To the Members of SKey a Industries Ltd ground of reduced realizations on accountof lowering of crude oil
The Directors hereby presents their Twenty Seventh Annual report together prices andcontributing to whopping Earnings Per Share at `28.24 on with the Audited FinancialStatements for the Financial Year (FY) 2016-17 enhance capital compared to `24.35 perShare (PY).
|Financial Results ||Year Ended 31-Mar-17 ||Year Ended 31-Mar-16 ||% Change |
| || || || |
|Total Revenue ||30945.09 ||27711.79 ||+12% |
|Profit Before Interest Depreciation and Exceptional items (EBIDTA) ||7473.63 ||5009.27 ||49% |
|Depreciation and Amortization ||1388.96 ||1093.21 || |
|Finance Cost ||1412.58 ||1271.94 || |
|Profit Before Tax ||4672.09 ||2644.12 ||+77% |
|Tax ||465.86 ||34.23 || |
|Profit After Tax ||4206.23 ||2678.35 ||+57% |
|Earnings per Share (`) ||28.24 ||24.35 ||+16% |
|Book alue per share ( `) ||145.56 ||80.99 ||+80% |
Your Company delivered a strong performance with steady growth in profitability whilerecording progress on several strategic initiatives including expansion plans even amidstextremely challenging backdrop for the chemical industry in wake of sharp decline in theglobal crude oil prices and related petrochemical intermediates and slow recovery in Keyemerging Markets. The Financial Year
(FY) 2016-17 was a challenging year on multiple fronts and your
Company has delivered a resilient performance indicating robustness of the businessmodel. The emphasis on quality and sustainability of operations widening of portfolio ofproducts active customer engagement focuson profitable products and a healthy mix of enduser industries and markets served has enabled it to emerge stronger and better positionedto capture the opportunities ahead. Against this backdrop and in light of the severalchallenges faced from the wave of regional protectionism spread across the developed worldand increased pitch for supporting local production to preserve jobs the growth in exportmarkets has been muted. These were coupled with BREIT and instability in EU region. Thelingering effects of the depressed crude oil prices and resultant impact on petrochemicalintermediates also continued to exert pressure on growth although re-entry of Iran as aglobal crude supplier improved the availability of higher grades of crudes in the mirageof reversing the waning prices of commodities.
Despite these head winds your Company clocked double-digit growth of 12% (Y-o-Y) inrevenues which stood at `30945.09 Lakhs compared to PY `27711.79 Lakhs despite declinein crude oil prices and related petrochemical intermediates considerably reducingrealisation of all products. Amplified operating margins and strong growth in volumes wasequipoise by lower realisation steering to temperate growth in absolute revenues.Moderniation and Upgradation initiatives taken by your Company to improve operatingefficiency abetted 49% growth in Earnings (Profit) Before Interest Depreciation Tax& Amortiation (EBIDTA) to `7474 Lakhs from `5009 Lakhs (PY). The traction from newlyintroduced products has been instrumental in healthy trajectory in the SpecialityChemicals segment resulting in commendable growth in volumes and higher contribution inthe overall product mix aggressive marketing. Your company leveraged its strength byswitching and enhancing the volumes of the Value added products to mitigate the impactfrom down cycle from the up stream product categories. Going ahead your company willcontinue to widen and deepen its market presence.
Profit Before Tax stood at`4672.09 Lakhs whereas Profit after Tax was at `4206.23Lakhs up 77% and 57% respectively (Y-o-Y) breaking the
For the year under review the Directors have recommended a dividend of `1 per share(10%) on the Ordinary Shares of the Company (previous year `1 per share). If declared bythe members at the ensuing Annual General meeting (AGM) the total dividend out go duringFY 2017-18 would amount to `244.93 Lakhs including Dividend tax (previous year `132.39Lakhs including Dividend Tax).
During the period under review your Company has issued and allotted 9350000 EquityShares and 4250000 convertible warrants - of face value of `10/- each and at a premiumof `170/- per share and warrant respectively in accordance with the provisions of Section42 and 62 of the Companies Act 2013 (the Act). Post issue of the Equity Shares theissued subscribed and paid up capital of your Company has increased from `11.00 Crores to`20.35 Crores and on conversion of warrants to Equity it shall be further expanded to`24.60 Crores
Management Discussion & Analysis and Corporate Governance
Pursuant to Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 (Listing Regulations) Management Discussion & Analysis and theCorporate Governance
Report are presented in a separate section forming part of the Annual Report.
Capacity ExpansionNewProects Diversification &
During the year in retrospect your Company has successfully modernisation andupgradation Project of its Nitro Chlorobenzene manufacturing plant which has resulted inIncrease in Raw material efficiency Improvement in product quality Reduction inUtilities consumption increase in ease of operation and more over increase in Capacity ofNitro Chlorobenzenes from 15000 TPA to 33000 TPA.
This expansion will further enhance the profitability by contributing to the Top &Bottom line.
