The Directors of your Company take pleasure in presenting the 26th Annual Report on thebusiness and operations of the Company together with financial statements for thefinancial year ended 31st March 2018.
Operations - Financials
The summarised standalone and consolidated financial results of the Company for thefinancial year ended March 31 2018 as compared to the previous year are as under:
(Rs. in Lakhs)
| ||Standalone ||Consolidated |
|Corresponding figures for the previous year have been regrouped / recast wherever necessary to correspond to current year / year Classification ||Financial Year ||Financial Year |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Revenue and other Income ||172584.04 ||150988.79 ||198886.15 ||175523.06 |
|EBITDA as per financial statement ||19092.39 ||13211.99 ||21303.29 ||15428.99 |
|Less: Financial Expenses ||(3811.87) ||(3557.03) ||(4317.43) ||(4262.17) |
|Profit before Exceptional Items ||15280.52 ||9654.96 ||16985.86 ||11166.82 |
|Depreciation & Tax || || || || |
|Less: Depreciation ||(5512.79) ||(4766.14) ||(6752.10) ||(5835.58) |
|Profit Before Exceptional Items and Tax ||9767.73 ||4888.82 ||10233.76 ||5331.24 |
|Provisions || || || || |
|Less: Share in loss of jointly controlled entity ||- ||- ||(531.62) ||(80.82) |
|Less: Exceptional Items ||- ||(155.11) ||- ||(43.63) |
|Less: Tax Provisions ||(2995.08) ||(884.37) ||(3140.21) ||(1043.30) |
|Net Profit After Tax Provisions ||6772.65 ||3849.34 ||6561.93 ||4163.49 |
|Add: Other Comprehensive Income/ ||(57.57) ||(93.45) ||46.45 ||(242.87) |
|Expense || || || || |
|Less: Profit attributable to Non-controlling interest ||- ||- ||(60.34) ||(37.66) |
|Less: Appropriations: || || || || |
|Dividend ||(1534.64) ||(767.32) ||(1540.70) ||(803.71) |
|Corporate Tax on Dividend Distribution ||(309.98) ||(141.57) ||(309.98) ||(141.57) |
|Balance carried forward in Balance Sheet ||4870.46 ||2847.00 ||4697.36 ||2937.68 |
The automotive sector including the auto components manufacturers witnessed goodtailwinds on account of macroeconomic factors as well as structural changes in consumerpreference. The fiscal 2018 ended with hitherto unseen growth trajectory in the last 5months of the fiscal 2018 seeing double digit growth consecutively. Sales of the twowheelers (2W) and commercial vehicles (CV) segments surged impressively by 15.44% and15.93% respectively. The structural trend of customers preferring scooters in 2Ws and SUVsin 4Ws continued in the fiscal 2018 which yet again registered a growth of over 19.4% and18.75% respectively. Passenger vehicles (PV) sales growth stood at 6% y-o-y. 2W volumegrowth can be attributed to positive rural sentiments and new launches by OEM's (ahead ofimplementation of mandatory ABS/CBS norms from 1st April 2018). Additionally the low baseof last year aided strong volume growth. Robust growth in the CV segment was on account ofimprovement in rural-related sectors (FMCG and agriculture) and pick up in roadconstruction and mining demand.
Also pre buying ahead of AIS140 standards (intelligent transport systems) in thepassenger segment w.e.f from 1st April 2018 led to strong growth. The LCV segment reportedstrong growth of 19.5% driven by good demand from e-commerce FMCG and agro-sectors andincreased demand for last mile connectivity post GST implementation. The MHCV segment alsoreported strong double-digit growth of 11% y-o-y on account of improved demand from theinfrastructure segment. Moreover stringent restrictions on overloading also aided volumegrowth.
