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Sicagen India Ltd.

BSE: 533014 Sector: Others
NSE: SICAGEN ISIN Code: INE176J01011
BSE 00:00 | 22 Sep 24.80 0.75
(3.12%)
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25.20

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NSE 05:30 | 01 Jan Sicagen India Ltd
OPEN 24.50
PREVIOUS CLOSE 24.05
VOLUME 7231
52-Week high 28.60
52-Week low 10.31
P/E 9.25
Mkt Cap.(Rs cr) 98
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 24.50
CLOSE 24.05
VOLUME 7231
52-Week high 28.60
52-Week low 10.31
P/E 9.25
Mkt Cap.(Rs cr) 98
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sicagen India Ltd. (SICAGEN) - Director Report

Company director report

Your Directors are pleased to present the 16th Annual Reportand the Audited Financial Statements of the Company for the year ended 31stMarch 2020.

FINANCIAL RESULTS

Financial performance of the Company for the year ended 31stMarch 2020 is summarized below:

(' in Lakhs)

Year ended 31st March 2020 Year ended 31st March 2019
Revenue from operations 43415 53781
Other Income 757 993
Total Revenue 44172 54774
Profit before Finance Cost Depreciation and Tax 1572 1406
Finance Cost 600 723
Depreciation 461 179
Profit Before Tax 511 504
Provision for Tax 299 285
Profit After Tax 212 219
Other Comprehensive Income (498) (465)
Total Comprehensive Income for the year (286) (246)
Opening Balance in Other Equity 34117 34649
Amount available for Appropriations 33831 34403
Appropriations
General Reserve -- --
Dividend on Equity shares 198 158
Tax on Dividend -- 33
Earnings per share (EPS) in ' 0.54 0.55

REVIEW OF OPERATIONS

During the year under review the total revenue of the Company was'44172 Lakhs as compared to '54774 Lakhs in 2018-19. Profit before tax was '511 lakhs asagainst '504 Lakhs in the previous year. The operational performance of the Company had animpact on account of economic slowdown as well as due to COVID-19 pandemic and nationwidelockdown.

Building Material division has posted a total turnover of '35637 Lakhsand a net profit of '12 Lakhs in the current year as against '45555 Lakhs and '82 Lakhsrespectively in previous year.

Power & Control Systems division has posted a total turnover of '2868 Lakhs as compared to ' 2973 Lakhs in the previous year. The net profit was ' 397Lakhs when compared to ' 477 Lakhs in the previous year.

Speciality Chemicals division has posted a total turnover of '1158Lakhs and net profit of '196 Lakhs as compared to '1158 Lakhs and '239 Lakhs respectivelyin 2018-19.

Industrial Packaging division has posted total revenue of

'3710 Lakhs this year as compared to '4124 Lakhs in 2018-19. The netprofit of this division for the current year was '176 lakhs as compared to '212 Lakhsprevious year.

Engineering division has received new orders from Ministry of Fisheriesfor construction of 8 deep sea fishing boats for fishermen. This division has postedrevenue of '167 lakhs this year and net profit of '6 Lakhs.

Dividend

Your directors are pleased to recommend a dividend of 50 paise perequity share (5% on equity capital of the Company) for the financial year 2019-20. Totaldividend pay out for the year is '198 lakhs and necessary tax on dividend will be deductedas per Income Tax Act. The dividend shall be paid to the eligible shareholders whose namesappear in the Register of Members as on the record date fixed by the Board.

Voluntary delisting of equity shares from NSE

Your Company's equity shares have been listed with Bombay StockExchange (BSE) and National Stock Exchange (NSE) and traded in the market since 2008.

Considering the insignificant volume traded in the market and as partof saving in administration cost and additional compliance requirement etc. the Board ofDirectors of the Company has at its meeting held on 23rd April 2020considered for voluntary delisting of equity shares from NSE. Accordingly your Companyhas submitted application to NSE for delisting of shares on 18th May 2020.However the equity shares of the Company shall continue to remain listed on Bombay StockExchange Ltd (BSE) which has nationwide terminals and delisting of equity shares from NSEwill not adversely affect the investors.

Disclosures under the Companies Act 2013

Pursuant to Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 the Company has complied with requirements and thedetails of which are disclosed hereunder.

