Your Directors are pleased to submit their 32nd Annual Report of thebusiness operations together with the Audited financial statements of the Company for theyear ended 31st March 2019:
1. OVERVIEW OF FINANCIAL RESULTS
| || ||(Rs in Lakhs) |
| ||2018-2019 ||2017-2018 |
|Sales ||18933 ||18500 |
|Other Operating Income ||36 ||26 |
|Revenue from Operations ||18969 ||18526 |
|Other Income ||228 ||165 |
|Total Income ||19197 ||18691 |
|Less : Materials Consumed ||13186 ||12775 |
|Employees Remuneration & Benefits ||646 ||704 |
|Manufacturing Administrative Selling & Other Expenses ||3513 ||3496 |
|Total Expenses ||17345 ||16975 |
|Operating Profit (EBITDA) ||1852 ||1716 |
|Less: Finance Cost ||1070 ||969 |
|Profit Before Tax & Depreciation ||782 ||747 |
|Less: Depreciation ||586 ||596 |
|Net Profit Before Tax ||196 ||151 |
|Less: Exceptional Item ||174 ||- |
|Net Profit Before Tax ||22 ||151 |
|Less: Tax Expense || || |
|Current Tax Expense ||- ||31 |
|Net Profit after Tax ||22 ||120 |
|Other Comprehensive Income || || |
|Add: Remeasurements of post-employment benefit obligation ||(4) ||5 |
|Total Comprehensive Income for the period ||18 ||125 |
In the preparation of the financial accounts and the statements the Company hasfollowed the Indian Accounting Standards 2015 as amended.
In view of carried forward losses the Board of Directors does not recommend anydividend for the year ended 31st March 2019.
3. SHARE CAPITAL
The Paid-up Equity Share Capital as on 31st March 2019 was Rs 7.35crores. During the year under review the Company has not issued new shares.
4. MANAGEMENT'S DISCUSSION AND ANALYSIS: F.Y. 2018-2019
I. Industry Structure & Development:
The Chemical Industry is a key enabler for other industries. As chemicals areconsumed in varying proportion by every industry (rightly from electronics to paints frompharmaceuticals to cosmetics) without chemicals sustainable development of other sectorsis not possible.
The Chemical Industry is a crucial constituent of the growing Indian Economy providingthe key material for several industries. The Company is operating only in one Segmentnamely Specialty Chemicals'. Specialty Chemicals are particular chemical productswhich provide a wide variety of effects on which many other industry sectors rely.
Specialty chemicals which comprise of low volume high value chemicals with specificapplications constitute a significant part of the Indian chemical industry and aretargeted towards specific end-use applications.
Specialty chemicals are produced by a complex interlinked industry. In the strictestsense specialty chemicals are chemical products that are sold on the basis of theirperformance or function rather than their composition. Products and services in thespecialty chemicals industry require intensive knowledge and ongoing innovation.
The Company manufactures a wide range of specially formulated and customized productsfor various Industrial applications. Company's customers are well recognized and locatednot only in India but all over the World especially in America Europe and Far-East.
Our customers represent a wide range of Industries such as Metal treatment WireInsulation Enamel PVC stabilizers Inks Colours Coatings Textiles Agro ChemicalsPolymers Plastics Rubber Latex Tyre and Tubes Conveyor belts Lubricants AdditivesHome care Cosmetic Soaps detergents Fertilizers and many more. Our Customers are alwaysseeking innovative products formulations for their current process needs which arefulfilled by Company's product development knowledge & experience. Solvay Group whichrepresents this worldwide in specialty chemicals supports the Sunshield team.
Company's main products belong to:
a. Specialty Surfactant applications which are predominantly Ethylene Oxide (EO) basedproducts. The technologies developed involve surfactants Esters Amides and othercomplementary processes.
b. Specialty Anti-Oxidants for Lubricants Polymers Rubber Tyre & Latex and otherIndustries involving Aminic & Phenolic technologies and
c. Other Non-EO technologies & customized blends for various applications.