Last year your Company had announced setting-up of a Greenfield project to beself-reliant for most of its Raw materials Reduce Cost of Energy Diversify intoSpecialised High 9alue & High Margin products 9alue addition to By-Products byreusing the same for manufacturing of high margin products and expansion in capacity ofits captive use products. Your Company has successfully achieved the financial closure forits capital Outlay of `73458 Lacs and have incurred
`38871 Lacs until June 30th 2017. The Project once commissioned shall phoenix up theTop Line by `1000 Crores and Bottom-line by
`300 Crores of the Company and shall make it achieve leading and dominant position inSpeciality Chemicals globally for all its products. The combined Capacity of the variousProduct Plants under set-up shall be 512550 MTPA of which 48% of the Capacity shall beutilised for Captive consumption to produce High 9alue and High Margin
Credit Rating agencies have reaffirmed the ratings to A- (A Minus) ratings for the longterm loan facilities availed by the company and
A2 (A Two) for short-term facilities enjoyed by the Company despite the ongoingGreenfield Expansion Project.
Your Company obKey s to austere guiding principles to efficiently manage its workingcapital level and maintain its debt at a reasonable level. The long term debt of yourCompany increased during the year due to borrowing of Long Term Loans for UpgradationModernisation and Set-up of additional facility of Nitro Chlorobenenes expanding yourCompany's footprint from 15000 TPA to 33000 TPA which resulted in modest increase inInterest cost on additional term borrowings.
Depreciation increased due to capitalisation of the Upgraded and Modernised facilitydespite this your Company's enhanced financials have tractioned advancement of financialparameters. Your Company endures its emphasis to effectively manage its cash flows throughprudent regulators to reduce the overall interest costs. Robust Cash flow Repayment ofTerm loan and Effective management of working capital have leveraged Debt/Equity ratio at0.29x with a Net Debt/ EBITDA of 1.30x propounding much more financial Upcoming Projects.The Overall Capital outlay of the Greenfield Expansion Project is `73458 Lacs which isbeing funded through a combination of Debt and Equity. Your Company has achieved thefinancial closure for the said Project on March 25 2017.
Reserves & Surplus
The Reserves at the beginning of the year were `7809.10 Lakhs and the Reserves at theend of the year are `27514.14 Lakhs. During the period under review no amount istransferred to General Reserves.
The Company has neither accepted nor renewed any deposits during the year under review.The Company does not have any deposits which are not in compliance with the requirementsof Chapter V of the Act.
The Company's Information Technology (IT) infrastructureis continuously reviewed andrenewed in line with the development in technology and its requirements.
Directors and Key Managerial Personnel Directors
In Accordance with the provision of the Act and the Articles of
Association of the Company Mr. Asit umar Bhowmik is liable to retire by rotation andbeing eligible offered himself for reappointment. The Company has received declarationsfrom all the Independent
Directors of the Company confirming that thKey meet the criteria of independence asprescribed both under the Section 149(6) of the Act and Regulation 16 of the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 (Listing Regulations). In theopinion of the Board thKey fulfil the conditions of independence as specified independentof the management.
The brief resume and other details relating to the Director who is proposed to beappointed / re-appointed as required to be disclosed under Regulation 36(3) of ListingRegulations is mentioned in the explanatory Statement annexed to the Notice of 27th AnnualGeneral Meeting.
Key Managerial Personnel (KMP)
Mr. Ashok G Rajani Managing Director and Ms. Manisha Solanki Company Secretary arethe MP as per the definition under Section
2(51) and Section 203 of the Act.
The Independent Directors are not liable to retire by rotation in terms of Section 149(13) of the Act. In accordance with Section 149 (7) of the Act each independent Directorhas given a written declaration to the Company confirming that he / she meets thecriteria of independence as mentioned under Section 149 (6) of the Act and the ListingRegulations.
Performance evaluation of Board its committees and of
The Board recognise the importance of reviewing and improving upon its performance. Forthis purpose thKey discuss the effectiveness of the functioning of the Chairman ExecutiveDirectors and other
Directors and to agree ways in which performance can be further improved looking at thelikely needs in future.
A structured questionnaire was prepared after taking into consideration various aspectof the Board's functioning composition of the Board and its committees cultureexecution and performance of specific duties obligation and governance.
The Performance evaluation of the Chairman and Non-independent
Directors was carried out by the Independent Directors. The Board of Directorsexpressed their satisfaction with evaluation process of flexibility for Board.
Familiarization Programme for Independent Directors
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industries.
The Details of programmes for familiarisation of Independent
Directors with the Company their roles rights responsibilities in the Company andrelated matters are put up on the website of the Company under the link http://www.sKeya.in/wp-content/ uploads/2011/06/Familiarization-Program_for-Independent-Directors-SKeya.pdf
The Company has adopted governance guidelines on Board effectiveness. The governanceguidelines cover aspects related to composition and role of the Board Chairman andDirectors Board diversity definition of independence Directors' term retirement ageand committees of the Board. It also covers aspects relating to nomination appointmentinduction and development of Directors Director Remuneration Code of Conduct BoardEffectiveness Review and mandates of Board committees.
Procedure for Nomination and Appointment of Directors
The Nomination and Remuneration (NRC) is responsible for developing competencyrequirements for the Board based on the industry and strategy of the Company. The Boardcomposition analysis reflects in-depth understanding of the Company including itsstrategies environment operations financial conditions and compliance requirements.
