Your Directors are pleased to present their Report together with the Audited Accountsof the Company for the year ended 31 March 2019.
|FINANCIAL RESULTS || ||(?' In Crores) |
|Particulars ||For the year ended 31 March 2019 ||For the year ended 31 March 2018 |
|Revenue from Operations ||1042.90 ||989.27 |
|Profit before Tax ||276.69 ||253.07 |
|Profit after Tax ||184.09 ||168.61 |
|Earnings per share of Face || || |
|Value of ' 10/- each - Basic. ||11.14 ||10.27 |
|- Diluted ||11.08 ||10.15 |
Performance of the Company
Your Directors are pleased to inform you that the Company recorded a positive growth of10% during the first half of the financial year however experienced negative growth inthe second half due to a slowdown in the Auto sector coupled with excess supplies fromChina. In spite of this the year has ended on a satisfactory note.
The Manufacturing sector in general and the Auto sector in particular which wasbuoyant during the first half of the financial year experienced a recessionary situationin the second half of the year and this trend looks likely to continue for some part ofthe next financial year. Apprehensions related to the US China trade war also created aslowdown in China resulting in surplus availability directed towards supplies to non-USexports markets. However despite short-term challenges the global tyre manufacturers arehaving a positive outlook on a medium term / long term and thus have committed aninvestment outlay of over US $ 8 Bn which is good news for rubber chemicals playersincluding your company.
Against this backdrop your company has posted Revenue from Operations of ' 1043 Croresas compared to ' 989 Crores for the previous year a growth of more than 5%.
Your company continues to practice its ethical business strategy and all regularcustomers were served in a timely manner with the best quality and services at affordableprices.
Your company has recorded a Net Domestic turnover of ' 727 Crores as against ' 713Crores for the previous year. In view of the reasons mentioned in the previous para thedomestic sales reported a marginal growth as compared to the previous Financial Year2017-18.
The Domestic tyre industry got impacted by the slowdown in the OEM industry whichstarted from August 2018 onwards and the trend has not yet shown any significantimprovement. The slowdown led to a drop in capacity utilization at the major tyrecompanies. Recent interactions with customers business associates and other externalconsultants and based on their feedback we look forward for recovery and positive signs inthe market. In view of the BS VI auto emission introduction we are hopeful that autosales is likely
to witness a growth from September 2019 onwards due to prebuying. This is also endorsedby a recent opinion report expressed by ICRA which is predicting a growth of 7-9 % for theauto sector in India.
Expectedly rubber chemicals prices softened from October 2018 in view of the slowdown better availability and drop in corresponding CIF levels. The global slowdownfortunately softened the prices of major raw materials. From the high levels of June 2018the prices have dropped by more than 40 % in certain raw materials.
Though China accounts for about 70% of world's rubber chemical production it onlyconsumes about 33-35 % of the rubber chemicals resulting in exportable surplus whichmakes it possible to dump it into neighboring markets including India. The Company hasmade necessary applications before the Director General of Trade Remedies (DGTR) towardsextension of anti-dumping duty in respect of six of its products. The matter is subjudiceat this point of time.
For the year under review Exports showed a healthy growth of 24% in revenue. Yourcompany despite challenging conditions experienced in the global market recorded itsbest export performance. In view of our expanded presence in the international marketyour Company is hopeful to participate more fruitfully in certain key accounts and theexports business activity is expected to cross the current level of ' 316 Crores in thecoming years on a back of higher capacity.
Your company strategically continues to promote some high quality and high valuespeciality products in the export market which contribute significantly to our exportturnover and margins. In case of other products where competition is acute fromChina/Korea/ EU and pricing unattractive your company continues to maintain only astrategic presence in certain select key accounts focusing on long term business strategyas well as to ensure better capacity utilisation.
The production of all products was aligned in line with the market conditions in viewof the auto industry slow down. As a result some production cuts had to be undertaken tomanage the inventories.
On the input fronts the sharp reduction in crude oil and Benzene prices have resultedin sharp downward movements in prices of all major inputs more particularly fromSeptember 2018 onwards. Crude Oil witnessed a downtrend in price from November 2018 andstabilized in the range of $62- $66/ barrel at the end of the year. Benzene prices toowitnessed sharp downward movement from the levels of US $ 1200 per MT above US $ 585 perMT at the end of the year. Increased availability of Aniline due to slow down in MethyleneDiphenyl Di-isocyante (MDI) demand resulted in the spreads dropping significantly lowerover Benzene spot price. As a result your company managed to enter into long termcontractual arrangements with its vendors in respect of Aniline at a very attractive fixedspread over spot Benzene price.
