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Seya Industries Ltd.

BSE: 524324 Sector: Industrials
NSE: SEYAIND ISIN Code: INE573R01012
BSE 00:00 | 19 May 29.50 -0.75
(-2.48%)
OPEN

28.75

HIGH

31.15

LOW

28.75

NSE 00:00 | 19 May 29.00 -0.95
(-3.17%)
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29.05

HIGH

30.60

LOW

28.70

OPEN 28.75
PREVIOUS CLOSE 30.25
VOLUME 760
52-Week high 85.25
52-Week low 28.30
P/E 35.54
Mkt Cap.(Rs cr) 78
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 28.75
CLOSE 30.25
VOLUME 760
52-Week high 85.25
52-Week low 28.30
P/E 35.54
Mkt Cap.(Rs cr) 78
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Seya Industries Ltd. (SEYAIND) - Director Report

Company director report

To the Members of Seya Industries Ltd

The Directors hereby presents their Thirtieth Annual report together with the AuditedFinancial Statements for the Financial Year (FY) 2019-20

Financial Performance

Rs in Lakhs

Financial Results
Year Ended 31-Mar-19 Year Ended 31-Mar-20
Total Revenue 41493.62 25819.52
Profit Before Interest Depreciation & Taxes 14041.86 7650.40
Profit Before Tax 10624.46 5196.68
Profit After Tax 8848.76 4701.98
Earnings Per Share – Basic (Rs ) 35.97 19.10
Earnings Per Share – Diluted (Rs ) 35.97 17.69

During the year under review despite exceptional business conditions extremelychallenging backdrop of economic environment due to Covid-19 inception in Q3FY20 in Chinaand other challenges faced due to shortage of Nitric acid Effluent disposal and waterscarcity which impacted Company's manufacturing operations and performance your Companyhas delivered competitive and profitable performance with Sales Turnover of Rs 258.19 CrEBIDTA of Rs 76.50 Cr EBIT of Rs 59.88 Cr and PAT of Rs 47.02 Cr. Lowering of EBIDTAspreads reduction in Unit sale price of Products resumption of Supplies from China arevarious factors which affected the Revenue and Profitability.

The traction from Modernization and Upgradation initiatives taken by your Company toimprove operating sustaining profitable performance maintain high quality standardstimely servicing of Customers. Your company is working on priority to mitigate therestriction on Effluent discharged imposed by NGT establishing its own captive ZLD basedETP plant. Once completed the company shall be able to ramp up its manufacturingcapacities to optimum levels.

State of Company Affairs: COVID-19 Impact

Your Company is in the business of manufacture of speciality chemical intermediateshaving applications in the manufacture of

Pharmaceuticals (like Paracetamol floxacins etc) Personal & Health Care Products(like Hair dyes) Printing Inks & Paints (used in Laser/

Ink jet Printers for Road markings etc) Agrochemicals (like DDT etc)Insecticides/Pesticides (like Quinalphos Mortein Baygon etc)

Rubber chemicals (for Leather protection) Textile dyes Thermic fluids (used asheating medium) etc.

The Operations of the Company have been severely impacted due to the Covid -19pandemic. The Government of India declared a nationwide lockdown w.e.f. 21 March 2020 andhence the manufacturing operations of the Company were halted. Upon obtaining necessarypermissions from the concerned authorities and after taking all safety measures asprescribed in the said permissions though the Company have resumed operations in aphased-wise manner w.e.f. May-2020 several International and State governments continueto restrict distribution operations which impact the Company's operations. As a resultthe revenues continue to be materially impacted. Subsequent to the period under reviewyour Company has received notices of Force Majeure from certain suppliers and customersand similarly the Company has also issued notices of Force Majeure to customers andsuppliers. However based on the preliminary legal evaluation of these notices theManagement does not anticipate any material economic outflow of resources which wouldimpact its cash position and the carrying value of its assets. The Company howevercontinued to incur committed expenditure with respect to its Employees Plant relatedexpenditures and Other expenditures. This has significantly impacted the profitability.Covid-19 hasalsohad significantimpact on customers and their ability to meet theircommitted obligations. The extent and duration of COVID-19 is currently unknown anddepends on future developments that are uncertain. Any resultant outcome and impact onbusiness due to this is unpredictable. The Management in process of evaluating thepossible effects if any that may result from COVID-19 pandemic on the carrying amounts ofTrade receivables and Inventories. In developing the assumptions and estimates relating tothe uncertainties as at the balance Sheet date in relation to the recoverable amounts ofthese assets the management has used internal and external sources of information to theextent determined by it. The Impact of the same may differ from that estimated as at thedate of approval of these financial statements due to the impact of the pandemic and theManagement will continue to closely monitor the developments.