In the case of the Company the Consolidated Revenue from Operations & Other Incomestood at Rs.198886.15 Lacs vis-a-vis Rs.175523.06 Lacs in the previous year followingcontinuing rigorous efforts at business promotion and controls aimed at cost economies asmuch of refurbishment of products / components with un-mitigating thrust on penetration ofmarket resulting from effective managerial inputs. The aforesaid Revenue numbers of thefiscal under review are not comparable with the previous year as they are computed inaccordance with IND-AS 18 which requires netting of the Goods & Service Tax whereas
Excise Duty form part of the Expenses in the previous year and the fiscalunder reviewupto 30th June 2017 prior to the date of GST implementation. Turning the whole part intoa meaningful reality besides the turnover level as aforesaid EBITDA also registered goodgrowth of 38.07% at consolidated level clocking Rs.21303.29 Lacs vis-a-vis Rs.15428.99Lacs in the previous year along with other operating parameters. At standalone level thegrowth registered was 44.51% as compared to previous year.
The Profit before Depreciation Exceptional Items and Tax at Consolidated level was52.11% higher at Rs.16985.86 Lacs in the fiscal year under review as againstH11166.82Lacs in the previous fiscalyear; the Profit after tax was more profound and higher atRs.6561.93 Lacs as against Rs.4163.49 Lacs in the previous fiscal following nilexceptional items and lower costs registering a growth of 57.61%. At the standalone levelExceptional Items and Tax was theProfit 58.27% higher than the previous fiscal and stoodatH15280.52 Lacs vis-a-vis Rs.9654.96 Lacs. At the standalone level the Profit after taxfor the fiscal under review stood atH6772.65 Lacs vis-a-vis Rs.3849.34 Lacs registeringa remarkable growth of 75.94%. The lower percentage of growth at Consolidated level is onaccount of share in losses of jointly controlled entities which are at the startup stages.However the crucial aspect of cash flow has been managed observing due diligencecombined with conservation strategies which kept the Company on its feet throughout theyear. Looking ahead the challenges are one of business growth and that too withreasonable margins: the overall outlook for real march forward in the current year appearsquite optimistic with predictably better monsoons demand growth driven by OEMs(including plans of localisation)/replacement market growth driven by regulatory changesand technological advancement as well as consumer preferences the only foreseeabledampener being rise in crude oil prices and political instability. All possible steps areafoot to meet on the ground' challenges with focus on Research & Developmentholding over deferrable capital expenditure cutting down on operational expenses withoutsacrificing effectiveness and deliverable all ensuring efficacious management of cashcorporate strategies are planned to focus on creating value on the one hand and managingrisk and shaping up enterprise performance on the other hoping at the same time thatthe turnaround for the Sector is not far too distant.
The Board of Directors have paid during the year interim dividends as per particularsbelow:
|S.No ||Date of Declaration ||Rate of Dividend ||Amount (in Lakhs) |
| || || ||(Excluding the Dividend distribution tax) |
|1 ||19th December 2017 ( 1st interim) ||10% ||511.55 |
|2 ||07th March 2018 ( 2nd interim Dividend) ||10% ||511.55 |
The 1st & 2nd interim dividend put together aggregated to Rs.2/- per equity share.The same being in line with the Company's Dividend policy the Board has recommended the1st & 2nd interim dividend to be as finaldividend and no additional dividend is beingrecommended for the financial year 2017-18.
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 March 31 2018 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 Act. Consolidated financial statements together withthe auditor's report form part of this annual report.
The Authorised Share Capital of the Company is Rs.700000000/- (Rupees SeventyCrores only) divided into 68000000 (Six Crores and Eighty Lakhs only) Equity Shares ofRs.10/- (Rupees Ten only) each and 200000 (Two Lakhs only) Preference shares of Rs.100/-(Rupees Hundred only) each. During the financial year under review 9036144 equityshares of 10 each were allotted in Initial Public Offer (IPO) of the Company.Consequently the issued and paid up capital of the Company as on March 31 2018 wasRs.601907080/- (Rupees Sixty Crores Nineteen Lakhs Seven Thousand Eighty only).