It may be recalled that the Board of Directors of your company had approved a capitalexpenditure of ' 170 Crores in March 2017. In terms of the said plan capex which was tobe incurred
at Navi Mumbai got commissioned by the end of June 2018 and Dahej expansion plans gotcommissioned by end of January 2019. There was slight delay in execution of expansion;however due to slowdown in the industry there was no negative impact on the business.Currently the products manufactured out of the Dahej expansion projects are sampled andare awaiting customer approvals. On receipt of approvals the gradual scaling up of theproduction capacities will take place in line with the commercial orders.
However in respect of the second expansion phase of ' 255 Crores the progress of thesame is on schedule and it is expected that the plants would be commissioned by 3rdquarter of 2019-20. The Management expects the samples to be approved in respect of theseplants around March 2020. In view of the company's current liquidity position and thelikely business scenario in the upcoming financial year the board is confident that thesaid Capital Expenditure will be financed through internal accruals.
During the second consecutive year under review in view of optimum utilization ofresources the Company generated cash profits and did not utilize any working capitalfacilities for the whole year. The Company as a result incurred lower Finance cost forthe year under review. In addition the Company has repaid the residual term loan of ' 5Crores and thus has become debt free.
The Credit Ratings Agency CARE has reaffirmed ratings as CARE AA (Double A) (Stable)for long term Bank Facilities (Terms loan as well as Fund Based facilities) and CARE A1+(A One plus) rating for short term Non-Fund Bank facilities.
The Company had also approached CRISIL Limited for review of its existing ratingswhich had assigned CRISIL AA for its Fund- based Bank Facilities and CRISIL A1+ (stable)for its Non - Fund- based Bank Facilities.
Your company forms part of the List of top 500 listed entities based on MarketCapitalisation as on 31st March 2018. In view thereof pursuant to the provisions ofRegulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 as amended at its meeting held on 4th May 2018 the Board of Directorshave approved the Dividend Distribution Policy effective from the Financial Year 2018-19.The said Policy is attached as Annexure "H" and is also available on theCompany's website the weblink of which is http://www.nocil.com/images/fckeditor/file/Dividend-Distribution-Policy-2018.pdf.
Your Directors are pleased to recommend payment of dividend of ' 2.50 per share of'10/- each (25%) on the equity share capital of the Company [previous year ' 2.50/- pershare of '10/- (25%)]. The dividend together with the tax on Dividend will absorb a sumof approx. ' 49 crore (previous year ' 49 crore).
Transfer of Unpaid Dividend and corresponding Equity Shares to the Investor Educationand Protection Fund (IEPF)
In terms of the provisions of Section 125 of the Companies Act 2013 read with theCompanies (Declaration and Payment of Dividend) Rules 2014 all unclaimed / unpaiddividend up to FY 2010-11 has been transferred to the Investor Education and ProtectionFund
and unclaimed / un-encashed dividend for the FY 2011-12 paid on 31 July 2012 is due fortransfer to IEPF on 6 September 2019.
The Ministry of Corporate Affairs (MCA) had vide its Notification dated 5thSeptember 2016 notified the Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 (the Rules). In terms of the Rules the EquityShares in respect of which the Dividend has not been claimed for seven consecutive yearsor more are also required to be transferred to the IEPF in the prescribed manner.
The said Rules were amended from time to time. As per the Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Second Amendment Rules2017 notified by MCA vide its Notification dated 13th October 2017 the duedate for transfer of Equity Shares in respect of Dividend pertaining to the Financial Year2010-11 was 2 September 2018. The Company had intimated individually to concernedshareholders and published necessary notice in the newspapers intimating the shareholdersabout the impending transfer and the modus operandi for the same.
In compliance with the Amended Rules during the year the Company has transferred136176 Equity shares to the designated demat account opened by IEPF Authority with NSDLthrough Punjab National Bank belonging to those shareholders holding shares both indematerialized form as well as physical form who had not encashed their Dividend for aperiod of 7 years or more beginning from the Financial Year 2010-11. The shares held indemat / physical mode were transferred in September 2018.
The Company has also uploaded the details of the shareholders whose shares were liableto be transferred to IEPF on its website viz. www.nocil.com .
