Your Directors present the 46th Annual Report of the Company along with theaudited financial statements for the year ended 31st March 2019.
1. Financial Highlights
| || ||(र Lakhs) |
| ||2018-19 ||2017-18 |
|Revenue from operations ||16019.14 ||14999.16 |
|Operating Profit ||2291.21 ||2111.19 |
|Interest ||27.50 ||13.77 |
|Profit before Tax ||2263.71 ||2097.42 |
|Provision for Tax ||655.99 ||719.97 |
|Profit after Tax ||1607.72 ||1377.45 |
|Other Comprehensive Income (Net of Tax) ||(30.24) ||14.30 |
|Total Comprehensive Income ||1577.48 ||1391.75 |
The Company does not propose to transfer any amount to the Reserves for the year underreview.
Your Directors have not recommended any dividend for the financial year ended 31stMarch 2019.
During the financial year the Indian economy grew by 7.2% over the previous year. Inthe first half of 2018-19 the economy recorded good growth; however growth declinedsignificantly in the second half. Led by the slowdown in auto industry growth of themanufacturing sector witnessed a sharp drop. Private investment also did not pick up asexpected. In the auto industry while the passenger vehicle segment did not do well thecommercial vehicle segment returned to a high growth trajectory (24% over theprevious year). The 3 wheeler segment also grew at a faster pace. However competitionintensified in the 3 wheeler segment during the year and this adversely impactedyour Company's sales growth. While your Company's sales grew by 6.8% operating profitincreased by 8.5%.
4. Shifting of Registered Office
The Members at the 45th Annual General Meeting approved the shifting ofregistered office from T-94 M.I.D.C. Bhosari Industrial Area Pune 411 026 Maharashtrato Plot No. 616 & 617 Village Kuruli Pune-Nashik Road Chakan Pune 410 501Maharashtra.
5. Material changes and commitments after the end of financial year
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year anddate of the report.
6. Particulars of loans guarantees or investment
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 ("Act") are given in the notes forming part ofthe financial statements.
7. Human Resources
Employee relations were cordial. Your Directors place on record their appreciation forcontribution made by all employees of your Company. As on 31st March 2019there were 127 employees.
The Company follows best practices in hiring and on-boarding of employees. The Companyadopts fair and transparent performance evaluation processes. In order to improve theorganizational efficiency and employee engagement various process change initiatives wereundertaken during the year. Your Company believes in conducting its business in a highlytransparent and ethical way. To ensure this and also to improve skill levels employeesparticipate in various training programmes and complete mandated e-learning courses. TheCompany has adopted the Saint-Gobain Attitudes which binds all the employees and providesan environment conducive to fairness and equality of all employees.
Your Company is committed to creating a healthy working environment that enablesemployees to work without fear of prejudice gender bias and sexual harassment. TheCompany believes that all employees have a right to be treated with dignity and has zerotolerance towards violation of its Code of Conduct and Sexual Harassment Policy. TheCompany has a Policy on Sexual Harassment which is widely disseminated. During the yearunder review no complaint of sexual harassment was received by the Compliance Committee.
8. Conservation of energy technology absorption foreign exchange earnings andoutgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 are set out in Annexure 1 to this Report.
9. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197of the Act read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as Annexure 2(A) to this Report.
The Statement containing names of top ten employees in terms of remuneration drawn andthe particulars of employees as required under Section 197(12) of the Act read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is provided in a Annexure 2(B) forming part of this Report. Further the Annual Report isbeing sent to the Members excluding the aforesaid Annexure 2(B). In terms of Section 136of the Act the said Annexure is open for inspection at the Registered Office of theCompany. Any Member interested in obtaining copy of the same may write to the CompanySecretary. The full Annual Report including the aforementioned information is available onthe website of the Company www.sekuritindia.com.
10. Public Deposits
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the balancesheet.
11. Directors and Key Managerial Personnel
Mr. M. G. Ramakrishna had been appointed as a Director on the Board of the Company on22nd March 2005 and subsequently as an Independent Director of the Company bythe Members at the 41st Annual General Meeting held on 18th July2014 to hold office for a term of five consecutive years ("first term"). He hasserved as the Chairman of the Board since 30th January 2015.