We have taken several actions to mitigate theeffectof Covid-19 on our business. We havetaken steps to reduce our unit costs and increase our liquidity by making our operationsmore efficient and nimbler putting on hold discretionary expenses deferring certaincapital expenditures etc. In order to sustain operations we also had to take actions tocut employee costs through pay cuts leave without pay and reduction in workforce. We areramping up our operations in a phased manner subject to Government directions. Theunprecedented nature of the pandemic makes the future business environment uncertainhowever we will continue to carry out the impact assessment on our assets and closelymonitor any material changes to future economic conditions.

Dividend

For the year under review given the developments with regard to the COVID-19 pandemicand its fallout the Board of Directors prudently decided to conserve cash for thequarters ahead.

Share Capital been vertebrae of

During the period under review the Company has issued and allotted 1970540 CompulsoryConvertible Preference Shares (CCPS) face value of Rs 10 per share with a premium of Rs513 per share.

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 & Analysis and the Corporate Governance Report are presentedin a separate section forming part of the Annual Report.

Capacity Expansion New Projects & Diversification

Capacity Expansions: The Company had completed the capacity of one of its product inQ1FY20 however due to unavailability of one of the critical raw material ie. Conc. NitricAcid and restriction over permitted effluent discharge due to pending implementation of

MIDC CETP the capacity could not be ramped up.

De-bottlenecking & Efficiency Improvement:The said brown-field project has beencompleted to the extent of 30% and shall be completed once the funds tied-up with Lendershall be released. Once completed the

Company shall have parallel capacities for select products to align the productionplants and processes on new Technologies. In addition to this considering the restrictionimposed on all industries in MIDC Tarapur on permitted Effluent discharge the Companyshall on top priority be upgrading its Effluent Treatment Plant to Zero LiquidDischarge(ZLD) to permanently circumvent restriction imposed by NGT and support itscapacity expansions. The de-bottlenecking and exercises under implementation are expectedto boost production volumes and margins. The estimated capital expenditure for aboveCapital expansion and de-bottlenecking project is Rs. 70 – 75 Crores which is beingfunded through Debt.

Mega Green-Field Project Under Implementation: Your Company is addressing cost issuesof raw materials and its price volatility and high energy costs which shall result inreduction in energy and fixed costs yield better cash flows which will result inlong-term value creation for its stakeholders. Cash generation through operationalexcellence and to realize the synergies of being a fully integrated facility shall driveefficiencies and effectiveness in transitioning to value-added products. With a clearlydefined vision to emerge as an Integrated Global producer for Speciality Chemicals andhaving invested Rs. 5 Bn in Capex in last 6 years Company took its next step forward tostart next round of expansion at cost of Rs. 7.35Bn to set-up additional installedcapacity of 527900 MTPA. The project is expected to contribute additional Rs. 10-12Bn inRevenue at an estimated capacity utilization of 80%. The project is in close vicinity ofSeya's existing manufacturing operations at MIDC Tarapur Boisar in State of Maharashtraand is presently awaiting disbursement from its Lenders who failed to keep up theircommitment. The Company has filed representation in Hon'ble High

Court and based on its directions has submitted the funding plan to the Lenders whichis under consideration with the Lenders.

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 theTechnology by executing confidentiality and copyright agreements with its technologysuppliers restricting sale of technology acquired for next 20 years from the Contractdate. Almost 50% of the installed capacity in the proposed greenfield mega project is tobe captively consumed as intermediates. Out of balance 50% 30% of the proposed installedCapacity is contracted to existing customers on long term supply contract and balance 20%is envisaged to provide as import substitute to cater to the increasing demand arisingfrom Supply disruptions and geographical shift from China.

Finance Term Loans and Working Capital

During the year under review the debt pertaining to the manufacturing operations ofyour Company decreased due to certain repayments. CARE Ratings Limited had wrongfully& illegally committed breach of mandatory terms of the Contract which had beenterminated by the Company much prior to the period under review. Despite such terminationCARE released an un-authorised rating downgrade report with malafide intent. The Companyhas filed a suit & complaint to SEBI against such unauthorised downgrade by

CARE. During the period certain Lenders have initiated formal legal communication witha view to protect their interest. The Company has contested and continues to defend suchaction by the Lenders.

