Seya Industries Ltd.
|BSE: 524324||Sector: Industrials|
|NSE: SEYAIND||ISIN Code: INE573R01012|
|BSE 00:00 | 18 Jun||64.25||
|NSE 00:00 | 18 Jun||64.80||
|Mkt Cap.(Rs cr)||171|
|Mkt Cap.(Rs cr)||170.71|
Seya Industries Ltd. (SEYAIND) - Director Report
Company director report
To the Members of Seya Industries Ltd
The Directors hereby presents their Twenty Ninth Annual report together with theAudited Financial Statements for the Financial Year (FY) 2018-19
Rs in Lakhs
Performance review and State of Company Affairs
Your Company continued to deliver record performance with steady growth in volume andprofitability while recording progress on several strategic initiatives includingexpansion plans even amidst extremely challenging backdrop of economic environment.
Your Company clocked double-digit growth of 19% (Y-o-Y) in revenues which stoodat Rs 41494 Lakhs compared to PY Rs 34894 Lakhs led by volume growth and betterrealizations due to Environmental challenges and production disruptions in China.Amplified operating margins and growth in volumes resulted in 31.89% growth in Earnings(Profit) Before Interest Depreciation Tax & Amortization (EBIDTA) to Rs 14042 Lakhsfrom 10646 Lakhs (PY). The traction from Modernization and Upgradation initiatives takenby your Company to improve operating efficiency has been instrumental in growth in volumesand higher contribution in the overall product mix. Domestic markets supported themomentum with procurement of high volumes on the back of high visibility therebymaintaining the spread.
Profit Before Tax stood at Rs 10624 Lakhs whereas Profit after Tax was at Rs 8849Lakhs up 45% and 69% respectively (Y-o-Y) contributing to Earnings PerShare at Rs 35.97 on enhanced capital compared to Rs 23.32 per Share (PY).
During the year under review your Company undertook several initiatives to brace itsProducts by increasing integration of manufacturing process for select high value productswhich will enable your Company to further enhance profitability.
For the year under review your Directors are pleased to recommended dividend of Rs 1.5per share (15%) on the Ordinary Shares (Rs 10 face value) of the Company (previous year Rs1 per share). If declared by the members at the ensuing Annual General meeting (AGM) thetotal dividend outgo during FY 2018-19 would amount to Rs 431.15 Lakhs including Dividendtax (previous year Rs 287.43 Lakhs including Dividend Tax).
During the period under review the Company has increased its Authorised capital from Rs176.30 Crores to Rs 179.80 Crores. There is no change in the Paid-up Share Capital of theCompany during the period under review.
Management Discussion & Analysis and Corporate Governance Reports
Pursuant to Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 ("Listing Regulations") Management Discussion & Analysisand the Corporate Governance Report are presented in a separate section forming part ofthe Annual Report.
Capacity Expansion New Projects & Diversification
Your Company is favorably positioned to capture opportunities emerging across thechemicals and specialty chemicals value-chain. More importantly China which was theworld's largest supplier for multiple chemicals has enhanced its focus on environmentalprotection and sustainable manufacturing processes. As a result local Chinese producersare faced with higher cost of operations which have increased the landed cost ofchemicals. This has improved the competitiveness of alternate suppliers openingopportunities for established players like us with proven capabilities and abundantcapacities.
Company continues to take initiatives to upgrade its manufacturing facilities andincrease its capacities by way of forward and backward integration and debottlenecking allproduct plants. The Effluent plant also gets upgrade simultaneously to protect theenvironment. The benefits of the de-bottlenecking activities are expected to be witnessedfrom FY20 whereby the Operational efficiencies are expected to be increased and contributeto higher margins.
Capacity Expansions: Your Company completed doubling the capacity of one of its highmargin products in Q1FY20 which presently contributes ~20% to its revenues. Thebrownfield expansion is expected contribute additional growth of 10-15% in EBIdTa in FY20.
