Your Directors are pleased to present the 66thAnnual Report together withthe Audited Statement of Accounts of the Company for the year ended 31 stMarch2017.
1. FINANCIAL HIGHLIGHTS:
The Company's financial performance for the year ended 31st March 2017 issummarised below:
|Particulars ||2016-17 ||2015-16 |
| ||(Rupees in Million) ||(Rupees in Million) |
|Total Revenue ||13155.87 ||12201.38 |
|Earnings Before Interest Tax Depreciation and ||1961.99 ||1686.28 |
|Amortization (EBITDA) || || |
|Less : Interest ||245.03 ||263.50 |
|Less : Depreciation ||498.78 ||437.91 |
|Less : Provision for Taxation ||324.08 ||268.58 |
|Profit After Tax ||894.10 ||716.29 |
|Add :Surplus brought forward ||1309.24 ||942.92 |
|Net Profit available for appropriation ||2203.34 ||1659.21 |
|Appropriations || || |
|1. General Reserve ||150.00 ||100.00 |
|2. Interim Dividend @ 125% (Rs. 2.50 per equity share) ||173.07 ||173.07 |
|3. Final Dividend (Proposed) @ 50% ||- ||34.61 |
|(Previous Yeardividend paid @ Rs.0.50 pershare) || || |
|4. Tax on Dividend ||35.24 ||42.29 |
|TOTAL ||358.31 ||349.97 |
|Surplus to be carried forward ||1845.03 ||1309.24 |
2. THE YEAR IN RETROSPECT:
During the year under review subdued business sentiments demonetization of the IndianRupee combined with difficult market conditions and slowdown in global demand posedchallenges. As a result Company could post only nominal sales growth. The Directors arepleased to inform that in spite of not so favourable conditions your Company hasregistered much better performance in terms of growth in profits as compared to theprevious year.
Total Revenue from operations for the year ended 31st March 2017 aggregatedto Rs. 13156 million as against Rs. 12201 million achieved during the previous year.Profit after tax for the year ended 31st March 2017 was Rs. 894 million asagainst Rs. 716 million earned during the previous year.
Pigment sales increased from Rs. 10656 million in the previous year to Rs. 11001million in the year under review. Profits for the Pigment Division for the year underreview amounted to Rs. 1803 million as compared to Rs. 1637 million of the previousyear.
Agro Sales for the year ended 31st March 2017 amounted to Rs. 1445 millionas against Rs. 1163 million achieved during the previous year. Profits for the AgroDivision for the year under review amounted to Rs. 84 million as against Rs. 63 millionfor the previous year.
The Company's Indian Subsidiaries have performed well. Prescient Color Limitedcontinues to register good growth. RIECO Industries Limited has registered an improvementin the performance as compared to the preceding Financial Year. The Company's overseassubsidiaries in the Netherlands and North America continue to record improvedperformance.
On a Consolidated basis your Company's Total Revenues for the year ended 31stMarch 2017 stood at Rs. 15450 Million up by 9 % as compared to Rs. 14234 Million inFinancial Year 2015-16. Net
Profit Before Tax after consolidation grew by 38% to Rs. 1362 Million in FinancialYear 2016-17 as compared to Rs. 990 Million in Financial Year2015-16.
The Company's overseas subsidiaries in The Netherlands and North America set up withthe objective of marketing and selling Pigments continue to record improved performance.Both the overseas subsidiaries have entered a consolidation phase and will play a crucialrole in positioning the Company as a dominant player in the Global Pigment Industry.Revenue from exports for the year ended 31st March 2017 amounted to Rs. 5079million as against Rs. 5176 million for the previous year.
During the year your Company had declared and paid an Interim Dividend of Rs. 2.50 (@125%) per Equity share (of Rs. 2.00 each). Yourdirectors are pleased to recommend a FinalDividend of Rs. 1.00 (@50%) per Equity share (of Rs. 2.00 each) for the Financial Year2016-17. The Interim Dividend along with recommended Final Dividend aggregates to a totalDividend of Rs. 3.50 (@ 175%) per Equity share (of Rs. 2.00 each) for the Financial Year2016-17 as compared to the total Dividend of Rs. 3.00 (@ 150 %) per Equity share (of Rs.2.00 each) for the Financial Year 2015-16. The total amount of Dividend pay-out for theyearwould be Rs.291.63 Million (Previous Year: Rs. 249.97 Million).
4. FIXED DEPOSITS:
The Company did not accept any fixed deposit during the year under review. Unclaimeddeposits to the extent of Rs. 0.67 Million were outstanding as on 31st March2017.
5. INCORPORATION OF STEP-DOWN SUBSIDIARY (SDS) IN MEXICO:
During the year the Company has incorporated through its direct subsidiary in TheNetherlands viz. Sudarshan Europe B.V. a step-down subsidiary (SDS) in Mexico by nameSudarshan Mexico on 25thJanuary 2017 for marketing and selling pigmentsmanufactured by Sudarshan India. Further the SDS will also be in a position to keepstocks of finished products and do invoicing. This will also enable the Company to servicekey customers in regions around U.S.A.
6. DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with Section 134 of the Companies Act 2013 the Directors based on therepresentation received from the management confirm that:
i. in the preparation of accounts for the Financial Year ended 31st March2017 the applicable accounting standards have been followed with no material departures;
ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of Financial Year and of theStatement of Profit and Loss of the Company for that period;
iii. the Directors 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 for preventing and detecting fraud andother irregularities;
iv. the Directors have prepared the Annual Accounts on a going concern basis;
v. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;
vi. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
7. CORPORATE GOVERNANCE:
Members are aware that the Company has always strived to maintain applicable standardsof good corporate governance and the commitment to good corporate governance is embodiedin its vision mission and corporate values. As a means to realise its goal of sustainablevalue creation the Company has adopted performance excellence as part of its culture andits corporate values to foster a shared and common set of behaviour amongst all theemployees.
Members will be pleased to note that the Company has complied with the mandatoryrequirements of Corporate Governance set out under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
A detailed report on Corporate Governance duly certified by the Statutory Auditors ofthe Company B.K. Khare &Co. Chartered Accountants Mumbai is appearing separately inthe Annual Report.
8. MANAGEMENT DISCUSSION AND ANALYSIS:
A Management Discussion and Analysis covering a wide range of issues relating toindustry trends Company Performance Business and Operations is given separately in theAnnual Report.
9. BUSINESS RESPONSIBILITY REPORT:
In terms of SEBI Listing Regulations 2015 top 500 Companies in terms of marketcapitalisation are mandatorily required to include Business Responsibility Report as partof the Annual Report. The Company's name has been included in the list of top 500companies in terms of market capitalisation. Accordingly Business Responsibility Reportfor the year ended 31st March 2017 is separately provided.