Mr. M. G. Ramakrishna vide letter dated 9th May 2019 has conveyed to theBoard that he does not seek reappointment for the second term as Independent Director dueto his personal reasons and will resign with effect from 10th May 2019. TheDirectors place on record their appreciation for the valuable contributions made by Mr.Ramakrishna. He has confirmed that there is no other material reason for his resignation.
Mr. Padmanabha Shetty had been appointed as an Independent Director of the Company bythe Members at the 41st Annual General Meeting held 18th July2014 to hold office for a term of five consecutive years ("first term")expiring on 17th July 2019. On recommendation of the Nomination andRemuneration Committee the Board of Directors have recommended reappointment of Mr.Padmanabha Shetty as an Independent Director for second term of five consecutive yearsfrom 18th July 2019 subject to approval of the Members by specialresolution at the Annual General Meeting. The Board considers that the knowledge andexperience of Mr. Shetty in law finance and banking would be of immense benefit to theCompany. In terms of the provisions of Section 160(1) of the Act the Company has receiveda Notice from a Member signifying his intention to propose the candidature for theappointment of Mr. Padmanabha Shetty as an Independent Director.
Mr. Joseph Andrew Jude Pereira has been appointed as an Additional Director(Independent) from 9th May 2019. On the recommendation of the Nomination andRemuneration Committee the Board of Directors has recommended appointment of Mr. JosephAndrew Jude Pereira as an Independent Director for a term of five consecutive years from9th May 2019 subject to approval of the Members of the Company at theAnnual General Meeting. The Board considers that the knowledge and experience of Mr.Pereira in finance human resource and corporate service would be of immense benefit tothe Company. In terms of the provisions of Section 160(1) of the Act the Company hasreceived a Notice from a Member signifying his intention to propose the candidature forthe appointment of Mr. Joseph Andrew Jude Pereira as an Independent Director.
Pursuant to Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") a person who hasattained the age of seventy five years can continue as non-executive director of a companyif approval of its members is obtained by way of a special resolution. Mr. PadmanabhaShetty and Mr. Joseph Andrew Jude Pereira will attain seventy five years of ageduring their term as Non-Executive Independent Directors of your Company. Specialresolutions seeking approval for continuation of their directorships after attaining theage of seventy five years on the existing terms of appointment form part of theNotice convening the 46th Annual General Meeting.
Mr. Santhanam had been appointed as an Additional Director by the Board of Directorsfrom 1st April 2019. On recommendation of the Nomination and RemunerationCommittee the Board of Directors have recommended appointment of Mr. Santhanam as a Non-ExecutiveDirector liable to retire by rotation. In terms of the provisions of Section 160(1) ofthe Act the Company has received a Notice from a Member signifying his intention topropose the candidature for the appointment of Mr. Santhanam as a Non-ExecutiveDirector liable to retire by rotation.
In accordance with the Act and Articles of Association of the Company Mr. AnandMahajan Director retires by rotation and being eligible offers himself forreappointment. The Nomination and Remuneration Committee and the Board of Directorsrecommend his reappointment as a Director.
Pursuant to Section 203 of the Act the Key Managerial Personnel of the Company are Mr.A. Dinakar Managing Director Mr. R. Manigandann Chief Financial Officer and Ms. RukminiSubramanian Company Secretary. During the year there has been no change in the KeyManagerial Personnel.
None of the Director or Key Managerial Personnel has any pecuniary relationship ortransaction vis--vis the Company other than salaries and sitting fees.
12. Director's appointment and remuneration
The Nomination and Remuneration Committee has laid down the criteria for Directors'appointment and remuneration. These are set out in the Nomination and Remuneration Policyannexed as Annexure 3 to this Report.
13. Annual evaluation of performance by the Board
The Board on the recommendation of the Nomination and Remuneration Committee hasadopted a framework for performance evaluation of the Board its committees individualdirectors and the chairperson through a survey questionnaire. The survey questionnairebroadly covers various aspects of board functioning composition of Board and itscommittees culture execution and performance of specific duties obligation andgovernance. The evaluation parameters are based on execution of specific duties qualityof deliberation at the meeting independence of judgement decision making contributionof Directors at the meetings and functioning of the Committees.
