Your Directors present the 48th Annual Report of the Company along with theaudited financial statements for the year ended March 31 2021.
1. Financial Highlights
| || ||(Rs. Lakhs) |
|Particulars ||2020-21 ||2019-20 |
|Revenue from operations ||10488.89 ||13498.45 |
|Operating Profit ||1560.70 ||1802.36 |
|Interest ||49.97 ||16.19 |
|Profit before Tax ||1510.73 ||1786.17 |
|Tax Expense ||369.13 ||444.76 |
|Profit after Tax ||1141.60 ||1341.41 |
|Other Comprehensive Income (Net of Tax) ||64.24 ||(50.02) |
|Total Comprehensive Income ||1205.84 ||1291.39 |
The Company does not propose to transfer any amount to the Reserves for the year underreview.
Your Directors are pleased to recommend for approval of the Members a dividend of Rs.1per equity share of face value of Rs.10 each for the financial year ended March 31 2021.The dividend on equity shares if approved by the Members would involve a cash outflow ofRs.911.06 Lakhs.
The Indian economy faced a difficult and challenging year during 2020-21. The GDP islikely to decline by 8%. An unprecedented happening in the world with a pandemicdisrupting the economy lives and livelihood of millions. The Covid-19 pandemic hit the 3wheeler industry hard; OEM and replacement market sales declined steeply in the financialyear 2020-2021. The reluctance to use shared transport as well as reduced need of lastmile connectivity amidst closure of schools colleges and limited use of rail busesmetro in turn shrunk the new vehicle demand.
Consequent to the nation-wide lockdown announced by the Government of India to managethe spread of Covid-19 virus the Company's plant and office were shut down during end ofMarch 2020. With the gradual easing of lockdown and in line with the various directivesof the Government the Company's plant and office commenced operations in a phased mannerfrom June 2020. Under these circumstances your Company's revenue from operations andoperating profit declined by 22% and 15% respectively.
Though there was a steep decline in 3 wheeler market by 66% (which is major operation)your Company's sales declined only by 22% due to increase in demand in the commercialvehicle segment. There was a shift in product mix which helped to achieve comparativelybetter performance. Your Company has been continuously working on improving theoperational efficiencies which helped profits not to decline as sharply as sales. YourCompany continues to work on productivity improvement and cost efficient methods inrunning the business.
Covid-19 pandemic had a disastrous impact globally and India was no exception to this.During these unprecedented times your Company attached the highest priority to ensuringthe safety security and well-being of its employees and took various measures in thisregard including facilitating work-from-home for all its office staff creating thenecessary infrastructure and changes in operations at its plants and supporting employeesand their families in dealing with Covid-19.
5. Material changes and commitments after the end of financial year
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year anddate of the report.
6. Sale of leasehold rights of MIDC Land
The Board of Directors at their meeting held on September 18 2020 approved to assign/ sell / transfer / dispose of the leasehold rights of the land obtained from MaharashtraIndustrial Development Corporation ("MIDC") at Bhosari Pune and subsequentlythe Members of the Company approved the same vide Postal Ballot on October 27 2020. TheCompany has initiated the necessary measures for the assignment/ sale / transfer /disposal of the leasehold rights of the land and is likely to complete the process in2021-22.
The Company has executed and registered Agreement to Assignment and Transfer ofleasehold rights with A2IR Industries Private Limited. RPIndospace Private Limited andUnnati Industrial Estate Co-operative Society Limited for aggregate consideration ofRs.32.50 crores subject to approval for transfer of lease from MIDC.
7. Particulars of loans guarantees or investment
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 ("Act") are given in the notes forming part ofthe financial statements.
8. Human Resources
Confronted with a global pandemic and consequent lockdowns your Company and itsemployees had to quickly adapt to a very uncertain and fast-changing environment. Theemployees went out of their way to support their colleagues as also the Company. At alltimes they showed a high degree of professional commitment and often went beyond the callof duty to keep operations running and to meet the needs of its customers. In this uniqueyear the Company's employees have been exceptional in every respect. Your Directors placeon record their appreciation for the huge contribution made by all its employees in thisdifficult year. Employee relations were cordial. Your Directors place on record theirappreciation for contribution made by all employees of your Company. As on March 31 2021there were 100 employees.