De-bottlenecking and Improvement of Efficiencies at Existing Capacities: Company isupgrading and debottlenecking all product plants by setting up parallel capacities forselect products and replacing machineries for some products to align the production plantsand processes on new Technologies. In addition to this keeping up its commitment as aresponsible corporate citizen Company is upgrading its Effluent Treatment Plant tosupport its capacity expansions. The de-bottlenecking and efficiency improvement exercisesunder implementation are expected to boost production volumes and margins through FY20 byat least 5%. The estimated capital expenditure for above Capital expansion anddebottlenecking project is Rs. 70 - 75 Crores which is being funded through internalaccruals and almost 50% of the estimated amount has been incurred in FY19.
Mega Green-Field Project Under Implementation: in FY17 your Company had announcedsetting-up of a Greenfield forward and backward integration project to be self-reliant formost of its Raw materials Reduce Cost of Energy Diversify into Specialised High Value& High Margin products Value addition to By-Products by reusing the same formanufacturing of high margin products and expansion in capacity of its captive useproducts. With a clearly defined vision to emerge as an Integrated Global producer forSpeciality Chemicals and having invested Rs 5Bn in Capex in last 5 years your Company isprogressing on its journey for another round of expansion at cost of Rs 7.35Bn to becommissioned and commercialized in H2FY20 with additional installed capacity of 527900MTPA. The installed capacities of proposed products under set up shall be the largest in
the world at a single location. The project is expected to contribute additional Rs10-12Bn in Revenue at an estimated capacity utilization of 80% and EBIDTA margins onsimilar lines of present manufacturing operations. The project is located in closevicinity of Seya's existing manufacturing operations at MIDC Tarapur Boisar in State ofMaharashtra and is being funded at 1:1 Debt-Equity.
The Equity has been fully introduced by the Promoters and is forming part of presentShare Capital/Equity Structure of the Company. The Project is being built under thesupervision of highly experienced and reputed EPC contractors German Technology Suppliersand PMC's holding successful track-record of more than 105 years backed by performanceguarantee. It involves latest state-of-the-art cutting edge continuous fully automatedprocess technology which will enable Seya to be the lowest cost producer in the World forthe products under set-up. The installed capacities of proposed products under set-up willbe the largest in the world at a single location.
Seya has safeguarded any copy of the Technology by executing confidentiality andcopyright agreements with its technology suppliers restricting sale of technologyacquired for next 20 years. The License Process Know-how and Engineering package forpatented technology have been delivered by the technology suppliers in H2FY18 and theproprietary plant and machinery has been delivered in Q1FY19
With this your Company will address the opportunity offered by the supply deficit inthe domestic market which is majorly being met by imports. In addition to competitivenesson cost due to supplying the domestic markets from a plant located in India your Companywill leverage on the latest manufacturing technologies in its state-of-the art plant whichwill reduce wastage and is more efficient in utilisation of inputs and energy. With anobjective of developing working relationships with major clients across India as well asestablishing strong marketing and distribution channels your company has been doing seedmarketing of the proposed products to understand and penetrate in the market.
The Company continued to enjoy working capital facilities under Consortium bankingarrangements with public sector Banks and the company has been regular in servicing thesedebts.
There was no change in the Credit Rating of the Company. As on March 31 2019 thecompany had following ratings:
A-/stable from CARE ratings for the long-term loan facilities and A2 (A Two) forshort-term facilities
Your Company obeys to austere guiding principles to efficiently manage its workingcapital level and maintain its debt at a reasonable level. During the year under reviewthe debt pertaining to the manufacturing operations of your Company decreased due toscheduled repayments and improved working capital management. However as your Company issetting-up its Mega Greenfield expansion project on a consolidated level the total debthas enhanced. These levels would normalise as your Company generate revenues from the newprojects. Modest increase in Interest cost was due to enhanced working capital drawdownmandated by increased scale of operation. Depreciation increased due to regular growth andmaintenance Capex; despite this your Company's enhanced financials have tractionedadvancement of financial parameters. Your Company endures its emphasis to effectivelymanage its cash flows through prudent regulators to reduce the overall interest costs.Robust Cash flow Repayment of Term loan and Effective management of working capital haveleveraged Debt/Equity ratio at 0.45x propounding much more financial flexibility forUpcoming Projects.