NRC conducts a gap analysis to refresh the Board on a periodic basis including eachtime a Director's appointment or re-appointment isin the Act and the Rules framed thereunder and are required. The Committee is also responsible for reviewing the profiles ofpotential candidates vis--vis the required competencies and meeting potentialcandidates prior to making recommendations of their nomination to the Board. At the timeof appointment specific requirements for the position including expert knowledgeexpected is communicated to the appointee.
Policy on Directors Appointment and Remuneration Including Qualifications PositiveAttributes and criteria for determining
Independence of a director
The Company has in place Remuneration Policy for the Directors MP and other employeespursuant to the provisions of the Act and the listing Regulations which is set out inAnnexure I which forms part of the Board' Report.
Meetings of the Board
The details of the number of meetings of the Board of Directors held during theFinancial Year 2016-17 forms part of the Corporate Governance Report.
Employee Stock Option
The Company has not issued any Employee Stock Options during the period under review.
Directors' Responsibility Statement
Based on framework of the internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and controls external consultant(s) including audit of internalfinancial over financial reporting by the statutory and the reviews performed byManagement and the relevant Board Committees including the Audit & Risk ManagementCommittee the Board is of the Opinion that the Company's internal financial controls wereadequate and effective during the financialyear 2016-17. Accordingly pursuant to Section134(5) of the Act the Board of Directors based on the representations received from theOperating Management and to the best of their knowledge and ability confirms
a. In the preparation of the Annual accounts for the financial year ended March 312017 the applicable accounting standards have been followed and that there are nomaterial departures;
b. The Directors have in selection of the accounting policies consulted theStatutory Auditors and have applied their recommendations consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at March
31 2017 and of the profitof the Company for the year ended on that date;
c. ThKey have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions the Act for safe guarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d. ThKey have prepared annual accounts on a going concern basis.
' e. ThKey have laid down internal financial controls to be followed by theCompany and that such internal financial adequate and are operating effectively; and
f. Proper systemhas been devised to ensure compliance with provisions of allapplicable laws and that such systems are adequate and operating effectively.
Contracts & Arrangements with Related Parties
All related party transactions entered into were on an arm's length basis and in theordinary course of business and were in compliance with the applicable provisions of theAct and the Listing Regulations.
Further there were no transactions with related parties which qualify as materialtransactions under the Listing Regulations. The policy on materiality of related partytransactions and dealing with related party transactions as approved by the Board may beaccessed on company's website at the link http://www.sKey a.in/wp-content/uploads/2011/06/Related-Party-Transactions-Policy-SKey a.pdf
The details of the transactions with related parties are provided in the accompanyingfinancial statements.
Corporate Social Responsibility (CSR)
The CSR committee has formulated and recommended to the
Board a CSR Policy indicating the activities to be undertaken by the Company asapproved by the Board.
The CSR activities are being undertaken by your Company through various Implementingagency with area specific need and focus to reach out to marginalised and deprived sectionof the society and bridge the gap between the haves and have nots by promotion of buildinghealth livelihood and education. The interventions of some implementing agency werespread across India. During FY 2016-17 your Company has spent `30.75 Lacs on CSRactivities against the requirement of `30.69 Lacs being 2% of average of the net profitsfor the preceding three years.
The Company's overall CSR initiative focuses on the following sectors and issues: Poverty alleviation livelihood enhancement and infrastructure support includingprograms on agriculture growth animal husbandry development and promotion of socialenterprises. Education and vocational skill development Environmentsustainability by investing in bio-diversity natural resource management awareness andenvironment education and mitigation of climate change impact. Health Carenutrition sanitation and safe drinking water. Women empowerment Responding toany disasters depending upon where thKey occur and its ability to respond tomeaningfully.
The CSR Policy is available on the Company's website. The Annual that: Report on CSRactivities is enclosed as Annexure - II
Material changes and commitments if any affecting the financial position of theCompany
No material changes and commitments affecting the financial position of the Companyoccurred between the ends of the financial year to which this financial statement relateon the date of this report.
Significant and material orders
No significant and material Orders were passed by the Regulators / Courts / Tribunalsimpacting the Company's going concern status and future Operations.
Internal Financial Control
Internal Financial control systems of the Company are commensurate with its sie and thenature of its operations these have been designed to provide reasonable assurance withregard to recording and providing reliable financial and operational informationcomplying with applicable accounting standards and relevant status safe guarding assetsfrom unauthorised use executing transactions are with proper authorisation an ensuringcompliance of corporate policies. The Company has well defined delegation of power withauthority limits for approving revenue as well as expenditure both capital and revenue.The Company uses an established ERP System to record day to day transaction for accountingand financial
The Company's internal audit function monitors and assesses the adequacy andeffectiveness of the internal financial control. The audit
Committee deliberated with the members of management considered the systems as laiddown and met the internal auditors and statutory auditors to ascertain inter alia theirviews on the internal financial control systems. The Audit Committee satisfied andeffectiveness of the internal financial control system as laid down and kept the Board ofDirectors informed.
Auditors Statutory Auditors
As per the provisions of Section 139 of the Act read with theCompanies(AuditandAuditors)Rules2014theterms officeof M/s. Jagiwala and Co.Chartered Accountants (firm Registration Number 131184W) as a Statutory Auditor of theCompany will conclude from the close of the forth coming AGM of the Company.
The Board of Directors places on record its appreciation for the services rendered bythem as the Statutory Auditors of the Company.