The Company follows best practices in hiring and on-boarding of employees. The Companyadopts fair and transparent performance evaluation processes. In order to improve theorganizational efficiency and employee engagement various process change initiatives wereundertaken during the year. Your Company believes in conducting its business in a highlytransparent and ethical way. To ensure this and also to improve skill levels employeesparticipate in various training programmes and complete mandated e-learning courses. TheCompany has adopted the Saint-Gobain Attitudes which binds all the employees and providesan environment conducive to fairness and equality of all employees.
Your Company is committed to creating a healthy working environment that enablesemployees to work without fear of prejudice gender bias and sexual harassment. TheCompany believes that all employees have a right to be treated with dignity and has zerotolerance towards violation of its Code of Conduct and Sexual Harassment Policy inparticular. The Company has a Policy on Sexual Harassment which is widely disseminated andalso constituted an Internal Complaints Committee ("ICC") under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Duringthe year under review no complaint of sexual harassment was received by the Company.
The Company had announced a Voluntary Separation Scheme (Scheme) for all its eligibleemployees on July 3 2020. During the year the Company has concluded the Scheme and theTotal financial impact under the Scheme is Rs.193.08 Lakhs.
9. Conservation of energy technology absorption foreign exchange earnings andoutgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed as Annexure 1 to this Report.
10. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197of the Act read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as Annexure 2(A) to this Report. The Statementcontaining names of top ten employees in terms of remuneration drawn and the Particularsof employees as required under Section 197(12) of the Act read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is providedin Annexure 2(B) forming part of this Report. Further the Annual Report is being sent tothe Members excluding the aforesaid Annexure 2(B). Any Member interested in obtaining copyof the same may write to the Company Secretary at email@example.com Thefull Annual Report including the aforementioned information is available on the website ofthe Company at www.sekuritindia.com.
11. Public Deposits
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the balancesheet.
12. Directors and Key Managerial Personnel
In accordance with the Act and Articles of Association of the Company Mr. SanthanamDirector retires by rotation and being eligible offers himself for reappointment. TheNomination and Remuneration Committee and the Board of Directors recommend hisappointment.
Mr. A. Dinakar Managing Director of the Company retired from December 31 2020. TheDirectors place on record their appreciation for the valuable services rendered by Mr.Dinakar.
Mr. Venugopal Shanbhag has been appointed as an Additional Director and ManagingDirector of the Company from January 1 2021. Mr. Venugopal Shanbhag holds officeas Additional Director from January 1 2021 till ensuing Annual General Meeting. On therecommendation of the Nomination and Remuneration Committee the Board of Directors haverecommended appointment of Mr. Venugopal Shanbhag as a Director not liable to retire byrotation. In terms of the provisions of Section 160(1) of the Act the Company hasreceived a Notice from a Member signifying intention to propose the candidature for theappointment of Mr. Venugopal Shanbhag as a Director not liable to retire by rotation. Mr.Venugopal Shanbhag on recommendation of Nomination and Remuneration Committee has alsobeen appointed as the Managing Director for a term of five years from January 1 2021 toDecember 31 2025 subject to approval of the shareholders.
Mr. Padmanabha Shetty Mr. Joseph Andrew Pereira and Ms. Padmasudha Chandrasekhar havesubmitted declarations that each of them meets the criteria of independence as provided inSection 149(6) of the Act and Regulations 16(1) and 25(8) of the Listing Regulations.There has been no change in circumstances affecting their status as IndependentNon-Executive Directors of the Company during the year. They have also registered with theIndependent Directors Databank and the requisite disclosures have been received from themin this regard.
Pursuant to Section 203 of the Act the Key Managerial Personnel of the Company are Mr.Venugopal Shanbhag Managing Director Mr. R. Manigandann Chief Financial Officer and Ms.Rukmini Subramanian Company Secretary.
None of the Directors or Key Managerial Personnel has any pecuniary relationships ortransactions vis--vis the Company other than salaries and sitting fees.
13. 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 Policyannexed as Annexure 3 to this Report.
14. Annual evaluation of performance by the Board
The Board on the recommendation of the Nomination and Remuneration Committee hasadopted a framework for performance evaluation of the Board its committees individualdirectors and the chairperson through a survey questionnaire. The survey questionnairebroadly covers various aspects of board functioning composition of Board and itscommittees culture execution and performance of specific duties obligation andgovernance. The evaluation parameters are based on execution of specific duties qualityof deliberation at the meeting independence of judgement decision making contributionof directors at the meetings and functioning of the Committees.
