The Directors of your Company take pleasure in presenting its 28th Annual Report on thebusiness and operations of the Company together with financial statements for financialyear ended the 31st March 2020.
OPERATIONS - FINANCIALS
The summarised standalone and consolidated financial results of the Company forfinancial year ended the 31 March 2020 as compared to the previous year are as under:
(Rs. in Lacs)
|Corresponding figures for the previous year have been regrouped / recast wherever necessary to correspond to current year / year Classification || |
Standalone Financial Year
|Consolidated Financial Year |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue and other Income ||165015.33 ||204326.80 ||195344.66 ||234219.41 |
|EBITDA as per financial statement ||16916.09 ||22760.82 ||20641.75 ||25784.23 |
|Less: Financial Expenses ||(1263.43) ||(1745.91) ||(2045.63) ||(2394.62) |
|Profit before Exceptional Items Depreciation & Tax ||15652.66 ||21014.91 ||18596.12 ||23389.61 |
|Less: Depreciation ||(7560.17) ||(6669.80) ||(9841.47) ||(8088.12) |
|Profit Before Exceptional Items and Tax Provisions ||8092.49 ||14345.11 ||8754.65 ||15301.49 |
|Less: Share in loss of jointly controlled entity ||- ||- ||(949.72) ||(685.94) |
|Less: Exceptional Items ||- ||148.05 ||- ||(74.08) |
|Less: Tax Provisions ||2000.39 ||4664.36 ||(2107.05) ||(4956.23) |
|Net Profit After Tax Provisions ||6092.10 ||9532.70 ||5697.88 ||9585.24 |
|Add: Other Comprehensive Income/Expense ||734.07 ||(65.11) ||963.21 ||3.53 |
|Less: Profit attributable to Non-controlling interest ||- ||- ||(12.05) ||(67.70) |
|Less: Appropriations: || || || || |
|Dividend ||(1504.77) ||(752.38) ||(1529.15) ||(778.62) |
|Corporate Tax on Dividend Distribution ||(299.45) ||(144.8) ||(299.45) ||(144.8) |
|Balance carried forward in Balance Sheet ||5021.95 ||8570.41 ||4820.43 ||8597.65 |
The Auto industry has produced a total 26362284 vehicles including PassengerVehicles Commercial Vehicles Three Wheelers Two Wheelers and Quadricycle in April-March2020 as against 30914874 in April-March 2019 with a decline of (-)14.73%.
The decline is on account of several factors such as temporarily shutting down ofmanufacturing plants due to Corona Pandemic decrease in the OEMs' sales drasticslow-down in the infrastructure sector thereby impacting the growth in the Company's Cabinand Fabrication division despite commencement of sales at new manufacturing units slowtraction in the new product development business due to poor off-take and softeningcommodity prices.
Your company's strong brand resonance and fundamentals are well positioned to navigatethrough such extraordinary times. The Company will continually strive to enhance andstrengthen its market position by exploring new geographies innovation manufacturingexcellence and providing customized solutions to customer's needs. Sandhar will leverageits unique business model to achieve sustainable and profitable growth over medium to longterm.
STATE OF COMPANY'S AFFAIRS
Discussion on state of affairs of the Company has been covered as part of theManagement Discussion and Analysis (MDA). MDA for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming part of this Annual Report.
AMOUNT TRANSFERRED TO RESERVE
The Board of Directors has decided to retain the entire amount of profits in the profitand loss account.
The Board in its meeting held on 10th February 2020 declared an interim dividend ofRs. 1.25 per equity share as per particulars below:
|Date of Declaration ||Rate of Dividend ||Amount (in Rs. Lacs) (Excluding Dividend distribution tax) |
|1 10th February 2020 (Interim Dividend) ||12.5% ||752.38 |
Further the Board in its Meeting held on 27th June 2020 recommended a final dividendof Rs. 0.75 per equity share for the Financial Year ended on 31st March 2020 subject tothe approval of shareholders at the ensuing Annual General Meeting of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
As per Regulation 33 of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 (Listing Regulations) applicable provisions of theCompanies Act 2013 (Act) read with the rules issued thereunder and IndianAccounting Standard (AS)-110 on Consolidated Financial Statements read with Ind AS-28Investments in Associates and Joint Ventures the Audited Consolidated Financial Statementfor the FY ended 31st March 2020 is provided in this Annual Report.