Subject to the approval of the members the Board of Directors of the Company hasrecommended the appointment of M/s. Anil
Chauhan & Associates Chartered Accountants Mumbai (ICAI Firm Registration No.140786W) as the Statutory Auditors of the Company pursuant to Section 139 of the Act. efrom certificat The Company has received written consent and M/s. Anil Chauhan& Associates confirming that thKey satisfy the criteria provided under Section 141 ofthe Act and that the appointment if made shall be in accordance with the applicableprovisions of the Act and rules framed thereunder.
The Report given by M/s. Jagiwala and Co. Chartered Accountants on the financialstatement of the Company for FY 2016-17 is a part of the Annual Report. There has been noqualification or adverse remarks in their report.
The Board has appointed M/s. Hemant Shah & Associates Cost
Accountants as the Cost Auditor for the Financial Year 2016-17.
M/s. Hemant Shah & Associates have been appointed as Cost
Auditor of the Company for the Financial Year 2017-18 and approval of members is beingsought for ratification of
In terms of Section 204 of the Act and Rules made there under M/s. Dipali apadia &Associates Practising Company Secretary have been appointed as Secretarial Auditor of theCompany. The Report of the Secretarial Auditors is enclosed as Annexure III to thisreport. With respect to remark on CFO your Board would like to inform that this is crucialposition which requires proper due diligence before appointing anyone on this position.There has been a delay in appointing CFO. Interviews are in process and the Company shallappoint CFO very soon. At present responsibility of CFO is carried out by the ManagingDirector of the Company.
Audit & Risk Management Committee
The Company has an Audit & Risk Management committee comprising Mr. Anand TaggarsiMr. Ashok G Rajani and Ms. alpana Tirpude. The Board has accepted the recommendationsmade by the Audit & Risk Management Committee from time to time. Details about themeetings held during the year is provided in the Corporate Governance Report.
Risk management policy of the Company promotes a proactive approach in reportingevaluating and resolving risks associated with the business. Mechanisms for identificationand prioritisation of risks include risk survKey business risk environment scanning andinputs from the Materiality Assessment Report and focused discussions in Risk Managementworkshops.
Identifiedrisks are used as one of the Key inputs for the development of strategy andbusiness plan. The respective risk owner selects a series of actions to align risks withthe Company's risk appetite and risk tolerance levels to reduce the potential impact ofthe risk should it occur and/or to reduce the expected frequency of its occurrence.Mitigation plans are finalised owners are identified and progress of mitigation actionsare monitored and reviewed. The risk assessment update is provided to the Audit & RiskManagement Committee (ARMC) on periodical basis. ARMC is appointed by the Board andcomprises Directors and executives from the Company and is chaired by an IndependentDirector. ARMC assists the Board of Directors in overseeing the Company's risk managementprocesses and controls.
Whistle Blower Policy and igil Mechanism
In accordance with the provisions of Section 177 (9) of the Act and Regulation 22 ofthe Listing Regulations your Company has a vigil mechanism which has been adopted in theform of Whistle
Blower Policy. The policy has been formulated with a view to provide a mechanism forDirectors and employees of the Company to report genuine concerns. The Whistle BlowerPolicy also provides for adequate safeguards against victimization of persons who usevigil mechanism and for direct access to the Chairman of the Audit
Committee in appropriate or exceptional cases. The Whistle Blower
Policy is uploaded on the website of Company i.e. www.sKey a.in.
Share Registrar and Transfer Agents
The Company's Registrar & Transfer agents for shares are M/s. Universal CapitalSecurities Private Limited (RTA). RTA is duly registered with SEBI. The contact details ofRTA are mentioned in the
Report of Corporate Governance.
Investors are requested to address their queries if any to RTA however in case ofdifficulties as always thKey are welcome to contact the Company's InvestorServices Department the contact particulars of which are contained in the Report ofCorporate Governance.
Consolidated Financial Statements
There being no subsidiaries and associates companies disclosure requirements pursuantto Regulation 33 & 34 of the Listing
Regulation are not applicable. their remuneration.
Subsidiaries oint entures Associate Companies
As on March 31 2017 the Company did not have any subsidiary join venture orassociate company. Since the Company doesn't have any subsidiary a policy on materialsubsidiary has not been formulated.
Particulars of Loans Guarantees or Investments under Section 1 of the Companies Act1 during F 1-1
During the period under review the Company has not given any loans guarantees or Madeinvestments under Section 186 of the Companies Act 2013
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The Particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed pursuant to the provisions ofSection 134 of the Act read with Companies (Accounts) Rules 2014 are provided inAnnexure I to this Report.
Research and Development
The Company recognies the need to have well equipped R & D
Facilities to meet customer requirements and developing cutting edge products. Detailedreport on Research and Development carried out by your Company is given as an Annexure Iof this report.
Human Resources Management
Your Company considers human resources as the main assets of the
Company as it believes that Human resources play a very critical role in its growth.Your Company continuously focus on training requirements of its employee on a continuingbasis. With a view to increase the productivity the management periodically organisesvarious training programmes and lectures which boosts and motives the employee to givetheir best to the organisation.
During the year under review your Company's industrial relations at all manufacturingand other locations have remained amicable. All these efforts are concentrated onattracting and retaining the best talent in the industry as people are at the centre ofyour Company's growth.