Reserves & Surplus
The Reserves at the beginning of the year were Rs 71573.72 Lakhs and the Reserves atthe end of the year are Rs 80133.46 Lakhs representing an increase by Rs 8559.74 LacsDuring the period under review no amount is transferred to General Reserves.
Deposits from Public
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on date of the BalanceSheet.
The Company's Information Technology (IT) infrastructure is 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 theCompany Mr. Asit Kumar Bhowmik is liable to retire by rotation and being eligible offeredhimself for reappointment.
The Members have appointed Ms. Kalpana Tirpude as an Independent Director of theCompany to hold office for five consecutive years from April 23 2015 to March 31 2020.Pursuant to the provisions of the Act and based on the recommendation of the Nominationand Remuneration Committee ('NRC') the Board recommends for the approval of the membersthrough a Special Resolution the reappointment of Ms. Kalpana Tirpude as an IndependentDirector of the Company for a Second term of five consecutive years from April 1 2020 toMarch 31 2025.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theSection 149(6) of the Act and Regulation 16 of the SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 ("Listing Regulations"). In the opinion of theBoard they fulfil the conditions of independence as specified in the Act and the Rulesframed there under and are independent of 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 29thAnnual General Meeting.
Key Managerial Personnel (KMP)
In terms of the Provisions of Section 2(51) and Section 203 of the Act the followingare KMP of the Company
Mr. Ashok G Rajani - Chairman & Managing Director
Mr. Asit Kumar Bhowmik - Executive Director
Mr. Amrit Rajani - Chief Financial Officer
Ms. Manisha Solanki - Company Secretary Independent Directors
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 Director's
The Board recognise the Importance of reviewing and improving upon its performance. Forthis purpose they 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 carriedout by the Independent Directors. The Board of Directors expressed their satisfaction withevaluation process of 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 theCompany their roles rights responsibilities in the Company and related matters are putup on the website of the Company under the link http://www.seya.in/wp-content/uploads/2011/06/Familiarization-Program_for-Independent- Directors-Seya.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
NRC is responsible for developing competency requirements for the Board based on theindustry and strategy of the Company. The Board composition analysis reflects in-depthunderstanding of the Company including its strategies environment operations financialconditions 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 is required. The Committee is alsoresponsible for reviewing the profiles of potential candidates vis-a-vis the requiredcompetencies and meeting potential candidates prior to making recommendations of theirnomination to the Board. At the time of appointment specific requirements for theposition including expert knowledge expected is communicated to the appointee.
During the period under review the Board has also identified the list of core skillsexpertise and competencies of the Board of Directors as are required in the context of thebusiness and sectors applicable to the Company and those actually available with Board.
Policy on Directors' Appointment and Remuneration Including criteria for determiningQualifications Positive Attributes and Independence of a director
The Company has in place Remuneration Policy for the Directors KMP 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 2018-19 forms part of the Corporate Governance Report.
Employee Stock Option/Sweat Equity/Preferential Allotment
The Company has not issued any Employee Stock Options/Sweat Equity
or Shares as Preferential allotment 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 external consultant(s) including audit of internal financialcontrols over financial reporting by the statutory and the reviews performed by Managementand the relevant Board Committees including the Audit & Risk Management Committeethe Board is of the Opinion that the Company's internal financial controls were adequateand effective during the financial year 2018-19. Accordingly pursuant to Section 134(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 that:
a. In the preparation of the Annual accounts the applicable accounting standardshave been followed and that there are no material 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 2019 and of the profit of the Company forthe year ended on that date;
c. They 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 safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d. They have prepared annual accounts on a 'going concern basis.'
e. They have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and are operating effectively; and
f. Proper system has been devised to ensure compliance with provisions of allapplicable laws and that such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2018-19.
