To the Members
The Directors are pleased to present the Thirty-fourth Annual Report ofthe Company and the Audited Financial Statements for the year ended 31st March2020.
(Rs in lakhs)
|Particulars || |
|FY 2020 ||FY 2019 ||FY 2020 ||FY 2019 |
|Total Income ||6425.51 ||4650.52 ||6425.53 ||4650.96 |
|Profit (Loss) before Tax and Depreciation ||999.95 ||671.36 ||999.35 ||667.56 |
|Provision for Taxes ||208.66 ||169.70 ||214.37 ||169.79 |
|Depreciation ||73.56 ||66.67 ||84.84 ||77.88 |
|Profit (Loss) for the Year After Tax and Depreciation ||673.24 ||430.62 ||655.66 ||415.52 |
|Earnings per Share (in ^) ||15.88 ||10.16 ||15.46 ||10.00 |
During the year under review your Company achieved Total Income of?6425.51 Lakhs on a Standalone basis as compared to ?4650.52 Lakhs during the previousFinancial Year. After considering Interest Depreciation Foreign Exchange (Loss) / Gainand Tax the Company has Net Profit of ?673.24 Lakhs for the current Financial Year asagainst Net Profit of ?430.62 Lakhs in the previous Financial Year.
On a Consolidated basis your Company achieved Total Income of ?6425.53Lakhs during the year under review as compared to ?4650.96 Lakhs during the previousFinancial Year. After considering Interest Depreciation Foreign Exchange (Loss) / Gainand Tax the Company has Net Profit of ?655.66 Lakhs for the current Financial Year asagainst Net Profit of ?415.52 Lakhs in the previous Financial Year.
The Directors of your Company recommend a dividend of 11 % (?1.10 pershare) subject to the approval of the members payable to those shareholders whose namesappear in the Register of Members as on the book closure date.
TRANSFER TO GENERAL RESERVE
No amount is proposed to be transferred to the general reserve for theyear under review.
The Company has 4 subsidiaries as on March 31 2020. There are noassociate companies within the meaning of section 2(6) of the Companies Act 2013("Act"). There has been no material change in the nature of the business of thesubsidiaries during the period under review.
During the year the Board of Directors ("the Board")reviewed the affairs of the subsidiaries. In accordance with Section 129(3) consolidatedfinancial statements of the Company have been prepared which forms a part of this AnnualReport. Further a statement containing salient features of the financial statement of theCompany's subsidiaries in Annexure-I - Form AOC-1 is appended to the Board's report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Company has received necessary declaration from each independentdirector under Section 149(7) of the Companies Act 2013 (the "Act") that theymeet the criteria of independence laid down in Section 149(6) of the Act and Regulation 25of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI Listing Regulations").
During the year the Non-Wholetime directors of the Company had nopecuniary relationship or transactions with the Company other than sitting fees andexpenses incurred for attending meetings of the Company.
As per the provisions of the Act Mr. Kunal Sikka retires by rotationat the ensuing Annual General Meeting and being eligible has offered himself forre-appointment. The Board recommends his re-appointment.
The Board on the basis of the recommendations made by the Nomination& Remuneration Committee has recommended the re-appointment of Mr.Kunal Sikka asWhole Time Director for a further one year from 01st October 2020 to 30th September2021 as mentioned in the Notice.
Four meetings of the board were held during the year. For details ofthe meetings of the Board reference may be made to the corporate governance report whichforms part of this report.
During the financial year 2019-20 there were no changes in the Boardand Key Managerial Personnel of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act the Directors'Responsibility Statement is given hereunder:
i In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to material departuresif any;
ii The Directors have in the selection of the accounting policiesconsulted the statutory auditors and have applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit of theCompany for that period;
iii The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv The Directors have prepared the annual accounts on a going concernbasis;
v The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
vi The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
SEBI Listing Regulations mandates that the Board shall monitor andreview the Board evaluation framework. The structure includes the evaluation of directorson various parameters such as board dynamics and relationships information flow decisionmaking relationship with stakeholders company performance tracking board andcommittees' effectiveness and peer evaluation.
As per the provisions of the Act including Schedule IV the evaluationof all the directors and the Board as a whole was conducted based on the criteria andframework adopted by the Board. The evaluation process has been explained in the corporategovernance report. The Board approved the evaluation results as collated by the nominationand remuneration committee.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy for selection and appointment of Directors KeyManagerial Personnel and their remuneration which is stated in the corporate governancereport that forms part of this report.