Particulars of Employees
The Information required under Section 197 of the Act read with
Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 are given as Annexure to this
None of the Company's Employees were covered by the disclosure requirement pursuant tothe provisions of Section 197 of the Companies Act 2013 read with Rules 5 (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules
Statement of Companys Affairs
The state of Company's affairs is given under the heading Five
Magnificence Growth Years' and various other headings in this Report and in theManagement Discussion and Analysis Report annexed to the Directors' Report.
All the insurable interests of your Company including inventories buildings plant andmachinery are adequately insured against risk of fire and other risks.
Environment Health and Safety
Employee's Health Safety and Environmental protection are core business values withinyour Company. The Company's Management believes that environment and safety of all itsstakeholders including those who associated with the projects sites and manufacturingfacilities is of prime importance. We believe that it's our responsibility to protect itsemployees property and environment in which it operates. As your Company deals inChemicals it has to make sure that the highest degree of safety measures is maintained inorder to avoid any risk at the workplace. It strives towards excellence and aligns itsgrowth path to make tomorrow safer cleaner greener and more sustainable. Your Company iscommitted to maintain its operations and workplace free from incidents and significantrisk to the health and safety of its stakeholders through improved engineering practicesstrong channels of communication safety awareness robust checking systems and soundtraining practices. Your Company has well-equipped Occupational Health Centres at all itsmanufacturing locations to monitor health of employees on regular basis. It also monitorsemployees for any indications of lifestyle or work-style related diseases and providescounselling. Your Company regularly monitors the occupational health of employees workingin designated haardous areas with respect to exposure to hazardous chemicals andprocesses.
The employees are continuously educated and trained to improve their awareness andskills. Environment Health and Safety (EHS) targets assigned to each division to reduceresource consumption and are regularly monitored through an EHS scorecard which isreviewed at monthly business review meetings. All the manufacturing locations of yourCompany have a well-defined Environment
Management System. It follows well mapped procedure in order to select projects assessimpacts on society and environment and mitigate any adverse impacts. EHS initiatives havebeen strengthened further due to formation of a core group for exchange of knowledge andstandardising of systems and procedures. This core group also assess the Plants' Safetyand Environment protection improvement activities. Periodic audits were conducted by thecore group to ensure compliance with the statutory requirements.
Special emphasis is given on resource conservation and process innovations to convertwaste streams into saleable products and minimise use of water in processing. Your Companyproactively fulfils the environmental requirements of customers by delivering productsthat match international standards. Your Company continues to focus on proper treatment ofeffluents and reduction of pollution as a part of its Green and ecofriendly initiatives.This has made your Company a safe and healthy place to work.
Your Company is signatory to the Responsible Care' initiatives and Responsiblecare logo holding organisation. Management System at all manufacturing plants andcorporate office have been assessed and are equivalent to ISO 9001 ISO 14001 & OHSAS18001. All raw materials and products within supply chain framework of your
Company are transported in a secure manner for the safety of its customers carrierssuppliers distributors and contractors. Your
Company takes utmost care during transportation and ensures that it complies with allthe regulations.
All safety statutory requirements like licenses mock drills under emergency conditionsand testing of manufacturing equipments etc. are being complied with. Requirements ofenvironmental acts and regulations are complied with. Effluent treatment of waste streamsand suppression of fugitive emissions through sprinklers is also carried out effectively.Massive tree plantation has been undertaken to improve the greenery all around the plant.
Electronic copies of the Annual Report and Notice of the General Meeting are sent toall the Members whose email addresses are registered with the Company for communicationpurposes. For members who have not registered their email addresses physical copies ofthe Notice and Annual Report are sent in the permitted mode. Members requiring physicalcopies can send a request to the Company.
Prevention of Sexual Harassment at Workplace
The Company is conscious about gender diversity and promotes equal opportunityemployment to have a work where employees hold their head high with dignity.
You Company has zero tolerance towards any act which may fall under the ambit of SexualHarassment at work place and has adopted a Policy on prevention prohibition and redressalof sexual harassment at work place in line with the provisions of Sexual Harassment ofWomen at workplace (Prevention Prohibition and Redressal) Act
2013 and the Rules.
The following is the summary of the Complaints received and disposed-off during thefinancial year 2016-17:
No. of Complaints received: NIL No. of Complaints Disposed-off: NIL
Extract of the Annual Return
Pursuant to Section 92(3) of the Act and Rules 12(1) of the Companies (Management andAdministration) Rules 2014 extract of annual return in form MGT-9 is enclosed as AnnexureI to this Report.
The Notes forming part of the Accounts are self-explanatory or to the extentnecessary have been dealt with in the preceding paragraphs of the Report.
Your Company endures to trek forward with robust growth and increase in Profitabilitytractioned by the newly introduced forward integrated products. The road ahead appearsencouraging as your Company foresees several opportunities in the Indian chemicals space.Your Company is confident of its prospects as the focus of strategies and efforts of thelast few years has been to diversify and strengthen the business model and allow yourCompany to further elevate the growth trajectory by strengthening all of the growthengines.