10. CONTRACTS ANDARRANGEMENTS WITH RELATED PARTIES:
All related party transactions that were entered into during the Financial Year 2016-17were on arm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions entered into by the Company withPromoters Independent Directors Key Managerial Personnel .Senior Management and /ortheir relatives which may have potential conflict with the interests of the Company atlarge.
All related party transactions are presented to the Audit Committee for their priorapproval. Subsequent modifications of related party transactions are also placed beforethe Audit Committee for its approval. Omnibus approval is obtained for the transactionswhich are foreseen and repetitive in nature. Astatement of all related party transactionsis presented before the Audit Committee on quarterly basis specifying the nature valueand terms and conditions of the transactions.
The related party transactions policy is uploaded on the Company's websitewww.sudarshan.com .
The particulars of contracts or arrangements made with related parties pursuant toSection 188 is covered in Notes to the Financial Statements and material contracts /arrangements made with related parties is given in Form AOC-2 which is attached asAnnexure VI to this report.
11. CORPORATE SOCIAL RESPONSIBILITY:
The Corporate Social Responsibility (CSR) activities of the Company are in accordancewith Schedule VII to the Companies Act 2013. All CSR activities of the Company arecarried out under the aegis of "SUDHA" (Sudarshan's Holistic Aspiration). As aresponsible corporate citizen the Company continues its efforts to meet among othersthe Environmental Health and Safety expectations of society at large.
SUDHA is envisaged as a movement to involve the Company and the community in which itoperates to create better living standards and safeguard the environment. As a part ofCorporate Social Responsibility SUDHA has been engaged in various social projectsembracing the people that live in the vicinity of its manufacturing and other facilities.
The Company's grand vision is "Growing together" with all its stakeholders ina manner that is spiritually fulfilling socially just and environmentally sustainable.SUDHA contributes to this vision by ensuring that all its initiatives are driven with thisperspective in mind. SUDHA's vision is 'Aspiring wholesome sustainable growth for womenand children of communities around the Company's plants' and Mission is 'Reach out tocommunities by engaging in projects related to Livelihood Health Education and CommunityDevelopment'.
Various projects that SUDHA is working on are Livelihood enhancement Project;Employment Enhancing Vocational Skill Project; Health Improvement Project; Promotion ofEducation; Community Development Project; Environment Sustainability Project etc. Throughall these initiatives SUDHA continues to touch the lives of thousands of people aroundthe Company's facilities.
As a testimony to its ongoing CSR activities The Institute of Directors has conferredthe Company as the Winner of 'Special Commendation' for 'Golden Peacock Award forCorporate Social Responsibility'
for the year 2016. This Award for Corporate Social Responsibility has been institutedto encourage initiatives in Corporate Social Responsibility and promoting sustainabledevelopment.
The Board is pleased to inform that during the year the Company has spent an aggregateamount of Rs.14.31 Million.
The Annual Report on CSR activities are annexed as Annexure IV to this report.
12. RISK MANAGEMENT AND INTERNAL CONTROLS:
Your Company has an elaborate Risk Management procedure which is based on threepillars: Business RiskAssessment Operational Controls Assessment and Policy Complianceprocesses. Your Company has set up a Risk Management Committee to monitor the risks andtheir mitigating actions. The key risks and mitigating actions are also placed beforetheAudit Committee of the Company. The Company's internal control systems are commensuratewith the nature of its business and the size and complexity of operations. These systemsare routinely tested and certified by Statutory as well as Internal Auditor and coveralloffices factories and key business areas. Significant audit observations and follow upactions thereon are reported to the Audit Committee. The Audit Committee reviews adequacyand effectiveness of the Company's internal control environment and monitors theimplementation of audit recommendations including those relating to strengthening of theCompany's risk management policies and systems.
13. REMUNERATION POLICY:
The Remuneration policy of the Company covering the appointment and remuneration of theDirectors Key Managerial Personnel and Senior Management of the Company includingcriteria for determining qualifications positive attributes independence of a Directorand other related matters has been provided separately as Annexure III.
14. SUCCESSION POLICY:
The Company has a Succession Policy approved by the Board of Directors with the mainobjective to ensure the orderly identification and selection of new Directors WorkingDirectors and Senior Management in the event of any vacancy whether such vacancy existsby reason of an anticipated retirement re-organization unanticipated departure orotherwise. For full details members are requested to refer to the Company's web sitewww.sudarshan.com
15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. A. B. Rathi was inducted as a Non-Executive Non-Independent Director on the Boardof Directors of the Company w.e.f. 11th November 2016. Mr. A. B. Rathi isB.Tech from University of Madras M. S. Chemical Engg.from University of Detroit U.S.A.and MBAfrom U.S.A.
Mr. A. B. Rathi is the Managing Director of RIECO Industries Limited (RIECO) a WhollyOwned Subsidiary of the Company. RIECO manufactures Air Pollution Control Equipments SizeReduction Equipments and Pneumatic Conveying Systems. Mr. A. B. Rathi is also heading theIndustrial Mixing Solutions Business of the Company which manufactures Industrial Mixers.
In terms of Section 152 and 161 of the Companies Act 2013 and Article 116 of theArticles of Association of the Company Mr.A.B.Rathi Non-Executive Non-IndependentDirector holds the Office upto the date of this Annual General. Board recommends theappointment of Mr. A.B.Rathi as a Non-Executive NonIndependent Director of the Companyliable to retire by rotation.
In terms of Section 152 of the Companies Act 2013 and Article 116 of the ArticlesofAssociation of the Company Mr. K.L.Rathi Non-Executive Non-Independent Director willretire at the 66th Annual General Meeting and being eligible offers himself forreappointment. The Board of Directors recommend the reappointment of Mr. K.L.Rathi as aNon-Executive Non Independent Director of the Company liable to retire by rotation.
Key Managerial Personnel
In accordance with the provisions of Section 203 of the Companies Act 2013 thefollowing are Key Managerial Personnel of the Company:
a. Mr. P. R. Rathi Chairman and Managing Director
b. Mr. R. B. Rathi Dy. Managing Director
c. Mr. V. V. Thakur Dy. General Manager (Acting CFO)
d. Mr. P. S. Raghavan Company Secretary
Declaration by Independent Directors
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under Section 149 (6)of the Companies Act 2013.
Annual Evaluation of Board of Directors its Committees and Individual Directors
At a separate meeting of the Independent Directors held on 27th March 2017the performance evaluation of the Chairman Non-Independent Directors and the Board ofDirectors was carried out by the Independent Directors who also reviewed the adequacy andflow of information between the Company Management and the Board. The evaluation of theIndependent Directors was carried out by the entire Board.
The Directors were satisfied with the evaluation results which reflected the overallcommitment and sense of duty.
