The Directors of your Company take pleasure in presenting the 27th AnnualReport on the business and operations of the Company together with financial statementsfor the financial year ended 31st March 2019.
Operations - Financials
The summarised standalone and consolidated financial results of the Company for thefinancial year ended 31st March 2019 as compared to the previous year are asunder:
(Rs. in Lakhs)
| ||Standalone ||Consolidated |
|Corresponding figures for the previous year have been regrouped / recast wherever necessary to correspond to current year / year ||Financial Year ||Financial Year |
|Classification ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue and other Income (Net of Excise/GST) ||204326.80 ||168861.21 ||234219.41 ||195109.25 |
|EBITDA as per financial statement ||22760.82 ||19092.39 ||25784.23 ||21303.29 |
|Less: Financial Expenses ||(1745.91) ||(3811.87) ||(2394.62) ||(4317.43) |
|Profit before Exceptional Items Depreciation & Tax ||21014.91 ||15280.52 ||23389.61 ||16985.86 |
|Less: Depreciation ||(6669.80) ||(5512.79) ||(8088.12) ||(6752.10) |
|Profit Before Exceptional Items and Tax ||14345.11 ||9767.73 ||15301.49 ||10233.76 |
|Provisions || || || || |
|Less: Share in loss of jointly controlled entity ||- ||- ||(685.94) ||(531.62) |
|Less: Exceptional Items ||(148.05) ||- ||(74.08) ||- |
|Less: Tax Provisions ||(4664.36) ||(2995.08) ||(4956.23) ||(3140.21) |
|Net Profit After Tax Provisions ||9532.70 ||6772.65 ||9585.24 ||6561.93 |
|Add: Other Comprehensive Income/Expense ||(65.11) ||(57.58) ||3.53 ||46.45 |
|Less: Profit attributable to Non-controlling interest ||- ||- ||(67.70) ||(60.33) |
|Less: Appropriations: || || || || |
|Dividend ||(752.38) ||(1534.64) ||(778.62) ||(1540.70) |
|Corporate Tax on Dividend Distribution ||(144.80) ||(309.98) ||(144.80) ||(309.98) |
|Balance carried forward in Balance Sheet ||8570.41 ||4870.45 ||8597.65 ||4697.37 |
The automotive sector including the auto components manufacturers witnessed one ofthe most volatile period in the recent history on account of several macro-economicfactors as well as lack of consumer demand. The fiscal 2019 ended with modest growthtrajectory with the second half registering a lower rate of growth than the first half forthe first time post demonetisation. While commercial vehicles (CV) segments surgedimpressively by 17.55% and two wheelers registered modest growth of 6.86% it was thepassenger vehicles segment which faced the headwinds and registered a nominal growth of2.70%. Within the Two Wheelers segment after successive double digit growth for severalquarters Scooters saw a decline by (-) 0.27 percent whereas Motorcycles and Mopeds grewby 7.76 percent and 2.41 percent respectively in Fiscal 2019 over Fiscal 2018.Additionally the high base of last year impacted the volume growth. Robust growth in theCV segment was mainly driven by the demand in H1 due to new infrastructure projects andfleet replacement. But for the implementation of revised axle norms and tightenedliquidity this segment would have seen a much higher growth.
In the case of the Company the Consolidated Revenue from Operations & Other Incomestood at RS.234219.41 Lakhs vis-a-vis H198886.15 Lakhs in the previous year followingconcerted efforts at business promotion and controls aimed at cost economies. Theaforesaid Revenue numbers of the fiscal under review are not comparable with the previousyear as they are computed in accordance with IND-AS 115 which requires netting of theGoods
& Service Tax whereas Excise Duty form part of the Expenses in the previous yearupto 30th June 2017 prior to the date of GST implementation. Besides theturnover level as aforesaid EBITDA also registered good growth of 21.03% at Consolidatedlevel clocking RS.25784.23 Lakhs vis--vis RS.21303.29 Lakhs in the previous yearalong with other operating parameters. At standalone level the growth registered was19.21% as compared to previous year.
The Profit before Depreciation Exceptional Items and Tax at Consolidated level was37.70% higher at RS.23389.61 Lakhs in the fiscal year under review as against H16985.86Lakhs in the previous fiscal year; the Profit after tax was more profound and higher atRS.9585.24 Lakhs as against RS.6561.93 Lakhs in the previous fiscal followingexceptional items and lower finance costs registering a growth of 46.07%. At thestandalone level the Profit before Depreciation Exceptional Items and Tax was 37.53%higher than the previous fiscal and stood at Rs. 21014.91 Lakhs vis--vis H15280.52Lakhs. At the standalone level the Profit after tax for the fiscal under review stood atRS.9532.70 Lakhs vis--vis RS.6772.65 Lakhs registering a remarkable growth of 40.75%.The lower percentage of growth at Consolidated level is on account of share in losses ofjointly controlled entities which are at the startup stages.