During the year the Board of Directors reviewed the affairs of the subsidiaries inaccordance with Section 129(3) of the Companies Act 2013. Consolidated financialstatements together with the auditor's report form part of this annual report.
The Authorised Share Capital of the Company is Rs. 7000.00 Lacs divided into 680.00Lacs Equity Shares of Rs. 10/- (Rupees Ten only) each and 2.00 Lacs Preference shares ofRs. 100/- (Rupees Hundred only) each. The Paid up Capital of the Company is Rs. 6019.07Lacs divided into 601.91 Lacs Equity Shares of Rs. 10/- each.
There was no public issue rights issue bonus issue or preferential issue etc. duringthe year. The Company has not issued shares with differential voting rights sweat equityshares nor has it granted any stock options.
SUBSIDIARIES AND JOINT VENTURES
During the year under review three new Joint Venture namely Sandhar Han ShinAutomotive Private Limited Winnercom Sandhar Technologies Private Limited and Sandhar HanShin Auto Technologies Private Limited have been incorporated. As at 31st March 2020 theCompany had following Subsidiaries and Joint Ventures:
1. Sandhar Tooling Pvt. Ltd.
2. Sandhar Strategic Systems Pvt. Ltd.
3. Sandhar Technologies Barcelona S.L. including step down subsidiaries at Mexico& Poland
1. Sandhar Hansung Technologies Private Limited
2. Indo Toolings Private Limited
3. Sandhar ECCO Green Energy Private Limited
4. Sandhar Daewha Automotive Systems Private Limited
5. Sandhar Amkin Industries Private Limited
6. Jinyoung Sandhar Mechatronics Private Limited
7. Sandhar Daeshin Auto Systems Private Limited
8. Sandhar Whetron Electronics Private Limited
9. Kwangsung Sandhar Technologies Private Limited
10. Sandhar Han Shin Automotive Private Limited
11. Sandhar Han Shin Auto Technologies Private Limited
12. Winnercom Sandhar Technologies Private Limited
Pursuant to the provisions of Section 129 (3) of the Companies Act 2013 a statementcontaining the salient features of the financial statements of all the Joint Ventures/Subsidiaries in form AOC-1 is annexed hereto as Annexure-I and hence not repeated herefor the sake of brevity.
A copy of the audited financial statements of each of the subsidiary companies andEnglish translation thereof will be kept for inspection by any Member of the Company atCorporate Office during business hours. Further pursuant to the provisions of Section 136of the Companies Act 2013 these financial statements are also placed on the Company'swebsite www.sandhargroup.com. Copy of these financial statements shall be made availableto any Member of the Company on request.
Details of subsidiaries of the Company and their performance are covered in ManagementDiscussion and Analysis Report forming part of the Annual Report.
CAPEX AND LIQUIDITY
During the fiscal Company spent Rs. 8106.27 Lacs on Capex and Investments in JointVentures. Despite this significant spent the Company was able to keep the gross debtlevel stable during the year.
Cash and Cash Equivalents at the Consolidated level as at the 31st March 2020 was Rs.670.37 Lacs vis-a-vis Rs. 370.33 Lacs in the previous fiscal.
During the year under review the Company has not accepted any deposits thus farwithin the meaning of Section 73 of the Companies Act 2013 and the Companies (Acceptanceof Deposits) Rules 2014.
Particulars of Loans Guarantees and Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to the Financial Statements.