All the unclaimed fixed deposits/ unclaimed fixed deposit warrants have beentransferred to Investor Education & Protection Fund as required under Section 125 ofthe Companies Act 2013. Since the Company no longer accepts deposits from public thereare no outstanding/unclaimed deposits as at 31 March 2019.
The Company has taken all the necessary steps to insure its properties and insurableinterests as deemed appropriate and as required under the various legislative enactments.There were no major incidents or accidents to warrant Insurance claims during the yearunder review.
Health Safety and Environment (HSE)
Health Safety and Environment forms a core theme for long term sustainability of yourcompany. HSE is an essential feature of your company's business module which ensures cleanenvironment and safety of all employees community around all manufacturing locations andall the stakeholders.
High emphasis is placed on laid down policies systems and procedures collectivelearning and continuous improvement by encouraging all employees including contractemployees to report no "near miss accidents" continuous training to allemployees and a humane approach for strengthening the culture through a strong "SafeAttitude Encouragement" initiative by Senior Management of the Company.
Management of process safety is an essential part of risk assessment and even thesmallest change incorporated in the Plant undergoes risk assessment study beforeimplementation. Extensive process safety is incorporated through automatic control systemand training is imparted to all the concerned employees.
Work areas are regularly monitored to check the concentration of chemicals noiselevel illumination and quality of ambient air to ensure safe and healthy workenvironment. Safe practices in the Company are encouraged by conducting various annualcompetitions and rewarding the employees for proposing novel safety messages.
Mitigation Actions are undertaken through weekly planned emergency drills to train theemployees for systematic communication and planned actions. Your company is also a memberof "mutual aid group" in which all the neighbouring industries participate inthe mock drills to ensure all time preparedness for emergencies.
Research Centre of your company has a core team which focuses on developing andimplementing the technologies which ensures continuous improvement in the environmentstandards of all manufacturing locations. Highest emphasis is placed on the environmentstandards by your company management and substantial capital expenditure is allocated toimplement new technologies developed by the Research Centre.
Conservation of natural resources is a major initiative as a part of HSE. Capitalexpenditure is encouraged and reviewed periodically by the board of your company to ensurecontinuous reduction in consumption of natural resources.
Your company has occupational health centers at all locations which not only undertakesthe mandatory periodical health check of employees but also counsels the employees on thelife style health hazards. Based on the health statistics of the community collectivecounselling by experts is organized to increase the health awareness of employees.
HSE performance of your company is reviewed by your board every quarter and valuablesuggestions by the board members are incorporated in policies/ work practices to furtherstrengthen the HSE standards of the Company.
Total Quality Management (TQM)
Total Quality is an integral part of your company's business which ensures uniformculture business processes and systems across all locations in the organization. Domesticand international customers expect a high level of commitment by the Company for TQMstandards and periodically conduct audits which includes all aspects of the business fromsupply chain to product delivery including the interest of all stakeholders and CSRpractices.
The Company's Plants situated at Navi Mumbai and Dahej and also PIL Chemicals Limiteda wholly owned subsidiary of the Company are certified for ISO 9001:2015 ISO 14001:2015ISO 45001: 2018 and IATF 16949: 2016.
Your company is certified as a member of "Responsible Care" and enjoys theprivilege of using Responsible Care Logo.
Dahej location has adopted "5S" to create an international cleanlinessculture as a way of operating standard.
Quality Assurance laboratory of your company is accredited in accordance with ISO17025:2017 standard.
TQM standards and HSE practices are complementary and form a part of businesssustainability. TQM is an important business pillar for the successful journey of yourcompany.
Research & Development
The VISION of Research & Development team of your company is to create a long-termsustainable rubber chemical business advantage in terms of product quality cost &economics and coining the principles of GREEN CHEMISTRY & GREEN ENGINNERING. Research& development team is the backbone of the Company & is playing a vital role indeveloping innovative process technologies to fulfil the company's vision to be a WorldClass innovative organisation in the field of rubber chemicals.
Company's R & D focus is on the following key areas:
Continuous improvement in process efficiency & product quality to satisfycustomers through innovative strategies.
Development of Green Processes & Technologies for environmentalsustainability.
Development of niche products/ intermediates by exploring innovative & noveltechnologies.
Enhancement of plant capacities by process/ plant debottlenecking.
Conservation of natural resources with emphasis on recycling of water.
