2020 as CompanySecretary. d. Percentage increase in the median remuneration of employees

The percentage increase in the median remuneration of employees in the Financial Year2020-21 was 2.89%.

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

As on 31st March 2021 Company had 22 permanent employees on the rolls ofthe Company. Out of 22 employees 5 have already opted for VRS and retire from Companyw.e.f. April 15 2021.

f. Average percentage increase already made in the salaries of employees in theFinancial Year 2020-21 in April 2020 and its comparison with the percentage increase inthe managerial remuneration and justification thereof and exceptional circumstances forincrease in the managerial remuneration if any

Particulars Financial Year 2020-21
Average percentage increase in the salaries of employee other than Managerial Personnel 5.35%
Average percentage increase in salary of Managerial Personnel 5.0 %

g. Policy compliance affirmation

The remuneration of the Directors and KMP is as per the nomination and remunerationpolicy of the Company.

25. 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 2020-21 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 2020-21 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 2020-21 and was in receiptof remuneration in that Financial Year in the aggregate or as the case may be at a ratewhich in the aggregate is in excess of that drawn by the Managing Director or Whole-timeDirector and holds by himself or along with its spouse and dependent children not lessthan two percent of the equity shares of the Company.

Top ten employees in terms of remuneration drawn during the Financial Year 2020-21

Sl. No. Name (In Alphabetical Order) Designation (As on 31st March 2021)
1 Anurag Srivastava Head - Site HR & Facilities
2 Brijesh Arora Managing Director
3 Jaipal Singh Rawat Sr. Manager - Procurement & Commercial
4 Madan Gopal Sinha Director (Works) & Plant Head
5 Manoj Kumar Head - Supply Chain & IT
6 Pradeep Kumar Head - Environment Safety Health Quality
7 Poonam Jhingan Executive Assistant
8 Rajeev Agarwal DGM - Finance & Accounts
9 Sandeep Kumar Gupta Head – Engineering
10 Shivangi Negi Director - Finance & CFO

26. AUDITORS

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.

The members are also hereby informed that during the previous year an appeal of PWIndia firms (including Price Waterhouse & Co Chartered Accountants LLP) was heard bythe Securities Appellate Tribunal (SAT). The SAT vide its final order dated September 92019 decided the appeal in favour of the PW India firms (including Price Waterhouse &Co Chartered Accountants LLP) quashing the SEBI

order dated January 10 2018 restricting the PW India firm undertaking statutory auditand other certification work for listed companies and intermediaries registered with SEBIfor a period of 2 years. The SAT has also quashed SEBI Order directing listed companiesand intermediaries not to engage PW India firms as auditors. Subsequently SEBI has filedan appeal to the Supreme Court of India against the order of SAT. The appeal is stillpending for disposal however the Hon'ble Supreme Court of India vide its interim orderdated November 18 2019 has limited stayed some observations made in the SAT order as topowers and jurisdiction of SEBI.

Based on legal opinion received by the Statutory Auditor there has been no stay on theoperation of the SAT order in totality and there is no restraint order presently on PriceWaterhouse firms (including Price

Waterhouse & Co Chartered Accountants LLP) which restrains them from carrying outaudit of listed companies. The Board of Insilco is of the view that Price Waterhouse &Co Chartered Accountants LLP will be able to serve as Statutory Auditor of Insilco Limitedfor the year ending 31st March 2022 as Hon'ble Supreme Court of India will beunder obligation to protect interest of the companies for whom PW firms are already actingas Statutory Auditor as per the well-established principles of law.

27. COST AUDITOR/MAINTENANCE OF COST

RECORDS

Maintenance of Cost Records for the Financial Year 2020-21

Pursuant to provisions of Section 148 of the Companies Act 2013 and the Companies(Cost Records and Audit) Rules 2014 (including any statutory modification(s) thereto orre-enactment/ amendment thereof for the time being in force) and any other applicableprovision the Company is required to maintain cost records basis a turnover criteria inthe previous year. However the operations of the company stand suspended since October26 2019 due to refusal of "Consent to Operate" by Uttar Pradesh PollutionControl Board. Accordingly the production and sales turnover was NIL during the year.

The Board has appointed M/s. Ajay Ahuja and Associates Cost Accountant (RegistrationNo. 101142) for maintenance of Cost Records of the products of the Company for theFinancial Year ended 31st March 2021. The Cost records of the Company will bepresented before 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 2019-20

The Company was required to maintain cost records for the Financial Year 2019-20. TheBoard had appointed M/s. Ajay Ahuja and Associates Cost Accountant (Registration No.101142) for maintenance of Cost Records of the products of the Company for the FinancialYear ended 31st March 2020. The report/ certificate of M/s. Ajay Ahuja andAssociates was placed before the Board in its meeting dated 13th August 2020.

28. 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 2021
S. No. Name of the Director Designation in Audit Committee
1 Mr. Dara Phirozeshaw Mehta Chairman
2 Ms. Sonia Prashar Member
3 Mr. Vinod Paremal Member

The Board of Directors of the Company has accepted all the recommendations made by theAudit Committee.

29. 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.

30. DEPOSITS

The Company has not accepted any deposits during the year pursuant to the provisions ofChapter V of the Companies Act 2013.

31. 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 except as stated in Point No. 6 of thisreport.

32. ADEQUACY OF INTERNAL FINANCIAL CONTROL

WITH RESPECT TO THE FINANCIAL STATEMENT

The Company has laid down proper and adequate internal financial control for ensuringefficient and effective conduct of business safeguarding of its assets and prevention anddetection of fraud and errors with respect to internal financial statement. The same isexplained in management and discussions and analysis report under the heading"Internal Control System and their adequacy".

33. 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.

34. 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 - 3 and 3.3 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 – 3.1.

iii. Certificate from Managing Director and Chief Financial Officer regardingcorrectness of the financial statements presented to the Board is attached as Annexure– 3.2.

35. MANAGEMENT DISCUSSION AND ANALYSIS

REPORT

Pursuant to the provisions of the Listing Regulations a Management Discussions andAnalysis Report is enclosed as Annexure - 4 forming part of Annual Report.

36. COMPLIANCE OF SECRETARIAL STANDARDS

The Company is in compliance with the applicable provisions of Secretarial Standardsissued by the Institute of Company Secretaries of India.

37. 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 have no personalinterest in relation to all material financial and commercial transactions that may havea potential conflict with the interest of the Company at large.

38. INDUSTRIAL RELATIONS

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

39. 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 Employees andother Stakeholders which have been a constant source of strength to the Company. The Boardof Directors also expresses its sincere gratitude to all the shareholders for theircontinuous support and trust they have shown in the management. The dedication and senseof commitment shown by the employees at all levels during the year deserve specialmention.

Your Company is thankful to the parent Company Evonik Operations GmbH Germany forcontinuously providing excellent management technical and marketing support.

For & on behalf of the Board of Insilco Limited

Sd/- Sd/-
Sonia Prashar Vinod Paremal
Director Managing Director
DIN : 06477222 DIN : 08803466
Place: New Delhi Place: Mumbai
Date : 31st May 2021 Date : 31st May 2021

.