Your Company did well in managing the cash flows well within the manageable limits withconservation strategies which ensured no fresh long term borrowing was needed. Lookingahead the challenges are one of business growth in current volatile scenario and that toowith growing margins: the overall outlook for the current year appears moderate with asingle digit growth on account of predictably better monsoons demand growth driven byOEMs (including plans of localisation)/rement market growth driven by regulatory changesand technological advancement as well as consumer preferences the only foreseeabledampener being rise in commodity prices crude oil prices political instability anddipped consumer sentiments. All possible steps are afoot to meet on the ground'challenges with focus on Research & Development holding over deferrable capitalexpenditure cutting down on operational expenses without sacrificing effectiveness anddeliverable capability and of all ensuring efficacious management of cash flow.Corporate strategies are planned to focus on creating value on the one hand and managingrisk and shaping up enterprise performance on the other.
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 05th November 2018 declared an interimdividend of Rs.1.25 per equity share as per particulars below:
|Date of Declaration ||Rate of Dividend ||Amount (in Rs. Lakhs) |
| || ||(Excluding Dividend distribution tax) |
|1. 05th November 2018 ||12.5% ||752.38 |
|(Interim Dividend) || || |
Further the Board in its Meeting held on 27th May 2019 recommended a finaldividend of Rs.1.25 per equity share for the Financial Year ended on 31st March2019 subject to the approval of shareholders at the ensuing Annual General Meeting of theCompany.
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 2019 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.7000.00 Lakhs divided into 680.00Lakhs Equity Shares of Rs.10/- (Rupees Ten only) each and 2.00 Lakhs Preference shares ofRs.100/- (Rupees Hundred only) each. The Paid up Capital of the Company is Rs.6019.07Lakhs divided into 601.91 lakhs 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 WhetronElectronics Private Limited Sandhar Daeshin Auto Systems Private Limited and KwangsungSandhar Technologies Private Limited have been incorporated. As at 31st March2019 the Company 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 Han sung Technologies Pvt. Ltd.
2. Indo Toolings Pvt. Ltd.
3. Sandhar ECCO Green Energy Pvt. Ltd.
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 (incorporated on 03rd May2018)
8. Sandhar Whetron Electronics Private Limited (incorporated on 19th July2018)
9. Kwangsung Sandhar Technologies Pvt. Ltd (incorporated on 06th February2019)
Pursuant to the provisions of Section 129 (3) of the Companies Act 2013 a statementcontaining the salient features of the financials statements of all the Joint Ventures/Subsidiaries in form AOC-1 is annexed hereto as Annexure-I and hence not repeatedhere 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. Further pursuant to the provisions of Section136 of the Companies Act 2013 these financial statements are also placed on theCompany's website www.sandhargroup.com. 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.
Capex and Liquidity
During the fiscal Company spent 11778.40 lakhs on Capex and Investments in JointVentures at standalone level. Despite this significant spent the Company was able to keepthe gross debt level stable during the year.
Cash and Cash Equivalents at the Consolidated level as at 31st March 2019was RS.370.33 Lakhs vis--vis RS.25499.01 Lakhs in the previous fiscal.
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 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.
During the year the Company has amended the Policy on materiality of related partytransactions and dealing with related party transactions in line with the requirements ofSEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018. Thekey change include inter-alia threshold limits for determining materiality. The amendedpolicy is available on our website at www.sandhargroup.com
Related party transactions were disclosed to the Board on regular basis. Details ofrelated party transactions may be referred to in Note 31 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 Daeshin Machinery Ind. Co. Ltd. South Korea: Company signed a 50:50joint venture with Daeshin Machinery Ind. Co. Ltd South Korea. A JV Company viz. SandharDaeshin Auto Systems Private Limited was incorporated under the Companies Act 2013 onMay 03 2018 in Gurugram Haryana. The main object of this joint venture company ismanufacturing and sale of gear shifters (auto/manual) parking brakes for four wheelersin India and abroad.