The performance of the Board its committees individual directors and chairperson werereviewed by the Nomination and Remuneration Committee and Board of Directors. TheIndependent Directors evaluated the performance of Non-Independent Directors Chairpersonand the Board as a whole. The Board of Directors evaluated the performance of theIndependent Directors their fulfilment of independence criteria in terms of the Act andListing Regulations and their independence from the management. The Director beingevaluated did not participate in the evaluation process.
15. Declaration given by Independent Directors
The Company has received necessary declarations from Independent Directors of theCompany pursuant to Section 149(7) of the Act confirming that they meet the criteria ofindependence as under Section 149(6) of the Act and Regulation 16 of the ListingRegulations.
16. Familiarisation programme for Independent Directors
The Company's familiarisation programme for Independent Directors provides orientationand training at the time of joining to enable them to understand the operations businessand other details of the Company. Details of the familiarisation programme for IndependentDirectors are available on the website of the Company at www.sekuritindia.com. TheIndependent Directors are regularly briefed on the developments that are taking place inthe Company and its operations.
17. Number of meetings of the Board
The Board meets at regular intervals to review the Company's business and to discussstrategy and plans. A tentative annual calendar of the meetings is circulated to theDirectors in advance to enable them to plan their schedule and to ensure effectiveparticipation.
During the year five meetings of the Board were held. The maximum interval between themeetings did not exceed the period prescribed under the Act and Listing Regulations.
18. Committees of the Board
During the year in accordance with the Act and Listing Regulations the Board hasconstituted 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 providedin the "Corporate Governance Report".
19. Directors Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained your Directors make the following statements in terms of Section134 of the Act
i. that in the preparation of the annual financial statements for year ended March 312021 the applicable accounting standards have been followed along with properexplanations relating to material departures if any;
ii. that such accounting policies have been selected and applied consistently andjudgments and estimates have been made
iii. that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year on March 31 2021 and of theprofit of the Company for the year ended on that date;
iv. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
v. that the annual financial statements have been prepared on a going concern'basis;
vi. that proper internal financial controls are in place and that such internalfinancial controls are adequate and are operating effectively;
vii. that systems to ensure compliance with the provisions of all applicable laws arein 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 soundInternal Financial Controls ("IFC") commensurate with the nature and size of itsbusiness. However the business is dynamic and IFC are not static and evolve over time asthe business technology and fraud environment changes in response to competitionindustry practices legislation regulation and current economic conditions. There willtherefore be gaps in the IFC as business evolves.
The Company has a process in place to continuously identify such gaps and implementnewer and / or improved controls wherever the effect of such gaps would have a materialeffect on the Company's operations.
20. Related Party Transactions
All related party transactions entered during the financial year were in ordinarycourse of business and on an arm's length basis. The Company has obtained necessaryapprovals towards the related party transactions as prescribed by the Act and the ListingRegulations.
The policy on related party transactions as approved by the Board is available on thewebsite of the Company at www.sekuritindia.com.
The Particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Act in prescribed Form AOC-2 is annexed as Annexure 4 tothis Report.
21. Corporate Social Responsibility
It is your Company's belief that its primary goal is to serve the needs of itscustomers and in the process of doing so to generate employment livelihood and incomefor all its stakeholders (suppliers vendors service providers employees lendersshareholders etc.) and at the same time to contribute to the revenues of the Government.Further it is your Company's belief that by pursuing its primary goal and by ensuringthat its business practices meet the highest standards of corporate governance and ethicsit best fulfils its obligations and responsibility to society.
Against the backdrop of this belief your Company is committed to implementing theagenda set out in its Corporate Social Responsibility ("CSR") policy.
In accordance with Section 135 of the Act a Corporate Social Responsibility Committeeof the Board has been constituted to monitor the CSR policy and the programmes and toensure that they are in line with the Act and the Rules made thereunder. The CSR policyand initiatives taken during the year in the format prescribed under the Companies(Corporate Social Responsibility Policy) Rules 2014 are annexed as Annexure 5 to thisReport.
22. Risk management and internal financial controls
Your Company recognises that managing risk is an integral part of good managementpractice and an essential element of good corporate governance. It aims to have a commonformalised and systematic approach for managing risk and implementing risk managementprocess across the Company. The Company ensures effective communication and management ofrisk across all risk categories. The Company has identified elements of risk which maythreaten the existence and financial position of the Company and are set out inManagement Discussion and Analysis.