II. Operating and Financial Performance of the Company
| || ||(Rs in Lakhs) |
| ||F.Y. 2018-2019 ||F.Y. 2017-2018 ||Change over Previous year |
|i) Exports ||7992 ||7953 ||0.5% |
|ii) Domestic ||10941 ||10547 ||4% |
|iii) Other Operating Income ||36 ||26 ||38% |
|Revenue from Operation (Excluding Excise Duty) ||18969 ||18526 ||2% |
|Other Income ||228 ||165 ||38% |
|Total Income ||19197 ||18691 ||3% |
| ||F.Y. 2018-2019 ||F.Y. 2017-2018 ||Change over Previous year |
|Volume Sales (MT) ||12528 ||13359 ||(6%) |
|Sales Value (Rs) ||18933 ||18500 ||2% |
|Average Product Price (Rs per kg) ||151 ||139 ||9% |
During the year Sales by Volume went down by 6% whereas the sales in Value terms wentup by 2%. Export Sales were marginally up by 0.5% from Rs 7953 Lakhs to Rs 7992 Lakhs anddomestic Sales went up by 4% from Rs 10547 Lakhs in 2017-18 to Rs 10941 Lakhs in 2018-19.
Major change is in the sales of Theic where volume has gone down but on a higher pricerealization. Sale volume of Ethoxylates Propoxylates based products has been reduced by9%. However sale value is almost the same. The improvement is mainly due to change inproduct mix and increase in the demand of products.
The Company expects Financial Year 2019-20 to be a challenging year due to severeheadwinds owing to Auto sector and consumer demand slowdown and trade war impacts. Thegrowth for specialty chemicals is driven by both domestic consumption and exports.Specialty chemicals finding applications across consumer industrial and infrastructuresegments are driven by the overall growth of the Indian economy. We are in the midst ofrationalizing and aligning our products to those segments that has potential for growthdriven by growing end user industry. Technology & Innovation will play a major role ingrowth.
Factors like Crude oil price Forex Fluctuations Global Demand & geopoliticalsituation Global Trade wars and ability to develop new business will play an importantpart in the future of the Company.
The Company's products continue to be well received by world's leading users ofspecialty chemicals for a diverse range of industrial applications. The Company has beenrecognized as a reputable and dependable supplier to many Indian and global consumers ofspecialty products developed in-house.
IV. Risks and Concerns
The Company has laid down a well-defined Risk Management Framework covering the riskrisk exposure potential impact and risk mitigation process. The Present and future risksare reviewed by the management of the Company at regular intervals. Adequate riskmanagement is a key success factor to mitigate risks associated with the solutions weprovide. Major risks identified by the business and functions are systematically addressedthrough by taking corrective actions on a continuous basis. These are discussed at AuditCommittee and Board of Directors Meetings.
Major Risk arises from main raw material viz. Ethylene Oxide (EO). There isavailability risk associated with EO which is currently and consistently available fromonly one manufacturer in the country. If there is an issue with the supply of EOproduction of several products would be affected. To mitigate this risk we keep anadequate inventory and pipeline of EO. Besides some of the major raw materials arehazardous and inflammable the Company has ensured that Safety equipment's andinfrastructure are in place as per statutes and global safety standards.
Further concerns are posed by severe space constraints within the Plant battery limits.Due to shortage of space and layout limitations we are not in a position to expandcapacities and have to rely on product replacements. Although we have initiated variousmanufacturing excellence programs to mitigate these concerns however business growthpotential is still limited by such concerns.
The Company is committed to protecting the environment and ensuring the health andsafety of its employees customers neighbors and public. Some of our major raw materialsare hazardous and flammable and some safety risks are inherent in the manufacturingprocesses. The Company has ensured that required process controls safety equipment's andinfrastructure are in place as per statutes and global safety standards.