1. Extract of Annual Return

As per the Companies Act 2013 the details of extract of Annual Returnwhich forms part of this report is posted on the Company's website www.sicagen.com.

2. Number of Board Meetings

The Board of Directors met 4 (Four) times in the year 2019-20. Thedetails of the Board meetings and the attendance of the Directors are given in theCorporate Governance Report.

3. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors report that:

(a) in the preparation of the Annual Accounts the applicableaccounting standards have been followed and that no material departures have been madefrom the same.

(b) they have selected such accounting policies and applied themconsistently and made judgments and estimates which are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2020 and of the profit & loss account of the Company for year ended on thatdate.

(c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and preventing and detecting fraud and otherirregularities.

(d) they have prepared the annual accounts on a going concern basis.

(e) they have laid down internal financial controls to be followed bythe Company and such internal financial controls are adequate and effective.

(f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems were adequate and operatingeffectively.

4. Statement on declaration given by Independent Directors

The Company maintains the requisite number of Independent Directors asrequired under Section 149(4) of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The IndependentDirectors have submitted the declaration of independence as required under Section 149(7)of the Companies Act 2013 confirming that they meet the criteria of independence asprovided in sub-Section(6) of Section 149 of the Act.

5. Remuneration Policy

The Company follows a policy on remuneration of Directors KeyManagerial Personnel and Senior Management employees including criteria for determiningqualification positive attributes and independence of Directors. The following is theRemuneration Policy for Directors.

(i) . For Executive Directors

The remuneration of the Whole Time Directors shall comprise of a fixedcomponent and a performance linked pay as may be fixed by the Nomination and RemunerationCommittee and subsequently approved by the Board of Directors and Members. PerformanceLinked Pay shall be payable based on the performance of the individual and the Companyduring the year. Remuneration trend in the industry and in the region academicbackground qualifications experience and contribution of the individual are to beconsidered in fixing the remuneration. These Directors are not eligible to receive sittingfees for attending the meetings of the Board and Committees.

(ii) . For Non-Executive Directors

The Non-Executive Directors will be paid sitting fees for attending theBoard and Committee Meetings as per the stipulations in the Act and the Articles ofAssociation of the Company and as recommended by the Nomination and RemunerationCommittee. Different scales of sitting fee may be fixed for each category of the directorsand type of meeting. However the fees payable to the Independent Directors and WomanDirectors shall not be lower than the fee payable to other categories of directors. Inaddition to this the travel and other expenses incurred for attending the meetings are tobe

met by the Company. Subject to the provisions of the Act and theArticles of Association the Company in General Meeting may by special resolutionsanction and pay to the Directors remuneration not exceeding 1% of the net profits of theCompany computed in accordance with the relevant provisions of the Act. The Company shallhave no other pecuniary relationship or transactions with any Non-Executive Directors.

6. Explanation of Board on qualification of statutory auditors &secretarial auditor if any

The Auditors' Report for fiscal 2019-20 does not contain anyqualification reservation or adverse remark. The Report is enclosed with the financialstatements in this Annual Report.

As required by the Listing Regulations the Practicing CompanySecretary's certificate on corporate governance for fiscal 2019-20 is enclosed with theCorporate Governance report. The certificate does not contain any qualificationreservation or adverse remark.

The Secretarial Auditors' Report for fiscal 2019-20 does not containany qualification reservation or adverse remark. The Secretarial Auditors' Report isenclosed to the Board's report in this Annual Report.

7. Particulars of loans guarantees or investments given or made by theCompany

During the year 2019-20 the Company has not given any loan guaranteeand/or provided any security in connection with the loan to any person/body corporateexcept the loans to the parties covered in the register maintained under Section 189 ofthe Companies Act 2013.

8. Related Party Transactions

The related party transactions entered into with related parties are onarm's length basis and in compliance with the applicable provisions of the companies actand the listing agreement. There are no materially significant related party transactionsmade by the company with promoters directors or key managerial personnel etc. which mayhave potential conflict of interest with the interest of the company at large.

All the related party transactions were placed before the AuditCommittee and the Board specifying the nature value and terms and conditions of thetransactions. In principle approval is obtained for the transactions which are foreseenand are repetitive in nature.