INITIAL PUBLIC OFFERING
During the year under review the Company made offer of 1 54 36144 Equity Shares ofFace Value of 10 Each ("Equity Shares") for subscription by the public by wayof Initial Public Offer ("IPO"). The IPO was comprising a fresh issue of9036144 equity shares aggregating 3000 million ("fresh issue") and an offerfor sale of 6400000 equity shares by GTI Capital Beta Pvt Ltd (the "sellingshareholder") aggregating 2124.80 million ("offer for sale").The EquityShares in the IPO were offered at a price of 332 per share. The Company listed its EquityShares on BSE Limited and National Stock Exchange of India Limited on the 02nd April2018.
Post IPO 29.86% of the shareholding is held by public and balance 70.14% is held bythe Promoter and Promoter group.
UTILISATION OF IPO PROCEEDS:
The Company utilized the Net Proceeds from the Fresh Issue towards:
Repayment or prepayment in full or in part of certain loans availed by ourCompany; and
General corporate purposes
SUBSIDIARIES AND JOINT VENTURES
During the year under review there were no new subsidiaries incorporated nor anycompany ceased to be a subsidiary of the Company. However two new joint ventures havebeen incorporated. As at 31st March 2018 the Company had following subsidiaries andJoint Ventures:
1. Sandhar Tooling Pvt. Ltd.
2. Sandhar Strategic Systems Pvt. Ltd.
3. Sandhar Technologies Barcelona S.L. including step down subsidiaries at MexicoPoland & Breniar
1. Sandhar Hansung Technologies Pvt. Ltd.
2. Indo Toolings Pvt. Ltd.
3. Sandhar ECCO Green Energy Pvt. Ltd.
4. Sandhar Daewha Automotive Systems Private Limited (incorporated on 20th June 2017)
5. Sandhar Amkin Industries Private Limited (incorporated on 6th September 2017)
6. Jinyoung Sandhar Mechatronics Private Limited (incorporated on (20th March 2017) Astatement containing the salient features of the financials statements of all the JointVentures/ Subsidiaries in form AOC-1 is annexed hereto as Annexure-I and hencenot repeated here for 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 atits Corporate Office during business hours. These financial statements are also placed onthe Company's website www.sandhar.co.in. Copy of these financial statements shall be madeavailable to 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.
Cash and Cash Equivalents at the Consolidated level as at 31st March 2018 wasRs.25499.01 Lacs vis-a-vis Rs.567.82 Lacs in the previous fiscal. The higher Cash &Cash Equivalents balance in the fiscal under review is primarily on account of the IPOProceeds.
The Company has been making use of need based credit from its bankers and is sparing noeffort towards optimizing self-generated resources making sure that all commitments tothe bankers' / financing agencies are met regularly. However with the infusion of Equityby way of IPO the Company's long term debts stand repaid to the extent of Rs.22500 Lacsin April 2018.
Financial resources to meet requirements as they emerge will continue to be raised inthe current year through appropriate strategies and instruments at cost effective rates. Apart of resources as in the past would consist of the self-generated surplus ploughedback for productive purposes.
The Company has not accepted any deposits thus far within the meaning of Section 73of the Companies Act 2013 and the Companies (Acceptance of 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 were not attracted. There are no materially significant Transaction during the yearunder review made by the Company with Promoters Directors or other designated personwhich may have a potential conflict with the interest of the Company at large. Thusdisclosure in Form AOC-2 is not required. Pertinent in this context is to say thatduring the year the Company has not entered into any contract / arrangement / transactionwith related parties which could be considered material in accordance with the policy ofthe Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website atwww.sandhar.co.in Related party transactions were disclosed to the Board on regular basis.Details of related party transactions may be referred to in Note 32 of the StandaloneFinancial Statements.
MATERIAL CHANGES AND COMMITMENTS
There have significantor material changes in the been no 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 as well as Indiancollaborators as below:
Sandhar Daewha Automotive Systems Pvt Ltd. was incorporated under the Companies Act2013 on June 20 2017 in Gurugram Haryana. This company is a 50:50 joint venture betweenour Company and Daewha Fuel Pump Ind. Ltd. South Korea. This joint venture company wouldbe primarily engaged in inter alia the business of manufacturing selling and assemblingfuel pumps filters starter motor and wiper blades in India and such other products asmutually agreed.