Buoyance by an Optimistic economic landscape in Speciality Chemicals your Company isconfident of delivering value-led growth through its customised Speciality Chemicalsportfolio steered by customer acceptance resulting in increased volumes gearing increasecapacity utilisation. Your Company will continue to accelerate its momentum given therelative stability in the global prices of crude oil improved sentiment in both domesticand international markets and its foray into diversified speciality chemical segmentsfurther improving its operational efficiency along with cost
Specialty chemical industry is a knowledge driven industry. In
India it has been growing rapidly at 1.2-1.3x of GDP growth rate. Domestic demand ofspecialty chemicals is expected to follow an accelerated growth path driven by the stronggrowth outlook for end use industries. This along with increased adoption of specialtychemicals and newer usages shall propel the growth further which is evident from thecontribution of 99% of the said segment to the total revenue of the Company.
Your Directors wish to express their gratitude and appreciation to all of the Company'semployees at all its locations who through their competence tremendous personal effortsas well as their collective dedication have contributed to the Company's performance.
Your Directors acknowledge with sincere gratitude the co-operation and assistanceextended by the Banks Financial Institutions Suppliers 9endors Customers and all theCentral and State Government authorities and all other Business associates.
The Board also takes this opportunity to express its deep gratitude for the continuedco-operation and support received from its valued shareholders.
|For & on behalf of the Board of Directors |
|ASHO G RA-ANI |
|Chairman & Managing Director |
|Mumbai August 26 2017 |
Criteria for determining Qualifications Positive attributes and NominationRemuneration and Evaluation Policy for Directors Key Managerial Personnel and Others
Criteria for determining ualifications positive attributes and independence ofDirectors
The Nomination and Remuneration Committee (NRC)has formulated the criteria fordetermining independence of Directors in termsof provisions of the Companies
Act 2013 (the Act) and SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 (Listing Regulations).
Independence: A Director will be considered as an Independent Director' if he/ she met with the criteriafor Independent Director' as laid down in the Act andtheListing Regulations.
Qualifications: A transparent Board nomination process is in place that encouragesdiversity of thought experience knowledge perspective age and gender. It is alsoensured that the Board has an appropriate blend of functional andindustry expertise. Whilerecommending the appointmentof a Director the NRC considers the manner in whichthefunction and domain expertise of the individual willcontribute to the overall skill-domainmix of the Board.
Positive Attributes: In addition to the duties as prescribed under the
Act the Directors on the Board of the Company are also expected to demonstrate highstandards of ethical behavior strong interpersonal and communication skills and soundnessof judgment. Independent
Directorsare also expected to abide by the Code for Independent
Directors' as outlined in Schedule IV to the Act.
A Nomination Remuneration and Evaluation Policy for
Directors Key Managerial Personnel and Others
The Nomination Remuneration and Evaluation policy (the Policy) is in compliance withSection 178 of the Act read along with the applicable rules thereto and the ListingRegulations
The Main obectives of the policy are as follows:
1.1. Ensuring that the level and composition of remuneration is reasonable andsufficient to attract remain and motivate to run the Company successfully.
1.2. Ensuring that relationship of remuneration to performance is clear and meetsthe performance benchmarks.
1.3. Ensuring that remuneration involves a balance between fixed and incentives payreflecting short and long term performance objectives appropriate to the working of theCompany and its goals.
1.4. To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board. attributes and 1.5. Toachieve a balance of merit experience and skills amongst its Directors Key ManagerialPersonnel and Senior Management.
This Policy applies to the Board of Directors (the Board) .Key Managerial Personnel(the MP) and the Senior Management personnel of SKey a Industries Ltd. This policy setsout guiding principles for the remuneration and nomination committee for recommending tothe Board the remuneration of the Directors .Key Managerial Personnel and other employeesof the Company.
3.1. "Director" means a Director appointed to the Board of theCompany.
3.2. "Key Managerial Personnel"
3.2.1. The Chief Executive Officer or the Chairman or the
Managing Director or the Manager 3.2.2. The Company Secretary 3.2.3. TheWhole Time Director
3.2.4. The Chief Financial Officer and
3.2.5. Such other officer as may be prescribed under the Companies Act 2013
3.3. Nomination and Remuneration Committee means the committee constitutedby the Company's Board in accordance with the provisions of the Act 2013 and
3.4. "Senior Management" mean personnel of the Company who aremembers of its core management team excluding the Board of Directors. This would alsoinclude all members of management one level below the executive directors including allfunctional heads.
4.1. The Board is ultimately responsible for the appointment of Directors and KeyManagerial Personnel.
4.2. The Board has delegated responsibility for assessing and selecting thecandidates for the role of Directors .Key Managerial Personnel and the Senior Managementof the Company to the Nomination and Remuneration committee which makes recommendations& nominations to the Board.
Role of Nomination and Remuneration committee:
5.1. Reviewing the structure sie and composition (including the skills knowledgeand experience) of the Board on regular intervals and making recommendations on anyproposed changes to the Board to complement the Company's corporate strategy with theobjective to diversify the Board
5.2. Identifying individuals suitably qualified to be appointed as the MPs or inthe senior management of the Company
5.3. To formulate a criteria for determining qualifications positive attributesand independence of a Director.
5.4. To carry out evaluation of Director's performance and recommend to theBoard appointment / removal based on his / her performance.