The Board has also adopted a Board Diversity Policy. The policies of Board diversityand performance evaluation of the Directors of the Company can be accessed from theCompany's website www.sudarshan.com
16. GREEN INITIATIVE:
Members are aware that the Company had started a sustainability initiative with the aimof going green and minimizing impact on the environment. This year also electronic copiesof the Annual Report for FY 2016-17 and Notice of the 66th AGM are being sentto all Members whose email addresses are registered with the Company / DepositoryParticipant(s). For Members who have not registered their email addresses physical copiesof the Annual Report 2016-17 and the Notice of the 66th AGM are sent in thepermitted mode. Members requiring physical copies can send a request to the CompanySecretary.
The Company is providing remote e-voting facility to all Members to enable them to casttheir votes electronically on all resolutions set forth in the Notice of the AGM. This ispursuant to Section 108 of the Companies Act 2013 and Rule 20 of the Companies(Management and Administration) Rules 2015 read with Regulation 44 of the SEBI ListingRegulations 2015. The instructions for remote e-voting are provided in the Notice of theAGM.
17. INDUSTRIAL RELATIONS:
Industrial relations continue to remain cordial at Roha and Mahad plants GHO Pune andat R & D Laboratory situated at Ambadvet (Sutarwadi) Dist. Pune. The Board ofDirectors record its appreciation of the commitment and support of employees at alllevels.
18. HUMAN RESOURCES:
Human resources continue to be an invaluable and intangible asset and key successfactor for the Company to grow and sustain its market position in a highly competitive andchallenging environment. Company firmly believes that people are the pivotal force behindthe growth and excellence in business operations. The overall performance and the marketposition the Company enjoys are the result of the combined strength of its people. TheCompany during the year paid special attention to developmental activities comprising ofsharpening of skills and abilities developing academic and professional knowledge andcultivating appropriate behavioural skill sets such as improving interpersonal relationsteam building abilities effective communication and presentation skills. Focus ondeveloping leadership skills and building talent for the future and the process ofimproving organizational and human capability through competency mapping of managerialpositions in all areas of the Company's operations continued as a major initiative
During the year under review several human capital enhancing measures were undertaken:
1. To meet organisational challenges Company has initiated measures aimed at buildingcapabilities at the Leadership Levels 1 and 2 and have also taken up an initiative ofLeadership Intervention for them for a period of 18 months. For both Level 1 and 2leaders the process has started and the reports have been generated based on datacollected from various sources. Also Individual Development Plans have been made andCoaching sessions have started.
2. Communication of Company performance and objectives to employees at all levels bythe top management have become a culture at the Company with SUDA CONNECT being celebratedfor the fourth year in succession. The event also provided an opportunity to rewardexemplary performances at individual level based on meritocracy. Employees with longservices in the Company were alsofelicitated during this occasion. Employees demonstratedtheir talents through various cultural programmes. The meet demonstrated a perfect blendof communication team bonding and celebrations.
3. Like last year "Fit Sudarshan" continued to be one of the mostappreciated initiatives. This year Roha Half Marathon (21Km) was organised. This event wasenjoyed by all employees their spouses and children. Sudarshan Marathon is notjustorganised to promote fitness among employees and their families but also its majorfocusis on spreading awareness on 'Clean Roha Healthy Roha' .which is one of the focus areasof our CSR activities. Cleanliness Drive was also organized post the run where everyonefrom the Dy. MD level to the children of the employees participated in cleaning the nearbyareas of our Roha facility.
4. Under Training and Development Company initiated Supervisory Assessment andDevelopment program for L4-L5 grade employees who are working on shop floor. This was ahuge success and the high potential people were identified to take higher responsibilitiesand for appropriate grooming .
5. All the Human Resource processes and initiatives launched in the last four yearshave been further reinforced and strengthened by taking them to the next level. As anendorsement of these efforts the Company received certification on global platform fromGreat Place to Work institute.
6. Last year we made it to the list of TOP 50 "Dream Companies to work" atWorld HRD Congress. This year as well we have been recognised as Dream Company to work forin Chemical Sector which is anotherfeather in the cap.
This year was very fruitful and encouraging considering our various talent managementinitiatives and Company's efforts were recognised for our Talent Management initiativesat World HRD Congress 2017.
These global awards have reinforced Company's belief of realizing Company's vision ofbecoming one amongst the top four pigment producers in the World.
19. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:
The Company has an ongoing familiarisation Programme for Independent Directors withregard to their role rights responsibilities in the Company nature of the industry inwhich the Company operates the business model of the Company etc. The Company also has anongoing programme where Directors in the course of meetings of the Board of Directors aregiven information about the operational and functional areas of the Company businessmodel as also developments in legal and regulatory areas which impact the working of theCompany so as to enable them to discharge their roles rights and responsibilities in theCompany effectively. Details of the same are available on the website of theCompanywww.sudarshan.com.
20. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL)ACT 2013:
Your Company has Zero tolerance towards any action on the part of any one which mayfall under the ambit of "Sexual Harassment" at work place and is fullycommitted to uphold and maintain the dignity of every woman working with the Company. ThePolicy framed by the Company in this regard provides for protection against sexualharassment of women at the workplace and for prevention and redressal of such complaintswithin the framework of law. Details of the same are available on the website of theCompany www.sudarshan.com.
No case of sexual harassment has been reported during the year under review.
In line with the provisions of Section 139 (2) (b) of the Companies Act 2013B.K.Khare & Co. Statutory Auditors hold office as Statutory Auditors of the Companyupto the conclusion of the 66th Annual General Meeting i.e. 10thAugust 2017.
The Board of Directors on the recommendation of the Audit Committee have approved theappointment of B S R& Associates LLP Chartered Accountants as the Statutory Auditorsof the Company for a period of 5 years from the conclusion of the ensuing 66thAGM upto the conclusion of the 71stAGM.
The Board recommends the appointment of B S R & Associates LLP CharteredAccountants as the Statutory Auditors of the Company.
As per Section 148 of the Companies Act 2013 the Company is required to have its costrecords audited by a Cost Accountant in practice. The Board of Directors of the Companyhas on recommendation of the Audit Committee approved the appointment of Parkhi Limaye& Co. Cost Accountants Pune as the Cost Auditor of the Company to conduct costaudits of "Agro Chemicals" and "Industrial Mixers" and cost recordsmaintained by the Company for the year ending on 31st March 2018. As requiredunder the Companies Act 2013 the remuneration payable to the Cost Auditor is required tobe placed before the Members in a General Meeting for their ratification. Accordingly aresolution seeking ratification of the Members for the remuneration payable to ParkhiLimaye & Co. Cost Accountants Pune is included at Item No. 6 of the notice conveningthe Annual General Meeting.
23. SECRETARIAL AUDITOR:
The Board of Directors had appointed Mr. Rajesh Karunakaran Practicing CompanySecretary to conduct Secretarial Audit for the year under review.