V. Internal Financials Controls and its adequacy
Internal Checks and Controls covering operations of the Company are in place and areconstantly being improved upon. The Company had laid down internal financial controls tobe followed by the Company and such policies and procedures adopted by the Company are forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information. During the year the internal and statutoryauditors of the Company have reviewed the effectiveness and efficiency of these controlsand procedures. As per the said assessment the Board is of the view that the InternalFinancial Controls operate effectively and no material weaknesses exist.
VI. Key Financial Ratios
|Key Ratios ||2018-19 ||2017-18 ||Change% |
|Debtors Turnover* (No. of days) ||51.24 ||58.67 ||-13% |
|Inventory Turnover* (No. of days) ||29 ||34 ||-15% |
|Interest Coverage Ratio* ||2 ||11 ||-81% |
|Current Ratio* ||0.61 ||0.77 ||-20% |
|Debt Equity Ratio* ||10.20 ||10.79 ||-5% |
|Operating Profit Margin (%)* ||8.87% ||9.28% ||-4% |
|Net Profit Margin (%)* ||0.12% ||0.82% ||-86% |
|Return on Net Worth (%)* ||1.97% ||13.65% ||-86% |
* Changes in these ratios are mainly due to lower operating profits during the year.Profitability was impacted due to slowdown in various sectors of the economy.
VII. Human Resources
The Company implemented Employee relationships at all levels continued to besatisfactory. The management would like to record its appreciation of dedicated and strongsupport provided to your Company by its employees at all levels. The number of theemployees on the roll as on 31st March 2019 was 75.
(The statement in this report including Management's Discussions & Analysis Reportreflects Company's projections estimates expectations or predictions. These may beforward looking statements within the meaning of applicable securities laws andregulations. Actual results could differ materially from those expressed or implied sinceyour Company's operations are influenced by many external and internal factors beyond thecontrol of the Company.)
5. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY
Implementation of Voluntary Retirement Scheme
In view of the very challenging business environment faced by the Company in thebackdrop of the tough competition from several players in the industry the Company hastaken several cost optimization and process improvement initiatives in order to improvethe efficiency in this challenging business environment. During the year under review theCompany came out with Voluntary Retirement Scheme (VRS) for the employees of the Plantlocated at Rasal. In all 14 employees took the VRS. The total outgo for VRS was Rs174 Lakhs.
Maharashtra Pollution Control Board (MPCB) Issue
The Company received directions ('Closure Direction') from Maharashtra PollutionControl Board (MPCB) on 28th September 2018 for closure of manufacturingactivity of the Company under section 33(A) of Water (Prevention & Control Pollution)Act 1974 and under section 31 of the Air (Prevention & Control Pollution) Act 1981alleging Pollution caused by the Company. The Company replied to the notice received andalso made representation to MPCB.
Thereafter on 20th October 2018 the Company has received a communicationfrom MPCB to restart the manufacturing activities subject to fulfilling Effluent treatmentconditions.
6. BOARD OF DIRECTORS COMPOSITION
The composition of the Board of Directors of the Company is in complete conformity withthe requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and Companies Act 2013. The details of the Board of Directors as on date of thisreport are as under:
|Sr. no. Name of Director ||Category of Directorship |
|1. R L Shenoy ||Non-executive Chairman and Independent Director |
|2. Ajit Shah ||Non-Executive Independent Director |
|3. Aruna Soman ||Non-Executive Independent and Woman Director |
|4. Manoj Khullar ||Managing Director |
|5. Srivata M K ||Executive Director |
|6. Lim Kim Swee ||Non-Executive Director |
|7. Boon Tong Koh ||Non-Executive Director |
|8. YockJeng Goh ||Non-Executive Director |
The composition of the Board represents an optimal mix of professionalism knowledgeand experience which enables the Board to discharge its responsibilities and provideeffective leadership to the business. None of the Directors of the Company is relatedinter-se.