Declaration by Independent Directors
The Company has received declaration from all of its Independent Directors underSection 149(7) of the Companies Act 2013 that they meet the criteria of independence asprovided in Section 149(6) of the Companies Act 2013.
Redemption of Shares/ Debentures
The Company has not redeemed any Shares or Debentures.
Disqualification of Director
No Director of the Company is disqualified under any law to act as a Director.
Insider Trading Proceedings/ Enquiry
No such enquiry/proceeding has ever been initiated/pending against the Company.
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.seya.in/wp-content/uploads/2011/06/Related-Party-Transactions-Policy-Seya.pdf The details of the transactionswith related parties are provided in the accompanying financial statements.
Corporate Social Responsibility (CSR)
The CSR committee has formulated and recommended to the Board a CSR Policy indicatingthe activities to be undertaken by the Company as approved 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 2018-19 your Company has spent Rs 99.50 Lacs on CSRactivities against the requirement of Rs 97.95 Lacs being 2% of average of the netprofits for the preceding three years.
The Company's overall CSR initiative focuses on the following sectors and issues:
Poverty alleviation livelihood enhancement and infrastructure supportincluding programs on agriculture growth animal husbandry development and promotion ofsocial enterprises.
Education and vocational skill development
Environment sustainability by investing in biodiversity natural resourcemanagement awareness and environment education and mitigation of climate change impact.
Health Care nutrition sanitation and safe drinking water.
Responding to any disasters depending upon where they occur and its ability torespond to meaningfully.
The CSR Policy is available on the Company's website. The Annual 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 or Material orders passed against the Company
Pursuant to the requirement of Section 134(3)(q) of the Companies Act 2013 read withRule 8(5)(vii) of the Companies (Accounts) Rules 2014 it is confirmed that during FY2018-19 there were no significant or material orders passed by the Regulators or Courts orTribunals impacting the going concern status and your Company's operations in future.
Internal Financial Control
IInternal Financial control systems of the Company are commensurate with its size andthe nature of its operations these have been designed to provide reasonable assurancewith regard to recording and providing reliable financial and operational informationcomplying with applicable accounting standards and relevant status safeguarding assetsfrom unauthorised use executing transactions 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 reporting.
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 aslaid down and met the internal auditors and statutory auditors to ascertain inter aliatheir views on the internal financial control systems. The Audit Committee satisfieditself of the adequacy and effectiveness of the internal financial control system as laiddown and kept the Board of Directors informed.
Details of internal control system are given in the Management Discussion and AnalysisReport which forms part of this Annual Report.
Statutory Auditors & Its Report
As per provisions of Section 139 142 and other applicable provisions of the CompaniesAct 2013 if any read with the Companies (Audit & Auditors) Rules 2014 includingany statutory enactment or modification thereof M/s. Anil Chauhan & AssociatesChartered Accountant (Firm Registration No. 140786W) be and is hereby appointed as theStatutory Auditors of the Company and to hold the office from the conclusion of thisAnnual General Meeting till the conclusion of 32nd Annual General Meeting ofthe Company at a remuneration to be decided by the Board of Directors in consultationwith the Auditors plus applicable service tax and reimbursement of travelling and out ofpocket expenses incurred by them for the purpose of audit.
The Company has received a written consent and certificate from M/s. Anil Chauhan &Associates confirming that they satisfy the criteria provided under Section 141 of theAct and that the appointment if made shall be in accordance with the applicableprovisions of the Act and rules framed thereunder.
The Statutory Auditor's report read together with relevant notes thereon form anintegral part of the Financial Statement of this Annual Report and are self-explanatoryand hence do not call for any comments. There is no qualification reservation adverseremark or disclaimer by the Statutory Auditors in their Report.
As per Section 148 of the Act the Company is required to have the audit of its costrecords conducted by a Cost Accountant in practice. The Board on Recommendation of theAudit Committee & Risk Management has appointed Manish Shukla & Associates (FirmRegistration No. 101891) as the Cost Auditor of the Company for FY 2019-20 under Section148 and all other applicable provisions of the Act read with the Companies (Cost Recordsand Audit) Amendment Rules 2014.
