Your Directors present the 47th Annual Report of the Company along with the audited financial statements for the year ended 31st March 2020.
1. Financial Highlights
|Revenue from operations||13498.45||15976.28|
|Profit before Tax||1786.17||2263.71|
|Provision for Tax||444.76||655.98|
|Profit after Tax||1341.41||1607.73|
|Other Comprehensive Income (Net of Tax)||(50.02)||(30.24)|
|Total Comprehensive Income||1291.39||1577.49|
The Company does not propose to transfer any amount to the Reserves for the year under review.
Your Directors have not recommended any dividend for the financial year ended 31st March 2020.
The Indian economy was volatile during 2019-20. The GDP will register lowest growth of 4.5%. The lower growth was mainly due to stagnation in the manufacturing and construction sector. The manufacturing sector led by auto industry witnessed contraction during 2019-20. The tighter credit conditions due to crisis in non-banking financial services accentuated the substantial weakness in the domestic demand. The demand for commercial vehicles and 3 wheelers declined due to tightening of credit transition of BS-VI emission norms. The supply chain disruption in the fourth quarter of the financial year and temporary suspension of operations due to COVID-19 affected the overall performance. Under these circumstances your Company's revenue from operations and operating profit declined by 16% and 21% respectively.
4. Material changes and commitments after the end of financial year
There have been no material changes and commitments if any affecting the financial position of the Company which have occurred between the end of the financial year and date of the report.
5. Particulars of loans guarantees or investment
Details of loans guarantees and investments covered under the provisions of Section 186 of the Companies Act 2013 (Act) are given in the notes forming part of the financial statements.
6. Human Resources
Employee relations were cordial. Your Directors place on record their appreciation for contribution made by all employees of your Company. As on 31st March 2020 there were 119 employees.
The Company follows best practices in hiring and on-boarding of employees. The Company adopts fair and transparent performance evaluation processes. In order to improve the organizational efficiency and employee engagement various process change initiatives were undertaken during the year. Your Company believes in conducting its business in a highly transparent and ethical way. To ensure this and also to improve skill levels employees participate in various training programmes and complete mandated e-learning courses. The Company has adopted the Saint-Gobain Attitudes which binds all the employees and provides an environment conducive to fairness and equality of all employees.
Your Company is committed to creating a healthy working environment that enables employees to work without fear of prejudice gender bias and sexual harassment. The Company believes that all employees have a right to be treated with dignity and has zero tolerance towards violation of its Code of Conduct and Sexual Harassment Policy. The Company has a Policy on Sexual Harassment which is widely disseminated. During the year under review no complaint of sexual harassment was received by the Company.
7. Conservation of energy technology absorption foreign exchange earnings and outgo
The information on conservation of energy technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure 1 to this Report.
8. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as Annexure 2(A) to this Report. The Statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in Annexure 2(B) forming part of this Report. Further the Annual Report is being sent to the Members excluding the aforesaid Annexure 2(B). Any Member interested in obtaining copy of the same may write to the Company Secretary at firstname.lastname@example.org The full Annual Report including the aforementioned information is available on the website of the Company at www.sekuritindia.com.
9. Public Deposits
The Company has not accepted any public deposits and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
10. Directors and Key Managerial Personnel
In accordance with the Act and Articles of Association of the Company Mr. Santhanam Director retires by rotation and being eligible offers himself for reappointment. The Nomination and Remuneration Committee and the Board of Directors recommend his appointment.
Mr. M. G. Ramakrishna Independent Director decided not to seek reappointment for second term and resigned as Director and Chairman with effect from 10th May 2019. The Directors place on record their appreciation for the valuable services rendered by Mr. Ramakrishna.
Mr. Padmanabha Shetty has been appointed as Chairman with effect from 10th May 2019. He was reappointed as an Independent Director of the Company for the second term from 18th July 2019 at the 46th Annual General Meeting held on 3rd August 2019. Ms. Marie-Armelle Chupin resigned as Director (Non-Executive) with effect from 4th November 2019. The Board of Directors place on record their appreciation for the valuable services rendered by her.
Mr. Anand Mahajan resigned as Director with effect from 1st April 2020. The Board of Directors place on record their appreciation on the enormous contribution made by Mr. Anand Mahajan as the Chairman and as the Director during the past 25 years. Ms. Isabelle Delphine Hoepfner was appointed as an Additional Director (Non-Executive) from 4th November 2019. On the recommendation of the Nomination and Remuneration Committee the Board of Directors have recommended appointment of Ms. Isabelle as a Non-Executive Director liable to retire by rotation. In terms of the provisions of Section 160(1) of the Act the Company has received a Notice from a Member signifying intention to propose the candidature for the appointment of Ms. Isabelle Delphine Hoepfner as a Non-Executive Director liable to retire by rotation.