Sandhar Amkin Industries Pvt. Ltd. was incorporated under the Companies Act 2013 onSeptember 6 2017 in Delhi. This company is a 50:50 joint venture between our Company andAmkin Group Pvt. Ltd. Delhi. This joint venture company would be primarily engaged ininter alia would be primarily involved in inter alia the business of designingmanufacturing marketing selling helmet helmet accessories and related parts visorssafety headgear riding protection accessories etc in India.
Sandhar Daeshin Auto Systems Pvt. Ltd. has been incorporated on May 3 2018. Thiscompany which would be a 50:50 joint venture between our Company and Daeshin MachineryInd. Co. Ltd. South Korea and is being set up for the manufacturing assembly and saleof gear shifters and parking breaks for the four-wheeler segment.
The Company had also signed notable Memorandum of Understanding ("MOU")during the Financial Year 2017-18:
|S. No. ||Name of the Strategic Partner ||Country ||Contract Products ||Nature of Agreement ||Date of Agreement |
|1 ||Kwangsung Corporation Ltd. ||South Korea ||Sun Visors Reservoir Tanks Resonator Glove Boxes ||MOU ||5th March 2018 |
|2 ||Whetron Electronics Co. Ltd. ||Taiwan ||Rear Parking Sensors Door Alert System Tyre Pressure Monitoring Systems Rear Parking Cameras etc ||MOU ||9th May 2018 |
Diversification in product range and continuing product development would add strengthand vibrancy on its way forward to the Company's operations.
In-house R & D Division:
Added to the aforesaid is the real-time emphasis on Research and Development wherefora dedicated organizational wing with requisite Government approvals in place is inoperation.
The programs for innovations as chartered out and time lines set therefor are closelymonitored for their proceeding apace.
New and/or Extended Manufacturing Units:
Sandhar Technologies Limited- CFD- Jaipur
JCB the largest customer of the Company for the Cabins &
Fabrication business has awarded contract of fabrication and supply of skid steerloaders backhoe loaders wheel loaders and the Load-alls etc. Since the supplies are tobe made to JCB's Jaipur plant the Company has set up a new Unit at Jaipur in closevicinity of JCB's manufacturing units for ensuring easy and timely supplies to JCB. Theplant has got commissioned in the month of February 2018.
Sandhar Technologies Limited- Hosur
The Company has setup a new green field project at Hosur for one of its esteemedcustomer viz. TVS Motors for manufacturing of aluminium die casting components which hascommenced operations with effect from March 2018.
Effective from the 1st September 2012 Sandhar Technologies Poland was started inCzestochowa. This plant being a finishing assembling and logistic hub for parts requiredfor manufacturing items in Europe catalysis as a supply chain subsidiary of SandharTechnologies Barcelona (Spain); the supervisional aspect accordingly vests in thelatter.
As a second tier subsidiary company to Sandhar Technologies Barcelona (Spain) anotherinitiative taken by setting up a unit in Mexico which commenced operations in February2015 the items of manufacture being aluminium pressure die casting components andover time extend the range in a format found appropriate.
Overall the Company is seeking to power a culture of continuing enterprise buildingand innovation imbued with rightful level of responsibility transparency andaccountability; besides giving a strategic push to those activities in hand towardsreaching a stage of rightful fruition.
Future Outlook & Prospects
The global uncertainties arising out of geo-political issues have dwindled to a largeextent. This augurs well for the auto and automotive components sector both in India aswell as overseas. Coupled with this the macro-economic conditions in India hasdrastically improved. The fiscal deficits are well under control the inflationarypressures have subsided to a large extent and the interest rates are at an all-time low.With robust foreign exchange reserves infrastructure push by the government multipledemand drivers to pull the growth in the auto & auto component sector at play webelieve the Company is set to reap maximum benefits. Two wheeler segment with whom yourCompany is intimately associated since inception has witnessed reasonably satisfactoryincrease in volume of sales and accompanying bottom-line parameters. The trend might beexpected to continue hoping that policy and perception so too events would turn furtherbetter during the year.