Research & Development efforts in the above areas resulted in de-bottlenecking ofplant capabilities cost reduction through lower raw material usage & energy recoveryof value-added products & reagents from process streams significant reduction inenvironmental load & in the development of niche products.
The research program of your company is approved by DSIR (Department of Scientific& Industrial Research) Govt. of India & acknowledged by national &international customers. One of the Process technology developed by the Company is wellappreciated by the Indian Scientific Community & Indian Chemical Council (ICC) whichhas conferred ACHARYA P.C. RAY AWARD for the development of indigenous technology for theyear 2017- 18.
In view of strengthening R & D facilities & capabilities your board hasregularly encouraged investment in R & D and continuous appreciation & motivationfor R & D scientists and Engineers. The research team of your company will continue towork on innovative programs which is envisaged to bring long term business sustainabilityin rubber chemicals and develop new business areas.
Risk Assessment and Management
Your Company has a well-defined Risk Management System in place as a part of its goodCorporate Governance practices. Your Company has assigned the ownership of key risks tovarious Risk Owners and has made the concerned departments and officials responsible formitigation plans and review of these risks from time to time. The risks are identified atvarious departmental levels and suitable mitigation measures are thereafter adopted. Theseare further subjected to a quarterly review by the Risk Co-ordination
Committee as well as the Board. The Business plans are devised and approved by theBoard keeping in mind risk factors which can significantly impact the performance of thebusiness. All major capital expenditure commitments are subjected to thorough scrutiny bythe Board and investments are permitted only on being satisfied about their return orutility to the Company. Expansion projects are subject to detailed risk assessment andsensitivity tests and approved only after found to pass eligibility criteria.
Your company now falls under top 500 listed entities based on market capitalizationcalculated as on 31 March 2018. In view of this in addition to the above the Board hasconstituted the Risk Management Committee (RMC) w.e.f. 1 April 2019 as required underRegulation 21(4) of SEBI (Listing Obligations and Disclosure Requirements) (Amendment)Regulations 2018. RMC will specifically cover inter alia the risk factors related toCyber Security.
Internal Control Systems and their Adequacy
Adequate internal controls systems and checks are in place commensurate with thesize of the Company and the nature of its business. The management exercises financialcontrol on the company's operations through a well-defined budget monitoring process andspecifying standard operating procedures. Your Company has appointed an externalprofessional agency M/s. Aneja Associates Chartered Accountants to conduct the internalaudit and the findings and recommendations of the Internal Auditors are placed before theAudit Committee of your Board regularly.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrols in the company its compliance with operating systems accounting procedures andpolicies at all locations of the Company. Based on the report of internal auditors themanagement undertakes corrective action in the respective areas and thereby furtherstrengthens the controls. Significant audit observations and corrective actions thereonare presented to the Audit Committee of the Board. The Audit committee of the Boardensures that necessary corrective actions suggested are put in place. In addition duringthe year under report the Audit Committee and the Board have specifically reviewed theInternal Financial Controls with reference to the Financial Statements and processprevalent in the Company. The Board also engages the services of professional experts inthe said field on a periodical basis to ensure that adequate financial controls andsystems are in place. At the end of a period the CEO/CFO gives a declaration in theprescribed format to certify that the financial statements prepared are accurate andcomplete in all aspects and that there are no significant issues that can impair thefinancial performance of the Company. Over all the Internal as well Statutory Auditorswere satisfied with the Internal Control Systems including Compliances and SAP - ITrelated security.
Vigil Mechanism / Whistle Blower Policy
The Company has a Vigil Mechanism Policy to deal with an instance of fraud ormismanagement if any. It is heartening to note that no untoward or fraud case wasreported. The details of the Policy are explained in the Corporate Governance Report andare also posted on the website of the Company.
Policy on Prevention of Sexual Harassment of Women at Workplace
As per the requirement under the provisions made under section 4 of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 anappropriate Committee has been formed to attend to the complaints of the sexual harassmentat workplace if any made by female employees. The committee of 4 members consists of twowomen employees Vice President-Human Resource and a practicing Advocate in the field oflabour laws and regulations. The Company is having a Policy on the Prevention of SexualHarassment. During the year under review no complaints were received.
- Number of Board Meetings
During the year the Board of Directors met six times as per details stated in thereport on Corporate Governance.