Ms. Padmasudha Chandrasekhar has been appointed as an Additional Director (Independent) from 1st April 2020. On the recommendation of the Nomination and Remuneration Committee the Board of Directors have recommended appointment of Ms. Padmasudha as an Independent Director for a term of five consecutive years from 1st April 2020 subject to approval of the Members of the Company at the Annual General Meeting. In terms of the provisions of Section 160(1) of the Act the Company has received a Notice from a Member signifying intention to propose the candidature for the appointment of Ms. Padmasudha Chandrasekhar as an Independent Director.
Pursuant to Section 203 of the Act the Key Managerial Personnel of the Company are Mr. A. Dinakar Managing Director Mr. R. Manigandann Chief Financial Officer and Ms. Rukmini Subramanian Company Secretary. During the year there has been no change in the Key Managerial Personnel.
None of the Directors or Key Managerial Personnel has any pecuniary relationships or transactions vis--vis the Company other than salaries and sitting fees.
11. Director's appointment and remuneration
The Nomination and Remuneration Committee has laid down the criteria for Directors' appointment and remuneration. These are set out in the Nomination and Remuneration Policy annexed as Annexure 3 to this Report.
12. Annual evaluation of performance by the Board
The Board on the recommendation of the Nomination and Remuneration Committee has adopted a framework for performance evaluation of the Board its committees individual directors and the chairperson through a survey questionnaire. The survey questionnaire broadly covers various aspects of board functioning composition of Board and its committees culture execution and performance of specific duties obligation and governance. The evaluation parameters are based on execution of specific duties quality of deliberation at the meeting independence of judgement decision making contribution of directors at the meetings and functioning of the Committees.
The performance of the Board its committees individual directors and chairperson were reviewed by the Nomination and Remuneration Committee and Board of Directors. The Independent Directors evaluated the performance of Non-Independent Directors Chairperson and the Board as a whole. The Board of Directors evaluated the performance of the Independent Directors their fulfillment of independence criteria in terms of the Act and Listing Regulations and their independence from the management. The Director being evaluated did not participate in the evaluation process.
13. Declaration given by Independent Directors
The Company has received necessary declarations from Independent Directors pursuant to Section 149(7) of the Act confirming that they meet the criteria of independence as under Section 149(6) of the Act and Regulation 16 of the Listing Regulations.P>
14. Familiarisation programme for Independent Directors
The Company's familiarisation programme for Independent Directors provides orientation and training at the time of joining to enable them to understand the operations business and other details of the Company. Details of the familiarisation programme for Independent Directors are available on the website of the Company at www.sekuritindia.com. The Independent Directors are regularly briefed on the developments that are taking place in the Company and its operations.
15. Number of meetings of the Board
The Board meets at regular intervals to review the Company's business and to discuss strategy and plans. A tentative annual calendar of the meetings is circulated to the Directors in advance to enable them to plan their schedule and to ensure effective participation.
During the year four meetings of the Board were held. The maximum interval between the meetings did not exceed the period prescribed under the Act and Listing Regulations.
16. Committees of the Board
During the year in accordance with the Act and Listing Regulations the Board has constituted or reconstituted its Committees. Currently the Board has the following Committees:
- Audit Committee
- Nomination and Remuneration Committee
- Stakeholders Relationship Committee
- Corporate Social Responsibility Committee
- Share Transfer Committee
Details of the Committees along with their constitution and other details are provided in the Corporate Governance Report.
17. Directors Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained your Directors make the following statements in terms of Section 134 of the Act
i. that in the preparation of the annual financial statements for year ended 31st March 2020 the applicable accounting standards have been followed along with proper explanations relating to material departures if any;
ii. that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year on 31st March 2020 and of the profit of the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual financial statements have been prepared on a `going concern' basis;
v. that proper internal financial controls are in place and that such internal financial controls are adequate and are operating effectively;
vi. that systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and are operating effectively.
With reference to the point number (v) the Board believes that the Company has sound Internal Financial Controls (IFC) commensurate with the nature and size of its business. However the business is dynamic and IFC are not static and evolve over time as the business technology and fraud environment changes in response to competition industry practices legislation regulation and current economic conditions. There will therefore be gaps in the IFC as business evolves. The Company has a process in place to continuously identify such gaps and implement newer and / or improved controls wherever the effect of such gaps would have a material effect on the Company's operations.