M/s. Manish Shukla & Associates have confirmed that they are free fromdisqualification specified under Section 141 (3) and proviso to Section 148 (3) read withSection 141 (4) of the Act and that the appointment meets the requirements of Section 141(3)(g) of the Act. They have further confirmed their independent status and an arm'slength relationship with the Company;
The Remuneration payable to the Cost Auditors is required to be placed before themembers in a general meeting for their ratification. Accordingly a Resolution for seekingmembers ratification for the remuneration payable to M/s. Manish Shukla & Associatesis included at Item No. 6 of the Notice Convening the AGM.
Secretarial auditor & Its Report
In terms of Section 204 of the Act and Rules made there under M/s. TRS &Associate Practising Company Secretary have been appointed as Secretarial Auditor of theCompany. The Report of the Secretarial Auditors is enclosed as Annexure - III to thisreport.
Reporting of Fraud by Auditors
There is no instance of fraud reported by the Auditors during the FY 2018-19.
Secretarial Standards of ICSI
Your Company is in compliance with the Secretarial Standards on Meetings of the Boardof Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of CompanySecretaries of India and approved by the Central Government.
Audit & Risk Management Committee
The Company has an Audit & Risk Management committee comprising Mr. Anand TaggarsiMr. Ashok G Rajani and Ms. Kalpana 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 survey business risk environment scanning andinputs from the Materiality Assessment Report and focused discussions in Risk Managementworkshops.
Identified risks 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 mitigationactions are monitored and reviewed. The risk assessment update is provided to the Audit& Risk Management Committee (ARMC) on periodical basis. ARMC is appointed by the Boardand comprises 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 Vigil 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 amechanism for Directors and employees of the Company to report genuine concerns. TheWhistle Blower Policy also provides for adequate safeguards against victimization ofpersons who use vigil mechanism and for direct access to the Chairman of the AuditCommittee in appropriate or exceptional cases. The Whistle Blower Policy is uploaded onthe website of Company and the link is http://
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 they are welcome to contact the Company's 'Investor ServicesDepartment the contact particulars of which are contained in the Report of CorporateGovernance.
Sustained commitment to highest levels of quality best-in-class service managementrobust information security practices and mature business continuity processes helped theCompany attain significant milestones during the year.
The Company's equity shares continue to be listed at BSE. We are pleased to inform youthat your Company got listing approval from NSE on July 11 2019 and shares of the Companyare now available for trading on Both the Stock Exchanges. We confirm that the Listing feefor the financial year 2018-2019 and 2019-20 has been paid to BSE and for FY 2019-20 toNSE. The stock code of the company at BSE is 524324 and Script Code at NSE is SEYAIND
Consolidated Financial Statements
There being no subsidiaries and associates companies disclosure requirements pursuantto Regulation 33 & 34 of the Listing Regulation are not applicable.
Subsidiaries / Joint Ventures / Associate Companies
As on March 31 2019 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 186 of the Companies Act2013 during FY 2017-18
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 - IV to this Report.
Research and Development
The Company recognizes the need to have well equipped R&D Facilities to meetcustomer requirements and developing cutting edge products. Detailed report on Researchand Development carried out by your Companies given as an Annexure IV of this report.
Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 read with IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') all unpaid orunclaimed dividends are required to be transferred by the Company to the IEPF establishedby the Government of India after the completion of seven years. Further according to therules the shares on which Dividend has not been paid or claimed by the Shareholders forseven consecutive years or more shall be transferred to the Demat account of the IEPFAuthority. No unclaimed and unpaid dividends is yet meeting the eligibility criteria andhence no amounts were transferred to IEPF.
Human Resources Management and Industrial Relations
Your Company considers human resources as the main assets of the Company as it believesthat Human resources play a very critical role in its growth. Your Company continuouslyfocus on training requirements of its employee on a continuing basis. With a view toincrease the productivity the management periodically organises various trainingprogrammes and lectures which boosts and motives the employee to give their best to theorganisation.