RELATED PARTY TRANSACTION
Following the provisions of Section 188(1) of the Companies Act 2013 all RelatedParty contracts / arrangements / transactions entered by the Company during the financialyear had been in the ordinary course of business and on arm's length basis with AuditCommittee having a domain role the Board of Directors brought into picture wherevernecessary and/or obligatory. Therefore the provision of Section 188 of the Companies Act2013 was not attracted. There are no materially significant Related Party Transactionduring the year under review made by the Company with Promoters Directors or otherdesignated person which may have a potential conflict with the interest of the Company atlarge. Thus disclosure in Form AOC-2 is not required. Pertinent in this context is tosay that during the year the Company has not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.
Related party transactions were disclosed to the Board on regular basis. Details ofrelated party transactions may be referred to in Note 32 of the Standalone FinancialStatements.
MATERIAL CHANGES AND COMMITMENTS
There have been no significant or material changes in the operations commitments andgovernance aspects following the provisions of Companies Act 2013 and Rules madethereunder.
NOTABLE INITIATIVES DURING THE YEAR
Technical Collaborations / Joint Ventures:
The Company had signed Joint Venture Agreements with foreign collaborators as below:
With Han Shin Corporation South Korea:
Company signed a 50:50 joint venture with Han Shin Corporation. A JV Company viz.Sandhar Han Shin Auto Technologies Private Limited was incorporated under the CompaniesAct 2013 on 26th November 2019 in Delhi. The main object of this joint venture companyis manufacturing and selling inter-alia electronic parts and accessories for theautomotive industries in India which would include Antenna Radio Cable AV/NAVI CableGPS/DMB Cable USB Cable AVM Cable etc.
With Winnercom Co. Ltd. South Korea:
Company signed a 50:50 joint venture with Winnercom Co. Ltd South Korea. A JV Companyviz. Winnercom Sandhar Technologies Private Limited was incorporated under the CompaniesAct 2013 on 22nd August 2019 in Gurugram Haryana. The main object of this jointventure company is manufacturing and selling inter-alia electronic parts and accessoriesfor the automotive industries in India which would include Shark fin antenna and micropole antenna etc. and catering to the four-wheeler segment.
IN-HOUSE R & D DIVISION
Added to the aforesaid is the real-time emphasis on Research and Developmentwherefore a dedicated organizational wing with requisite Government approvals in placeis in operation. The programs for innovations as chartered out and time lines settherefore are closely monitored for their development & entering into commercialactivity.
The Company continues to take full advantage of Information Technology leveraging itas a source of competitive advantage. As in earlier years the enterprise wide Oracle ERPplatform forms the backbone of IT and encompasses all core business processes in theCompany and also provides a comprehensive data warehouse with analytics capability thathelps in better and speedier decisions.
Multiple new initiatives have been taken to ensure that the investments in creationmaintenance and upgradation of IT Infrastructure is kept at optimal level and relevant newtechnologies are adopted to facilitate risk mitigation ensuring business continuityachieve scalability in operations and ensuring that data security and privacy are notcompromised.
Company has already upgraded its ERP platform from On premise Oracle EBS to Cloud basedOracle Fusion technology platform which covers all core business processes includingend-to-end solution for digital expense management giving employees easy data entryoptions and financial managers detailed spend information and policy-driven control.
Corporate governance is an ethically driven business process that is committed tovalues and aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with firm commitment to valueswhile meeting stakeholders' expectations. Further Corporate Governance is based on theprinciples of conducting the business with all integrity fairness and being transparentwith all the transactions making the necessary disclosures and decisions complying withthe laws of the land accountability and responsibility towards the stakeholders andcommitment of conducting the business in an ethical manner. At Sandhar it is ensured thatCompany's affairs are managed in a fair and transparent manner. This is vital to continueto gain and retain the trust of its stakeholders.
A separate section on Corporate Governance standards followed by your Company and therelevant disclosures as stipulated under the Listing Regulations Companies Act 2013 andRules made thereunder forms part of this Annual Report.
