gujarat borosil ltd Directors report

Dear Members,

The Directors take pleasure in presenting the Thirtieth Annual Report together with the Audited Financial Statements for the year ended March 31, 2019.

Financial Highlights

The highlights of the financial results of the Company for the financial year 2018-19 are as follows:

(Rs. in Lakhs)

	Year Ended 31.03.2019	Year Ended 31.03.2018
Revenue from operations	21,676	19,981
Other Income	345	350
Profit before finance cost, depreciation, exceptional items and tax	4,537	3,908
Finance cost	1,330	1,377
Depreciation	1,789	1,668
Exceptional items- Income/(Expenditure)*	0	(195)
Net Profit before tax	1,418	668
Provision for Taxation/MAT/Earlier year Tax	1,089	31
Provision for deferred tax liability /(Asset) **	(680)	(55)
Other Comprehensive income	(8)	4
Total Comprehensive Income	1,001	696
Add: Balance brought forward from last year	(1,089)	(1,781)
Add:- Transitional impact of Ind AS 115	(115)	0
Balance carried to Balance Sheet	(195)	(1,089)

*Exceptional items in the previous year ended 31 ^st March, 2018 represent loss on sale of Captive Power Plant.

**Reduction in income tax rate by the Finance Bill, 2018 resulted into reversal of deferred tax liability earlier recognised, accordingly there is a tax credit in the year ended 31 st March, 2018.

DIVIDEND

Your Directors do not recommend any dividend for the year ended March 31, 2019 on both Equity and 9% Non-Cumulative Non-Convertible Redeemable Preference Shares, in view of carry forward losses and in order to conserve resources for the ongoing capital expenditure project to expand production capacity.

RESERVE

During the year under review, no amount was transferred to any reserve.

TRANSFER OF SHARES/ DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, the Company was not required to transfer any dividend/shares to Investor Education & Protection Fund Authority.

EXTENSION OF DATE OF ANNUAL GENERAL MEETING

In view of impending Composite Scheme of Amalgamation and Arrangement, the Company had obtained extension of time from the Registrar of Companies, Mumbai vide their letter dated August 16, 2019, for the purpose of holding AGM of the Company for the accounting year ended March 31, 2019, which was due to be held by September 30, 2019, by a period of 3 months.

SHARE CAPITAL

The paid up Share Capital comprises of 6,82,07,500 Equity shares of Rs.5/- each and 90,00,000 – 9% Non-Cumulative Non-Convertible Redeemable Preference shares of Rs.100/- each. The Preference Shareholder had acquired voting rights due to non-payment of dividend for more than two years. During the year under review, the Company has not issued shares with differential voting rights nor sweat equity.

EMPLOYEE STOCK OPTION SCHEME

During the year under review, the members of the Company at its meeting held on August 08, 2018 had approved ‘Gujarat Borosil Employee Stock Option Scheme 2018 and to grant option to employees of the Company. However no stock options have been granted so far.

VARIATION IN TERMS OF PREFERENCE SHARES

During the year under review, the members of the Company at their meeting held on August 08, 2018 had approved variation in terms and conditions of preference shares by extension of redemption period of 90,00,000 9% Non-Cumulative Non-Convertible Redeemable Preference Shares of Rs. 100/- each of the Company by 3 years. The said preference shares shall be now due for redemption on March 15, 2022. Undeclared cumulative dividend on the Preference shares shall be payable as and when declared by the Company or otherwise at the time of redemption and all other terms and conditions associated with the aforesaid preference shares shall remain same.

BORROWINGS

The Company has borrowed INR 125 crores from Borosil Glass Works Limited (BGWL) to part finance the solar expansion project. As per revised terms, the said Inter Corporate Deposit(s) carries interest at 9.5% per annum, compounded on yearly basis, but payable on maturity.

In addition to the above, the Company has availed secured term loan from its bankers i.e. IndusInd Bank Limited and Kotak Mahindra Bank Limited to the tune of INR 100 Crores to fund the said solar glass expansion project.

CHANGE IN REGISTERED OFFICE

During the year under review, the members of the Company at their meeting held on August 08, 2018 had approved change in place of registered office of the Company from the state of Gujarat to the state of Maharashtra. The Regional Director has approved such change and the Registered Office has been shifted to Maharashtra, with effect from November 05, 2018.

STATE OF AFFAIRS / PERFORMANCE

Revenue during the year under review grew by 8.48% from Rs.19,981 Lakhs achieved in the previous year to Rs. 21,676 Lakhs. This was enabled by higher volume of tempered glass sale and better average price realization.

Exports (including to customers in SEZ) during the year under review were higher at Rs. 5,769 lakhs as compared to Rs. 4,260 lakhs during the previous year registering an increase of 35%. Domestic sales on the other hand remained almost flat.

The Company successfully started commercial production and sale of fully tempered 2 mm solar glass for Glass-to-glass modules. The demand for this segment in the Photovoltaic solar market is expected to grow in the near future in both export as well as domestic market. Moreover, the Company is offering solar glass in intermediate thicknesses, e.g. 2.8mm and 2.5mm, which allows manufacturers to make completely new, lighter and more efficient Photovoltaic modules. The Company expects to enhance the sale of thinner glass to cater to the growing demand within the overall sale of solar tempered glass.