Meanwhile the Company also continues to engage with lenders with a view to arrive at aresolution to ongoing matters. Due test are yet to to ongoing dispute with thelenders in relation to their failure to comply with committed lending obligations andoutstanding the Company has basis of legal advice not provided for interest costs oncertain loans outstanding amounting to INR 807.98 Lacs in respect of Operating Assets andINR 2884.00 Lacs in respect of Project Assets. The Company continues to believe in themerits of the litigation however there continues to remain material uncertainties inrelation to the outcome of the said litigations.

The Company manages liquidity through surplus and financing facilities by continuouslymonitoring actual cash flows. The Company has obtained fund and non-fund based workingcapital lines from various Banks/FI/Others. The Company monitors funding options availablein the debt and capital markets with a view to maintaining financial flexibility. Save andexcept as stated above all payments are generally made along due dates and requests forearly payments are entertained after due approval and availing early payment discounts.

Reserves & Surplus and aid in debt reduction all of

During the period under review there has been no transfer to the general reserve.There has been addition in the Securities Premium Reserve on account of Issue of 1970540Compulsorily Convertible Preference Shares of Face Value of Rs 10/- each at a Premium ofRs 513/- each. There has been transfer from the Other Reserves to Capital RedemptionReserve on account of redemption of Non-Convertible Redeemable Preference Shares of Rs15126.17 Lakhs. Total reserves and surplus increased by a 17.9% to Rs 94509.24 Lakhs ascompared to previous year of Rs 80133.46 Lakhs.

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.

IT Initiatives

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 Board of Directors on recommendation of Nomination and Remuneration Committee hasappointed Mr. Ronen Joshi (DIN: 08167071) as an Additional Director in category ofNon-Executive

Independent Director with effectfrom February 06 2020. Brief resume regarding hisappointment at the ensuing Annual General Meeting is given in the Notice convening theensuing Annual General Meeting. The Company has received declarations from all theIndependent

Directors of the Company confirming that they 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 ("ListingRegulations"). In the opinion of the Board they fulfil the conditions ofindependence as specified in the Act and the Rules framed there under and are 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 30th AnnualGeneral Meeting.

The Board is of the opinion all the Independent Directors hold highest degree ofintegrity and are individuals who are experts in their respective fields with enormousexperience. One of Independent

Directors of the Company who are required to appear and clear proficiency appear forthe same. However the same shall be carried out before the timeline prescribed by theCompanies Act 2013.

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 furtherimproved looking at the likely 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

Governance Guidelines

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 Board Effectiveness Review and mandates ofBoard 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-depth understanding of the Company includingits strategies 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 is required. The Committee is alsoresponsible for reviewing the profiles of potential candidates vis--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 identifiedthe 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

During FY 2019-20 Seven (7) Board Meetings were held. The details of the BoardMeetings with regard to their dates and attendance of each of the Directors thereat havebeen set out in the Report on Corporate Governance.

Employee Stock Option/Sweat Equity/Preferential Allotment

The Company has not issued any Employee Stock Options/Sweat Equity or Shares asPreferential 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

Management 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 financial year 2019-20. 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 that for theyear ended March 31 2020: a. In the preparation of the Annual accounts the applicableaccounting standards have been followed and that there are no material departures; b. Theyhave selected such accounting policies and applied them 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 at the end of the Financial year and of the Profit of theCompany for that period; c. They have taken proper and their knowledge and ability forthe maintenance of adequate accounting records in accordance with the provisions the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d. They have prepared annual accounts on a ‘going concernbasis.' 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; andf. Proper system has been devised to ensure compliance with provisions of all applicablelaws and that such systems are adequate and operating effectively.

Redemption of Shares/ Debentures

During the period under review your Company has fully redeemed the Non-ConvertibleRedeemable Preference Shares of Rs 15126.17 Lakhs and accordingly there has beentransfer from the Other Reserves to Capital Redemption Reserve on account of redemption.Additionally S. C. India Credit Fund (SCICF) became a shareholder vide invocation ofshares pledged by Mr. Ashok G Rajani which were offered as collateral in relation toNon-Convertible Debentures (NCD) issued by the Company to SCICF. The Company has contestedthis wrongful invocation and initiated appropriate legal proceedings. However pendingoutcome such legal proceedings the company has acknowledged SCICF as a shareholder infull settlement of its outstanding NCD in accordance with the Terms of the Debenturesubscription agreement as entered with SCICF and accordingly the NCD issued to SCICF havebeen fully redeemed.