9. Lease

Effective 1st April 2019 the Company adopted Ind AS 116Leases and applied the standard to all lease contracts existing on 1st April2019 using the modified

retrospective method. Consequently the Company has recorded the leaseliability at the present value of the lease payments discounted at the incrementalborrowing rate prevailing on the date of application and the Right of Use asset equivalentto the Lease Liability and the cumulative effect of initially applying this standard onRetained Earnings was Nil. Comparatives as at and for the year ended 31st March2019 have not been retrospectively adjusted.

The adoption of the new standard resulted in recognition of 'Right ofUse asset and lease liability at a value of '863 lakhs on the date of transition and thenature of expenses has changed from lease rent in previous periods to depreciation costfor the right- of-use asset and finance cost for interest accrued on lease liability.

10. Amount transferred or proposed to be transferred to any reserves

The Company has not transferred or proposed to transfer any amount toany reserves as there is no necessity to transfer such amount as required under theCompanies Act 2013.

11. Material changes and commitments if any affecting the financialposition of the Company

There are no material changes and commitments affecting the financialposition of the Company between the end of the financial year 31st March 2020and the date of this report.

12. Transfer of unclaimed dividend/Shares to the Investor Education andProtection Fund

As required under the provisions of Section 124 and other applicableprovisions of Companies Act 2013 and the rules and amendments made thereunder theCompany is required to transfer the dividends that remain unpaid/unclaimed for a period of7 (seven) years to Investor Education and Protection Fund (IEPF) and also all the equityshares in respect of which unpaid/unclaimed dividend pertaining to those shares remainsunclaimed/unpaid for a period of seven consecutive years to an IEPF account administeredby the Central Government. On transfer of the amounts to IEPF account no claim shall liein respect of those amounts against the Company. During the year the Company hastransferred the unclaimed dividend amount of '990632/- pertaining to the financial year2011-12 to IEPF account. The Company is also in the process of transfer of shares inrespect of which unclaimed dividend has been transferred to IEPF account.

As on 31st March 2020 an amount of '9.69 Lakhs lying in theunclaimed dividend account of the Company pertaining to the financial year 2012-13 isrequired to be transferred to the IEPF account on or before 05th

October 2020. Therefore the members who have so far not encashed theirdividend warrant(s) or those yet to claim their dividend amounts pertaining to thefinancial year 2012-13 may write to the Company/RTA (Cameo Corporate Services Limited)for claiming the same before transfer to the IEPF account.

13. Particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo

Particulars required to be disclosed under Section 134 of the CompaniesAct 2013 read with the Rule 8(3) of the Companies (Accounts) Rules 2014 relating toconservation of energy technology absorption foreign exchange earnings and outgo aregiven in Annexure I which forms part of this Report.

14. Risk Management Committee

Constitution of Risk Management Committee is not applicable to theCompany.

15. Composition of Audit Committee

The Audit Committee constituted by the Board as required under theCompanies Act 2013 and SEBI (LODR) Regulations are given in the Corporate GovernanceReport.

16. Evaluation of Board

The meeting of Independent Directors proposed to be convened during endof March 2020 was deferred due to COVID-19 pandemic and nationwide lockdown andsubsequently convened on 17th June 2020 as required under Section 134 of theCompanies Act 2013 read with Schedule IV of the Act and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

The performance of evaluation of Independent Directors proposed to beconsidered at the Board meeting scheduled during end of March 2020 was also deferred dueto COVID-19 pandemic and nationwide lockdown. The said evaluation of Independent Directorsas required under Regulation 17(10) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 was considered by the Board on 17th June 2020.

17. Corporate Social Responsibility (CSR)

Pursuant to the provisions of Section 135 of the Companies Act 2013read with the Companies (Corporate Social Responsibility Policy) Rules 2014 the Companyhas to spend at least 2% of last three years of its average profit before tax for carryingout appropriate CSR activities as referred under Schedule VII of the Act. The Company hasconstituted a CSR Committee and framed a policy for implementation of CSR initiatives.