The Secretarial Audit Report issued by Mr. Rajesh Karunakaran Practicing CompanySecretary for the year ended 31st March 2017 as required under Section 204 ofthe Companies Act 2013 and Rules there under appears as Annexure VIII to the Directors'Report. The Secretarial Audit Report for the year under review does not contain anyqualification reservation or adverse remark.
24. SUCCESSFUL COMMISSIONING OF COGEN PLANT AT ROHA:
Board takes immense pleasure in informing you that the Company has successfullycommissioned the COGEN plant of 8.24 megawatt capacity at its Roha site. This will makethe Company self-reliant in power as far as requirements of Roha factory is concerned.This is the biggest Cogen plant in the Konkan Industrial Belt.
The Board takes this opportunity to congratulate the entire team involved in thecommissioning of this project within a record time of 12 months.
25. SUDHAMANTHAN PROJECT:
The Company has engaged the services of Renoir Consulting for a 30 week project inOperations function. Renoir is a worldwide leading Change Implementation Specialist whodelivers operational and financial outcomes that are measurable and sustainable. Thecoverage of the project includes both the Roha and Mahad Plants as well as the SupplyChain and Purchase departments. The main purpose of the project is to develop andimplement solutions processes and industry best practices to improve operationalefficiencies and foster a culture that can sustain these improvements over a longer periodof time.
26. ENVIRONMENT HEALTH SAFETY(EHS) AND POLLUTION:
Environment Health and Safety continues to be a major focus area for our Company inall its operations across the organization. As in earlier years the Company maintains"Zero lost time accident at the workplace" as its long term strategic goal.There was no major accident during the year across the Organization. There was also nooccupational health illness cases or major emergencies across the Organization. This hasbeen achieved through highest commitmentfrom the top management supported by all levelsof workforce across the Organization. Behaviour Based Safety Safety training ProcessSafety Management Hazard Identification and Rectification Near miss reportingContractor Safety and Process Safety were the key focus areas. During the year in all thesites model "EHS" systems and practices were implemented by instilling variousglobal safety practices including HAZOP Risk Assessment Layer of Protection Analysis(LOPA) Process Safety Management Visual management pre-start-up reviews and rigoroustraining to all employees and contract workers.
During the year the Company continued to focus on Environment management by furtherstrengthening the effluent treatment facility at Roha and Mahad. The Company is in theprocess of installing new technologies and facility in effluent treatment to furtherstrengthen the Pollution abatement plan.
Utility management and energy conservation initiatives have been given renewed focus inall manufacturing units.
All units of our Company are certified for OHSAS-18001 and ISO-14001 and awarded FiveStar rating from British Safety Council. Standards are regularly reviewed at variouslevels and systems aligned with the Company's Process Management.
Product stewardship transportation and warehouse safety continued to be strengthenedby providing resources standardization to match benchmark practices training to driversand warehouse workers for safe transportation storage and loading / unloading andemergency plan for road accidents. As part of the same Company has become member of"NICER GLOBE" an ICC initiative in coordination with major chemical industries.
The Company's efforts and performance in the area of "EHS" have beenrecognized across the manufacturing units through receipt of several awards.
Mahad unit has been able to sustain zero lost time accident free days for more than1000 days which has been an major milestone achievement in the Company's history.
27. RESEARCH AND DEVELOPMENT:
The Company recognizes the need to have well equipped R & D Facilities to meetcustomer requirements and developing cutting edge products. Members are aware that theCompany has renovated its R & D facilities atAmbadvet (Sutarwadi) Pune and RohaDist. Raigad to match global standards.
The formal inauguration of the renovated R & D Centre was done on 18thMarch 2017 by Dr. R. A. Mashelkar - Renowned Scientist and Padma Vibhushan and Dr. AbulIqbal - Scientific Advisor Technical Mentor of DPP Pigment. The Guest of Honour was Mr.Sunil Ramanand Joint Police Commissioner Pune.
The Company has spent approx. Rs. 163 million during the year under report on Researchand Development. The Ministry of Science and Technology New Delhi on behalf ofGovernment of India vide letter dated 1st April 2016 has recognized our inhouse R& D facilities for a further period of 3 years i.e. up to 31stMarch2019.
Indian Accounting Standards (IndAS)-IFRS Converged Standards:
The Ministry of Corporate Affairs vide its notification dated 16th February2015 has notified the Companies (Indian Accounting Standard) Rules 2015. Companies havinga net worth of less than Rs. 500 Crores (as per the standalone financial statements as on31st March 2014) are required to comply with Ind AS (Accounting standardsconverged with the International Financial Reporting Standards - IFRS) in the preparationof their financial statements for accounting periods beginning on or after 1stApril 2017 with the comparatives for the periods ending 31st March 2017 orthereafter. In pursuance of the above notification the Company and its subsidiaries willadopt Ind AS with effect from 1st April 2017. The implementation of Ind AS isa major change process for which the Company has established a project team and isdedicating considerable resources. The impact of the change on adoption of Ind AS onCompany's financials is being assessed.
Material changes and commitments if any affecting the financial position of theCompany:
There are no adverse material changes or commitments occurring after 31stMarch 2017 which may affect the financial position ofthe Company or may requiredisclosure.
Annual Accounts of Subsidiary Companies:
The Annual Accounts of the Subsidiary Companies for the year ended 31stMarch 2017 will be made available to any shareholder of the Company on request and willalso be available for inspection at the Registered Office of the Company during workinghours till the date of the Annual General Meeting. The Annual Accounts of the aforesaidsubsidiary companies and the related information will also be made available to theinvestors seeking such information at any point of time. The salient features of FinancialStatements of Subsidiary Companies is given in Annexure VII of this report.
The Company as of now does not have a material subsidiary. In conformity with theprovisions of Listing Regulations 2015 the Board has formulated a policy for determining"material subsidiaries". The Policy can be accessed from the Company's websitewww.sudarshan.com.
Consolidated Financial Statements:
In accordance with the requirements of Accounting Standard (AS) 21 the ConsolidatedFinancial Statements ofthe Company and its subsidiaries is provided separately and formspart of the Annual Report.
Vigil Mechanism / Whistle Blower Policy:
Pursuant to the provisions of Section 177 (9) and (10) ofthe Companies Act 2013 readwith Rule 7 ofthe Company (Meetings ofthe Board and its powers) Rules 2014 as amended avigil mechanism fordirectors and employees to report genuine concerns has beenestablished. The policy on vigil mechanism and whistle blower policy can be accessed fromthe Company's website www.sudarshan.com. The Company affirms that no Director or Employeehas been denied access to the Chairman of the Audit Committee and that no complaints werereceived during the year.
Policies underSEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
New Policies mandated underSEBI Listing Regulations 2015 have been adopted by the Boardand can be accessed from the Company's website - www.sudarshan.com. Some of the existingpolicies have also been revised on account of the changes imposed under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The extract of the Annual Return ofthe Company in Form No. MGT -9 as on 31stMarch 2017 as prescribed under Companies (Management and Administration) Rules 2014 isgiven in Annexure V to this report.