A Certificate from M/s K.K. Sachdeva & Associates Practising Company Secretaryconfirming the compliance by the Company to the conditions of Corporate Governance asstipulated under the Listing Regulations is annexed to the Report on CorporateGovernance which forms part of this Annual Report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Company's policy is to maintain an optimum combination of Executive andNon-Executive Directors on the Board. The composition of the Board is as follows:
|Co-Chairman & Managing Director ||Shri Jayant Davar |
|Non-Executive Directors ||Shri Dharmendar Nath |
| ||Davar (Chairman) |
| ||Smt. Monica Davar |
|Non-Executive Independent Directors ||Shri Arvind Kapur |
| ||Shri Ravinder Nagpal |
| ||Shri Krishan Lal Chugh |
| ||Shri Mohan Lal Bhagat |
| ||Shri Arjun Sharma |
| ||Shri Bharat Anand |
| ||(appointed on 12th |
| ||August 2019) |
| ||Shri Vimal Mahendru |
| ||(appointed on 05th |
| ||November 2019) |
| ||Smt. Archana Capoor |
|Executive Director ||Shri Arvind Joshi |
| ||Resigned from the |
| ||closing hours of 10th |
| ||May 2020 |
|Key Managerial Personnel ||Shri Narender Kumar |
| ||Dogra Chief Financial |
| ||Officer (Interim) |
| ||appointed on 11th |
| ||May 2020 |
| ||Km. Subhi Gupta |
| ||Company Secretary & |
| ||Compliance Officer |
| ||(Interim) appointed on |
| ||11th May 2020 |
All the Non Executive Independent Directors are not disqualified to be appointed assuch under the relevant provisions of the Companies Act 2013 and the rules madethereunder and shall not be subject for determination by retirement of Directors byrotation.
Appointment of Shri Bharat Anand Non-Executive and Independent Director of the Company
During the year under review in terms of section 149 150 & 152 of the CompaniesAct 2013 Shri Bharat Anand was appointed as an Additional (Non-Executive and Independent)Director by Circular Resolution dated 12th August 2019 to hold office for a period of 5(five) consecutive years and regularized as a Director (Non-Executive and Independent) ofthe Company in the 27th Annual General Meeting which was held on 10th September 2019.
Brief Profile of Shri Bharat Anand
Shri Bharat Anand aged about 43 years is a Partner in the Corporate Department ofKhaitan & Co. Shri Bharat is a dual qualified (England & Wales and India) lawyerand his practice focuses on corporate transactions such as acquisitions joint venturesand private equity investments. Shri Bharat joined Khaitan & Co in March 2009 from theLondon office of Freshfields Bruckhaus Deringer where he worked since 2001. Shri Bharathas been highly ranked by several legal journals and magazines. RSG Consulting anindependent UK-based consultancy featured Shri Bharat in their list of Top 25Second Generation Lawyers in India'. Shri Bharat plays an active role in leading industryassociations in India. He is Co-Chair of FICCl's Committee on Stressed Assets and a memberof Cll's Committee on Transparency and Governance. Shri Bharat read law at Jesus CollegeCambridge and is an alumnus of St. Columba's School.
Re-appointment of Shri Jayant Davar Managing Director of the Company.
Shri Jayant Davar has been serving as the Managing Director of the Company. His currenttenure as Managing Director of the Company is valid upto 31st December 2020. The Board ofthe Director at their meeting held on 27th June 2020 based on the commendation of theNomination & Remuneration Committee has decided to recommend the re-appointment ofShri Jayant Davar with effect from 01st January 2021 to 31st December 2025 subject to theapproval of members in the ensuing AGM.
Appointment of Shri Vimal Mahendru Additional Non-Executive and Independent Directorof the Company
During the year under review in terms of section 149 150 & 152 of the CompaniesAct 2013 by board of directors at its meeting held on the 05th November 2019. ShriVimal Mahendru was appointed as additional Non-Executive and Independent Director to holdoffice from 05th November 2019 till the ensuing Annual General Meeting of the Companybased on the commendation of the Nomination & Remuneration Committee and to holdoffice for a period of 5 (five) consecutive years thereafter subject to approval of theshareholders.