The Company is carrying out necessary CSR projects jointly with otherlikeminded entities through a Not- For-Profit entity namely AM Foundation. A report on CSRactivities forming part of this report is attached herewith as separate Annexure II.

18. Vigil Mechanism

Pursuant to the provisions of Section 177 (9) of the Companies Act2013 read with the Rule 7 of the Companies (Meetings of Board and its powers) Rules 2014and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has established a vigil mechanism for its directors and employees toreport their grievances or genuine concerns about unethical behaviour actual or suspectedfraud or violation of the Company's code of conduct. In order to prevent fraudulentactivities and also to ensure a corruption free work environment a detailed whistleblower policy has been laid down by the Board. The details of the whistle blower policyposted on the Company's website www.sicagen.com.

19. Internal Complaints Committee

The Company has constituted an Internal Complaints Committee to preventand prohibit any form of sexual harassment at workplace and provide redressal for womanemployees as required under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. During the year there was no event affecting any ofthe women employees on account of any sexual harassment at the work place.

20. Compliance with Secretarial Standards

The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India (ICSI) and that such systems are adequate and operating effectively.

21. Particulars required under Section 197(12) of the Companies Act2013 read with Rule 5(1)(2)&(3) of the Companies (Appointment and remuneration ofManagerial Personnel) Rules 2014

The particulars required under Section 197(12) read with Rule5(1)(2)&(3) of the Companies (Appointment and remuneration of Managerial Personnel)Rules 2014 are given in Annexures III & IV and form part of this Report.

22. Corporate Governance Report

A Report on Corporate Governance as stipulated under Schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forms part of thisAnnual Report. The requisite certificate from a Practicing Company Secretary confirmingcompliance with the conditions of Corporate Governance as

required under the above Regulation is attached to this Report.

23. Management Discussion & Analysis Report

Management Discussion & Analysis Report for the year under reviewas stipulated under Regulation 34(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is attached along with this report.

24. Directors / KMPs

Mr. R. Chandrasekar Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for re-election.

Due to personal reasons Mr. D Balagopal Chief Financial Officer ofthe Company resigned and was relieved from the services of the Company on

10.12.2019.

Mr. M O Ayyappan was appointed as Chief Financial Officer of theCompany w.e.f 07.02.2020.

Due to personal reasons Mr. G. Arunmozhi Company Secretary submittedresignation on 04.05.2020 and was relieved from the services of the Company on

03.07.2020.

Mr.R.Srikrishna was appointed as Company Secretary on 17.06.2020effective from 04.07.2020.

25. Auditors

(a) . Statutory Auditors

At the 13th Annual General Meeting (AGM) M/s. SRSV &Associates Chartered Accountants were appointed as statutory auditors of the Company fora period of 5 years and they will hold office until the conclusion of 18th AGM(FY 2017-18 to 202122) as per Section 139 of the Companies Act 2013 read with theCompanies (Audit & Auditors) Rules 2014. M/s.SRSV & Associates CharteredAccountants Chennai have also confirmed that the appointment is within the limits asspecified under the Companies Act 2013. Consequent to the amendment made in the provisionsof Section 139 of the Act the ratification of statutory auditors' appointment at theensuing AGM does not arise.

(b) . Cost Auditor and Cost Audit Report

Pursuant to Section 148 of the Companies Act 2013 read with theamended rules thereof the Board of Directors on recommendation of the Audit Committeehas appointed Mr.J.Karthikeyan Cost Accountant as Cost Auditor of the Company for thefinancial year 2020-21 to carry out necessary cost audit in respect of manufacturingactivities of the Company such as specialty chemicals division drums manufacturingdivision engineering

division (boat building) and governor services division etc. The Boardhas recommended the remuneration payable to the above Cost Auditor for ratification ofshareholders at the ensuing Annual General Meeting.

(c). Secretarial Auditor

The Company has appointed Mr.R.Kannan Practicing Company Secretary tocarry out necessary secretarial audit for the financial year 2020-21 as required underSection 204 of the Companies Act 2013. As required under Section 204 of the Act theSecretarial Audit Report issued by Mr.R.Kannan Company Secretary in practice is given inthe Annexure V.

d). Internal Auditor

M/s.Sundar Srini & Sridhar Chartered Accountants Chennai who wasappointed as Internal Auditors of the Company for the financial year 2019-20 haveconducted necessary internal audit as required under Section 138 of the Companies Act2013 read with the Rule 13 of the Companies (Accounts) Rules 2014. During the year theBoard has re-appointed M/s.Sundar Srini & Sridhar Chartered Accountants as InternalAuditors for the upcoming financial year 2020-21.