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 theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given asAnnexure V to this Report.
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 2014.
Statement of Company's Affairs
The state of Company's affairs is given under the various headings in this Report andin the Management Discussion and Analysis 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 ouremployees 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 stake holders 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 hazardous 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 mappedprocedure in order to select projects assess impacts on society and environment andmitigate any adverse impacts. EHS initiatives have been strengthened further due toformation of a core group for exchange of knowledge and standardising of systems andprocedures. This core group also assess the Plants' Safety and Environment protectionimprovement activities. Periodic audits were conducted by the core group to ensurecompliance 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 eco-friendly initiatives.This has made your Company a safe and healthy place to work.
Your Company is signatory to the 'Responsible Care' initiatives and Responsible carelogo holding organisation. Management System at all manufacturing plants and corporateoffice have been assessed and have certifications like ISO 9001:2015 ISO 14001:2015 &OHSAS 18001:2007. All raw materials and products within supply chain framework of yourCompany are transported in a secure manner for the safety of its customers carrierssuppliers distributors and contractors. Your Company takes utmost care duringtransportation and ensures that it complies with all the 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 General Meetings are sent to allthe Members whose email addresses are registered with the Company for communicationpurposes. For members who have not registered their email addresses physical copies ofthe Notices 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.
Your Company has zero tolerance towards any act which may fall under the ambit ofSexual Harassment at work place and has adopted a Policy on prevention prohibition andredressal of sexual harassment at work place in line with the provisions of SexualHarassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013 and theRules.
The following is the summary of the Complaints received and disposed-off during thefinancial year 2018-19:
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 AnnexureVI 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 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 Vendors 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
Seya Industries Ltd
ASHOK G RAJANI
Chairman & Managing Director
Mumbai August 05 2019
ANNEXURE - I
Criteria for determining Qualifications Positive attributes and Independence ofDirectors and Nomination Remuneration and Evaluation Policy for Directors Key ManagerialPersonnel and Others
Criteria for determining qualifications positive attributes and independence ofDirectors
The Nomination and Remuneration Committee (NRC) has formulated the criteria fordetermining qualifications positive attributes and independence of Directors in terms ofprovisions of the Companies Act 2013 ("the Act") and SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 ("Listing Regulations").
Independence: A Director will be considered as an 'Independent Director' if he /she met with the criteria for 'Independent Director' as laid down in the Act and theListing 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 and industry expertise.While recommending the appointment of a Director the NRC considers the manner in whichthe function and domain expertise of the individual will contribute to the overallskill-domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act theDirectors on the Board of the Company are also expected to demonstrate high standards ofethical behavior strong interpersonal and communication skills and soundness of judgment.Independent Directors are 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 ManagerialPersonnel 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 objectives 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.
1.5. To achieve a balance of merit experience and skills amongst its DirectorsKey Managerial Personnel and Senior Management.
This Policy applies to the Board of Directors ("the Board") Key ManagerialPersonnel ("the KMP") and the Senior Management personnel of Seya IndustriesLtd.
This policy sets out guiding principles for the remuneration and nomination committeefor recommending to the Board the remuneration of the Directors Key Managerial Personneland other employees of the Company.
3.1. "Director" means a Director appointed to the Board of the Company.
3.2. "Key Managerial Personnel"
3.2.1. The Chief Executive Officer or the Chairman or the Managing Director or theManager
3.2.2. The Company Secretary
3.2.3. The Whole 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 committeeconstituted by the Company's Board in accordance with the provisions of the Act 2013 andListing Regulations.
3.4. "Senior Management" mean personnel of the Company who are members ofits core management team excluding the Board of Directors. This would also include allmembers of management one level below the executive directors including all functionalheads.
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.
5. Role of Nomination and Remuneration committee:
5.1. Reviewing the structure size 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 KMPs 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 the Boardappointment / removal based on his / her performance.