Brief Profile of Shri Vimal Mahendru
Shri. Vimal Mahendru is the President of Legrand-India. Besides this Shri. Vimal ispresently the IEC Ambassador representing IEC in various government and stakeholder foraon standardization rural electrification and energy access. He is also the IEC SMB memberfrom India and Convener of IEC Systems Evaluation Group on standardization of Low VoltageDirect Current SEG4-LVDC.
He also a member of the Governing Council of Indian Electrical & ElectronicsManufacturers' Association (IEEMA) the apex industry body in India. He also Chair theBureau of Standards Sectional Committee 39 for standardization of fuses and fuseaccessories. Shri. Vimal has over 28 years of diverse experience in various functions inthe manufacturing industry.
Re-appointment of Shri Arjun Sharma as Independent Director
Based on the commendation of Nomination & Remuneration Committee Shri Arjun Sharmashall be re-appointed as Independent Director for a second term of Five Years effectivefrom 24th May 2021 to 23rd March 2026.
The Board is of the opinion that the skills and knowledge of Shri Arjun Sharma would beof immense help to the business interests of the Company. Proposal for his re-appointmentas Independent Director is being placed before the shareholders for approval at theensuing Annual General Meeting.
Resignation of Shri Arvind Joshi
During the year under review Shri Arvind Joshi resigned from the position ofWhole-Time Director Chief Financial Officer & Company Secretary of the Company witheffect from closing hours of 10th May 2020 due to unavoidable circumstances.
Retirement of Directors by rotation
In terms of Section 152 of the Act Shri Dharmendar Nath Davar Chairman and Smt.Monica Davar Non-Executive Director shall retire by rotation at the ensuing AGM andbeing eligible have offered themselves for re-appointment. Information as required underRegulation 36(3) of the Listing Regulations is provided in the Notice of 28th AGM.
MEETINGS OF THE BOARD
Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies financial matters and other businesses. The schedule of theBoard/Committee meetings to be held in the forthcoming quarter is circulated to theDirectors in advance to enable them to plan their schedule for effective participation inthe meetings. Due to business exigencies the Board has also been approving some proposalsby circulation from time to time.
During the year under review four Board Meetings were convened and the gap between themeetings was as per the period prescribed under the Companies Act 2013.
|Date of Board Meeting ||Board Strength ||No. of Directors Present |
|1 27th May 2019 ||10 ||8 |
|2 03th August 2019 ||10 ||10 |
|3 05th November 2019 ||12 ||9 |
|4 10th February 2020 ||12 ||12 |
Additionally several Committee meetings were held during the year including AuditCommittee. The detailed information on the meetings of the Committees are included in theReport on Corporate Governance which forms part of this Annual Report.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of Executive and Independent Directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on the 31st March 2020 the Board consists of twelve members one of whomare Executive or Whole-Time Director two are Non-Executive Directors including one womanDirector and eight are Independent Directors including one woman Director. The Boardperiodically evaluates the need for change in its composition and size.
The Policy of the Company on Director's appointment and remuneration including criteriafor determining qualifications positive attributes independence of Directors and othermatters provided under Section 178 (3) of the Companies Act 2013 is adopted by the Board.The remuneration paid to the Directors is as per the provisions of Companies Act 2013 andthe rules made thereunder. Annexure-IIA Policy for Selection of Directors and determiningDirector's Independence and Appointment and Remuneration Policies are annexed as AnnexureIIB.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Director as perthe provisions of Section 149(7) of the Companies Act 2013 that they meet the criteriaof Independence as laid down in Section 149(6) of the Companies Act 2013 and Regulation16 (1) (b) of the SEBI (LODR) Regulations 2015 (the Listing Regulations).
There has been no change in the circumstances offering their states as independentdirectors of the company so as to qualify themselves to the companies act 2013 and therelevant regulations.
SEPARATE MEETINGS OF INDEPENDENT DIRECTORS
In terms of requirement of schedule IV of the Companies Act 2013 the independentdirectors of the company met separately on the 10th february 2020 to inter alice reviewthe performance of non independent directors (including the chairman) the entire boardthe quality quantity and timelines of the flow of information between the management andboard.
DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178
As stipulated under Section 178 of the Act and based on the recommendation of theNomination and Remuneration Committee the Board has approved a Nomination andRemuneration Policy of the Company. The Policy documents the mechanism for appointmentcessation evaluation and remuneration of the Directors Key Managerial Personnel andSenior Management of the Company. Information on the Policy and details of the criteriafor determining qualifications positive attributes and other matters in terms of Section178 of the Act are provided in the Corporate Governance Report.
INFORMATION ON BOARD MEETING PROCEDURE AND ATTENDANCE DURING THE FINANCIAL YEAR 2019-20
The Board meetings of the Company are conducted as per the provisions of the ActListing Regulations and applicable Secretarial Standards. Information as mentioned in theAct and Schedule II to the Listing Regulations and all other material information as maybe decided by the management is placed for consideration of the Board. Details on thematters to be discussed along with relevant supporting documents data and otherinformation is also furnished in the form of detailed agenda to the Board and theCommittees concerned to enable directors take critical decisions and accordingly advisethe management.
Details regarding information furnished to the Board members number of Committee andBoard meetings held during the year along with attendance record of each director has beendisclosed in the Corporate Governance Report of the Company.
PERFORMANCE EVALUATION OF THE BOARD
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the Non-Executive Directors and Executive Directors. On the basis of thelaid out Policy a process of evaluation was followed by the Board for its own performanceand that of its Committees and individual Directors including Chairman.
The Company is committed to benchmark itself with best practices and standards in allareas including Corporate Governance. To this end the Board has the analytical andfunctional support of Committee of Directors Audit Committee Nomination &Remuneration Committee & Corporate Social Responsibility Committee. The system bringsinsight & effectiveness in to the designated areas of Corporate Governance.
COMMITTEES OF THE BOARD
Currently the Board has Six Committees which have been established in compliance withthe requirements of the business and relevant provisions of the applicable laws andstatutes. These are:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Corporate Social Responsibility Committee
4. Stakeholders Relationship Committee
5. Share Transfer & Allotment Committee and
6. Finance Committee.
The details with respect to the composition terms of reference number of meetingsheld etc. of these Committees are given in the Report on Corporate Governance which formspart of this Annual Report.
INSIDER TRADING POLICY FOR PREVENTION OF INSIDER TRADING AND FAIR DISCLOSURE OFUNPUBLISHED PRICE SENSITIVE INFORMATION
In terms of the SEBI (Prohibition of Insider Trading) Regulations 2015 the Companyhas adopted a Insider Trading Policy Further the Company has also adopted aCorporate Policy on Investor Relations
The Insider Trading Policy and Corporate Policy on Investor Relations are drawn up onthe principle that the Company's directors and employees owe a fiduciary duty amongstothers to the shareholders of the Company to place the interest of shareholders abovetheir own and conduct their personal securities transactions in a manner that does notgive rise to any conflict of interest. These codes lay down the mechanism for ensuringtimely and adequate disclosure of Unpublished Price Sensitive Information(UPSI) to the investor community by the Company to enable them take informedinvestment decisions with regard to its securities.
The Insider Trading Policy prescribes the procedure for trading in securities of theCompany and the disclosures to be made by persons covered under the Insider Trading Policywith respect to their shareholding in the Company both direct and indirect.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of Companies Act 2013 your Directorsstate that:
1. In the preparation of annual accounts for the year ended the 31st March 2020 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed along with proper explanation relating to material departures;
2. The Directors have 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 as on the 31st March 2020 and of theProfit of the Company for the year ended on that date;
3. The Directors have 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 and
4. The Directors have prepared the annual accounts on a going concern basis.
5. The Directors have laid down Internal Financial Controls to be followed by theCompany have been laid down and that such internal financial controls are adequate andoperating effectively; and
6. The Directors have devised proper systems to ensure compliance with the provisionsof all the applicable laws and that such Systems are adequate and operating effectively.