The other value propositions offered by Company through innovating new products like anti soiling and anti glare glass are making progress. The Company will be shortly commissioning a follow up study on use of antimony in the solar glass as the glass produced at its plant without using antimony has shown to generate higher output by upto 7.5% in field though the initial flash tester results show them to be almost equal.

The Company continues its focus on cost of production by optimizing on raw material cost and increasing productivity to stay competitive against cheap and dumped imports.

Profit before finance cost, depreciation, exceptional items and tax during FY19 was higher at Rs. 4,537 Lakhs as compared to Rs. 3,908 Lakhs in the previous year. The improvement was contributed by higher production of tempered glass, sale of thinner glass and higher average price realization.

Profit before tax also registered an impressive increase during FY19 to Rs. 1,418 lakhs as against Rs. 668 lakhs in the previous year.

The working in the six months of the current financial year has been adversely affected on account of inefficient operations of the furnace, which was facing quality and output related issues, as the same was due for repair and rebuild. This furnace was finally shut down on 19 ^th August 2019 for rebuild. In the meantime, the second furnace was commissioned and commercial production of glass started on 1 ^st August 2019. In the meantime the import prices continued its downward trend due to lower demand in China from second half of 2018. As a result the selling prices from the last quarter of FY 2019 had to be adjusted downwards. Moreover, the current mix of customers includes sale of higher volumes to large consumers who buy at lower prices thus affecting overall price realization. These factors have adversely affected the profitability in the first six months of the current financial year.

The old furnace, with increased capacity is expected to come back in production by end of November 2019. This capital expenditure has been/is being funded internally. It is expected that output from both the production lines will become available for sale from the last quarter of this year. However, average sales price realization is likely to remain under pressure due to continued cheap and dumped imports from China and Malaysia. While Anti dumping duty against China is in place the impact has been somewhat negated by a downward adjustment of prices by exporters. Our efforts are in progress to achieve some relief by way of anti dumping duty/ anti subsidy duty on solar tempered glass originating from Malaysia, which has acquired a significantly large market share.

SOLAR GLASS EXPANSION PROJECT

The Company has successfully commissioned its furnace for the second plant for Solar glass production and part of the related processing facilities. Commercial production of glass was achieved on 1 ^st August 2019. Your directors are happy to inform that the desired quality and level of production has been achieved in a shorter than expected time. The remaining processing facilities are under commissioning.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Some statements in this discussion pertaining to projections, estimates, exceptions or outlook may be forward looking. Actual results may however differ materially from those stated on account of various factors such as changes in government regulations, tax regimes, economic developments, currency exchange rates and interest rate movements, impact of competing products and their pricing, product demand and supply constraints within India and other countries where the Company conducts business. Estimates made with regard to market size of various segments and their respective rates of growth are internal estimates made by the management.

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is engaged in production of low iron solar glass for application in the solar power sector. Growth in Solar power sector globally for last few years has been dominated by China, which has become the world’s major player in solar manufacturing as well as in installations. Of late Chinese manufacturers have started to use Malaysia and Vietnam as their new manufacturing hubs. They indulge in large scale related party transactions with their subsidiaries by supplying capital, fixed assets, and raw materials at other than market prices, thus artificially lowering costs and thereby overcoming international trade restrictions. They also access incentives in the host countries.

In June 2018 China abruptly cut down its solarisation program, which led to panic amongst the manufacturers there. This led to large scale dumping of solar products around the world including in India, leading to a dramatic fall in prices of modules as well as components.

Since 2014 the Government of India has provided enormous momentum to the solar sector by announcing a target of installing 100 Giga Watt (GW) by 2022. Besides grid-connected installations, the program gives huge emphasis on the Agriculture sector by promoting the use of solar powered pumps and by encouraging off-grid roof-tops and standalone solar power solutions.

In 2018 annual global solar PV installations once again exceeded 100 GW of which China accounted for about 44 GW (down from 53 GW in 2017). In India the solar installations were 8 GW in new large-scale grid and rooftop solar. The country’s total installed capacity now stands at 28 GW as of December 2018.

Indian solar installations could have been higher, but for uncertainty with regard to rate of GST and applicability of safeguard duty. On the other hand EU, US and Turkey registered higher installations and these countries along-with other emerging markets like Japan, Vietnam etc contributed to maintaining the overall nos. above 100 GW for CY 2018. While Chinese installations are expected to be around 30-35 GW in CY 2019, the markets outside China are expected to show better performance and remain buoyant in coming times also.

However, the major concern is that most installations in India continue to be supplied by either fully made up solar modules or Indian made modules using imported cells. Where modules are made in India, there is very heavy dependence on imported components including cells and solar glass. The domestic manufacturing sector still awaits a comprehensive manufacturing policy from the Indian government. The levy of safeguard duty by government on import of solar cells and modules from July 2018 has provided some positive support to the domestic manufacturing. The recent announcements of the government to introduce domestic content requirement for CPSU scheme and measures to accelerate solar water pumps and use of Agriculture land to produce power and supply under KUSUM scheme will go a long way in promoting domestic manufacturing. Another initiative is for manufacturing linked to inter-state transmission system (ISTS)-connected solar photovoltaic (PV) projects for an aggregate capacity of 10 GW. Government is also pressing for meeting various renewable power obligations (RPOs), which is helping generate demand. These measures are expected to boost domestic manufacturing of modules, which in turn is expected to expand the demand for solar glass. On the other hand there is huge reversal of interest from investors and developers due to very thin margins in view of declining prices under reverse bidding mechanism. The Government is seized of the situation and appropriate measures are awaited.