5.5. Making recommendations to the Board on the remuneration payable to theDirectors/ KMPs/Senior Officials so appointed/reappointed;
5.6. To make recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the 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 appropriate performance benchmarks
5.8. To devise a policy on Board Diversity;
5.9. To develop a succession plan for the Board and to regularly review the plan;
6.1. The Committee shall consist of minimum three (3) nonexecutive 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 Annual Report.
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. Chairman of the Company shall be appointed as a member of the Committee butshall not be a chairman of 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 be required.
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 Committee.
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 orwhole-time director for a term of not exceeding five years at a time. No re-appointmentshall be made 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 reappointment on passing of a specialresolution by the Company and disclosure of such appointment in Board's Report shall bemade.
12.2.2. No Independent Director shall hold office for more than two consecutiveterm of upto maximum of 5 years each but such independent Director shall be eligible forappointment after expiry of three years of ceasing to become an Independent Director.
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 ensuredthat number of Boards on which such Independent Director serves is restricted to Sevenlisted companies as an Independent Director and three listed companies as an IndependentDirector in case such person is serving as a whole time director of a listed company orsuch other number as may be prescribed under the Act.
The Director KMP 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 KMP 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 / KMPs / Senior Management Personnel:
Enhancing the competencies of the Board and attracting as well as retaining talentedemployees for the role of KMP / a level below KMP are the basis for the Nomination andRemuneration Committee to select a candidate for appointment to the Board. Whenrecommending a candidate for appointment the Nomination and Remuneration committee hasregard 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 KMP/SeniorOfficial and how an appointee will enhance the skill sets and experience of the Board as awhole;
14.4 the nature of existing positions held by the appointee including directorshipsor other relationships and the impact they may have on the appointee's ability to exerciseindependent judgment;
14.5 Personal Specification:
Degree holder in relevant disciplines;
Experience of Management in diverse organization;
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 andhealth and 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 aformal letter of appointment in accordance with the guidelines provided under the Act;
15.3 Identify and recommend Directors who are to be put forward for retirement byrotation.
15.4 Determine the appropriate Size 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 any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the 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 Board.
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
(i) The guiding principal is that the level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate Directors Key ManagementPersonnel and other senior officials. The Directors Key Management Personnel and othersenior official's salary shall be based and determined on the individual person'sresponsibilities and performance and in accordance with the limits as prescribedstatutorily if any.
(ii) The Nominations & Remuneration Committee determines individual remunerationpackages for Directors KMPs 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 Committeeconsults with the Chairman of the Board as and when it deems appropriate.
(iii) The Board on recommendation of Nomination and Remuneration Committee shall reviewand approve the remuneration payable to the Executive Directors of the Company within theoverall 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 ofthe Company. The remuneration payable to the Key Managerial Personnel and the SeniorManagement shall be as may be decided by the Board having regard to their experienceleadership 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 predetermined 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.
16.2. Remuneration to Non-Executive Directors:
The Board on recommendation of Nomination and Remuneration committee shall review andapprove the remuneration payable to the Non-Executive Directors of the Company within theoverall limits approved by the shareholders.
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.
17. Evaluation / Assessment of Directors / KMPs / Senior
Management personnel of the Company:
17.1. The evaluation/assessment of the Directors KMPs and the senior officials ofthe Company is to be conducted yearly or at such intervals as may be considered necessaryand to satisfy the requirements of the Listing Regulations.
17.2. The following criteria may assist in determining how effective theperformances of the Directors/KMPs/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 plansobjectives budgets;
Regular monitoring of corporate results against projections;
Identify monitor & mitigate significant corporate risks;
Assess policies structures & procedures;
Direct monitor & evaluate KMPs senior officials;
Review management's succession plan;
Assuring appropriate Board size 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 / KMPs / Senior Management Personnel.
17.3. Evaluation on the aforesaid parameters will be conducted
by the Independent Directors for each of the Executive/
Non-Independent Directors in a separate meeting of the
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 in ScheduleIV 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.
For & on behalf of the Board of Directors
Seya Industries Ltd
ASHOK G RAJANI
Chairman & Managing Director
Mumbai August 05 2019