The details pertaining to the composition of the Audit Committee areincluded in the Corporate Governance Report which forms part of this report.
a. Statutory Auditors
At the AGM held on 27th September 2018 MessrsB.N.Subramanya & Co. Chartered Accountants (Firm Registration No. 004142S) wereappointed as Statutory Auditors of the Company for a period of five consecutive years. Asper the provisions of Section 139 of the Act B.N.Subramanya & Co. have confirmed thatthey are not disqualified from continuing as Auditors of the Company.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Messrs N. K. Hebbar & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company. The Secretarial Audit report isAnnexure-IV - MR3 herewith.
c. Auditor's Report
The Auditor's Report does not contain any qualifications reservationsor adverse remarks.
d. Secretarial Auditor's Report
The Secretarial Audit Report confirms that the Company has generallycomplied with the provisions of the Act Rules Regulations Guidelines etc. There is oneobservation flagged by the Secretarial Auditor which is elaborated in of the SecretarialAudit Report appended to the Directors' Report together with the clarification receivedfrom the Company Secretary in this regard.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee has formulated andrecommended to the Board a CSR Policy indicating the activities to be undertaken by theCompany which has been approved by the Board. The CSR Policy of the Company is alignedthe Companies Act 2013 and is available on the website of the Company.
During the financial year the Company has spent Rs. 7.01 Lakhs towardsthe various CSR activities. The Annual Report on CSR activities is appended as Annexure-III to the Board's report.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the pre servation of the accounting records and the timelypreparation of reliable financial disclosures.
The Company has a robust Risk Management framework commensurate withthe size and scale of its operations to identify evaluate business risks andopportunities. This framework seeks to create transparency minimize adverse impact on thebusiness objectives and enhance the Company's competitive advantage.
The development and implementation of risk management policy has beencovered in the Management Discussion and Analysis which is a part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 (the "Act") are disclosedin note 39 of the Financial Standalone Statements forming part of this report. The samewas given to a wholly owned subsidiary of the Company for meeting its statutoryrequirements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during thefinancial year were on arm's length basis and were in the ordinary course of business.There are no materially significant related party transactions made by the Company withPromoters Directors KMP or other designated persons which may have a potential conflictwith the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee asalso the Board for approval wherever required. Prior omnibus approvals of the AuditCommittee were obtained for the transactions of repetitive nature as applicable. None ofthe Directors have any pecuniary relationships or transactions vis-a-vis with the Company.Information on transactions with related parties which were in the nature for professionaland consultancy services pursuant to section 134 (3)(h) of the Companies (Accounts)Rules2014 are annexed herewith in Annexure - II -Form AOC-2 and the same forms part ofthis report.
EXTRACT OF ANNUAL RETURN
As provided under Section 23(3) of the Companies (Amendment) Act 2017the extract of the annual return in the prescribed form MGT-9 has been placed on thecompany's website www.sikaglobal.com and also forms part of the Annual Report Annexure -V.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace andhas adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules thereunder for preventionand redressal of complaints of sexual harassment at workplace. During the financial year2019-20 the Company had received zero complaints on sexual harassment and accordingly nocomplaints remain pending as of 31st March 2020.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION(12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors of the Company have not reported any fraud asspecified under the second proviso of Section 143(12) of the Act.
PARTICULARS OF EMPLOYEES
The information required under section 197 of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given in the Corporate Governance report that forms a part of the Report.
Your Company has not accepted any deposits from the public and assuch no amount on account of principal or interest on deposits from public wasoutstanding as on the date of the balance sheet.
As per SEBI Listing Regulations Management Discussion and AnalysisCorporate Governance Report and Auditors' Certificate on corporate governance areappended which form part of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO Conservation of Energy:
The operations of the Company are not energy intensive. Howeveradequate measures have been taken to conserve and reduce the energy consumption.Initiatives to integrate energy efficiency into overall operations are undertaken throughdesign considerations and operational practices. The key initiatives towards energyconservation were:
a) Improved monitoring of energy consumption;
b) Creating awareness within the Company on energy conservation;
c) Increased focus on procurement of energy efficient equipment; and
d) Exploring options towards utilisation of renewable energy.
Technology Absorption Adaptation and Innovation
a) Technology absorption and adaptation continues to be at core of theCompany's objectives and associated strategy. The Company continues to use the latesttechnologies for improving productivity and the quality of its products and services.During the year the Company has made continued efforts in developing new designs to meetrequirements of customers.
b) The research and development efforts of the Company are customerneed based and hence it is a continuous process. Because of its in-house R&D effortsthe Company was able to deliver the best solutions to the customers in a cost effectivemanner including for participation in import substitution programs for aerospace anddefence projects capitalising on new business opportunities and improvement of existingdesigns.
c) The Company has not imported any technology during the last threeyears.
d) The expenditure incurred on Research and Development during the yearwas Rs.87.27lakhs.
FOREIGN EXCHANGE EARNING AND OUTGO
During the year under review the Company earned T567.30 in foreignexchange and spent T4352.54 Lakhs.
MATERIAL CHANGES AND COMMITTMENTS
There have been no significant material changes and commitmentsaffecting the financial position between the end of the financial year and the date of thereport.
SIGNIFICANT AND MATERIAL ORDERS
There were no significant orders passed by any regulators or courts ortribunals during the year under review impacting the going concern status and Company'soperations in the future.
Your Directors wish to place on record their appreciation of thesupport which the Company has received from its employees shareholders customerslenders business associates vendors and the promoters of the Company.
| ||On behalf of the Board of Directors |
|Bangalore 29th June 2020 ||Rajeev Sikka |
|Chairman & Managing Director |