The environment for direct export both to Europe and USA on the Company's part is stillto take wholesome shape though the Company's subsidiary: Sandhar Technologies BarcelonaSpain has been operating on a sustainable basis with some job work being handled by itssubsidiary in Poland: Sandhar Technologies
Poland: the other subsidiary in Mexico might as well given some more time take onits role in a meaningful manner. It is hoped that against odds even these enterprisesshall remain on their feet.
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 ERP platform forms the backbone of ITand encompasses all core business processes in the Company and also provides acomprehensive data warehouse with analytics capability that helps in better and speedierdecisions.
The Company continues to lay stress on IT infrastructure to support businessapplications and has made use of India's expanded telecom footprint to provide highbandwidth terrestrial links to all operating units. The Company also uses software as aservice to provide agile cost effective IT capabilities in select areas. As the ITsystems and related processes get embedded into the ways of working of the organizationthere is a continuous focus on IT security and reliable disaster recovery managementprocesses to ensure all critical systems are always available. These are periodicallyreviewed and tested for efficacy and adequacy.
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.
Company Secretary A confirming the compliance by the Company to the conditions ofCorporate Governance as stipulated under the Listing
Regulations is annexed to the Report on Corporate Governance which forms part of thisAnnual 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:
|Managing Director- ||Shri Jayant Davar |
|Non-Executive Directors ||Shri Dharmendar Nath Davar |
| ||Smt. Monica Davar |
|Non-Executive Independent ||Shri Arvind Kapur |
|Directors ||Shri Ravinder Nagpal |
| ||Shri Krishan Lal Chugh |
| ||Shri Mohan Lal Bhagat |
| ||Shri Arjun Sharma |
|Executive Director ||Shri Arvind Joshi |
|Nominee Director ||Shri Gaurav Dalmia (since resigned |
| ||w.e.f. 20th April 2018) |
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 made thereunder and shall not be subject todetermination by retirement of Directors by rotation. Under the provisions of Section 149150 152 160 of the Companies Act 2013 be not liable having been appointed for 5years to determination by retirement of Directors by rotation.
Resignation of Shri Gaurav Dalmia
During the year under review Shri Gaurav Dalmia resigned from directorship of theCompany on the 20th April 2018. Shri Dalmia was a nominee of GTI Capital Beta Pvt Ltd("GTI") and was appointed on the Board of the Company pursuant to theShareholders' Agreement dated the 31st March 2012 executed between the Company GTI andCompany's other shareholders after GTI became a shareholder of the Company in 2012. Hisresignation was in terms of the said Shareholders'
Agreement whereby the agreement terminated upon listing of the Company's equity shareson the stock exchanges.
Resignation of Shri Chandra Mohan
During the year under review Shri Chandra Mohan resigned from directorship of theCompany on the 29th November 2017 due to health issues.
Resignation of Shri Arvind Pande
During the year under review Shri Arvind Pande resigned from directorship of theCompany on the 16th February 2018 due to some 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 the 26th AGM.
Re-appointment of Shri Arvind Joshi Whole-Time Director of the Company
Shri Arvind Joshi has been serving as the Whole Time Director of the Company since 1stJune 2013 in accordance with the provisions of the Companies Act 2013 recommendationof the Nomination & Remuneration Committee and the Board of Directors and with theapproval of the members. His current tenure as Whole Time Director of the Company is validupto the 31st May 2018. The Board of Directors at their meeting held on 26th May 2018based on the commendation of the Nomination & Remuneration Committee have decided torecommend the re-appointment of Shri Arvind Joshi as Whole Time Director with effect from1st June 2018 for a period of 5 (five) upto the 31st May 2023 subject to the approvalof members in the ensuing AGM.
Re-appointment of Shri Gaurav Dalmia Additional Non-Executive and Independent Directorof the Company
During the year under review in terms of section 149 150 & 152 of the CompaniesAct 2013 the Board of Directors at its meeting held on the 26th May 2018 appointed ShriGaurav Dalmia as additional Non-Executive Independent Director to hold office from 26thMay 2018 till the ensuing Annual General Meeting of the Company based on the commendationof the Nomination & Remuneration Committee and to hold office for a period of 5 (five)consecutive years thereafter subject to approval of the shareholders.