Meetings of the Board:
During the Financial Year 2016-17 five Board Meetings were held the details of whichare given under the Corporate Governance Report.
Particulars of loans guarantees or investments under Section 186:
The particulars of loans advanced guarantees given or investments made under Section186 form part of the Notes to the Financial Statements provided in the Annual Report. Allsuch loans guarantees or investments made during the Financial Year 2016-17 withrequisite approvals wherever applicable were entered into in the ordinary course ofbusiness and comply with arm's length principle.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo:
Information regarding conservation of energy technology absorption and foreignexchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act2013 and Rule 8 of the Companies (Accounts) Rules 2014 is attached to this Report.
Particulars of Employees and Related Disclosures:
The requisite information pursuant to Section 197(12) and Rule 5(2)(i)of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 with regard to thedetails of employees drawing remuneration of Rs. 0.85 Million per month or Rs. 10.20Million per annum is attached as Annexure II to this report.
Significant and Material Orders passed by the Regulators or Courts:
There are no significant material orders passed by the regulators or courts which wouldimpact the going concern status of the Company and its future operations.
A. The Board of Directors is pleased to announce that the Company has been selected forthe following awards from Dyestuffs Manufacturers' Association of India (DMAI) during theyear 2016-17 as detailed below:
a. Award in recognition of excellent performance in the field of exports of Pigments bya Large Scale Unit.
b. Second Award for the outstanding performance in Domestic Market by a Large ScaleUnit.
c. First Award in recognition of excellent performance in Pollution Control by a LargeScale Unit.
d. Second Award in recognition of excellent performance in Safety & Hazards Controlby a Large Scale Unit.
These awards signify Company's commitment towards Environment Health Safety andsignificant contribution in Exports.
B. The Board of Directors is also pleased to announced the receipt of following awardsfrom WORLD HRD Congress for
a. Great Place to Work - We are glad to inform that we have been declared as a GreatPlace to
b. Last year we made it to the list of TOP 50 "Dream Companies to work" atWorld HRD Congress. This year as well we have been recognised as Dream Company to work forin Chemical Sector which is anotherfeather in the cap.
c. This year Company has also been recognised for best Talent Management initiatives atWorld HRD Congress held at Taj Land Ends Mumbai in February 2017.
30. OUTLOOK FOR THE FUTURE:
The global economic climate continues to be volatile uncertain and prone togeo-political risks. Weak consumer sentiment and low commodity prices are expected toaffect global growth adversely. For India 2017-18 will be a key year for consolidatingits recovery and accelerating its growth. Despite challenging global headwinds a stablemacro performance will help India to remain an attractive investment destination. Howeverexecution of the reforms agenda and commencing the investment cycle will be keydeterminants of India's economic performance on a long term basis. While currentlyinflation is expected to be volatile upside pressures on inflation exist from thevagaries of monsoon or due to competitive devaluation of currencies. Roll out of Goods andServices Tax regime from July 2017 is a key need of the hour to remove cascading incidenceof tax simplifying tax compliance environment and enhancing ease of doing business.
The Company's overseas subsidiaries in The Netherlands and North America are fullygeared up and will play a major role in achieving quantum growth in Sales andProfitability. The setting up of the China and Mexico subsidiaries will also help theCompany consolidate its position further as a reliable global player in the Pigmentsmarket.
The Company aims to closely associate with its Customers and increase operational andtechnical excellence while pruning costs. Research and Development will also play abigger role in improving the competitiveness through innovations.
Agro Chemicals Division is also expected to do well. However much depends on themonsoon which has played truant in the past. As per IMD reports published by the CentralGovernment. The monsoon is expected to be moderate.
Barring any unforeseen circumstances the current year's prospects lookfavourable.
Your Directors place on record their gratitude to Bank of Maharashtra State Bank ofIndia Bank of Baroda ICICI Bank Limited HDFC Bank Limited HSBC Limited Export ImportBank of India State Bank of India Dubai and IDFC Bank Limited for their co-operation andassistance. Your Directors also place on record their appreciation of the servicesrendered by BMGI and Pragati Leadership. The Board is also grateful to the MembersCustomers Suppliers Business Associates and Employees of the Company for their continuedco-operation and support.
| ||For and on behalf of the Board of Directors |
| ||For SUDARSHAN CHEMICAL INDUSTRIES LIMITED |
| ||P.R.RATHI |
|Pune : 26th May 2017 ||CHAIRMAN AND MANAGING DIRECTOR |
ANNEXURES TO DIRECTORS' REPORT - 2016-17
REPORT OF THE BOARD OF DIRECTORS UNDER COMPANIES (ACCOUNTS) RULES 2014.
1. (a) Report on the performance and financial position of subsidiaries of the Companyviz.
|Particulars ||Sudarshan Europe B.V. ||Sudarshan North America Inc. ||Prescient Color Limited ||RIECO Industries Limited ||Sudarshan (Shanghai) Trading Company Limited |
| ||Year ended 31st March 2017 ||Year ended 31st March 2017 ||Year ended 31st March 2017 ||Year ended 31st March 2017 ||Year ended 31st March 2017 |
| ||(Rupees in Million) ||(Rupees in Million) ||(Rupees in Million) ||(Rupees in Million) ||(Rupees in Million) |
|Total Revenue ||1958.14 ||610.00 ||769.45 ||1035.54 ||- |
|Earnings Before Interest Tax Depreciation and Amortization (EBITDA) ||77.93 ||(18.34) ||112.27 ||47.63 ||(12.64) |
|Less : Interest ||7.46 ||2.62 ||20.46 ||34.67 ||- |
|Less : Provision for Taxation ||15.25 ||- ||(11.04) ||- ||- |
|Less : Depreciation ||0.03 ||0.43 ||24.89 ||3.87 ||- |
|Profit After Tax ||55.19 ||(21.39) ||77.96 ||9.09 ||(12.64) |
(b) Conservation of energy-
i. Steps taken or impact on conservation of energy.
New Cogen power plant of 8.24 MW commissioned at Roha site. Efficiency of Boiler is83%.Total investment is Rs. 401 Million and expected saving is Rs. 180 Million per year.Now Roha site has become self-reliant in power.
ii. Steps taken by the company for utilizing alternate sources of energy
Company has procured electrical power from open access through Thermal power plant.Total agreementwith provider is Rs.4.50 MWH. Total saving is Rs. 25 Million peryear.
iii. The capital investment on energy conservation equipments
Installation of LED light high efficiency motors high efficiency pumps transformersair compressors modified air coolerfor ice conveying VFD Heat exchangers for condensateand flash steam recovery etc.
Water conservation through compartmental washing of filter press vacuum pump waterrecycling cooling tower blowdown recycling Reactor jacket water recycling etc.
Installation of vapour absorption chiller in place of electrical chiller.