POLICIES OF THE COMPANY
The Company is committed to high ethical standards in its business transactions guidedby its value systems. The Listing Regulations mandate formulation of certain policies forlisted companies. Accordingly the Board of Directors has from time to time framed andapproved policies as required by the Listing Regulations as well as under the Act. Thesepolicies are reviewed by the Board at periodic intervals.
Some of the key policies that have been adopted till date are as follows:
S.No Name of Policy
1. Code of Conduct Policy
2. Determination of Materiality and Dealing with Related
3. Remuneration Policy
4. Whistle Blower Policy
5. Independent Director Policy
6. Policy on Determining Material Subsidiaries
7. Insider Trading Policy
8. CSR Policy
9. Policy for preservation of Documents and Archival of Documents
10. Policy on familiarisation of Independent Directors
11. Policy for Determination of Materiality of Events
The Polices are available on the Company's website on the link www.sandhargroup.com/investor-relations/corporate governance.
BUSINESS RISK MANAGEMENT
Pursuant to Section 134 (3) (n) of the Companies Act 2013 the Company may constitute aBusiness Risk Management Committee which shall be entrusted with the responsibility toassist the Board in:
Formulating and implementing Risk Management Policy;
Overseeing and approving the Company's enterprise wide risk management framework; and
Overseeing that all the risks that the Company faces such as strategic financialcredit market liquidity property IT legal regulatory reputational employee andother risks have been identified and assessed and there is an adequate risk managementinfrastructure in place capable of addressing those risks.
At present the Company has not identified any element of risk which may perceptiblythreaten the existence of the Company.
With a view to familiarising the Independent Directors with the Company's operationsas required under regulation 25(7) of the SEBI Listing Regulations 2015 the Company heldfamiliarisation programmes for the independent directors on an ongoing and continuousbasis. The details of such familiarisation programmes are placed on websitehttp://sandhargroup.com/uploads/downloads/details-of-familiarization-programmes-for-independent-directors-1.pdf
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Vigil Mechanism of the Company which also incorporates a Whistle Blower Policy isin place. There has been no case to report for the FY 2019-2020 no individual was deniedaccess to the Audit Committee for reporting concerns if any.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
There has been no case during the year requiring to be reported during the year underreview.
M/s. BSR & Co. LLP Chartered Accountants (Firm's Registration No.101248W/W-00022) hold office up to the conclusion of the 30th AGM.
M/s. BSR & Co. LLP were appointed as Statutory Auditors of the Company from theconclusion of 25th AGM i.e. from 29th July 2017. In terms of the proviso to Section139(1) of the Act the said appointment was subject to ratification by Members at everyAGM held during the tenure of their appointment. The proviso to Section 139(1) of the Acthas been omitted by the Companies (Amendment) Act 2017 with effect from 7th May 2018;accordingly the requirement of ratifying appointment of statutory auditors at everyannual general meeting during their tenure of appointment has been dispensed with.
The Auditors' Reports including the one on Internal Financial Controls does not carryany observation or infirmity in the Company's affairs.
As required u/s 204 of the Companies Act 2013 and rules hereunder M/s K.K Sachdeva andassociates shall be reappointed as the Secretarial Auditors of the company to conductSecretarial Audits for the year ended 31 st March 2021.
SECRETARIAL AUDIT REPORT
The Secretarial Audit Report for the financial year ended 31st March 2020 is set out inAnnexure-III to this report. The Secretarial Audit Reports does not contain anyqualification reservation or adverse remark or disclaimer.
The board on the recommendation of audit committee approved the appointment of M/S GSA& Associates Internal Auditors for conducting the internal audit of the company forthe financial fear 2020-2021.
The Board on the recommendation of Audit Committee approved the appointment of M/s.A.N. Satija & Co Cost Auditors for conducting the audit of cost records of theCompany for its business for the financial year 2019-2020. As required u/s 148 of thecompanies act 2013 and rules hereunder the board shall be re- appoint M/S A.N. Satija& Co Cost Auditors for FY 2020-2021. Necessary Resolution will be recommended by theBoard to be passed by the shareholders in the ensuing Annual General Meeting to ratify theremuneration of the Cost Auditors for the F.Y. 2020-2021.