Brief Profile of Shri Gaurav Dalmia
Gaurav Dalmia is the Chairman of Dalmia Group Holdings a holding company for businessand financial assets. It invests in private equity real estate public marketsstructured debt and fixed income.
He is an early investor in and a Board member of True North (formerly India ValueFund) a leading Indian private equity fund which manages approximately $3.5billion. Heis also the founder and Chairman of Landmark Holdings a real estate investment firmwhich has invested in more than 40 housing projects. He co-founded GTI a long terminvestment vehicle for India focused investments.
He is a Board member of Brookings India. He was selected as a Global Leader forTomorrow by the World Economic Forum in 2000. Gaurav Dalmia received an MBA with BetaGamma Sigma honors from Columbia Business School.
Shri Dalmia has long time experience in variegated fields activities with focus onmarketing and is very well spoken of as a professional of business acumen and resultoriented approaches and action.
MEETINGS OF THE BOARD
Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies financial businesses. The schedule of the Board/Committee meetingsto be held in the forthcoming quarter is circulated to the Directors in advance to enablethem to plan their schedule for effective participation in the meetings. Due to businessexigencies the Board has also been approving some proposals by circulation from time totime.
During the year under review six Board Meetings (besides an adjourned one) wereconvened and held and the interim gap between the meetings was as per the periodprescribed under the Companies Act 2013.
|S. No. ||Date of Board Meeting ||Board Strength ||No. of Directors Present |
|1 ||25th May 2017 ||12 ||11 |
|2 ||29th August 2017 ||12 ||10 |
|3 ||18th November 2017 ||12 ||9 |
|4 ||19th December 2017 ||11 ||10 |
|5 ||07th March 2018 (Original Meeting) ||10 ||8 |
|6 ||22nd March 2018 (Adjourned Meeting) ||10 ||8 |
|7 ||29th March 2018 ||10 ||9 |
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 March 31' 2018 the Board consists of ten members two of whom areExecutive or Whole-Time Director two are Non-Executive Directors including one womanDirector one Nominee Director and five are Independent Directors. The Board periodicallyevaluates the need for change in its composition and size.
The Policy of the Company on Director's appointment and remuneration including criteriafor determining positive attributes independence of Directors and other matters providedunder Section 178 (3) of the Companies Act 2013 is adopted by the Board. The remunerationpaid to the Directors is as per the provisions of Companies Act 2013 and the rulesthereunder. Annexure-IIA Policy for Selection of Directors and determiningDirector's Independence and Appointment and
Remuneration Policies are annexed as Annexure IIB.
Declaration by Independent Directors
The Company has received necessary declarations from each Independent Director underthe 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 (Listing Regulations & Disclosure Requirements) Regulations 2015(the "Listing Regulations").
Directors' Remuneration Policy and Criteria for matters under Section 178
As stipulated under Section 178 of the Act and based on the commendation 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 other matters in terms of Section 178of the Act are provided in the Corporate Governance Report.
Information on Board Meeting Procedure and attendance during the Financial Year 2017-18
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 ofCommittee and Board meetings held during the year along with attendance record of eachdirector has been disclosed 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.
TheCompanyiscommittedtobenchmarkitselfwithbestpractices and standards in all areasincluding Corporate Governance. To this end the Board has the analytical and functionalsupport of Committee of Directors Audit Committee Nomination & RemunerationCommittee & Corporate Social Responsibility Committee. The system brings insight &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.
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders Relationship Committee
4. Share Transfer & Allotment Committee
5. Corporate Social Responsibility Committee
6. IPO Committee
The details with respect to the composition terms of reference and number of meetingsheld etc of these Committees are given in the Report on Corporate Governance which formspart of this Annual Report.
Corporate Social Responsibility (CSR) Committee
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.sandhar.co.in.