- Board Evaluation
Pursuant to the provisions of the Companies Act 2013 as amended from time to time andRegulations 17 and 25 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out an annual performance evaluation of its ownperformance of individual Directors as well as the evaluation of the working of itsAudit Nomination & Remuneration and other Committees. The various criteria consideredfor evaluation of Whole Time / Executive Directors included qualification experienceknowledge commitment integrity leadership engagement transparency analysis decisionmaking governance etc. The Board commended the valuable contributions and the guidanceprovided by each Director in achieving the desired levels of growth. This is in additionto evaluation of NonIndependent Directors and the Board as a whole by the IndependentDirectors in their separate meeting being held every year.
- Declaration by Independent Directors
As required under Section 149(7) of the Companies Act 2013 read with SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 the IndependentDirectors have placed the necessary declaration in terms of the conditions laid down underSection 149(6) of the Companies Act 2013 as amended in the Board Meeting held on 10thMay 2019.
- Familiarization Programme to Independent Directors
The Company provides suitable familiarization programme to Independent Directors tohelp them familiarize themselves with the nature of the industry in which the companyoperates and the business model of the company in addition to regular presentation onexpansion plans and their updates technical operations marketing and exports andfinancial statements. In addition to the above Directors are periodically advised aboutthe changes effected in the Corporate Law Listing Regulations about their roles rightsand responsibilities
as Directors of the Company. There is a regular interaction of Directors with the KeyManagement Personnel of the Company. The details of the familiarization programme havebeen disclosed and updated from time to time on the Company's website and its web link is:http://www.nocil.com/ images/fckeditor/file/Familiarization-Programme-for-IDS.pdf.
Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134 (3)(c) of the Companies Act 2013:
(a) That in the preparation of the annual financial statements for the year ended 31stMarch 2019 the Indian Accounting Standards (Ind AS) the provisions of the Companies Act2013 as applicable and guidelines issued by the Securities and Exchange Board of India(SEBI) have been followed along with proper explanations relating to material departuresif any;
(b) That such accounting policies as mentioned in Note 1 forming part of the FinancialStatements have been selected and applied consistently and judgment and estimates havebeen made that are reasonable and prudent to give a true and fair view of the state ofaffairs of the Company as at 31 March 2019.
(c) That proper and sufficient care has been taken 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) That the annual financial statements have been prepared on a going concern basis;
(e) That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
(f) That system to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
(g) That all the applicable Secretarial Standards have been complied with by theCompany during the year under review.
The above assessment of the Board was further strengthened by periodic review ofinternal controls by both internal as well as external auditors.
During the Financial Year 2014-15 based on the recommendations of the Nomination &Remuneration committee the Board of Directors approved a Policy for selection andappointment of Directors Senior Management and their remuneration. The weblink of thePolicy is http://www.nocil.com/images/fckeditor/file/Remuneration- Policy.pdf . There hasbeen no change in the said Policy for the year under review. The Salient features ofRemuneration Policy are given in the Corporate Governance Report and criteria forremuneration to independent directors / non-executive directors is also available on theCompany's website.
Re-classification of shareholding of Promoters and Promoter Group
Subsequent to the amicable restructuring of shareholding amongst the Promoters andPromoter Group of Companies which was part of a family settlement and succession planbetween Mr. H. A. Mafatlal and Mr. V. P. Mafatlal in the year 2016 at the last AGM heldin 2018 the members of the Company approved re-classification of the Promoters andPromoter Group companies belonging to Mr. V. P. Mafatlal into Public / Non- Promotercategory. Approval of the Stock Exchanges under Regulation 31A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 was received on 18thSeptember 2018 for the same.
Related Party Transactions
All related party transactions that were entered into during the financial year were atan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors andKey Managerial Personnel wholly-owned subsidiary company or other designated personswhich may have a potential conflict with the interest of the Company at large except asstated in the Financial Statements / Directors' Report.
As per the Related Party Transactions Policy approved by the Board of Directors of theCompany during the year under review the Company has entered into related partytransactions based upon the omnibus approval granted by the Audit Committee. On quarterlybasis the Audit Committee reviewed such transactions for which omnibus approval wasgiven.
Particulars of contracts or arrangements with related parties as referred to in Section188(1) of the Companies Act 2013 in the prescribed form for FY 2018-19 are given inAnnexure "G".