18. Related Party Transactions
All related party transactions entered during the financial year were in ordinary course of business and on an arm's length basis. The Company has obtained necessary approvals towards the related party transactions as prescribed by the Act and the Listing Regulations.
The policy on related party transactions as approved by the Board is available on the website of the Company at www.sekuritindia.com.
The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act in prescribed Form AOC-2 is annexed as Annexure 4 to this Report.
19. Corporate Social Responsibility
In accordance with Section 135 of the Act a Corporate Social Responsibility (CSR) Committee of the Board has been constituted to monitor the CSR policy and the programmes and to ensure that they are in line with the Act and the Rules made thereunder. The CSR policy and initiatives taken during the year in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules 2014 are annexed as Annexure 5 to this Report.
20. Risk management and internal financial controls
Your Company recognises that managing risk is an integral part of good management practice and an essential element of good corporate governance. It aims to have a common formalised and systematic approach for managing risk and implementing risk management process across the Company. The Company ensures effective communication and management of risk across all risk categories. The Company has identified elements of risk which may threaten the existence and financial position of the Company and are set out in Management Discussion and Analysis.
The Company's internal financial control systems are commensurate with the nature of its business financial statements and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.
21. Whistle-Blower Policy and Vigil Mechanism
The Company believes in conducting its affairs in a fair and transparent manner by adopting the highest standards of professionalism honesty integrity and ethical behaviour. In order to provide a secure environment and encourage employees and others to report unethical unlawful or improper practices acts or activities including leak or suspected leak of unpublished price sensitive information a Whistle Blower Policy has been operational in the Company. The Whistle Blower Policy and Vigil Mechanism are disseminated through the website of the Company at www.sekuritindia.com.
22. Secretarial Standards
The Company complies with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
23. Auditors a. Statutory Auditors
M/s. Kalyaniwalla & Mistry LLP (Registration No. 104607W/W100166) were appointed as the Statutory Auditors of the Company at the 44th Annual General Meeting held on 29th July 2017 for a term of five years until the conclusion of 49th Annual General Meeting subject to ratification by members at every Annual General Meeting in terms of Section 139 of the Act. In accordance with the Companies (Amendment) Act 2017 enforced on 7th May 2018 by the Ministry of the Corporate Affairs the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.
b. Cost Auditor
The Board of Directors had appointed Mr. G. Thangaraj Cost Accountant as the Cost Auditor to conduct audit of cost records of the Company for the financial year 2019-20. The Cost Audit Report for the financial year 2019-20 will be filed with Ministry of Corporate Affairs.
As per Section 148 and other applicable provisions if any of the Act read with Companies (Audit and Auditors) Rules 2014 the Board of Directors of your Company on recommendation of the Audit Committee has appointed Mr. G. Thangaraj Cost Accountant as the Cost Auditor of the Company for the financial year 2020-21.
Your Company has received consent from Mr. G. Thangaraj to act as the Cost Auditor of your Company for the financial year 2020-21 along with a certificate confirming his independence.
c. Secretarial Auditor
The Company had appointed M/s. V. N. Deodhar & Co. Company Secretaries to undertake the Secretarial Audit of the Company for the financial year ended 31st March 2020. The Secretarial Audit Report for the financial year ended 31st March 2020 is annexed as Annexure 6 to this Report.
24. Comments on Auditors' Report
There are no qualifications reservations or adverse remarks or disclaimers made by M/s. Kalyaniwalla & Mistry LLP Statutory Auditors in their Auditor's Report and by M/s. V. N. Deodhar & Co. Company Secretaries in their Secretarial Audit Report. The Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year ended 31st March 2020.
25. Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company
There has been no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations. All orders received by the Company during the year are routine in nature and have no significant / material impact.
26. Extract of Annual Return
An extract of Annual Return in the prescribed Form No. MGT-9 is annexed as Annexure 6 to this Report. The extract of Annual Return is also available on the website of the Company at www.sekuritindia.com.
27. Management Discussion and Analysis Corporate Governance Report and Business Responsibility Report
In terms of the Regulation 34(2)(e) of the Listing Regulations the Corporate Governance Report with a Certificate from a Practicing Secretary thereon Management Discussion and Analysis and Business Responsibility Report are annexed and form part of this Report.
Your Directors take this opportunity to acknowledge with sincere gratitude the support of its esteemed customers the strength it derives from its association with Compagnie de Saint-Gobain and its subsidiaries the continued support and co-operation from its Bankers and the loyalty of the Company's Suppliers Dealers and valued Shareholders.
On behalf of the Board of Directors
|B Santhanam||A. Dinakar|
|11th May 2020|