5.5. Making recommendations to the Board on the remuneration payable to theDirectors / MPs / Senior Officials so appointed/reappointed
5.6. To make recommendations to the Board concerning any matters relating to thecontinuation in office any Director at any time including the suspension or termination ofservice of an Executive Director as an employee of the Company subject to the provision ofthe law and their service contract;
5.7. Ensure that level and composition of remuneration is reasonable andsufficient relationship of remuneration to performance is clear and meets appropriateperformance benchmarks
5.8. To devise a policy on Board Diversity
5.9. To develop a succession plan for the Board and to regularly review theplan;
6.1. The Committee shall consist of minimum three (3) non-executive directorsmajority of them being independent.
6.2. Minimum two (2) members shall constitute a quorum for the committee meeting.
6.3. Membership of the Committee shall be disclosed in the
6.4. Terms of Committee shall be continued unless terminated by the Board ofDirectors.
7.1. Chairman of the Committee shall be Independent Director. 7.2. Chairmanof the Company shall be appointed as a member of the Committee but shall not be a chairmanof the Committee.
7.3. In the absence of the chairman the members of the committee present at themeeting shall choose one amongst them to act as chairman.
7.4. Chairman of the Committee meeting could be present at the Annual generalmeeting of the Company or may nominate some other member to answer the shareholdersqueries.
8. Frequency of the Meetings:
The meeting of the committee shall be held at such regular intervals as may berequired.
9. Committee Member's interests:
9.1. A member of the committee is not entitled to be present at the meeting whenhis or her own remuneration is discussed at a meeting or when his or her performance isbeing evaluated.
9.2. The Committee may invite such executives as it considers appropriate to bepresent at the meetings of the
The Company Secretary of the Company shall act as a Secretary to the committee
11.1. Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.
11.2. In case of equality of votes the Chairman of the meeting will have a castingvote.
12. Term / Tenure:
12.1. Managing Director / Whole time Director
The Company shall appoint or re-appoint any person as its Managing Director or wholetime director for a term of not exceeding five years at a time. No re-appointment shall bemade earlier than one year before the expiry of term.
12.2. Independent Director:
12.2.1. An Independent Director shall hold office for a term upto five consecutiveyears on the Board of the Company and will be eligible for re-appointment on passing of aspecial resolution by the Company and disclosure of such appointment in Board's Reportshall be made. 12.2.2. No Independent Director shall hold office than twoconsecutive term of upto maximum of 5 years each but such independent Director shall beeligible for appointment after expiry of three years of ceasing to become an IndependentDirector.
12.2.3. Provided that an independent Director shall not during the said period ofthree years be appointed in or be associated with the Company in any other capacitywhether directly or indirectly
12.2.4.At the time of appointment of Independent
Director it should be ensured that number of
Boards on which such Independent Director serves is restricted to Seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a whole time director of a listed company or such othernumber as may be prescribed under the Act.
The Director MP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director MP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.
14 Appointment of Directors MPs Senior Management Personnel:
Enhancing the competencies of the Board and attracting as well as retaining talentedemployees for the role of MP / a level below MP are the basis for the Nomination andRemuneration
Committee to select a candidate for appointment to the
Board. When recommending a candidate for appointment the
Nomination and Remuneration committee has regard to:
14.1 Assessing the appointee against a range of criteria which includes but not belimited to qualifications skills regional and industry experience background and otherqualities required to operate successfully in the position with due regard for thebenefits from diversifying the Board
14.2 The extent to which the appointee is likely to contribute to the overalleffectiveness of the Board work constructively with the existing directors and enhancethe efficiencies of the Company
14.3 The skills and experience that the appointee brings to the role of MP/SeniorOfficial enhance the skill sets and experience of the Board as a whole;
14.4 The nature of existing positions held by the appointee including directorshipsor other relationships and the impact thKey may have on the appointee's ability toexercise independent judgment
14.5 Personal Specification:
Degree holder in relevant disciplines;
Experience of Management in diverse organiation
Excellent interpersonal Communication and representational skills;
Demonstrable leadership skills;
Commitment to high standards of ethics personal integrity and probity;
Commitment to the promotion of equal opportunities community cohesion and healthand safety in the workplace;
Having continuous professional development to refresh knowledge and skills.
15.1 Ensure that there is an appropriate induction & training program in placefor new Directors and reviewing its effectiveness;
15.2 Ensure that on appointment to the Board Non-executive
Directors receive a formal letter of appointment in accordance with the guidelinesprovided under the Act;
15.3 Identify and recommend Directors who are to be put forward for retirement byrotation.
15.4 Determine the appropriate Sie diversity and composition of the Board
15.5 Setting a formal and transparent procedure for selecting new Directors forappointment to the Board
15.6 Evaluate the performance of the Board members and Senior Management in thecontext of the Company's
Performance from business and Compliance prospective;
15.7 Make recommendation to the Board concerning ofany matters relating to thecontinuation in office any Director at any time including the suspension or termination ofservice of an Executive Director as an employee of the Company subject to the provision ofthe law and their service contract.
15.8 Recommend any necessary changes to the Board.
15.9 Considering any other matters as may be requested by the Board
15.10 To consider and determine the Remuneration Policy based on the performanceand also bearing in mind that the remuneration is reasonable and sufficient to attractretain and motivate members of the Board and such other factors as the Committee shalldeem appropriate all elements of the remuneration of the members of the
15.11 To approve the remuneration of the Senior Management including Key managerialpersonnel of the Company maintaining a balance between fixed and incentive pay reflectingshort and long term performance objectives appropriate to the working of the Company.