None of the Directors on the Board is a Director in more than 10 public companies or isa member in more than 10 Committees or Chairperson of more than 5 Committees. TheBoard of Directors of the Company bring to the fore a vast range of skills and experiencefrom various fields functions and sectors which enhance the governance framework andBoard's decision making process. Following are the core skills expertise and competenciesthat are identified and available within the Board of the Company for effectivefunctioning:
Strategic expertise: Ability to understand review and suggest appropriatestrategies;
Experience: Leadership experience in managing people and achieving change;
Industry: Knowledge of organic & Inorganic chemical Industry manufacturingmarketing finance banking HR legal & public affairs in which the Company operates;
Technical: Technical/professional skills to assist with ongoing aspects of theCompany's Board's role;
Legal & Governance: Knowledge and understanding of legal & regulatorylandscape in which Company operates
Behavioral: Behavioral competencies such as collaborative and ability to work asa team member seeking and giving feedback to/ from individual directors be challengingbut supportive in the Board room.
Personal attributes: Willingness and ability to devote adequate time and energyto fulfill Board and Committee responsibilities strategic thinking integrity with highethical standards trust accountability and avoid situations leading to conflict ofinterest.
7. DIRECTORS & KEY MANAGERIAL PERSONNEL
1. Mr. Lim Kim Swee was appointed as an additional director of the Company based on therecommendation of Nomination and Remuneration Committee with effect from 27thMay 2019. He holds office upto the conclusion of the ensuing Annual General Meeting (AGM).
2. Mr. Ranjal L Shenoy was appointed as an Independent Directors in the 28thAGM of the Company held on 15th September 2015 for a term of 5 years and histerm ends on 31st March 2020. Mr. Shenoy is eligible for re-appointment foranother term of five consecutive years subject to approval of the Members by SpecialResolution. Mr. Shenoy has consented to his re-appointment and confirmed that he is notdisqualified from being appointed as an Independent Director in terms of Section 164 ofthe Companies Act 2013.
Based on the performance evaluation of the Independent Directors the Nomination &Remuneration Committee and the Board of Directors of the Company at their Meetings held on27th May 2019 have recommended the re-appointment of Mr. Ranjal L Shenoy as anIndependent Director for a second term of five consecutive years effective from 1st April2020. During his tenure of appointment he shall not be liable to retire by rotation asprovided under Section 152(6) of the Companies Act 2013.
3. Mr. Sandeep Kulkarni was appointed as Chief Financial Officer (CFO) of the Companyin compliance with provisions of Section 203 of the Companies Act 2013 with effect from11th February 2019 in the Board Meeting held on 11th February2019 on the recommendation of Audit Committee.
Retirement by Rotation:
In accordance with the provisions of Section 152(6) of the Companies Act 2013 andArticles of Association of the Company Mr. Boon Tong Koh (DIN 08066070) will retire byrotation at the ensuing AGM of the Company and being eligible offer himself forreappointment. The Board recommends his reappointment.
1. Mr. Rajeev Gupte retired as Chief Financial Officer w.e.f. 13th September2018. Your Directors place on record their sincere appreciation of the valuablecontribution made during his tenure as CFO of the Company.
2. Mr. Satish Kelkar the non-executive director of the Company resigned from theoffice of the Director with effect from 11th February 2019. Your Directorsplace on record their sincere appreciation of the valuable contribution made by him duringhis tenure as Director of the Company.
3. Mr. Guo Lin the alternate director to Mr. YockJeng Goh ceased to beAlternate Director with effect from 12th April 2019. Your Directors place onrecord their sincere appreciation of the valuable contribution made by him during histenure as Alternate Director of the Company.
4. Mr. Ian Brown the non-executive director of the Company resigned from the officeof the Director with effect from 21st May 2019. Your Directors place on recordtheir sincere appreciation of the valuable contribution made by him during his tenure asDirector of the Company.
None of the Directors is disqualified from being appointed as Directors as specified inSection 164(2) of the Companies Act 2013. Note on the background of the Director(s)proposed for appointment/re-appointment is given as annexure to the Notice which formspart of this Annual Report.