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website and its weblink ishttp://www.nocil.com/images/fckeditor/file/Policv-on-Related- Party-Transaction.pdf
Loans Guarantees or Investments
Particulars of loans guarantees or investments under Section 186 of the Companies Act2013 are given in the Notes forming part of Financial Statements for the year ended 31stMarch 2019.
Extract of Annual Return
Extract of Annual Return for the Financial Year ended on 31 March 2019 as required bySection 92 (3) of the Companies Act 2013 is annexed as Annexure "E". Theweblink is http://www.nocil.com/ images/fckeditor/file/Extract-of-Annual Return-2018-19.pdf.
PIL Chemicals Limited (PIL) wholly-owned subsidiary has recorded a Turnover of '13.16 Crores and Profit before Tax of ' 1.55 Crores for the year under review. The Boardof Directors of PIL recommended a Dividend of Re. 0.60/-per share. (Previous year Re.0.60/- per share)
The Company does not have any material subsidiary however the Company has formulateda policy for determining material
subsidiary(ies) and such policy has been disclosed on the Company's website and itsweblink is http://www.nocil.com/images/ fckeditor/file/Policv-on-Material-Subsidiaries.pdf
Pursuant to the requirements of Regulation 34 (3) read with Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the details of Loans/Advances made to and investments made in the subsidiary have been furnished in Notesforming part of the Accounts.
A statement containing the salient features of the financial statement of the Company'swholly-owned subsidiary under the provisions of section 129(3) of the Companies Act 2013read with Rule 5 of the Companies (Accounts) Rules 2014 has been annexed in prescribedform AOC -1.
The audited accounts of the wholly-owned subsidiary company are placed on the Company'swebsite and the members interested in obtaining copy of annual report of the wholly-ownedsubsidiary company are requested to get in touch with the Office of the Company Secretary.
Consolidated Financial Statements
Consolidated Financial Statements are prepared by your Company in accordance with theapplicable Indian Accounting Standards (Ind AS) issued by the Ministry of CorporateAffairs and the same together with Auditors' Report thereon form part of the AnnualReport. The financial statements have been prepared as per Division II of Schedule IIIissued by the Ministry of Corporate Affairs vide its Notification dated 6thApril 2016.
The relations during the year between the employees and the management of yourCompany continued to be cordial. The present tenure of the Agreement with the Workers'Union ended on 31 December 2018. Negotiations with the Union are progressingsatisfactorily and are expected to be finalized in due course of time.
Your Directors wish to thank all the employees for their continued support andco-operation during the year under review.
In terms of your approval read with the SEBI (Employees Stock Option Scheme andEmployees Stock Purchase Scheme) Guidelines 1999 as amended the details required to beprovided under the SEBI (Employees Stock Option Scheme and Employees Stock PurchaseScheme) Guidelines 1999 are set out in Annexure "C" to this Report.
Particulars of Employees
The information required under section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016 in respect of employees of the Company is provided in Annexure "F".
Appointment/Reappointment of Directors and Key Managerial Personnel
During the year under review in the month of March 201 9 the Company obtainedMember's approval by passing Special Resolutions through conduct of Postal Ballot forre-appointment Mr. N. Sankar Mr. Rohit Arora Mr. D. N. Mungale and Mr. P
V. Bhide as Independent Directors for second term of further period of 5 yearseffective from 30 June 2019. In view of Regulation 17(1A) of the SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 approval wasobtained for continuing Mr. N. Sankar as an Independent Director notwithstanding that on19th November 2020 he attains the age of 75 years and approval was obtainedfor Mr. C. L. Jain for continuing as Independent Director beyond 75 years for his residualterm up to 29 June 2019.
Pursuant to Section 152(6) of the Companies Act 2013 and the Articles of Associationof the Company Mr. Vilas R. Gupte Non-Executive Director retires by rotation at theforthcoming Annual General Meeting. Being eligible he offers himself for reappointment.Further approval of members is also being sought under Regulation 17 (1A) of the SEBI(Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 forcontinuing Mr. Gupte as Non-Executive Director notwithstanding that on 9 September 2019he attains the age of 75 years.
There has been no change in Key Managerial Personnel of the Company during the year.