16. Remuneration of Directors Key Managerial Personnel and Senior Management:
(i) The guiding principal is that the level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate Directors .Key Managementandhowanappointee will Personnel and other senior officials. The Directors .KeyManagement Personnel andotherseniorofficial's salary shall be based and determined on theindividual person's responsibilities and performance and in accordance with the limits asprescribed statutorily if any.
(ii) The Nominations & Remuneration Committee determines individual remunerationpackages for Directors MPs and Senior Officials of the Company taking into accountfactors it deems relevant including but not limited to market business performance andpractices in comparable companies having due regard to financial and commercial health ofthe Company as well as prevailing laws and government/other guidelines. The
Committee consults with the Chairman of the Board as and when it deems appropriate.
(iii) The Board on recommendation of Nomination and
Remuneration Committee shall review and approve the remuneration payable to theExecutive Directors of the Company within the overall limits approved by the shareholders.
(iv) The Board on the recommendation of the Nomination and Remuneration Committeeshall also review and approve the remuneration payable to the .Key Managerial
Personnel of the Company. The remuneration payable to the .Key Managerial Personnel andthe Senior Management shall be as may be decided by the Board having regard to theirexperience leadership abilities initiative taking abilities and knowledge base
16.1. Remuneration to Executive Directors: Basic Compensation (Fixed Salaries)
Basic compensation must be competitive and reflective of the individual's roleresponsibility and experience in relation to performance of day to day activities usuallyreviewed on an annual basis (includes salary allowances and other statutory /non-statutory benefits which are normal part of remuneration package in line with marketpractices).
The Nomination and remuneration committee may in its discretion structure any portionof remuneration to link rewards to corporate and individual performance fulfillment ofspecified improvement targets or the attainment of certain financial or other objectivesset by the Board. The amount payable is determined by the committee based on performanceagainst pre-determined financial and non-financial metrics.
The remuneration payable to the Directors shall be as per the Company's policy andshall be valued as per the
Income Tax Rules.
1 Remuneration to Non-Executive Directors:
The Board on recommendation of Nomination and
Remuneration committee shall review and approve the remuneration payable to theNon-Executive Directors of the Company within the overall limits approved by theshareholders.
The Independent Directors shall not be entitled to any stock option and may receiveremuneration by way of fee for attending meetings of the Board or Committee thereof or forany other purpose as may be decided by the Board and profit related commission as may beapproved by the members.
16.3. Remuneration to other Employees:
Employees may be assigned grades according to their qualification and work experiencecompetencies as well as their roles and responsibilities in the organization. Individualremuneration shall be determined within appropriate grade and shall be based on variousfactors such as job profile skill sets seniority experience and prevailing remunerationlevels for equivalent jobs.
1 Evaluation Assessment of Directors MPs Senior Management personnel of the Company:17.1. The evaluation/assessment of the Directors MPs and the senior officials of theCompany is to be conducted yearly or at such intervals as may be considered necessary andto satisfy the requirements of the Listing Regulations.
17.2. The following criteria may assist in determining how effective theperformances of the Directors / MPs / Senior officials have been:
Leadership & stewardship abilities
Contributing to clearly define corporate objectives & plans;
Communication of expectations & concerns clearly with subordinates;
Obtain adequate relevant & timely information from external sources
Review & approval achievement of strategic and operational plans objectivesbudgets
Regular monitoring of corporate results against projections;
Identify monitor & mitigate significant corporate risks
Assess policies structures & procedures
Direct monitor & evaluate MPs senior officials
Review management's succession plan;
Assuring appropriate Board sie composition independence structure
Clearly defining roles & monitoring activities of committees;
Review of corporation's ethical conduct
Any other parameter which committee may feel appropriate from time to time toevaluate the performance of the Directors / MPs / Senior Management Personnel.
17.3. Evaluation on the aforesaid parameters will be conducted by the IndependentDirectors for each of the Executive/
Non-Independent Directors in a separate meeting of the Independent Directors.
17.4. The Executive Director/Non-Independent Directors along with the IndependentDirectors will evaluate/assess each of the Independent Directors on the aforesaidparameters. Only the Independent Director being evaluated will not participate in the saidevaluation discussion.
17.5. Positive Attributes:
In addition to the duties as prescribed under the Act the Directors on the Board ofthe Company are also expected to demonstrate high standards of ethical behavior stronginterpersonal and communication skills and soundness of judgment. Independent Directorsare also expected to abide by the Code for Independent Directors' as outlined inSchedule IV to the Act.
18. Amendment to the Policy:
18.1. The Board of Directors on its own and / or as per the recommendation ofNomination and Remuneration
Committee can amend this Policy as and when deemed fit.
18.2. In case of any amendment(s) clarification(s) circular(s) etc issued by therelevant authorities not being consistent with the provisions laid down under thispolicy then the such amendment(s) clarification(s) or circular(s) etc. shall prevailupon the provisions hereunder and this policy shall stand amended accordingly from theeffective date as laid down under the amendment(s) clarification(s) or circular(s) etc.