Pursuant to Sections 2(51) and 203 of the Companies Act 2013 the Board has proposedMr. Manoj Khullar Managing Director Mr. Srivatsa M K Director Mr. SandeepKulkarni Chief Financial Officer and Mr. Amit Kumashi Company Secretary of the Company asKey Managerial Personnel of the Company.
8. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section149(6) and the Listing Regulations.
9. BOARD MEETINGS
The Board meets at regular intervals to discuss and decide on Company/business policyand strategy apart from other Board business.
The Board met five times in the financial year 2018-19 i.e on 28th May 201819th July 2018 13th August 2018 12th November 2018 and11th February 2019.
10. BOARD COMMITTEES
There are currently six Committees of the Board which are given below:
Audit Committee includes Five Directors viz. Mr. Ajit Shah (Chairman/IndependentDirector) Mrs. Aruna Soman (Independent Director) Mr. Ranjal Laxmana Shenoy (IndependentDirector) Mr. Manoj Khullar (Managing Director) and Mr. Satish Kelkar (Non-ExecutiveDirector) (till 11th February 2019).
The role and the terms of reference of the Audit Committee include amongst othersoversight of Company's financial reporting process and disclosure of financialinformation to ensure that the financial statements are correct sufficient and credible;recommending the appointment re-appointment remuneration and terms of appointment ofauditors and approval of payment for any other services rendered by statutory auditors;reviewing with the management quarterly results and annual financial statements beforesubmission to the Board for approval; approval or any subsequent modification of anytransactions of the Company with related parties; review and monitor the auditor'sindependence and performance and effectiveness of audit process; scrutiny of intercorporate loans and investments if any; evaluation of internal financial controls andrisk management system; and reviewing the functioning of the whistle blower mechanismreviewing the findings of any internal investigation involving suspected fraud orirregularity. The Audit Committee also reviews before submission to the Board for approvalof financial statements the Directors Responsibility statement changes in accountingpolicies if any with reasons for the same Management Discussions and Analysis onCompany's operations.
Audit committee met 4 times on 28th May 2018 13th August 201812th November 2018 and 11th February 2019.
Nomination and Remuneration Committee
The Board has constituted Nomination and Remuneration Committee which comprises ofIndependent Directors viz. Mr. Ranjal Laxmana Shenoy Mr. Ajit Shah and Mrs. Aruna Soman.The role of the committee include the Formulation of the criteria for determiningqualifications positive attributes and independence of a director and recommend to theBoard a policy relating to the remuneration of the directors key managerial personneland other employees; formulation of criteria for evaluation of Independent Directors andthe Board; devising a policy on Board diversity; and identifying persons who are qualifiedto become directors and who may be appointed in senior management in accordance with thecriteria laid down and recommend to the Board their appointment and removal anddetermining whether to extend or continue the term of appointment of the independentdirectors on the basis of the report of performance evaluation of independent directors.Nomination and Remuneration Committee met 3 times on 28th May 2018 19thJuly 2018 and 11th February 2019.
Stakeholders' Relationship Committee
Stakeholders Relationship Committee comprises of Mr. Ajit Shah (Independent Director)Mrs. Aruna Soman (Independent Director) and Mr. Manoj Khullar (Managing Director).
The Committee focuses primarily on monitoring and ensuring that all shareholder andinvestor services operate in an efficient manner and that shareholder and investorgrievances/complaints including those of all other stakeholders are addressed promptlywith the result that all issues are resolved rapidly and efficiently.
Stakeholders Relationship committee met 12th November 2018.
Corporate Social Responsibility (CSR) Committee
The Board has constituted Corporate Social Responsibility Committee comprising of Mr.Ajit Shah (Independent Director) Mr. Srivatsa M K (Director) and Mr. Manoj Khullar(Managing Director).
The Committee focuses on formulation and Review of CSR policy indicating activities tobe undertaken by the Company; recommendation of the amount of expenditure to be incurredon CSR activities and monitoring and implementing this policy from time to time. CorporateSocial Responsibility Committee met on 28th May 2018.