B. OPPORTUNITIES & THREATS OPPORTUNITIES

The Company remains the only producer of solar glass in the country and enjoys widespread acceptance of its product. It constantly evaluates avenues for growth in this sector in both domestic and export markets. In the domestic market, its natural advantage of offering a shorter lead-time to module manufacturers works favorably in helping it to secure business.

Despite concerns about weak power demand growth and growing incidence of grid curtailment, the solar power outlook in India remains very strong.

Solar accounted for approximately 45% of all new power capacity added in India during 2017. The share of solar was 51% in 2018. This robust installation activity also made solar the single largest source of new power capacity additions consecutively in 2017 and 2018.

The initiatives as above from the government by way of policy initiatives and taking measures to promote domestic manufacturing are expected to generate a long term sustainable demand which will enable creating a robust value chain in near future. The recent decision of the Government to curtail corporate tax rates for new manufacturing companies will also help attract investment in manufacturing. Also the decision of not signing Regional Comprehensive Economic Partnership (RCEP) will help domestic manufacturing, as this would avoid enhanced flooding of imports from China and Malaysia and cause adverse balance of payment for the country.

In view of growth in the sector led by above initiatives as also the levy of safeguard duty on solar cells and modules, domestic module manufacturing is growing. This will need higher supplies of solar glass. The demand for solar glass in India has risen to almost 450 TPD as against the domestic supply of 125 TPD coming from first furnace of your company. The availability of this opportunity to the Company has caused us to enhance our supply capacity to 320 TPD (installed capacity 420 TPD) by 31 ^st December 2019.

Gujarat Borosil’s thinner fully tempered solar glass (2 mm) offers glass to glass modules, which is suited for BIPV replacing the roof itself, floating installations in water and with use of bifacial cells can enhance the power generation by as much as 15-30%. The fully tempered 2 mm solar glass is a niche product and can provide substantial upside in operational performance going forward.

THREATS

• Government policies to provide solar power at cheapest price and the methods like reverse bidding for power projects and capping of tariffs has led to possibilities of compromise on quality and long-term aspects. This has been keeping the manufacturers of components away from taking up expansion plans.

The cancellations of bids/auctions after allotments by state owned distribution companies /States have been a major set back for the developers. This has recently caused lots of disturbances as newly elected state Government in some state decided to cancel all contracts and wanted to have revisions which was finally stopped by a legal process.

The uncertainty which prevailed in 2018 on account of different states seeking to impose different rates of GST and litigations on imposition of safeguard duty on Imported solar cells & modules has resulted in a set back in solar PV installations in 2018. Moreover, whether the safeguard duty will be a pass through or not on the already accepted bids also led to delays as developers chose to wait. A clear policy/taxation road map is required for a long-term view by the stakeholders to enable them to make financial commitments.

• India continues to meet the demand for Cells and modules to the extent of 90% by imports in the utility scale sector largely from China, Taiwan and Malaysia.

• Recent Trade/Tariff wars between USA and China have led to uncertainties and caused disturbances in prices.

• Currently the solar manufacturing facilities in China are far in excess of domestic program thereby making them highly dependent on exports. In the event of a slowdown in their domestic installations for solar PV, the Chinese producers can further impact the other markets in terms of both volumes and prices as it happened after 31 ^st May 2018. Solar glass production is a continuous process industry. Any abrupt change in Government policies in India or say China to cut the targets can result into surplus capacity for glass. This may cause severe pressure on the selling prices of glass and adversely affect the profitability.

• China as the World’s largest PV glass producer accounts for over 90% of the total solar glass capacity. The Chinese producers are setting up manufacturing plants in Vietnam and Malaysia mainly to cater to export markets. A significant portion of solar glass imports in the country today are happening from Malaysia. Also, manufacturing plants in Vietnam with large capacities are expected to be commissioned in a short time. We have earlier commented about the methods employed to circumvent imposition of anti-dumping duty on the output from these foreign subsidiaries. Glass availability is increasing rapidly and this could lead to subdued prices unless old inefficient plants in China keep closing on one hand and suitable immediate duty measures are put in place by Indian authorities on the other hand.

• Module producers based in SEZ zones in the country continue to clear the modules in domestic tariff area without bearing any anti-dumping duties on solar glass used by them. This is a big anomaly in the policy which needs to be corrected. The module manufactruers in SEZ zones prefer imports and stay away from domestic source of solar glass as they do not pay anti dumping duty on imports thereby restricting exports and shrinking the market for solar glass.

C. SEGMENTWISE OR PRODUCTWISE PERFORMANCE

The Company’s business activity falls within a single primary business segment viz. Manufacture of Flat glass. As such, there are no separate reportable segments as per Indian Accounting Standard 108.