With Whetron Electronics Co. Ltd. Taiwan: Company signed a 50:50 jointventure with Whetron Electronics Co. Ltd. Taiwan. Sandhar Whetron Electronics PrivateLimited was incorporated under the Companies Act 2013 on July 19 2018 in GurugramHaryana. This joint venture company would primarily engaged in manufacturing and sale ofelectronic parts and accessories for automobiles segment like Rear Parking Sensors AutoParking Cameras Around View Camera Driver Monitoring System Blind Spot Detection DoorOpen Alert Lane Departure Alert DVRs Radars to the Indian vehicle OEMs.
With Kwangsung Corporation Limited South Korea: Company signed a jointventure agreement with Kwangsung Corporation Limited South Korea. Kwangsung SandharTechnologies Pvt Ltd. was incorporated under the Companies Act 2013 on Feb 06 2019 inGurugram Haryana. The main object of this joint venture company is manufacturing andselling inter-alia interior and exterior parts plastic moulded parts and accessories forthe passenger and utility vehicles segment which would include Sunvisor Cargo ScreenBlack-Out Tape Glove Box & several other Blow-moulded products in a phased wisemanner
The Company had also signed a notable Memorandum of Understanding ("MOU")during the Financial Year 2018-19:
|Name of the Strategic Partner ||Country ||Contract Products ||Nature of Agreement ||Date of Agreement |
|1. Winnercom Company Limited. ||South Korea ||Shark Finn Antenna Micro Pole Antenna ||MOU ||24th January 2019 |
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 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 proceeding apace.
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 embarked on an ambitious upgradation on Cloud based Oracle Fusiontechnology platform which is a complete end-to-end solution for digital expensemanagement giving employees easy data entry options and financial managers detailed spendinformation 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:
|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 |
| ||Shri Gaurav Dalmia (resigned |
| ||w.e.f. 11th December 2018) |
| ||Smt Archana Capoor (w.e.f. |
| ||05th November 2018) |
|Executive Director ||Shri Arvind Joshi |
All the Non executive Independent Directors are not disqualified to be appointedas such 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. Under the provisions of Section 149 150 152 160 of the Companies Act2013 be not liable having been appointed for 5 years to determination byretirement of Directors by rotation.
Reappointment of Shri Krishan Lal Chugh Shri Arvind Kapur Shri Mohan Lal Bhagat andShri Ravinder Nagpal as Independent Directors
Based on the commendations of Nomination and Remuneration Committee Shri Krishan LalChugh Shri Arvind Kapur Shri Mohan Lal Bhagat and Shri Ravinder Nagpal were reappointedas Independent Directors for a second term of five years effective 04th July 2019 to 03rdJuly 2024. The Board is of the opinion that the skills and knowledge of Shri Krishan LalChugh Shri Arvind Kapur Shri Mohan Lal Bhagat and Shri Ravinder Nagpal would be ofimmense help to the business interests of the Company. Proposal for their re-appointmentas Independent Directors is being placed before the shareholders for approval at theensuing Annual General Meeting.
Resignation of Shri Gaurav Dalmia
During the year under review Shri Gaurav Dalmia resigned from directorship of theCompany on the 11th December 2018 due to unavoidable circumstances.
Appointment of Smt Archana Capoor Additional Non-Executive and Independent Director ofthe 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 05th November2018 appointed Smt Archana Capoor as additional Non-Executive Independent Director tohold office from 05th November 2018 till the ensuing Annual General Meeting ofthe Company based on the commendation of the Nomination & Remuneration Committee andto hold office for a period of 5 (five) consecutive years thereafter subject to approvalof the shareholders.
Brief Profile of Smt. Archana Capoor
Smt Archana Capoor aged about 61 years holds a masters' degree in BusinessAdministration with specialization in Finance and Market Research University ofAllahabad UP (India). She has a versatile profile in different sectors such as TourismBanking & Finance and Social. This apart she is an Independent Board Director/memberof 6 listed Companies and 3 Private Companies since 2014 also a member secretary andproject director of an NGO India Trust or Rural heritage and culture (ITRHD). She hasover 34 years of work experience in Finance Legal & International Business.
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 27thAGM.
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 held and theinterim gap between the meetings was as per the period prescribed under the Companies Act2013.
|Date of Board Meeting ||Board Strength ||No. of Directors Present |
|1. 26th May 2018 ||10 ||10 |
|2. 04th August 2018 ||10 ||09 |
|3. 05th November 2018 ||11 ||10 |
|4. 02nd February 2019 ||10 ||09 |
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 31st March 2019 the Board consists of ten members two ofwhom are Executive or Whole-Time Directors two are Non-Executive Directors including onewoman Director and six are Independent Directors. The Board periodically evaluates theneed 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 thereunder. Annexure-IIA Policy for Selection of Directors anddetermining Director's Independence and Appointment and Remuneration Policies are annexedas Annexure IIB.
