To the Members
The Directors are pleased to present the Thirty-third Annual Report of the Company andthe Audited Statement of Accounts for the year ended 31st March 2019.
|FINANCIAL HIGHLIGHTS ||Standalone ||Consolidated |
|Particulars ||FY 2019 ||FY 2018 ||FY 2019 ||FY 2018 |
|Total Income ||4650.52 ||2314.50 ||4650.96 ||2314.50 |
|Profit (Loss) before Tax and Depreciation ||671.36 ||266.00 ||667.56 ||268.71 |
|Provision for Taxes ||169.70 ||47.15 ||169.79 ||47.15 |
|Depreciation ||66.67 ||73.62 ||77.88 ||73.62 |
|Profit (Loss) for the Year After Tax and Depreciation ||430.62 ||145.23 ||415.52 ||147.93 |
|Earnings per Share (in `) ||10.16 ||3.43 ||10.00 ||3.49 |
During the year under review your Company achieved Total Income of ` 4650.52 Lakhs ona Standalone basis as compared to ` 2314.50 Lakhs during the previous Financial Year.After considering Interest Depreciation Foreign Exchange (Loss) / Gain and Tax theCompany has Net Profit of ` 430.62 Lakhs for the current Financial Year as against NetProfit of ` 145.23 Lakhs in the previous Financial Year.
On a Consolidated basis your Company achieved Total Income of ` 4650.96 Lakhs duringthe year under review as compared to ` 2314.50 Lakhs during the previous Financial Year.After considering Interest Depreciation Foreign Exchange (Loss) / Gain and Tax theCompany has Net Profit of ` 415.52 Lakhs for the current Financial Year as against NetProfit of ` 147.93 Lakhs in the previous Financial Year.
The Directors of your Company recommend a dividend of 8% ( ! 0.80 per share) subject tothe approval of the members payable to those shareholders whose names appear in theRegister of Members as on the book closure date.
TRANSFER TO GENERAL RESERVE
No amount is proposed to be transferred to the general reserve for the year underreview.
The Company has 4 subsidiaries as on March 31 2019. There are no associate companieswithin the meaning of section 2(6) of the Companies Act 2013 ("Act"). There hasbeen no material change in the nature of the business of the subsidiaries during theperiod under review.
During the year the Board of Directors ("the Board") reviewed the affairs ofthe subsidiaries. In accordance with Section 129(3) consolidated financial statements ofthe Company have been prepared which forms a part of this Annual Report. Further astatement containing salient features of the financial statement of the Company'ssubsidiaries in FormAOC-1 is appended to the Board's report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Company has received necessary declaration from each independent director underSection 149(7) of the the Companies Act 2013 (the "Act") that they meet thecriteria of independence laid down in Section 149(6) of the Act and Regulation 25 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations").
During the year the Non-Wholetime directors of the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees and expensesincurred for attending meetings of the Company.
As per the provisions of the Act Mrs. Krishna Sikka retires by rotation at the ensuingAnnual General Meeting and being eligible has offered herself for re-appointment. TheBoard recommends her re-appointment.
The Board on the basis of the recommendations made by the Nomination &Remuneration Committee has recommended the re-appointment of these Directors for a secondterm commencing from 25thSeptember 2019 upto 24thSeptember 2024 as mentioned in theNotice.
Four meetings of the board were held during the year. For details of the meetings ofthe Board reference may be made to the corporate governance report which forms part ofthis report.
During the financial year 2018-19 there were no changes in the Board and KeyManagerial Personnel of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of theAct the Directors' ResponsibilityStatement is given hereunder: i In the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if 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 theActfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; iv The Directors have prepared the annual accounts on a goingconcern basis; v The Directors have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively; vi The Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
SEBI Listing Regulations mandates that the Board shall monitor and review the Boardevaluation framework. The structure includes the evaluation of directors on variousparameters such as board dynamics and relationships information flow decision makingrelationship with stakeholders company performance tracking board and committees'effectiveness and peer evaluation.
As per the provisions of theAct including Schedule IV the evaluation of all thedirectors and the Board as a whole was conducted based on the criteria and frameworkadopted 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'APPOINTMENTAND REMUNERATION
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andtheir remuneration which is stated in the corporate governance report that forms part ofthis report.
The details pertaining to the composition of the Audit Committee are included in theCorporate Governance Report which forms part of this report.
a. Statutory Auditors
At the AGM held on 27th September 2018 B.N.Subramanya & Co. Chartered Accountants(Firm Registration No. 004142S) were appointed as Statutory Auditors of the Company for aperiod of five consecutive years. As per the provisions of Section 139 of the ActB.N.Subramanya & Co. have confirmed that they are not disqualified from continuing asAuditors of the Company.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Messrs N.K.Hebbar & Associates a firm of Company Secretaries in Practice to under take theSecretarial Audit of the Company. The Secretarial Audit Report is annexed here with
c. Auditor's Report and Secretarial Auditor's Report
The Auditor's Report and Secretarial Auditor's Report do not contain anyqualifications reservations or adverse remarks.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the preservation of the accounting records and the timely preparation ofreliable financial disclosures.
The Company has a robust Risk Management frame work commensurate with the size andscale of its operations to identify evaluate business risks and opportunities. Thisframework seeks to create transparency minimize adverse impact on the business objectivesand enhance the Company's competitive advantage.
The development and implementation of risk management policy has been covered in theManagement 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 the provisions ofSection 186 of the Companies Act 2013 (the "Act") are disclosed in note 38 ofthe Financial Standalone Statements forming part of this report. The same was given to awholly owned subsidiary of the Company for meeting its statutory requirements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KMPor other designated persons which may have a potential conflict with the interest of theCompany at large.