The Segment Revenue in the Geographical Segment considered for disclosure are as follows:

i) Revenue within India includes sales to customers located within India excluding SEZ and EOU.

ii) Revenue outside India includes sales to customers located outside India and including to SEZ/ EOU

Sales:	2018-19	2017-18
	(Rs. In lakhs)	(Rs. In Lakhs)
Within India	15,907	15,721
Outside India	5,769	4,260
TOTAL	21,676	19,981

D. OUTLOOK

The growth of solar energy in the Country has gained momentum in last 3-4 years. Solar module manufacturing requires huge quantity of solar glass. The Government plans to set up 100 GW of solar power installations by 2022. The actions on the ground in all the sectors i.e. Grid power, Rooftop and Solar water pumps are showing good growth. Electrical vehicles could be another big area for growth of solar power. The agencies like SECI are creating enough demand visibility and auctions are being held much in advance.

The solar energy produced will reduce pressure on natural resources besides being non-polluting and environment friendly and will lead to saving in the Oil import bill with very little recurring cost. It is expected that a very significant portion of new power installations will continue to come from renewables led by solar. Significant amount of work is going on providing economic and efficient storage, which will make the solar power along-with storage a competitive and desirable source. As the only domestic manufacturer of solar glass, your Company expects to participate in and benefit from the extremely strong growth potential for the solar power sector.

E. RISK AND CONCERNS

The Company is exposed to normal industry risk factors of competition, economic cycle and uncertainties in the international and domestic markets.

The Government approvals for land and readiness of power distribution companies to evacuate power needs to be focused in order to achieve ambitious growth plans to produce solar energy. The continued pressure to quote lower prices for electricity in the biddings to get Government allocations is leading to lower prices for input/component manufacturers thereby making them vulnerable, which could affect the health of the Industry. On the other hand it is leaving very little incentive for investors/ developers to commit resources.

In India there is complete exemption from import duty on solar glass whereas it is subject to levy of 21% import duty in China. It is essential that India imposes a similar import duty on import of solar glass from China. Such measures are needed to provide a level playing field to domestic industry. The import of modules reduces the demand for components. The absence of a suitable import duty structure impacts the incentive for investing in India for domestic production.

Despite aggressive push from the Government to Solar power a domestic manufacturing policy is yet to be announced. This is a strategically important industry and deserves detailed thin king by the government. It is expected that a manufacturing policy for solar to develop entire eco-system will be framed sooner than later thereby paving the way for robust growth and achievement of plans.

F. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate Internal Control Systems commensurate with its size and nature of business. All transactions are properly authorized, recorded and reported to the management. The internal control systems are designed to ensure that the financial statements are prepared based on reliable information. Internal Audits are continuously conducted by an in-house Internal Audit department of the Company and Internal Audit Reports are reviewed by the Audit Committee of the Board periodically.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL

PERFORMANCE

The operational performance during the year improved as record production of solar glass and sales were achieved. The EBIDTA margin also improved as against previous year. This enabled company to generate positive cash flows.

H. MATERIAL DEVELOPMENT IN HUMAN RESOURCES, INDUSTRIAL RELATION FRONT,

INCLUDING NUMBER OF PEOPLE EMPLOYED

The industrial relations continued to be cordial.

Number of people employed as on 31 ^st March, 2019 were as under:

Staff	: 245
Workers	: 150 (Excluding contract labour)

The Company has effective HR systems to make the performance appraisals and working more transparent. Greater operational and financial details are shared with the management cadre with a view to having their deeper involvement and for development of human resources.

I. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG-WITH DETAILED EXPLANATIONS-

Ratios	2018-19	2017-18	Change (%)	Explanation where Changes more than 25%
Debtors Turnover Ratio	8.93	7.80	15%
Inventory Turnover Ratio	5.23	5.56	-6%
Interest Coverage Ratio	2.07	1.49	39%	Better performance as compared to previous year
Current Ratio	2.27	2.50	-9%
Debt equity Ratio	3.01	2.02	49%	Increase in debt due to expansion of solar business
Operating Profit Margin %	11.08	9.46	17%	Better performance as compared to previous year
Net Profit Margin %	4.62	3.48	32%	Better performance as compared to previous year
Return on Net Worth %	10.24	10.10	1%

CORPORATE GOVERNANCE

As required by Regulation 34 read with schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance is appended along-with a Certificate of Compliance from the Auditors.

SCHEME OF AMALGAMATION AND ARRANGEMENT:

As Shareholders are aware in Q1FY18, the Board of Directors of the Company approved a composite scheme of amalgamation and arrangement amongst Vyline Glass Works Ltd (VGWL), Fennel Investment and Finance Private Limited (FIFPL), Gujarat Borosil Limited (GBL), Borosil Glass Works Ltd (BGWL) and Borosil Limited (Formerly known as Hopewell Tableware Limited) (BL) and their respective shareholders ("Scheme") for: i. Amalgamation of Vyline Glass Works Ltd (VGWL), Fennel Investment and Finance Private Limited

(FIFPL) and Gujarat Borosil Limited (GBL) with Borosil Glass Works Ltd (BGWL); and

ii. Demerger of the Scientific and Industrial products and Consumer products business of BGWL along with the Scientific and Industrial products and Consumer products business of VGWL into Borosil Limited (BL).

Post approval of scheme by regulatory bodies, Borosil Glass Works Limited will be renamed as Borosil Renewables Limited or such other name as may be approved by the concerned Registrar of Companies.