The composition of the CSR Committee is covered under the Corporate Governance Reportwhich forms the part of the 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 an "Insider Trading Policy" Further the Company has also adopted a"Corporate Policy on Investor Relations"
The Insider Trading Policy and Corporate Policy on Investor
Relations are drawn up on the principle that the Company's directors and employees owea fiduciary duty amongst others to the shareholders of the Company to place the interestof shareholders above their own and conduct their personal securities transactions in amanner that does not give rise to any conflict of interest. These codes lay down themechanism for ensuring timely and adequate disclosure of Unpublished Price SensitiveInformation ("UPSI") to the investor community by the Company to enable themtake informed investment 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) your Directors state that:
(i) In the preparation of annual accounts for the year ended March 31' 2018 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed along with proper explanation relating to material departures;
(ii) 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 at March 31st 2018 and of the Profitof the Company for the year ended on that date;
(iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities and
(iv) The Directors have prepared the annual accounts on a going concern basis.
(v) The Directors have laid down Internal Financial Controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.
(vi) 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 for listed companies. Accordinglythe Board of Directors have from time to time framed and approved policies as required bythe Listing Regulations as well as under the Act. These policies are reviewed by the Boardat periodic intervals
Some of the key policies that have been adopted are as follows:
|S.No ||Name of Policy |
|1 ||Code of Conduct Policy |
|2 ||Related Party Transactions |
|3 ||Remuneration Policy |
|4 ||Whistle Blower Policy |
|5 ||Independent Director Policy |
|6 ||Policy on Material Subsidiaries |
|7 ||Insider Trading Policy |
|8 ||CSR Policy |
The Polices are available on the Company's website on the link www.sandhar.co.in/investor-relations/corporategovernance.
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 managementframework; and
Overseeing that all the risks that the Company faces such as strategicfinancial credit market liquidity property IT legal regulatory reputationalemployee and other risks have been identified and assessed and there is an adequate riskmanagement infrastructure 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.
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 year. The Policy on Vigil Mechanism andWhistle Blower Policy may be accessed on the Company's website www. sandhar.co.in
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 and thereafter they have beenre-appointed every year. In terms of Section 139 of the Act read with Rule 6 of theCompanies (Audit and Auditors) Rules 2014 pertaining to mandatory rotation of auditorsthe term of appointment of M/s. BSR & Co. LLP as Statutory Auditors of the Companyexpires at the conclusion of the 30th AGM and they are not eligible for reappointment.
The Auditors' Reports including the one on Internal Financial Controls does not carryany observation or infirmity Company's affairs.
Pursuant to the provisions of the Companies Act 2013 M/s. S. S. Gupta a firmof Company Secretaries in Practice had been appointed to undertake the Secretarial Auditwhose Audit Report is annexed vide Annexure - III. The Secretarial Audit Reportdoes not contain any qualification reservation or adverse remark.
The Board has appointed M/s. A.N. Satija & Co Cost Auditors for conducting theaudit of cost records of the Company for its business for the financial year 2018-19.
Internal Control Systems and Adequacy thereof
The Company's internal control systems as laid down are 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 up action thereon are reported to the Audit Committee. The AuditCommittee as aforesaid reviews adequacy and effectiveness of the Company's internalcontrol environment including in-house Commercial Audit headed by a senior professionaland monitors the implementation of audit recommendations including those relating tostrengthening and adequacy of the Company's Risk Management policies and systems.
Extract of Annual Return
Extract of Annual Return of the Company is annexed as Annexure- IV to thisReport.
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.
The Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
Neither the Managing Director nor the Whole-Time Director of the Company receive anyremuneration or commission from any of its subsidiaries. No significant or material orderswere passed or Courts or Tribunals which impact the going concern status and Company'soperations in future.
Conservation of Energy Technology Absorption Foreign Exchange Inflow and Outflow
The information pertaining to conservation of Energy Technology Absorption and ForeignExchange Inflow and Outflow pursuant to Section 134(3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 given in Annexure VII observationsandfollowwhich forms a part of this Report.
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 Whole-time Director Chief Financial Officer &Company Secretary and the commendable team work done by the executives staff and workersat all levels in various units at different locations.