The performance of the Board its committees individual directors and chairperson werereviewed by the Nomination and Remuneration Committee and Board of Directors. TheIndependent Directors evaluated the performance of Non-Independent Directors Chairpersonand the Board as a whole. The Board of Directors evaluated the performance of theIndependent Directors their fulfillment of independence criteria in terms of the Act andListing Regulations and their independence from the management. The Director beingevaluated did not participate in the evaluation process.
14. Declaration given by Independent Directors
The Company has received necessary declarations from Independent Directors pursuant toSection 149(7) of the Act confirming that they meet the criteria of independence as underSection 149(6) of the Act and Regulation 16 of the Listing Regulations.
15. Familiarisation programme for Independent Directors
The Company's familiarisation programme for Independent Directors provides orientationand training at the time of joining to enable them to understand the operations businessand other details of the Company. Details of the familiarisation programme for IndependentDirectors are available on the website of the Company www.sekuritindia.com. TheIndependent Directors are regularly briefed on the developments that are taking place inthe Company and its operations.
16. Number of meetings of the Board
The Board meets at regular intervals to review the Company's business and to discussstrategy and plans. A tentative annual calendar of the meetings is circulated to theDirectors in advance to enable them to plan their schedule and to ensure effectiveparticipation.
During the year four meetings of the Board of Directors were held. The maximuminterval between the meetings did not exceed the period prescribed under the Act andListing Regulations.
17. Committees of the Board
During the year in accordance with the Act and Listing Regulations the Board ofDirectors has constituted or reconstituted its Committees. Currently the Board has thefollowing Committees:
- Audit Committee
- Nomination and Remuneration Committee
- Stakeholders Relationship Committee
- Corporate Social Responsibility Committee
- Share Transfer Committee
Details of the Committees along with their constitution and other details are providedin the Corporate Governance Report.
18. Directors Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained your Directors make the following statements in terms of Section134 of the Act
i. that in the preparation of the annual financial statements for year ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanations relating to material departures if any;
ii. that such accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearon 31st March 2019 and of the profit of the Company for the year ended on thatdate;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. that the annual financial statements have been prepared on a going concern'basis;
v. that proper internal financial controls are in place and that such internalfinancial controls are adequate and are operating effectively;
vi. that systems to ensure compliance with the provisions of all applicable laws are inplace and that such systems are adequate and are operating effectively.
With reference to the point number (v) the Board believes that the Company has soundInternal Financial Controls ("IFC") commensurate with the nature and size of itsbusiness. However the business is dynamic and IFC are not static and evolve over time asthe business technology and fraud environment changes in response to competitionindustry practices legislation regulation and current economic conditions. There willtherefore be gaps in the IFC as business evolves. The Company has a process in place tocontinuously identify such gaps and implement newer and / or improved controls whereverthe effect of such gaps would have a material effect on the Company's operations.
19. Related Party Transactions
All related party transactions entered during the financial year were in ordinarycourse of business and at an arm's length basis.
The Company has obtained necessary approvals towards the related party transactions asprescribed by the Act and Listing Regulations.
The policy on related party transactions as approved by the Board is available on thewebsite of the Company www.sekuritindia.com.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Act in prescribed Form AOC-2 is annexed as Annexure 4 tothis Report.
20. Corporate Social Responsibility
In accordance with Section 135 of the Act a Corporate Social Responsibility (CSR)Committee of the Board has been constituted to monitor the CSR policy and the programmesand to ensure that they are in line with the Act and the Rules made thereunder. The CSRpolicy and initiatives taken during the year in the format prescribed under the Companies(Corporate Social Responsibility Policy) Rules 2014 are annexed as Annexure 5 to thisReport.
21. Risk management and internal financial controls
Your Company recognises that managing risk is an integral part of good managementpractice and an essential element of good corporate governance. It aims to have a commonformalised and systematic approach for managing risk and implementing risk managementprocess across the Company. The Company ensures effective communication and management ofrisk across all risk categories. The Company has identified elements of risk which maythreaten the existence and financial position of the Company and are set out inManagement Discussion and Analysis.