Total investment is Rs. 45 Million. Total saving is Rs. 50 Million per annum.
iv. Specific areas in which R & D has been carried out are:
a) New grades of Pigments-Development and Introduction
b) High Performance Pigments and Effect Pigments - Development of Pigments forAutomotive paint application
c) Existing Pigments - Improvement in quality productivity and cost reduction to meetthe customer's changing requirements
d) New grades of Effects Pigments for cosmetic application
e) Cost reduction by process improvement and cycle time reduction.
v. Benefits derived as a result of the above R&D:
a) Improvement in product quality and productivity
b) Increase in capacities of existing products to meet the growing demand
c) Cost competitive products to meet the Chinese competition
d) New products generated additional business
e) Reduction in waste generated and energy input
(c) Technology absorption-
i. efforts made towards technology absorption-Ongoing
ii. benefits derived like product improvement cost reduction product development orimport substitution-Yes
iii. in case of imported technology (imported during the last 3 years reckoned from thebeginning of the Financial Year)- No technology imported during last 3 years.
iv. details of technology imported - Nil.
v. yearof import-NotApplicable
vi. whether technology has been fully absorbed-NotApplicable
vii. if not fully absorbed areas where absorption has not taken place and the reasonsthereof - NotApplicable
viii. the expenditure incurred on Research and Development-Rs. 163 Million.
(d) Foreign exchange earnings and Outgo-
- Total Foreign Exchange Earned : Rs. 5082 million (Previous year Rs. 5178 million)
- Total Foreign Exchange Used : Rs. 2101 million (PreviousyearRs. 2087 million)
2. Change in the nature of business if any.
3. Details of directors or key managerial personnel who were appointed or have resignedduring the year
Mr. A. B. Rathi was appointed as a Non-Executive Non-Independent Directorw.e.f. 11thNovember 2016.
4. The names of companies which have become Subsidiaries joint ventures or associatecompanies during the year
1. Sudarshan (Shanghai) Trading Company Limited Wholly Owned Subsidiary (WOS)
2. Sudarshan Mexico Step Down Subsidiary (SDS)
5. Details relating to deposits covered under Chapter V of the Act:
i. accepted during the year-Nil
ii. remained unpaid or unclaimed as at the end of the year-Rs. 0.67 Million
Hi. whetherthere has been anydefaultin repayment of deposits or payment of interestthereon during the year-There are no defaults during the year
maximum during the year-Nil
6. Details of deposits which are not in compliance with the requirements of Chapter Vof the Act.
7. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements.
Your Company has clearly laid down policies guidelines and procedures that form partof internal control systems which provide for checks and balances. The Company hasmaintained a proper and adequate system of internal controls. The system is designed toprovide a reasonable degree of assurance regarding the effectiveness and efficiency ofoperations the reliability of financial controls and compliance with applicable laws andregulations. The organization is well structured and the policy guidelines are welldocumented with pre-defined authority where monetary decision is involved. Structuredmanagement information and reporting systems together with an exhaustive budgetary controlprocess for all major operational activities form part of the overall control mechanism toensure that requisite information related to all operations are reported and are availablefor control and review. The Company's internal control systems commensurate with thenature and size of its business operations. The Audit Committee of the Board of Directorsregularly reviews the adequacy of internal control system.
The Company with a view to encourage independent approach has outsourced the functionof Internal Auditors to qualified professionals who conduct operational and system auditsin accordance with an audit plan adopted by the Audit Committee. Internal Auditors as partof their assignment evaluate and assess the adequacy and effectiveness of internalcontrol measures and the compliance with policies plans and statutory requirements. Theinternal audit reports are reviewed at Audit Committee meetings and appropriate action onthe recommendations is initiated by the Management.
Information pursuant to Section 197(12) of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014:
i. the ratio of remuneration of each director to the median remuneration of theemployees of the
Company for the financial year:
Median salary for FY 2016-17:580836
|Employee No. ||Name ||Grade ||Total annual salary ||Ratio |
|4262 ||P. R. Rathi ||DT ||24433397 ||42:1 |
|4263 ||R. B. Rathi ||DT ||22678787 ||39:1 |
ii. the percentage increase in remuneration of each director CFO CEO CS or Managerif any in the financial year;
During the Financial year 2016-17 Mr. P.R. Rathi Chairman and Managing Director andMr. R. B. Rathi Dy. Managing Director Working Directors were accorded an increase of 10%in the gross remuneration.
Mr. V. V. Thakur Dy. General Manager Finance (Acting CFO) and Mr. P. S. RaghavanCompany Secretary were accorded reasonable increase in their gross remuneration inaccordance with the Remuneration Policy of the Company.
iii. the percentage increase in the median remuneration of employees in the FinancialYear;
FY 15-16-mediansalary- Rs.589146 FY 16-17-median salary-Rs.580836
iv. the number of permanent employees on the rolls of company;
There were 870 permanent employees on the rolls of the Company.
v. the explanation on the relationship between average increase in remuneration andcompany performance;
Increase in remuneration is linked to the company performance through performanceappraisal system. The organizational performance which gives rise to the organizationalrating plays a key role in 'normalization' of ratings across the organization. This'normalized' rating is used to determine the increase in remuneration to the employees.
vi. comparison of the remuneration of the KMP (Key Management Personnel) against theperformance of the company;
As detailed above during the Financial Year 2016-17 Mr. P. R. Rathi Chairman andManaging Director and Mr. R. B. Rathi Dy. Managing Director Working Directors wereaccorded an increase of 10% in the gross remuneration. Mr. V. V. Thakur Dy. GeneralManager Finance (Acting CFO) and Mr. P. S. Raghavan Company Secretary were accordedincrease in their gross remuneration in accordance with the Remuneration Policy of theCompany.
vii. variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of thecompany as at the close of the current financial year and previous financial year;
The Company has not come out with any follow on Public issue. However the Net worth ofthe Company as on 31st March 2016 and the Net Worth of the Company of theCompany as on 31stMarch 2017 stood at Rs. 3268908749 and Rs. 3954698366respectively.
viii. average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
During the Financial year 2016-17 Mr. P. R. Rathi Chairman and Managing Director andMr. R. B. Rathi Dy. Managing Director Working Directors were accorded an increase of 10%in the gross remuneration. Likewise other employees were given increments in accordancewith the remuneration policy. The average percentile increase made in the salaries ofemployees other than the managerial personnel during the Financial Year 2016-17 aggregatesto10%.
ix. the key parameters for any variable component of remuneration availed by thedirectors;
Performance Management System derives an organizational rating on a scale of (1-5)where 1 is below standard and 5 is outstanding. This organizational rating in turndetermines the variable pay for the directors.
x. the ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year; and
xi. affirmation that the remuneration is as per the remuneration policy of the company.