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")
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 2018-19
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 may bedecided 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.
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.sandhargroup.com.
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 a "Insider Trading Policy" Further the Company has alsoadopted a "Corporate Policy on Investor Relations"
The Company has amended the Insider Trading Policy and Corporate Policy on InvestorRelations in line with the SEBI (Prohibition of Insider Trading) (Amendment) Regulations2018. This policy includes Policy for Determination of Legitimate Purposes and Policy forprocedure of Inquiry in case of Leak of Unpublished Price Sensitive Information("UPSI"). The Company has automated the declarations and disclosures toidentified designated persons and the Board reviews the policy on need basis. The amendedpolicy is available on our website at www. sandhargroup.com.
The Insider Trading Policy and Corporate Policy on Investor Relations aredrawn up on the principle that the Company's directors and employees owe a fiduciary dutyamongst others to the shareholders of the Company to place the interest of shareholdersabove their own and conduct their personal securities transactions in a manner that doesnot give 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) your Directors state that:
1. In the preparation of annual accounts for the year ended 31st March2019 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been followed along with proper explanation relating to materialdepartures;
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 at 31st March 2019 and ofthe Profit 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.
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:
|Name of Policy |
|1. Code of Conduct Policy |
|2. Determination of Materiality and Dealing with Related |
|Party Transactions |
|3. Remuneration Policy |
|4. Whistle Blower Policy |
|5. Independent Director Policy |
|6. Policy on Material Subsidiaries |
|7. Insider Trading Policy & Corporate Policy on Investor Relations |
|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 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.
During the year under review ICRA Ltd a credit rating agency registered with SEBI hadimproved the long term rating ICRA AA-/ stable from ICRA A+ and reaffirmed ICRA A1+ fromICRA A1 for short term rating. India Rating & Research a credit rating agencyregistered with SEBI had improved the long term rating IND AA-/ stable from IND A+ andreaffirmed IND A1+ from IND A1 for short term rating.
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 websitewww.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 year 2018-2019 no individual wasdenied access to the Audit Committee for reporting concerns if any. The Whistle BlowerPolicy was amended in line with SEBI (Prohibition of Insider Trading) (Amendment)Regulations 2018 ("the insider trading regulations") enabling employees toreport any violations under the insider trading regulations and leak of UnpublishedPrice-Sensitive Information (UPSI). The amended policy is available on the Company'swebsite at www.sandhargroup.com
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 theproviso to Section 139(1) of the Act the said appointment was subject to ratification byMembers at every AGM held during the tenure of their appointment. The proviso to Section139(1) of the Act has been omitted by the Companies (Amendment) Act 2017 with effect from7th May 2018; accordingly the requirement of ratifying appointment ofstatutory auditors at every annual general meeting during their tenure of appointmenthas been dispensed with.
The Auditors' Reports including the one on Internal Financial Controls does not carryany observation or infirmity in the Company's affairs.
Pursuant to the provisions of the Companies Act 2013 M/s. K.K. Sachdeva &Associates a firm of Company Secretaries in Practice had been appointed to undertake theSecretarial Audit whose Audit Report is annexed vide Annexure III. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
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.
During the year under review the Company has complied with the provisions of theapplicable Secretarial Standards issued by Institute of Companies Secretaries of India.The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively
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 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 thisReport.
Particulars of Employees and related disclosures
Disclosure of remuneration and other details as required under Section 197(12) of theAct read with Rules 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are annexed herewith as Annexure V.
A statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided as separate annexure forming part of thisReport. In terms of Section 136 of the Act the Annual Report and financial statements arebeing sent to the Members excluding the aforesaid annexure. The said annexure is availablefor inspection at the registered office of the Company during business hours and will bemade available to any shareholder on request.
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 which forms apart 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 CitibankN.A Yes Bank Limited DBS Bank Limited State Bank of India and HDFC Bank Limited. TheBoard specially 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 Eicher Motors and Tata Motors Limited.
| || ||For and on behalf of the Board of Directors |
| || ||Sandhar Technologies Limited |
| ||Jayant Davar ||D. N. Davar |
| ||Co-Chairman & ||Chairman |
|Dated: 27 May 2019 ||Managing Director ||DIN: 0002008 |
|Place: Gurgaon ||DIN: 00100801 || |