After receiving NOC from relevant stock exchange(s), an application was made to the National Company Law Tribunal ("NCLT"), Mumbai Bench, to pass an order to convene meetings of the Creditors and Members of the concerned companies. Accordingly, NCLT passed an order dated 29 ^th March, 2019, directing the convening of meetings of Secured and Unsecured Creditors and Members of applicant companies on 14 ^th & 15th May, 2019 while exempting convening of such meetings for Preference Shareholders of GBL & BL and Secured Creditors of VGWL. In all the meetings held accordingly, the Scheme was approved, following which the petition was made to NCLT on 28 ^th May, 2019 for approval of the said Scheme. NCLT vide its order dated September 30, 2019 fixed November 21, 2019 as the date of hearing.

The appointed date for the said Scheme is 01 ^st October, 2018. The Scheme intends to: a) Result in simplification of the group structure by eliminating cross holdings.

b) Confer shares in each business to each existing shareholder of all the companies thereby giving them an opportunity to participate in both the businesses. i.e. scientific and industrial products and consumer products businesses of BGWL and solar business of GBL. They will be free to decide whether to stay invested or monetize their investment in either of the businesses thereby unlocking value for the shareholders.

c) Enable each business to pursue growth opportunities and offer investment opportunities to potential investors.

d) Result in economies in business operations, provide optimal utilization of resources and greater administrative efficiencies.

On amalgamation, shareholders of VGWL will receive 200 (Two Hundred) fully paid up equity share of Re.1 each of BGWL for every 81 (Eighty One) equity fully paid equity shares of Rs. 10 each of VGWL.

On amalgamation, shareholders of FIFPL will receive 200 (Two Hundred) fully paid up equity share of Re.1 each of BGWL for every 109 (One Hundred and Nine) equity fully paid equity shares of Rs. 10 each of VGWL.

On amalgamation, shareholders of GBL will receive 1 (One) fully paid up equity share of Re.1 each of BGWL for every 2 (Two) equity fully paid equity shares of Rs. 5 each of GBL.

On demerger, shareholders of BGWL while retaining their existing holding, will also receive 1 (One) fully paid equity share in BL (post demerger) against 1 (One) fully paid equity share held in BGWL. BL will be listed on BSE and NSE post completion of the Scheme.

The share exchange ratio has been arrived at as per a valuation report by SSPA and Co, Chartered Accountants. A fairness opinion has been provided by M/s Keynote Corporate Services Ltd.

The amalgamation will eliminate cross holdings amongst group companies and simplify the group structure. A key rationale is the reduction in related party transactions in the current operations. Thus, under the aforesaid Scheme, shareholders of GBL, VGWL and FIFPL will get shares both in existing BGWL (which will be renamed) and in the existing BL after demerger of BGWL business (along with business of VGWL) into BL.

DEPOSITS

The Company has not accepted any deposits and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet. There is no deposit which is not under compliance of Chapter V of Companies Act, 2013.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary Company.

The Company is an associate company of Fennel Investment and Finance Private Limited by virtue of their holding of more than 20% of the equity share capital in the Company.

The Company was an associate company of Borosil Glass Works Limited (BGWL) till May 06, 2018 by virtue of their holding of more than 20% of the equity share capital in the Company. However, in view of amendment of Section 2(87) of the Companies Act, 2013, which defines ‘Subsidiary Company’, the Company has become a subsidiary of BGWL effective May 07, 2018, as BGWL controls more than one-half of the total voting power.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has established a Whistle Blower (Vigil) Mechanism and formulated a Whistle Blower Policy to deal with instance of fraud and mismanagement. The details of the Policy are explained in the Corporate Governance Report, which form part of this Annual Report and also posted on the website of the Company at http://www.gujaratborosil.com/policies.html - click on Whistle Blower Policy

BOARD OF DIRECTORS, ITS MEETINGS, EVALUATION ETC.

Board Meetings:

During the year, six Board Meetings, five Audit Committee Meetings and three Nomination and Remuneration Committee Meetings were convened and held. The details of these are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013;

Appointment/ re-appointment:

As per the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Ashok Jain (DIN 00025125), Director of the Company will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offers himself for re-appointment. The Board recommends his reappointment.

Mr. Ramaswami Velayudhan Pillai has been appointed as Whole Time Director and Key Managerial Personnel of the Company with effect from April 01, 2018, for a period of two years. Mr. B. L. Kheruka stepped down as Director and Chairman of the Board with effect from September 18, 2018. He was appointed as Chairman Emeritus from the said date. The Board places on record its deep appreciation of the contribution made by Mr. B. L. Kheruka as Chairman of the Company since its inception. Mr. P. K. Kheruka was appointed as non-executive Chairman of the Board with effect from September 18, 2018. Mr. Shreevar Kheruka was appointed as additional and non-executive director of the Company with effect from September 18, 2018.

The Board of Directors of the Company in its meeting held on September 18, 2018 appointed Mr. Milind Gurjar as Chief Executive Officer and Key Managerial Personnel of the Company with effect from September 24, 2018. However, he resigned as Chief Executive Officer and Key managerial Personnel of the Company on June 14, 2019, due to personal reasons.