INTERNAL CONTROL SYSTEMS AND ADEQUACY THEREOF
The Company's internal control systems as laid down to commensurate with the nature ofits business the size and the complexity of its operations. These are tested andcertified by Statutory as well as Internal Auditors and cover all factories and key areasof business. Significant audit observations and follow up action thereon are reported tothe Audit Committee. The Audit Committee as aforesaid reviews adequacy and effectivenessof the Company's internal control environment including in-house Commercial Audit headedby a senior professional and monitors the implementation of audit recommendationsincluding those relating to strengthening and adequacy of the Company's Risk Managementpolicies and systems.
EXTRACT OF ANNUAL RETURN
In terms of Sections 92(3) and 134(3) (a) of the Act and Rules made there underextract of the Annual Return in Form No. MGT-9 is annexed as Annexure- IV to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
A Statement containing Particulars of Employees as required under Section 197(12) readwith Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel)Rules 2014 is annexed in Annexure- V.
Further pursuant to the provision to Section 136(1) of the Companies Act 2013 read withthe Rule 5(2) of the companies (Appointment & Remuneration of Managerial Personnel)Rules 2014 will be sent to the members of the Company on request.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has establishedCorporate Social Responsibility Committee (the CSR Committee) and statutorydisclosures with respect to the CSR Committee and an annual report on CSR activities formspart of this Report as Annexure VI.
In this regard following the recommendation of the said Committee the Board hasapproved the CSR policy which is also available on the website of the Company i.e.www.sandhargroup.com .
The composition of the CSR Committee is covered under the Corporate Governance Reportwhich forms the part of the Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE INFLOW AND OUTFLOW ANDRESEARCH & DEVELOPMENT
The information pertaining to conservation of Energy Technology Absorption and ForeignExchange Inflow and Outflow and Research and Development activities carried out by thecompany pursuant to Section 134(3) (m) of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 given in Annexure VII which forms a part of thisReport.
INVESTOR EDUCATION & PROTECTION FUND
During the year under review there is no amount which is required to be transferred tothe investors education & protection fund as per the provisions of section 125 (2) ofthe Companies Act 2013.
BUSINESS RESPONSIBILITY REPORT
The business responsibility report as stipulated under regulation 34 (2) (f) of SEBI(LODR) regulation is presented in a separate section forming part of the annual report.
During the year under review India Rating & Research a credit rating agencyregistered with SEBI had given the credit ratings as follows:
I) Long Term Ratings : IND AA-/stable
ii) Short Term Ratings : IND A1+
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There was no significant and material order passed by the regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI)
The Directors state that applicable Secretarial Standards have been followed during thefinancial year 2019-20.
During the year under review no fraud has been reported by Auditors under sub-section(12) of Section 143 of the Companies Act 2013.
Statements in the Annual Report including those which relate to Management Discussionand Analysis describing the Company's objectives projections estimates andexpectations may constitute forward looking statements' within the meaning ofapplicable laws and regulations. Although the expectations are based on reasonableassumptions the actual results might differ.
PERSONNEL & INDUSTRIAL RELATIONS
Cordial atmosphere across functional verticals / units contributed as before to theoverall satisfactory performance of the Company. The Directors place on record their deepappreciation of the inspiring and motivating leadership provided by the Co-Chairman &Managing Director ably supported by Chief Financial Officer and Company Secretary and thecommendable team work done by the executives staff and workers at all levels in variousunits at different locations.
Your Directors are grateful for the co-operation and guidance received from CitibankN.A DBS Bank Yes Bank Limited State Bank of India and HDFC Bank Limited. The Boardspecially wishes to place on record their sincerest gratitude for the patronage itreceived from Hero MotoCorp Limited Honda Cars India Limited Honda Motorcycle andScooters Limited TVS Motor Company Limited JCB India Limited Eicher Motors and TataMotors Limited.