| ||For and on behalf of the Board of Directors |
| ||For SUDARSHAN CHEMICAL INDUSTRIES LIMITED |
| ||P.R.RATHI |
|Pune : 26th May 2017 ||CHAIRMAN AND MANAGING DIRECTOR |
STATEMENT OF PARTICULARS OF EMPLOYEES PURSUANT TO THE PROVISIONS OF RULE 5(2)(i) OFCOMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 AND FORMINGPART OF THE DIRECTORS' REPORT FORTHE YEAR ENDED 31st MARCH 2017.
|Sr. No. ||Name and Age (Years) ||Designation ||Total Remuneration (Rs.) ||Qualification and Experience (Years) ||Date of commencement of Service ||Last employment held before joining the Company |
|1 ||Mr.P.R.Rathi (64) ||Chairman and Managing Director ||24433397 ||M.S.(M.I.T.) M.B.A. (Columbia) (39) ||01/04/1976 ||" |
|2 ||Mr.R.B.Rathi (49) ||Dy. Managing Director ||22678787 ||B.E.Mech. Engg. MIT Pune B.S.Chem.Engg. Ohio University USA. M.B.A. - Pittsburgh Univesity - USA (23) ||01/10/1992 || |
|3 ||Mr. A.Vij (47) ||Chief Operating Officer - Pigment Division ||11674165 ||B.E.Chem. (25) ||08/12/2005 ||Jubilant Organosys Limited Gajraula (UP) |
1. The gross remuneration as above includes Salary PLVA Commission Company'scontribution to Provident Fund and Superannuation Scheme Leave Travel Allowance MedicalHouse RentAllowance and value of perquisites in respect of car facility which iscalculated in accordance with the provisions of the Income Tax Act 1961 and the rulesmade there under.
2. The conditions of employment are contractual.
3. Other terms and conditions are as perthe rules of the Company.
4. In terms of Rule 5(2)(iii) of the of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 it is clarified that during the Financial Year underreview no employee of the Company was in receipt of remuneration in that year which inthe aggregate or as the case may be at a rate which in the aggregate is in excess of thatdrawn by the Working Directors and holds himself / herself along with their spouse anddependent children not less than 2% of the equity shares of the Company.
5. Mr.P.R.Rathi Chairman and Managing Director and Mr.R.B.Rathi Dy. Managing Directorform part of the Promoter Group and hold in their individual names 3823450 (5.52%) and3284140 (4.74%) Equity Shares of the Company.
6. Mr.A.Vij Chief Operating Officer - Pigment Division is not related to any Directorof the Company and does not hold any shares of the Company.
| ||For and on behalf of the Board of Directors |
| ||For SUDARSHAN CHEMICAL INDUSTRIES LIMITED |
| ||P.R.RATHI |
|Pune : 26th May 2017 ||CHAIRMAN AND MANAGING DIRECTOR |
1. Purpose of this Policy:
Sudarshan Chemical Industries Limited ("SUDARSHAN" or the"Company") has adopted this Policy on appointment and remuneration of theDirectors Key Managerial Personnel (KMP) and Senior Management (the "Policy")as required by the provisions of Section 178 of the Companies Act 2013 (the"Act") and the provisions of SEBI Listing Agreement 2015.
The purpose of this Policy is to establish and govern the procedure applicable:
a. To evaluate the performance of the members of the Board.
b. To ensure remuneration to Directors KMP and Senior Management involves a balancebetween fixed and incentive pay reflecting short and long-term performance objectivesappropriate to the working of the Company and its goals.
c. To retain motivate and promote talent and to ensure long-term sustainability oftalented managerial persons and create competitive advantage.
The Committee should ensure that the level and composition of remuneration isreasonable and sufficient to attract retain and motivate Directors of the qualityrequired to run the Company successfully and the relationship of remuneration toperformance is clear and meets appropriate performance benchmarks.
Independent Director means a director referred to in Section 149(6) of the Act andRegulation 16(1)(b) of the SEBI Listing Regulations 2015 as amended from time to time.
Key Managerial Personnel (the "KMP") shall mean "Key ManagerialPersonnel" as defined in Section 2(51) of the Act.
Nomination and Remuneration Committee shall mean a Committee of Board of Directors ofthe Company constituted in accordance with the provisions of Section 178 of the Act andRegulation 19 of the SEBI Listing Regulations 2015.
"Remuneration" means any money or its equivalent given or passed to anyperson for services rendered by him and includes perquisites as defined under the IncomeTax Act 1961.
"Senior Management" means personnel of the Company who are members of itscore management team excluding Board of Directors. This would include all members ofManagement one level below the Executive Directors including all Functional Heads.
Words and expressions used and not defined in this Policy but defined in the Act orany rules framed under the Act or the Securities and Exchange Board of India Act 1992 andRules and Regulations framed there under or in the Regulation 19(4) - Part D of ScheduledII of the SEBI Listing Regulations 2015 or the Accounting Standards shall have themeanings assigned to them in these regulations.
3. Composition of the Committee:
The composition of the Committee is/shall be in compliance with the Act Rules madethere underand SEBI Listing Regulations 2015 as amended from time to time.
4. Role of the Committee:
The Committee shall:
Formulate the criteriafordetermining qualifications positive attributes andindependence of a Director;
Identify persons who are qualified to become Director and persons who may beappointed in Key Managerial and Senior Management positions in accordance with thecriteria laid down in this Policy;
Lay down the evaluation criteria for performance evaluation of IndependentDirector and the Board;
Recommend to the Board appointment remuneration and removal of Director KMPand Senior Management;
Devise a Policy on Board diversity.
5. Appointment and removal of Director KMP and Senior Management:
5.1 Appointment criteria and qualification:
The Committee shall identify and ascertain the integrity qualification expertise andexperience of the person for appointment as Director in terms of Diversity Policy of theBoard and recommend to the Board his / her appointment. For the appointment of KMP (otherthan Managing / Wholetime Director) or Senior Management a person should possess adequatequalification expertise and experience for the position he / she is considered for theappointment. Further for administrative convenience the appointment of KMP (other thanManaging / Wholetime Director) or Senior Management the Managing Director is authorisedto identify and appoint a suitable person for such position. However if need be theManaging Director may consult the Committee /Board for further directions /guidance.
The Term of the Directors including Managing / Wholetime Director / IndependentDirector shall be governed as per the provisions of the Act and Rules made there under andSEBI Listing Regulations 2015 as amended from time to time. Whereas the term of the KMP(other than the Managing / Wholetime Director) and Senior Management shall be governed bythe prevailing HR policies of the Company.
The Committee shall identify evaluation criteria which will evaluate Directors based onknowledge to perform the role time and level of participation performance of dutieslevel of oversight professional conduct and independence. The appointment /re-appointment / continuation of Directors on the Board shall be subject to the outcome ofthe yearly evaluation process. Framework for performance evaluation of IndependentDirectors and the Board is as per Annexure A to this Policy.