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 (if any) entered into were on an arm's length basis andin the ordinary course of business and were in compliance with the applicable provisionsof the Act 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 transactions with relatedparties 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 directly and through variousImplementing agency with area specific need and focus to reach out to marginalised anddeprived section of the society and bridge the gap between the haves and have nots bypromotion of building health livelihood and education. The interventions of someimplementing agency were spread across India. During FY 2019-20 your Company has spent Rs46.72 Lacs on CSR activities against the requirement of Rs 151.15 Lacs being 2% ofaverage of the net profits for the preceding three years. However on account of COVID-19in the month of March-20 the Company will fulfil its shortfall in obligation during FY20-21.

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.

• Women empowerment

• 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 FY2019-20therewerenosignificantor material orders passed by the Regulators or Courts orTribunals impacting the going concern status and your Company's operations in future.

Internal Financial Control

Internal 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 themembers of management considered the systems as laid down and met the internal auditorsand statutory auditors to ascertain inter alia their views on the internal financialcontrol systems. The Audit Committee satisfied itself of the adequacy and effectiveness ofthe internal financial control system as laid down and kept the Board of Directorsinformed.

Details of internal control system are given in the Management Discussion and AnalysisReport which forms part of this Annual Report.

Auditors

Statutory Auditors & Its Report

M/s. Anil Chauhan & Associates Chartered Accountant (Firm Registration No.140786W) present statutory Auditor of the Company have expressed his in-ability tocontinue as Statutory auditor of the Company with effect from 30 th Annual GeneralMeeting as they are winding up their operations in India and settling abroad As perprovisions of Section 139 142 and other applicable provisions of the Companies Act 2013if any read with the Companies (Audit & Auditors) Rules 2014 including anystatutory enactment or modification thereof the Board of directors of the Companyproposing to appoint S. S. Patwardhan & Co. Chartered Accountant (Firm RegistrationNo. 119155W) as the Statutory Auditors of the Company and to hold the office from theconclusion of this Annual General Meeting till the conclusion of 33rd Annual GeneralMeeting of the Company at a remuneration to be decided by the Board of Directors inconsultation with the Auditors plus applicable service tax and reimbursement of travellingand out of pocket expenses incurred by them for the purpose of audit.

The Company has received a writtenconsentandcertificatefrom

M/s. S.S. Patwardhan & Co. confirming that they satisfy the criteria providedunder Section 141 of the Act and that the appointment if made shall be in accordancewith the applicable provisions 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.

Cost Auditors

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 2020-21 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's length relationshipwith 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 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

During the year under review the Statutory Auditors Cost Auditors and SecretarialAuditors have not reported any instances of frauds committed in the Company by itsOfficers or Employees to the Audit Committee under Section 143(12) of the Act details ofwhich needs to be mentioned in this report.

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 Board has accepted the recommendations made by the Audit & Risk ManagementCommittee from time to time. Details about the meetings held during the year is providedin the Corporate Governance Report.

Risk Management

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.

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 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 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://www.seya.in/wp-content/uploads/2011/06/Whistleblower-policy_ SEYA_1.pdf

Share Registrar and Transfer Agents

The Company's Registrar & Transfer agents for shares are M/s.

Universal Capital Securities Private Limited (RTA). RTA is duly registered with SEBI.The contact details of RTA are mentioned in the Report of Corporate Governance.

Investors are requested to address their queries if any to RTA;

however in case of difficulties as always they are welcome to contact the Company's‘Investor Services Department the contact particulars of which are contained in theReport of Corporate Governance.

Quality Initiatives

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.

Listing

The Company's equity shares continue to be listed at BSE and NSE.

Required listing fees is paid to both the Stock Exchanges in full.

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 2020 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 2019-20

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') allunpaid or unclaimed dividends are required to be transferred by the Company to the IEPFestablished by the Government of India after the completion of seven years.

Further according to the rules the shares on which Dividend has not been paid orclaimed by the Shareholders for seven consecutive years or more shall be transferred tothe Demat account of the IEPF Authority. No unclaimed and unpaid dividends is yet meetingthe eligibility criteria and hence 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.

Insurance

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. The manufacturing location of your Companyhave 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 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 Responsiblecare logo holding organisation. Management System at all manufacturing plants andcorporate office have been assessed and have certifications like ISO 9001:2015 ISO14001:2015 & 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.

Green Initiatives

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 were 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 2019-20: 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 AnnexureVI to this Report.

General

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.

Acknowledgement

The Board of Directors places on record its sincere appreciation for the dedicatedservices rendered by the employees of the Company at all levels and the cooperationextended by them. Your Directors would like to express their appreciation for theassistance and support by all Shareholders Government Authorities Auditors financialinstitutions employees Customers suppliers and other business associates.

For & on behalf of the Board of Directors

Seya Industries Ltd

ASHOK G RAJANI

Chairman & Managing Director

Mumbai July 31 2020

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