The Board of Directors of the Company in its meeting held on February 07, 2019 appointed Mr. Raj Kumar Jain (DIN: 00026544) as an Additional and Independent Director of the Company with effect from February 07, 2019, subject to approval of the members of the Company at the ensuing Annual General Meeting.

The Board of Directors of the Company through resolution by circulation has appointed Mr. Pradeep Vasudeo Bhide (DIN: 03304262) as an Additional and Independent Director of the Company with effect from April 01, 2019, subject to approval of the members of the Company at the ensuing Annual General Meeting.

The Board of Directors of the Company through resolution by circulation has appointed Mr. Haigreve Khaitan (DIN: 00005290) and Mr. Asif Syed Ibrahim (DIN 08410266) as Additional and Independent Directors of the Company with effect from April 03, 2019, subject to approval of the members of the Company at the ensuing Annual General Meeting.

The Board of Directors of the Company in its meeting held on July 29, 2019 appointed Mr. Ashok Jain (DIN 00025125) as Whole Time Director and Key Managerial Personnel of the Company with effect from August 01, 2019 for a period of two years, subject to approval of the members of the Company at the ensuing Annual General Meeting.

The Board of Directors of the Company in its meeting held on July 29, 2019 re-appointed Mrs. Shalini Kamath (DIN: 06993314) as an Independent Director of the Company, not liable to retire by rotation, for second term of 5 (five) years with effect from November 03, 2019, subject to approval of the members of the Company at the ensuing Annual General Meeting.

Cessation of Independent Directors of the Company

During the year under review:

a. Mr. Jagdish Joshi resigned as a Non-Executive Independent Director of the Company with effect from

February 22, 2019. He vacated his office on attaining age of 75 years on 22 ^nd February, 2019 and in the spirit of new provisions inserted in SEBI (LODR) Regulations, 2018.

b. Cessation of Mr. Ashok Kumar Doda and Mr. Shashi Kumar Mehra as Non-Executive Independent

Directors of the Company on expiry of their term of appointment, i.e. March 31, 2019.

Your Directors place on record their appreciation for the contribution made by Mr. Jagdish Joshi, Mr. Ashok Kumar Doda and Mr. Shashi Kumar Mehra as Independent Directors of the Company.

Brief details of the Director(s) being appointed/ reappointed have been incorporated in the Notice for the forthcoming Annual General Meeting.

Except as stated above, there is no other change in the composition of the Board of Directors and Key Managerial Personnel during the year under review.

Declaration by Independent Directors:

The Independent Directors have submitted the declaration of independence, as required pursuant to Section 149(7) of Companies Act, 2013, stating that they meet the Criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and as per Regulation 25 read with Regulation 16 of SEBI LODR Regulations.

Company’s Policy on Directors Appointment and Remuneration etc.:

Under Section 178 of the Companies Act, 2013, the Company has prepared a policy on Director’s appointment and Remuneration. The Company has also laid down criteria for determining qualifications, positive attributes and independence of a Director. Policy relating to remuneration for the Directors, Key Managerial Personnel and Other employees is attached herewith as an ‘ Annexure A’ to this Report.

The Company has formulated a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees. This is available on the website of the Company at http://www.gujaratborosil.com/ policies.html - click on Remuneration policy.

Familiarization Programme for Independent Directors:

A Familiarization programme was prepared by the Company about roles, rights and responsibilities of Independent Directors in the Company, nature of industry in which the Company operates, business model of the Company, Secretarial Standards for Board & General Meeting, SEBI (LODR) Regulations, 2015 etc.. This was presented to Independent Directors on October 30, 2018 and May 07, 2019. The details of the above programme(s) are available on the website of the Company at http://www.gujaratborosil.com/ directors.html - click on Familiarization Programme for Independent Directors.

Formal Annual Evaluation:

In compliance with the Companies Act, 2013 and Regulations 17, 19 and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board was carried out during the year under review.

The Formal Annual Evaluation has been made as follows:

1. Manner of effective evaluation:

The Company has laid down evaluation criteria separately for the Board, Independent Directors, Directors other than Independent Directors and various committees of the Board in the form of questionnaire. As per the provisions of Section 178 of the Companies Act, 2013, the evaluation has been done by both the Nomination and Remuneration Committee and Board of Directors of the Company.

Evaluation of Directors

The criteria for evaluation of Directors (including the Chairman) include parameters such as willingness and commitment to fulfill duties including attendance in various meetings, high level of professional ethics, contribution during meetings and timely disclosure of all the notice/details required under various provisions of laws.

Evaluation of Board and its various committees

The criteria for evaluation of Board include whether Board meetings were held in time, all items which were required as per law or SEBI (LODR) Regulations, 2015 to be placed before the Board, have been placed, the same have been discussed and appropriate decisions were taken, adherence to legally prescribed composition and procedures, timely induction of additional/women Directors and replacement of Board members/Committee members, whenever required, whether the Board regularly reviews the investors grievance redressal mechanism and related issues, Board facilitates the independent directors to perform their role effectively etc.

The criteria for evaluation of committee include taking up roles and functions as per its terms of reference, independence of the committee, policies which are required to frame and properly monitored its implementation, whether the committee has sought necessary clarifications, information and explanations from management, internal and external auditors etc.