The Company's internal financial control systems are commensurate with the nature ofits business financial statements and the size and complexity of its operations. Theseare routinely tested and certified by Statutory as well as Internal Auditors. Significantaudit observations and follow up actions thereon are reported to the Audit Committee.
22. Whistle-Blower Policy and Vigil Mechanism
The Company believes in conducting its affairs in a fair and transparent manner byadopting the highest standards of professionalism honesty integrity and ethicalbehaviour. In order to provide a secure environment and encourage employees and others toreport unethical unlawful or improper practices acts or activities including leak orsuspected leak of unpublished price sensitive information a Whistle Blower Policy hasbeen operational in the Company. The Whistle Blower Policy and Vigil Mechanism aredisseminated through the website of the Company www.sekuritindia.com.
23. Secretarial Standards
The Company complies with applicable Secretarial Standards issued by the Institute ofCompany Secretaries of India.
a. Statutory Auditors
M/s. Kalyaniwalla & Mistry LLP (Registration No. 104607W/W100166) were appointed asthe Statutory Auditors of the Company at the 44th Annual General Meeting heldon 29th July 2017 for a term of five years until the conclusion of 49thAnnual General Meeting subject to ratification by members at every Annual General Meetingin terms of Section 139 of the Act. In accordance with the Companies (Amendment) Act 2017enforced on 7th May 2018 by the Ministry of the Corporate Affairs theappointment of Statutory Auditors is not required to be ratified at every Annual GeneralMeeting.
b. Cost Auditor
The Board of Directors had appointed Mr. G. Thangaraj Cost Accountant as the CostAuditor to conduct audit of cost records of the Company for the financial year 2018-19.The Cost Audit Report for the financial year 2018-19 will be filed with Ministry ofCorporate Affairs.
As per Section 148 and other applicable provisions if any of the Act read withCompanies (Audit and Auditors) Rules 2014 the Board of Directors of your Company onrecommendation of the Audit Committee has appointed Mr. G. Thangaraj Cost Accountant asthe Cost Auditor of the Company for the financial year 2019-20.
Your Company has received consent from Mr. G. Thangaraj to act as the Cost Auditor ofyour Company for the financial year 2019-20 along with a certificate confirming hisindependence.
c. Secretarial Auditor
The Company had appointed M/s. V. N. Deodhar & Co. Company Secretaries toundertake the Secretarial Audit of the Company for the financial year ended 31stMarch 2019. The Secretarial Audit Report for the financial year ended 31stMarch 2019 is annexed as Annexure 6 to this Report.
25. Comments on Auditors' Report
There are no qualifications reservations or adverse remarks or disclaimers made byM/s. Kalyaniwalla & Mistry LLP Statutory Auditors in their Auditor's Reportand by M/s. V. N. Deodhar & Co. Company Secretaries in their Secretarial AuditReport.
The Auditors have not reported any incident of fraud to the Audit Committee of theCompany during the financial year ended 31st March 2019.
26. Significant and Material Orders Passed by the Regulators or Courts or Tribunalsimpacting the going concern status of the Company
There has been no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations. All orders receivedby the Company during the year are routine in nature and have no significant / materialimpact.
27. Extract of Annual Return
An extract of Annual Return in the prescribed form MGT-9 is annexed as Annexure 7 tothis Report.
28. Management Discussion and Analysis and Corporate Governance Report
In terms of the Regulation 34(2)(e) of the Listing Regulations the CorporateGovernance Report with a Certificate from a Practicing Secretary thereon and theManagement Discussion and Analysis are annexed and form part of this Report.
Your Directors take this opportunity to acknowledge with sincere gratitude the supportof its esteemed customers the strength it derives from its association with Compagnie deSaint-Gobain and its subsidiaries the continued support and co-operation from its Bankersand the loyalty of the Company's Suppliers Dealers and valued Shareholders.
| ||On behalf of the Board of Directors |
| ||Anand Mahajan ||A. Dinakar |
|Mumbai 9th May 2019 ||Director ||Managing Director |