During the year under review the Company was not required to spend on CSR activitieson account of the losses incurred by the Company in the three preceding financial years.
Risk Management Committee
The Board though not mandatory has constituted Risk Management Committee comprising ofMr. Manoj Khullar (Managing Director) Mr. Srivatsa M K (Director) and Mr. ShekharPattekar (Manager-Factory). The Committee meets regularly for discussing Risk Managementframework in the Company.
The role of Risk Management Committee includes reviewing and approving the riskmanagement policies of the Company; assessment and monitoring of all risks associated withthe operations of the Company and development and implementation of internal complianceand control systems and procedures to manage risk and framing implementing reviewing andmonitoring the risk management plan and cyber security for the Company.
Committee for Issue of Duplicate Share Certificates
The Board has constituted a Committee for the purpose of issuance of duplicate sharecertificates. The Committee comprises of viz Mr. Satish Kelkar (Non-executive director)(till 11th February 2019) Mr. Srivatsa M K (Director) and Mr. Manoj Khullar(Managing Director).
11. ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance of the Directors individually aswell as the evaluation of the working of its Committees. The Independent Directors haveevaluated the performance of the non-independent Directors and the Board as a whole. Theyalso assessed the quality quantity and flow of information between Company's managementand the Board which is essential for the Board to effectively and reasonably perform theirduties.
Based on the evaluation Company expects the Board and other Directors evaluated tocontinue to play a constructive and meaningful role in creating value for all thestakeholders in the ensuing years.
12. COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Company has in place Policy on Directors Appointment and Remuneration. The Policyhas been published on the Company's websitehttps://www.solvayindia.in/en/solvay-in/Sunshield-Policies.html.
Prior to the induction of the director on the Board the Managing Director briefs theincoming director about the Company its line of business and the composition of thepresent board organization chart etc. The appointment letter issued to the independentdirectors also sets out detailed terms of employment including their roles functionresponsibilities and their fiduciary duties code of conduct performance evaluationprocess etc. as a director of the Company.
Independent directors have a right to access information and documents for enablingthem to have a good understanding of the Company and its various operations.
13. RISK MANAGEMENT POLICY
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of theCompany.
14. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a vigil mechanism named as Whistle Blower Policy within theCompany in compliance with the provisions of Companies Act and Listing Regulations.
The policy of such mechanism has been circulated to all employees within the Companywhich provides a framework to the employees for guided & proper utilization of themechanism. The Whistle Blower Policy has been placed on the Company's websitehttp://www.solvayindia.in/en/solvay-in/ sunshield-chemical-limited. There have been noinstances of any personnel seeking access to the Audit Committee.
15. SIGNIFICANT AND MATERIALS ORDERS PASSED BY THE REGULATORS/COURTS/ TRIBUNALS
No significant or material order were passed by the Regulators or Courts or Tribunalswhich impacts the going concern status and Company's operations in future.
16. CORPORATE GOVERNANCE REPORT
As per Regulation 15 (2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with respect to Corporate Governance report and certain regulations arenot applicable to Sunshield Chemicals Limited ("Company") since Company'sPaid-up Capital is less than Rs 10 crores and net worth is less than Rs 25 crores.
17. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act the Directors of your Company to the best oftheir knowledge and based on the information and explanations received from the Companyconfirm that:
(a) in the preparation of the annual financial statement for the financial year endedMarch 31 2019 the applicable accounting standards have been followed and there areno material departures from the same;
(b) 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 your Company as at March 31 2019 and of the profitof your Company for the said period;
(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the annual accounts have been prepared on a going concern' basis;
(e) proper internal financial controls to be followed by the Company were laid down andsuch internal financial controls are adequate and were operating effectively and;
(f) proper systems to ensure compliance with the provisions of all applicable laws weredevised and that such systems were adequate and operating effectively.
18. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION REDRESSAL) ACT 2013
The Company has in place Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention ProhibitionRedressal) Act 2013. The Company has zero tolerance on Sexual Harassment at workplace.
In compliance with the provisions of Companies Accounts Rules 2014 as amended theinternal committee is set up to redress complaints received regarding sexual harassment.All employees are covered under this Policy. All employees (permanent contractualtemporary trainees and other stakeholders) are covered under this policy. The followingis the summary of sexual harassment complaints received and disposed off during theFinancial Year 2018-19:
|Number of Complaints of sexual harassment received during the period April 2018 to March 2019 ||Number of complaints disposed off during the period April 2018 to March 2019 ||Nature of action taken by the employer |
|NIL ||Not applicable ||Not applicable |
19. SECRETARIAL STANDARDS
The Company complies with applicable Secretarial Standards issued by The Institute ofCompany Secretaries of India and approved by the Central Government under Section 118(10)of the Companies Act 2013 for the financial year ended 31st March 2019.
20. FRAUD REPORTING BY AUDITORS
As required under Section 134(3)(ca) of the Companies Act 2013 there are no instancesof fraud being reported by the Auditors.
21. AUDITORS Statutory Auditors
The Statutory Auditors Deloitte Haskins & Sells LLP Chartered Accountants holdsoffice till end of ensuing Annual General Meeting.
In terms of section 139 of the Companies Act 2013 Deloitte Haskins & Sells LLPcan be further reappointed for a further period of five years. Accordingly the Board ofDirectors at its Board Meeting held on 27th May 2019 has reappointed DeloitteHaskins & Sells LLP as Statutory Auditors of the Company for a further period of fiveyears. The proposed remuneration to be paid to Deloitte Haskins & Sells LLP CharteredAccountants for the financial year 2019-20 is Rs 20 Lakhs (Rupees Twenty Lakhs) plusout of Pocket expenses at actuals.
The Statutory Auditor has given a confirmation to the effect that they are eligible tocontinue with their appointment and have not been disqualified in any manner fromcontinuing as Statutory Auditor. The remuneration payable to the Statutory Auditor shallbe determined by the Board of Directors based on the recommendation of the AuditCommittee.
There are no qualifications reservation or adverse remark or disclaimer made in theaudit report for the Financial Year 2018-19.
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules2014 the Company is required to prepare maintain as well as have the audit of its costrecords conducted by a Cost Accountant and accordingly it has made and maintained suchcost accounts and records. The Board on the recommendation of the Audit Committee hasappointed M/s. Kishore Bhatia & Associates Cost Accountants (Firm Registration No.000294) as the Cost Auditors of the Company for FY 2019-20 under Section 148 and all otherapplicable provisions of the Act.
M/s. Kishore Bhatia & Associates have confirmed that they are free fromdisqualification specified under Section 141(3) and proviso to Section 148(3) read withSection 141(4) of the Act and that the appointment meets the requirements of Section141(3)(g) of the Act. They have further confirmed their independent status and an arm'slength relationship with the Company.
The remuneration payable to the Cost Auditors is required to be placed before theMembers in a General Meeting for their ratification. Accordingly a resolution for seekingMembers' ratification for the remuneration payable to M/s. Kishore Bhatia & Associatesis included at Item No. 5 of the Notice convening the AGM.
The Cost Audit Report for the Financial Year ended 31st March 2018was filed with the Ministry of Corporate Affairs on 14th August 2018within the stipulated time mandated in the Companies (Cost Records & Audit) Rules2014 as amended.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Alwyn D'Souza & Co. Company Secretaries to undertake the SecretarialAudit of the Company.
The Report of the Secretarial Audit is annexed herewith as Annexure A. There are no qualificationsreservations or adverse remarks or disclaimers made by the Secretarial Auditors in theirreport.
M/s. Nikhil Narkar & Associates Chartered Accountants have conducted internalaudits periodically and submitted their reports to the Audit Committee. Their Reports havebeen reviewed by the Audit Committee from time to time.