Based on such criteria, the evaluation was done in a structured manner through peer consultation & discussion.

2. Evaluation of the Board was made by a Separate Meeting of Independent Directors held under Chairmanship of Mr. Ashok Kumar Doda, Lead Independent director (without attendance of non – Independent Directors and members of management) on February 07, 2019.

3. The performance evaluation of all committees namely:

1.	Audit Committee
2.	Nomination and Remuneration Committee
3.	Corporate Social Responsibility Committee
4.	Share Transfer Committee

were done by the Board of Directors at its meeting held on February 07, 2019.

However, performance evaluation of Stakeholders Relationship Committee was done on May 07, 2019.

4. Performance evaluation of non – Independent Directors namely Mr. P. K. Kheruka, Mr. Shreevar Kheruka, Mr. Ashok Jain and Mr. Ramaswami V Pillai was done at a Separate meeting of Independent Directors.

5. Evaluation of Independent Directors namely Mr. Shashi Kumar Mehra, Mr. Jagdish M. Joshi and Mr. Ashok Kumar Doda and Mrs. Shalini Kamath was done (excluding the Director who was evaluated) by the Board of Directors of the Company at its meeting held on February 07, 2019.

6. In addition, the Nomination and Remuneration Committee has carried out evaluation of every Director’s performance at its meeting held on February 07, 2019.

7. The Directors expressed their satisfaction with the evaluation process. Performance evaluation of Board/ Independent Directors/ Committees was found satisfactory.

AUDIT COMMITTEE:

The details pertaining to the composition, terms of reference and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report. All recommendations of the Audit Committee in terms of its charter were accepted by the Board of Directors of your Company from time to time during the year under report.

RISK MANAGEMENT COMMITTEE

Your Company has voluntarily constituted a Risk management Committee on July 29, 2019, to review the risk management plan/ process of the Company.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANEGEMENT POLICY

The Company faces various risks in the form of financial risk, operational risks etc. The Company understands that it needs to survive these risks in the market and hence has developed a comprehensive policy on Risk Management.

KEY MANAGERIAL PERSONNEL

Key Managerial Personnel (KMP) of the Company under Section 203 of the Companies Act, 2013 are as follows:

SR NO.	NAME	DESIGNATION
1	Mr. Ramaswami Velayudhan Pillai	Whole Time Director with effect from April 01, 2018.
2	Mr. Ashok Jain	Whole Time Director with effect from August 01, 2019.
3	Mr. Milind Gurjar	Chief Executive Officer upto June 14, 2019.
4	Mr. Sunil Roongta	Chief Financial Officer
5	Mr. Kishor Talreja	Company Secretary and Compliance Officer

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As part of its initiatives under "Corporate Social Responsibility" (CSR), the Company has undertaken projects in the area of education which were in accordance with Schedule VII of the Companies Act, 2013.

During the year, the Company contributed:

Rs.33,40,000/- to Borosil Foundation, which in turn contributed:

- Rs.20,00,000/- to Manav Seva Mandal, Global Parli, for water retention projects

- Rs.2,40,000/- to Seva Yagna Samiti, Bharuch, Gujarat, for avoiding malnutrition as a measure of preventive health care & for food supply to patients of Government hospital at Bharuch, Gujarat - Rs.10,00,000/- to Friends of Tribals Society, Mumbai, as a part of a project being undertaken by them for imparting education in tribal areas under One Teacher School (OTS) called Ekal Vidyalayas, - Rs.1,00,000/- to EdelGive Foundation for its ongoing project The Influencer – an women empowerment initiative.

In terms of Section 135 of the Companies Act, 2013 and Rules made thereunder, the Company has constituted CSR committee comprising of the following members as on March 31, 2019:

1.	Mr. P. K. Kheruka-Chairman
2.	Mr. Shreevar Kheruka - Member
3.	Mrs. Shalini Kamath – Member

out of which Mrs. Shalini Kamath is an Independent Director.

Mr. Jagdish Joshi was member upto February 07, 2019 and Mr. Shashi Mehra was member upto March 15, 2019. Mr. Asif Ibrahim was appointed as member on July 22, 2019.

a. The CSR Committee of the Board of Directors indicates the activities to be undertaken by the Company

(within the framework of activities as specified in Schedule VII of the Act) during the particular year.

b. recommends to the Board the amount of expenditure to be incurred during the year under some of the activities covered in the Compnay’s CSR Policy.

c. monitors the said policy.

d. ensures that the activities as included in CSR Policy of the Company are undertaken by it in a phased manner depending on the available opportunities.

Company’s CSR Policy:

The Board of Directors of the Company has approved the CSR Policy as recommended by the CSR Committee and the same has been uploaded on the Company’s website at http://www.gujaratborosil.com/ policies.html - click on CSR policy.

Initiatives taken by the Company during the year:

The 2% of the net profits of the Company during the immediate three preceding financial years amounts to Rs.33.12 lakhs. The Company has contributed a sum of Rs.33.40 lakhs during the year.

The Company has jointly with Borosil Glass Works Limited (BGWL), holding Company and Borosil Limited (formerly known as Hopewell Tableware Limited) - BL, wholly owned subsidiary of BGWL constituted a Trust namely – ‘Borosil Foundation’ with the main objective of making CSR contributions by the Company, BGWL and BL, from time to time.