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval wherever required. Prior omnibus approvals of the Audit Committee wereobtained for the transactions of repetitive nature as applicable. None of the Directorshave any pecuniary relationships or transactions vis--vis with the Company. Informationon transactions with related parties which were in the nature for professional andconsultancy services pursuant to section 134 (3)(h) of the Companies (Accounts) Rules2014 are annexed herewith in FormAOC-2 and the same forms part of this report.
EXTRACT OFANNUAL RETURN
As provided under Section 23(3) of the Companies (Amendment) Act 2017 the extract ofthe annual return in the prescribed form MGT-9 has been placed on the company's website:www.sikaglobal.com and also forms part of the annual report.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at work place and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules thereunder for prevention and redressalof complaints of sexual harassment at workplace. During the financial year 2018-19 theCompany had received zero complaints on sexual harassment and accordingly no complaintsremain pending as of 31st March 2019.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143OTHER THAN THOSE WHICHARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Act.
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 inthe corporate governance report that forms a part of this report.
Your Company has not accepted any deposits from the public and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet.
As per SEBI Listing Regulations Management Discussion and Analysis CorporateGovernance Report and Auditors' Certificate on corporate governance are appended whichform part of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy:
The operations of the Company are not energy intensive. However adequate measures havebeen taken to conserve and reduce the energy consumption. Initiatives to integrate energyefficiency into overall operations are undertaken through design considerations andoperational practices. The key initiatives towards energy conservation 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 andadaptation continues to be at core of the Company's objectives and associated strategy.The Company continues to use the latest technologies for improving productivity and thequality of its products and services. During the year the Company has made continuedefforts in developing new designs to meet requirements of customers. b) The research anddevelopment efforts of the Company are customer need based and hence it is a continuousprocess. Because of its in-house R&D efforts the Company was able to deliver the bestsolutions to the customers in a cost effective manner including for participation inimport substitution programs for aerospace and defence projects capitalising on newbusiness opportunities and improvement of existing designs. c) The Company has notimported any technology during the last three years. d) The expenditure incurred onResearch and Development during the year was Rs.76.20 lakhs.
Foreign Exchange Earning and Outgo
During the year under review the Company earned ` 553 75 . Lakhs in foreign exchangeand spent ` 2923 19 . Lakhs.
MATERIAL CHANGESAND COMMITTMENTS
There have been no significant material changes and commitments affecting the financialposition between the end of the financial year and the date of the report.
SIGNIFICANTAND MATERIAL ORDERS
There were no significant orders passed by any regulators or courts or tribunals duringthe year under review impacting the going concern status and Company's operations in thefuture.
Your Directors wish to place on record their appreciation of the support which theCompany has received from its employees shareholders customers lenders businessassociates vendors and the promoters of the Company.
| ||On behalf of the Board of Directors |
|Bengaluru ||Rajeev Sikka |
|07th August 2019 ||Chairman & Managing Director |
Annexure -1 AOC-1
(Pursuant to first proviso to sub-section (3) of Section 129 read with rule 5 ofCompanies (Accounts) Rules 2014) Statement containing salient features of the financialstatement of subsidiaries/associate companies/joint ventures
|Part ||A - Subsidiaries || || || || |
| || || || || ||(` in lakhs) |
|1 ||Name of the Subsidiary/ Associate ||Sikka N Sikka Engineers Private Ltd. ||EMSAC Engineering Private Ltd. ||Aerotek Sika Aviosystems Pvt. Ltd. ||Sika Tourism Private Ltd |
|2 ||Share Capital ||6.00 ||5.00 ||150.00 ||1.00 |
|3 ||Reserves & Surplus ||113.58 ||(0.25) ||(17.20) ||(3.10) |
|4 ||Total Assets ||119.91 ||4.86 ||330.42 ||0.04 |
|5 ||Total Liabilities ||119.91 ||4.86 ||330.42 ||0.04 |
|6 ||Investments ||37.03 ||0.00 ||0.00 ||- |
|7 ||Turnover ||1.43 ||0.10 ||0.75 ||- |
|8 ||Profit before taxation ||0.17 ||(0.20) ||(14.46) ||(0.51) |
|9 ||Provision for taxation ||0.08 ||0.00 ||0.00 ||- |
|10 ||Profit after taxation ||0.09 ||(0.20) ||(14.46) ||(0.51) |
|11 ||Proposed Dividend ||- ||- ||- ||- |
|12 ||% of Shareholding ||100.00 ||100.00 ||30.86 ||100.00 |
Notes: a) Reporting period and reporting currency of the above subsidiary is the sameas that of the Company. b) Part B of the Annexure is not applicable as there are noassociate companies/joint ventures of the Company as on 31st March 2019.
Annexure II - AOC - 2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of Section 188 of the Act including certain arms-length transactions underthird proviso thereto
1. Details of contracts or arrangements or transactions not at arm's length basis: TheCompany has not entered into any material contracts or arrangement or transactions withits related parties which is not at arm's length and hence not applicable.
2. Details of contracts or arrangements or transactions at arm's length basis:
|Name(s) of the related party and nature of relationship ||Nature of contracts / arrangements / transactions ||Duration of the contracts / arrangements / transactions ||Salient terms of the contracts or arrangements or transactions including the value if any ||Date(s) of approval by the Board ||Amount paid as advances if any |
|Sikka N Sikka Engineers Private Limited - WOS Anuradha Sikka ||Consulting Services ||Mutual consent as per terms of contract ||Engineering Consulting Services ||25-05-2017 ||NA |
| ||Office or Place of profit ||Service Agreement ||Corporate advice ||24-11-2017 ||NA |
|Aerotek Sika Aviosystems Pvt Ltd ||Loan to Subsidiary Company ||Mutual consent ||Principal business acitivity ||07-08-2018 ||NA |