Appointment of Additional Director (After closure of Financial Year under review)
Pursuant to Sections 149 152 160 and any other applicable provisions of the CompaniesAct 2013 and based on the recommendations of the Nomination and Remuneration CommitteeMr. Debnarayan Bhattacharya was appointed as an Additional Director- Independent by theBoard of Directors in their meeting held on 10 May 2019. Further approval is beingsought from the shareholders to appoint Mr. Bhattacharya as an Independent Director tohold office for five consecutive years from 30 July 2019 to 29 July 2024 and also for hiscontinuation as an Independent Director notwithstanding that on 13 September 2023 hewould attain the age of 75 years during the said term of 5 years. The Board takes theopportunity to welcome him on the Board.
Pursuant to the requirement of Section 139(1) of the Companies Act 2013 at the AnnualGeneral Meeting held on 27th July 2017 the Members had accorded their approvalfor the appointment of M/s. Kalyaniwalla & Mistry LLP Chartered Accountants Mumbaias the Statutory Auditors of the Company to examine and audit the accounts of the Companyfor the Financial Years 2017-18 to 2021-22. They have confirmed their eligibility underSection 141 of the Companies Act 2013 and the Rules framed there under for re-appointmentas Auditors of the Company. As required under Regulation 33(1) (d) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India. The amended provision of Section 139(1) ofthe Companies Act 2013 has dispensed with the ratification of appointment of StatutoryAuditors each year by the Members.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyare required to be audited.
M/s. Kishore Bhatia & Associatesthe Cost Auditors have given a Certificate to theeffect that the appointment if made will be within the prescribed limits specified undersection 141 of the Companies Act 2013.
The Audit Committee has obtained a certificate from the Cost Auditor certifying theirindependence and arm's length relationship with the Company. The Cost Audit Report inrespect of F.Y. 2017-18 was filed on 7 August 2018 and the Report for the Financial Year2018-19 will be filed within the time limit as prescribed under the Companies (CostRecords and Audit) Rules 2014.
Your Directors had on the recommendation of the Audit Committee appointed M/s.Kishore Bhatia & Associates to audit the cost accounts of the Company for thefinancial year 2019-20 on a remuneration of ' 6.50 lakhs.
As required under the Companies Act 2013 the remuneration payable to the cost auditoris placed before the Members for their ratification.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshas appointed M/s. Makarand M. Joshi & Co. Company Secretaries a firm of CompanySecretaries in Practice to carry out the Secretarial Audit of the Company for FY 2018-19.The Report of the Secretarial Audit is annexed herewith as Annexure "B".
Report on Corporate Governance
As per Regulation 34 read with Schedule V (C) of SEBI (Listing Obligations andDisclosure Requirements) (Amendment) Regulations 2018 a separate section on Report onCorporate Governance practices followed by the Company together with a certificate fromthe Company's Auditors confirming compliance is attached.
Report on Management Discussion and Analysis
As required under Regulation 34 read with Schedule V (B) of SEBI (Listing Obligationsand Disclosure Requirements) (Amendment) Regulations 2018 report on "ManagementDiscussion and Analysis" is attached and forms a part of this Report.
Business Responsibility Report
The Company is now part of top 500 listed entities based on market capitalizationcalculated as on 31 March 2018. In view of this as required under Regulation 34(2)(f)SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018report on Business Responsibility is attached and forms a part of this report.
Corporate Social Responsibility
In line with the provisions of the Companies Act 2013 and the rules framed there underwith respect to the Corporate Social Responsibility (CSR) your company has formulated aPolicy on CSR and has also constituted a CSR Committee to recommend and monitorexpenditure on CSR. The details of CSR Expenditure are given in the prescribed format andforms part of this Report. The same is annexed as Annexure "A".
The company continues to actively support deserving social causes for improvement andup-liftment of various sections of the society as has been its practice for past severalyears.
Additional information on conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed in terms of section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is setout in Annexure "D" and forms a part of this Report.
Your Directors would like to draw your attention to Section 20 of the Companies Act2013 read with the Companies (Management and Administration) Rules 2014 as may beamended from time which permits paperless compliances and also service of notice/documents (including annual report) through electronic mode to its members. To supportthis green initiative of the Central Government in full measure we hereby once againappeal to all those members who have not registered their e-mail addresses so far arerequested to register their e-mail address in respect of electronic holdings with theirconcerned depository participants and / or with the Company.
Your Directors would like to acknowledge the continued support and co-operation fromits Bankers Government Bodies and Business Associates which has helped the company tosustain its growth during the year.
For and on behalf of the Board of Directors
Place : Mumbai Hrishikesh A. Mafatlal
Date : 10 May 2019 Chairman