26. Internal Control System

The Company has a proper and adequate internal control system to ensurethat all the assets of the Company are safeguarded and protected against any loss that allthe transactions are properly authorized and recorded and Information provided tomanagement is reliable and timely. The Company ensures adherence to all statues. Thestrong and robust internal control system is in place with appropriate policies andprocedures to ensure the achievement of operational and strategic goals compliance withpolicies rules and regulations prevention and detection of frauds and errors accuracyand completeness of accounting records and economical and efficient use of resources.

The Company has engaged a firm of external consultants for the internalauditor function to continuously monitor the effectiveness of internal controls. Auditsare conducted on an ongoing basis and all significant deviations are brought to the noticeof the Audit Committee. Corrective action is recommended for implementation by the auditcommittee. All these measures do facilitate timely detection of any irregularities andprovide early remedial steps. The Audit Committee approves the audit plan assigned to theinternal auditors and the audit plan is reviewed annually. Further the Audit Committeealso reviews the quarterly reports submitted by internal auditors critically and allmaterial deviations are seriously

viewed.

27. Fixed Deposit

The Company has not invited or accepted any deposits during the year.

28. Issue of shares

The Company has not issued and allotted any kinds of securities duringthe year.

29. Dematerialization of Equity Shares

As at 31st March 2020 38302248 equity sharesrepresenting 96.79% of the paid-up share capital of the Company have been dematerialized.The shareholders holding shares in physical form are advised to dematerialize their equityshares to avoid the risks associated with holding the share certificates in physical form.

30. Subsidiary & Associate Companies

Pursuant to Section 136 of the Companies Act 2013 which has givenexemption from attaching the annual reports of subsidiary companies along with the annualreport of the Company the copies of balance sheet profit and loss account report ofDirectors & Auditors and other related information of South India House Estates &Properties Ltd Wilson Cables Private Ltd Danish Steel Cluster Private Ltd (SubsidiaryCompanies) Wilson Far East Private Ltd Singapore (a step down subsidiary of SicagenIndia Ltd) are not attached with this annual report.

Hence a statement containing the salient features of the financialstatements of the aforesaid subsidiary Companies for the year ended 31st March2020 is attached with the consolidated accounts section.

During the year Edac Automation Ltd an Associate Company wherein yourCompany holds 49.99% equity stake was merged with Edac Engineering Ltd w.e.f 01.04.2018as per the Scheme of Amalgamation approved by NCLT vide its Order dated 10.07.2019 and asa result of which the said Edac Automation ceased to be an Associate Company.

The Company shall make available the annual accounts of the aforesaidsubsidiary Companies and Associate Company to the shareholders of the Company upon theirrequest. The annual accounts of the said subsidiary Companies and Associate Company shallalso be kept available for inspection by any member at the registered office of theCompany.

In accordance with Rule 5 of Companies (Accounts) Rules 2014 astatement containing the salient features of the Financial Statements of the Subsidiariesand Associate is attached in Form AOC-1 as separate Annexure.

31. Consolidated Financial Statements

In accordance with Indian Accounting Standard (Ind AS) 110 of Instituteof Chartered Accountants of India and Regulation 34(2) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the consolidated financial statements areprepared by the Company. The audited consolidated financial statements together withauditors' report for the financial year ended 31st March 2020 are attached withthis annual report.

Acknowledgement

Your Directors take this opportunity to express their gratitude toCompany's Bankers NBFCs Customers Suppliers Govt. Departments and other businessassociates for their unstinted support extended to the Company. Your Directors wish toplace on record their appreciation of the efficient and dedicated services rendered bythe employees at all levels across the Company. We are sincerely grateful to all theshareholders for their confidence faith and support in the endeavours of the Company.

For and on behalf of the Board
Place : Chennai Ashwin C Muthiah
Date : 17th June 2020 Chairman

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