Your Directors are grateful for the co-operation and guidance received from HSIIDCRIICO State Bank of India Citibank NA IndusInd Bank Yes Bank DBS Bank GE MoneyFinancial Services Ltd and ICICI Bank Ltd. HDFC Bank Limited TATA Capital FinancialServices Limited The Board specially wishes to place on record their sincerest gratitudefor the patronage it received from Hero MotoCorp Limited Honda Cars India Limited HondaMotorcycle and Scooters Limited TVS Motor Company Limited Eicher Motors and Tata MotorsLimited.
| || ||For and on behalf of the Board of Directors |
| || ||Sandhar Technologies Limited |
| ||Jayant Davar ||D. N. Davar |
| ||Co-Chairman & Managing Director ||Chairman |
|Dated the 26.05.2018 ||DIN: 00100801 ||DIN: 0002008 |
Compliance Certificate under Regulation 17(8) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015
Sandhar Technologies Limited
B-6/20 L.S.C. Safdarjung Enclave New Delhi-110029
Sub.: Compliance Certificate under Regulation 17(8) read with Part B of Schedule II tothe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015
This is to certify that for the financial year ended 31st March 2018:
1. We have reviewed the financial statements and the cash flow statement for theyear as aforesaid and to the best of our knowledge and belief:
a) These financial statements do not contain any materially untrue statement or omitany material fact or contain statements that might be misleading;
b) These statements together present a true and fair view of the Company's affairs andare in compliance with Indian Accounting Standards (Ind AS) applicable laws andregulations;
2. To the best of our knowledge and belief there are no transactions entered intoby the Company during the year which are fraudulent illegal or violative of theCompany's Code of Conduct for Directors and Employees;
3. We accept responsibility for establishing and maintaining internal controls forfinancial reporting and that we have evaluated the effectiveness of the internal controlsystems for financial reporting of the Company and there were no deficiencies in thedesign or operation of such internal controls; and
4. We have indicated to the Auditors and the Audit Committee:
a) That there were no significant changes in internal control over financialreporting during the year;
b) All significant changes in the accounting policy during the year if any have beendisclosed in the notes in the financial statements; and
c) There were no instances of fraud of which we have become aware of.
| ||FOR SANDHAR TECHNOLOGIES LIMITED |
|Jayant Davar ||Arvind Joshi |
|Managing Director ||Whole-Time Director Chief Financial Officer & Company Secretary |
DECLARATION BY MANAGING DIRECTOR
Sandhar Technologies Limited
B-6/20 L.S.C. Safdarjung Enclave
Sub: Declaration regarding compliance with the Company's Code of Conduct for Directorsand Employees. Ref.: Regulation 34(3) read with Part D of Schedule V to the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
I Jayant Davar Managing Director of Sandhar Technologies Limited hereby declare thatall the members of the Board of Directors and Senior Management have affirmed compliancewith the Code of Conduct for Directors and Employees of the Company
FOR SANDHAR TECHNOLOGIES LIMITED
PRACTICING COMPANY SECRETARY'S CERTIFICATE ON CORPORATE GOVERNANCE
Sandhar Technologies Limited
B-6/20 L.S.C. Safdarjung Enclave
We have examined the compliance of conditions of corporate governance by SandharTechnologies Limited (hereinafter referred "the Company") for the year ended on31st March 2018 as stipulated in relevant provisions of Securities and Exchange Board ofIndia (Listing Obligations and Disclosures requirements) Regulations 2015.
The compliance of conditions of corporate governance is the responsibility of themanagement. Our examination was limited to procedures and implementation thereof adoptedby the Company for ensuring the compliance of the conditions of the Corporate Governance.It is neither an audit nor an expression of opinion on the financial statements of theCompany.
In our opinion and to the best of our information and according to the explanationsgiven to us we certify that the Company has complied with the conditions of corporategovernance as stipulated in the above mentioned Listing Regulations as applicable. Wefurther state that such compliance is neither an assurance as to the future viability ofthe Company nor efficiency or effectiveness with which the management has conducted theaffairs of the Company
For S.S. Gupta Practicing Company Secretaries
FCS No. 936
CP No. 4907