22. PROHIBITION OF INSIDER TRADING
In compliance with the provisions of SEBI (Prohibition of Insider Trading Regulations)2015 as amended from time to time to preserve the confidentiality and prevent misuse ofunpublished price sensitive information (UPSI)/Leak of UPSI the Company hasadopted a Code of Conduct for Insider Trading for prohibition of Insider tradingwhich was revised and approved by Board for Promoters Member of Promoter groupdirectors Designated Person/ Employees their immediate relatives designated persons ofmaterial subsidiary Company and substantial shareholders in the listed Companies. Thispolicy also provides for periodical disclosures from the designated person as well aspre-clearances of transactions by such persons.
23. EXTRACT OF ANNUAL RETURN:
The extract of annual return in Form MGT-9 as required under Section 92(3) of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration)Rules 2014 is appended as an Annexure B to this Annual Report and also available on thewebsite of the Company at http://www.solvayindia.in/
24. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013
The Company has not provided any loans Guarantees or made investments under Section186 of the Companies Act 2013.
25. RELATED PARTY TRANSACTIONS
All Related Party Transactions (RPT) entered into by the Company during the year underreview were at arms' length basis and were in the ordinary course of business. There wereno materially significant RPT with Parent Company and its subsidiaries PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict of interest with the Company at large.
All RPT are placed before the Audit Committee for its review and approval. Prioromnibus approval of the Audit Committee is obtained for transactions which are of aforeseen and repetitive nature. Since there are no material RPT and also all thetransactions with related parties are at arm's length and are in the ordinary course ofbusiness no transactions are required to be reported in Form AOC2. Note No. 38 inthe note to accounts provides the details on all the related party transactions.
The Board of Directors of the Company have re-framed policy on materiality toregulate transactions between the Company and its related parties in compliance with theapplicable provisions of the Act and Regulation 23 of the Listing Regulations asamended. The Policy as approved by the Board is uploaded and can be viewed on theCompany's website https://www. solvayindia.in/en/solvay-in/Sunshield-Policies. html.
The Non-Executive Directors have no pecuniary relationship or transaction with theCompany other than sitting fees paid to them.
Company has not accepted any deposits from public/members under Section 73 of the Actread with Companies (Acceptance of Deposits) Rules 2014 during the year.
27. SUBSIDIARY ASSOCIATES AND JOINT VENTURES
The Company does not have any subsidiary or associates or joint ventures as on the dateof this report.
28. TRANSFER OF SHARE TO IEPF DEMAT ACCOUNT
Since the Company has not declared dividend in the last preceding seven financialyears the provision pertaining to transfer of shares on which dividend wasunclaimed/unpaid for seven years to Investor Education and Protection Fund (IEPF)Authority is not applicable to the Company.
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is annexed herewith as Annexure C.
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5(2) & (3) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of your company is available for inspectionby the members at registered office of the company during business hour on working days upto the date of the ensuing AGM. If any member is interested in obtaining a copy thereofsuch member may write to the company secretary whereupon a copy would be sent. There wereno employees who were drawing remuneration exceeding Rs 1.02 crores per annum and thus noparticulars are to be given under Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
Information as required by Section 134(3) (m) of the Act relating to Conservation ofEnergy Technology Absorption Foreign Exchange Earnings & Outgo is given in AnnexureD to this Report.
31. ENVIRONMENT HEALTH AND SAFETY
Your Company recognizes importance of Health and Safety of its employees and itsneighborhood. Regular Safety Audits are being conducted. Your Company has adopted aHealth Safety and Environment (HSE) Policy which applies to all employees andactivities.
Your Directors place on record their sincere appreciation of the wholehearted supportextended by the Company's bankers business associates employees' union shareholdersauditors and various statutory authorities both central and state Government.
The accompanying Annexure A to D is an integral part of this Director Report.
| ||For and On Behalf of the Board of Directors |
| ||R L Shenoy |
|Mumbai ||Chairman |
|27th May 2019 ||DIN 00074761 |