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act Rules and Regulations there under and / or for any disciplinary reasonsand subject to such applicable Acts Rules and Regulations and the Company's prevailing HRpolicies the Committee may recommend to the Board with reasons recorded in writingremoval of a Director KMP or Senior Management.
6. Remuneration of Managing / Whole-time Director KMP and Senior Management:
The remuneration / compensation / commission etc. as the case may be to the Managing/ Whole time Director will be determined by the Committee and recommended to the Board forapproval. The remuneration / compensation / commission etc. as the case may be shall besubject to the prior / post approval of the shareholders ofthe Company and CentralGovernment wherever required and shall be in accordance with the provisions of the Actand Rules made there under. Further the Managing Director of the Company is authorised todecide the remuneration of KMP (other than Managing / Wholetime Director) and SeniorManagement and which shall be decided by the Managing Director based on the standardmarket practice and prevailing HR policies ofthe Company.
7. Remuneration to Non-Executive / Independent Director:
The remuneration / commission / sitting fees as the case may be to the Non-Executive/ Independent Director shall be in accordance with the provisions of the Act and theRules made there under for the time being in force or as may be decided by the Committee /Board / Shareholders. An Independent Director shall not be entitled to any stockoptionofthe Company unless otherwise permitted in terms ofthe Act and SEBI Listing Regulations2015 as amended from time to time.
Annexure A to Remuneration Policy
Framework for performance evaluation of Independent Directors and the Board
As per the provisions of Listing Regulations 2015 the Nomination and RemunerationCommittee (the "Committee") shall lay down the evaluation criteria forperformance evaluation of Independent Directors and the Board. Further in terms ofListing Regulations 2015 the Board is required to monitor and review Board EvaluationFramework. This Framework shall contain the details of Board's self-evaluation framework(including all Committees of the Board and individual directors).
The Board is committed to assessing its own performance as a Board in order to identifyits strengths and areas in which it may improve its functioning. To that end theCommittee shall establish the following processes for evaluation of performance ofIndependent Director and the Board:
1. Once a year the Board will conduct a self-evaluation. It is the responsibility ofthe Chairman of the Board supported by the Company Secretary of the Company to organisethe evaluation process and act on its outcome;
2. The Committee shall formulate evaluation criteria for the Board and the IndependentDirectors which shall be broadly based on:
2.1 Knowledge to perform the role;
2.2 Time and level of participation;
2.3 Performance of duties and level of oversight; and
2.4 Professional conduct and independence.
3. The Board / Independent Directors shall be asked to complete the evaluation formsand submit the same to the Chairman.
| ||For and on behalf of the Board of Directors |
| ||ForSUDARSHAN CHEMICAL INDUSTRIES LIMITED |
| ||P.R.RATHI |
|Pune : 26th May 2017 ||CHAIRMAN AND MANAGING DIRECTOR |
PARTICULARS OF CONTRACTS/ARRANGEMENTS MADE WITH RELATED PARTIES
[Pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act 2013and Rule 8(2) of the Companies
(Accounts) Rules 2014-AOC-2]
This Form pertains to the disclosure of particulars of contracts / arrangements enteredinto by the Company with related parties referred to in Sub-section (1) of Section 188 ofthe Companies Act 2013 including certain arm's length transactions under third provisothereto.
Details of contracts or arrangements or transactions not at arm's length basis
There were no contracts or arrangements or transactions entered into during the yearended 31st March 2017 which were not at arm's length basis.
Details of material contracts or arrangements or transactions at arm's length basis
Details of material contracts or arrangements or transactions at arm's length basis forthe year ended 31st March 2017.
|Name of Related Party and Nature of Contract ||Nature of Relationship ||Duration of Contract ||Salient Terms ||Amount (Rs. in Millions) |
|Sale of material || || || || |
|Sudarshan Europe B.V. ||Subsidiary ||Ongoing ||Sale of raw material ||1625.16 |
|Unsecured Loans || || || || |
|Sudarshan Europe B.V. ||Subsidiary ||Not Applicable ||Unsecured loan provided ||34.80 |
|RIECO Industries Ltd. ||Subsidiary ||Not Applicable ||Unsecured loan provided ||30.00 |
|Sudarshan Europe B.V. ||Subsidiary ||Not Applicable ||Unsecured loan repaid ||149.22 |
|Commission || || || || |
|Rathi Brothers Poona Ltd. ||Selling Agent ||Not Applicable ||Commission ||55.83 |
|Rathi Brothers Delhi Ltd. ||Selling Agent ||Not Applicable ||Commission ||23.83 |
|Rathi Brothers Calcutta Ltd. ||Selling Agent ||Not Applicable ||Commission ||6.34 |
|Rathi Brothers Madras Ltd. ||Selling Agent ||Not Applicable ||Commission ||4.87 |
Date ofapproval by the board ifany : Not Applicable Amount paid as advances : Ifany :Nil
SALIENT FEATURES OF FINANCIAL STATEMENTS OF SUBSIDIARY COMPANIES VIDE FORM NO. AOC-1
Pursuant to Section 129(3) of the Companies Act 2013 and Rule 5 of Companies (Accounts) Rules 2014
|Sr. No. ||Name of the subsidiary ||Reporting Currency ||Share Capital ||Reserves & Surplus ||Total Assets ||Total Liabilities (excluding share capital and reserves & surplus) ||Investments ||Turnover ||Profit / (Loss) before taxation ||Provision for taxation ||Profit / (Loss) after taxation ||%of Shareholding |
|1 ||Prescient Color Limited ||Rupees ||60000000 ||160894760 ||493892757 ||272997997 ||- ||767591166 ||66918440 ||(11041968) ||77960408 ||100% |
|2 ||RIECO Industries Limited ||Rupees ||125000000 ||147668965 ||1055993937 ||783324972 ||- ||1033105646 ||9091392 ||- ||9091392 ||100% |
|3 ||Sudarshan Europe B.V. ||Euro ||190897415 ||28201877 ||905921785 ||686822493 ||209284838 ||1957631715 ||70443478 ||15252052 ||55191426 ||100% |
|4 ||Sudarshan North Ameirca Inc. ||US Dollars ||209284838 ||(137259363) ||248342695 ||176317220 ||- ||609721244 ||(21390489) ||- ||(21390489) ||100% |
|5 ||Sudarshan (Shanghai) Trading Company Limited ||US Dollars ||6634000 ||(12467849) ||897869 ||6731718 ||- ||- ||(12638309) ||- ||(12638309) ||100% |
1. The reporting period for Subsidiaries mentioned at Sr. Nos. 1 to 4 above is from 1stApril 2016 to 31st March 2017
2. The reporting period for Subsidiary mentioned at Sr. No. 5 above is from 17thMay 2016 to 31st March 2017
3. None of the aforesaid subsidiaries have declared dividend during the Financial Year2016-17.