The Company's internal financial control systems are commensurate with the nature ofits business financial statements and the size and complexity of its operations. Theseare routinely tested and certified by Statutory as well as Internal Auditors. Significantaudit observations and follow up actions thereon are reported to the Audit Committee.
23. Whistle-Blower Policy and Vigil Mechanism
The Company believes in conducting its affairs in a fair and transparent manner byadopting the highest standards of professionalism honesty integrity and ethicalbehaviour. In order to provide a secure environment and encourage employees and others toreport unethical unlawful or improper practices acts or activities including leak orsuspected leak of unpublished price sensitive information a Whistle Blower Policy hasbeen operational in the Company. The Whistle Blower Policy and Vigil Mechanism aredisseminated on the website of the Company at www.sekuritindia.com.
24. Secretarial Standards
The Company complies with applicable Secretarial Standards issued by the Institute ofCompany Secretaries of India.
25. Auditors a. Statutory Auditors
M/s. Kalyaniwalla & Mistry LLP (Registration No. 104607W / W100166) were appointedas the Statutory Auditors of the Company at the 44th Annual General Meetingheld on July 29 2017 for a term of five years until the conclusion of 49thAnnual General Meeting subject to ratification by members at every Annual General Meetingin terms of Section 139 of the Act. In accordance with the Companies (Amendment) Act 2017enforced on May 7 2018 by the Ministry of the Corporate Affairs the appointment ofStatutory 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 CostAuditor to conduct audit of cost records of the Company for the financial year 2020-21.The Cost Audit Report for the financial year 2020-21 will be filed with Ministry ofCorporate Affairs.
As per Section 148 and other applicable provisions if any of the Act read withCompanies (Audit and Auditors) Rules 2014 the Board of Directors of your Company onrecommendation of the Audit Committee has appointed Mr. G. Thangaraj Cost Accountant asthe Cost Auditor of the Company for the financial year 2021-22.
Your Company has received consent from Mr. G. Thangaraj to act as the Cost Auditor ofyour Company for the financial year 2021-22 along with a certificate confirming hisindependence.
c. Secretarial Auditor
The Company had appointed M/s. V. N. Deodhar & Co. Company Secretaries toundertake the Secretarial Audit of the Company for the financial year ended March 312021. The Secretarial Audit Report for the financial year ended March 31 2021 is annexedas Annexure 6 to this Report.
The Board has reappointed M/s. V.N. Deodhar & Co. Company Secretaries asSecretarial Auditor to conduct Secretarial Audit of the Company for the financial year2021-22.
26. Comments on Auditors' Report
There are no qualifications reservations or adverse remarks or disclaimers made byM/s. Kalyaniwalla & Mistry LLP Statutory Auditors in their Auditor's Report and byM/s. V. N. Deodhar & Co. Company Secretaries in their Secretarial Audit Report. TheAuditors have not reported any incident of fraud to the Audit Committee of the Companyduring the financial year ended March 31 2021.
27. Significant and Material Orders Passed by the Regulators or Courts orTribunals impacting the going concern status of the Company
There has been no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations. All orders receivedby the Company during the year are routine in nature and have no significant / materialimpact.
28. Annual Return
The Annual Return as on March 31 2021 pursuant to Section 92(3) read with Section134(3)(a) of the Act is available on the Company's website at www.sekuritindia.com.
29. Dividend Distribution Policy
The Dividend Distribution Policy of the Company was adopted to set out the parametersand the circumstances that will be taken into account by the Board of Directors indetermining the distribution of dividend to its shareholders. The policy is annexed asAnnexure 7 of this Report and is also available on the Company's website atww.sekuritindia.com
30. Management Discussion and Analysis Corporate Governance Report and BusinessResponsibility Report
In terms of the Regulation 34(2)(e) of the Listing Regulations the CorporateGovernance Report with a Certificate from a Practicing Secretary thereon ManagementDiscussion and Analysis and Business Responsibility Report are annexed and form part ofthis Report.
Your Directors take this opportunity to acknowledge with sincere gratitude the supportof its esteemed customers the strength it derives from its association with Compagnie deSaint-Gobain and its subsidiaries the continued support and co-operation from its Bankersand the loyalty of the Company's Suppliers Dealers and valued Shareholders.
| ||On behalf of the Board of Directors |
| ||For Saint-Gobain Sekurit India Limited |
| ||Santhanam ||Venugopal Shanbhag |
| ||Director ||Managing Director |
|May 14 2021 || || |