An Annual Report on CSR activities in terms of Section 134(3) (o) of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 is attached herewith as an ‘Annexure B’ to this Report.

Reason for non-spending balance CSR contribution:

Not Applicable: Since the Company has made contribution in excess of limit, as also total spending is more than 2%.

POSTAL BALLOT

During the year under review, no resolution was passed by Postal Ballot.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 (‘the Act’) and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return in form MGT 9 is attached as an ‘Annexure C’ to this Report and forms part to the report of the Board of Directors. The same is available on http://gujaratborosil.com/annual reports.htm

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at http://www.gujaratborosil.com/policies.html - click on Related Party Transaction policy.

The details of the transactions with Related Party are provided in the accompanying financial statements.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

During the year under review, the Company has received Show cause notice dated May 01, 2018 from Registrar of Companies, Gujarat for violation of certain provisions of the Companies Act, 2013, pursuant to inspection carried out by Regional Director and the default is compounded on payment of Compounding fee.

POLLUTION CONTROL

The Company’s plants do not generate any effluent except flue gas, the chemical composition of which is within permissible limits.

Internal financial control systems and their adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.

Policy on directors’ appointment and remuneration and other details

The Company’s policy on directors’ appointment and remuneration and other matters provided in Section 178 of the Companies Act, 2013 has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on www.gujaratborosil.com

Audit Committee

The details pertaining to the composition of the audit committee are included in the Corporate Governance Report, which is a part of this report.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS

During the year under review, there have not been any instances of fraud and accordingly, the Statutory Auditors have not reported any frauds either to the Audit Committee or to the Board under Section 143(12) of the Act.

AUDITORS:

STATUTORY AUDITORS

M/s. Chaturvedi & Shah, Chartered Accountants LLP, Mumbai (Firm Registration no.101720W), were appointed as Statutory Auditors of your Company for a term of five years from the conclusion of the 27 ^th Annual General Meeting held on August 08, 2016 till the conclusion of the 32nd Annual General Meeting.

The Statutory Auditor’s Report for the financial year 2018-2019 does not contain any qualifications, reservations, adverse remarks or disclaimer and no frauds were reported by the Auditors to the Company under sub-section (12) of Section 143 of the Act.

COST AUDITORS AND COST AUDIT REPORT

The Company is required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. The cost audit records maintained by the Company in respect of its activities are required to be audited pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended. The Board of Directors had, on the recommendation of the Audit Committee, appointed M/s. Kailash Sankhlecha & Associates, Cost Accountant as Cost Auditor to audit the cost accounts of the Company for the year ending 31 ^st March, 2020.

The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm’s length relationship with the Company. Pursuant of Section 148(6) of the Companies Act, 2013 and Rules made thereunder, the Cost Audit Report for the financial year 2018-19 was filed with the Ministry of Corporate Affairs on August 20, 2019 vide SRN no. H83708735.

There are no qualification, reservation or adverse remark in the Cost Audit Report of the Company for the Financial Year ended 31 ^st March, 2019 and hence do not call for any further comments in terms of the provisions of Section 134 of the Companies Act, 2013.

SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, Mr. Virendra Bhatt, Practicing Company Secretary (CP no.124) has been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is attached as an ‘Annexure D’ to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks by the Secretarial Auditors.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year 2018-19 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Mr. Virendra Bhatt has been submitted to the Stock Exchange within 60 days of the end of the Financial Year and is annexed at ‘Annexure E’ to this Board’s Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors confirms that, to the best of its knowledge and belief: a. that in the preparation of the annual financial statements, the applicable Indian accounting standards have been followed and there were no departures; b. that we have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for that period; c. that we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Compliance with Secretarial Standards

The Institute of Company Secretaries of India, a Statutory Body, has issued Secretarial Standards on Board and General Meetings. The Company has complied with all the applicable provisions of the Secretarial standards.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

During the year under review, the Company had not made any loans or given any guarantee. However, the Company had made investments in mutual fund, details of which are furnished in the Note no. 10 to the Financial Statements.

EMPLOYEES’ SAFETY

The Company continuously endeavours to ensure safe working conditions for all its employees.

The Company attaches high importance to the Occupational health and safety systems to protect all its employees. The Company has taken mediclaim policy for all its employees and their dependent family members as also personal accident insurance of appropriate amounts for the employees at various levels.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Policy for Prohibition and Redressal of Sexual Harassment at work place which is in line with the requirements of the Sexual Harassment of women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. All employees (permanent, contractual, temporary and trainees) are covered under this policy. The Company has constituted an Internal Complaint Committee for its Registered Office and Corporate Office under Section 4 of the captioned Act. No complaint has been filed before the said committee till March 31, 2019. The Company has filed an Annual Report with the concerned Authority.

PARTICULARS OF EMPLOYEES

The prescribed particulars of employees required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as ‘Annexure F’ and forms a part of this report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 is given as an ‘Annexure G’ to this Report.

OTHER DISCLOSURES:

o There have been no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

oThere is no change in the nature of business.

oNo Director is in receipt of any remuneration or commission from any of its subsidiaries, as the Company has no subsidiary Company.

oNo relative of director was appointed to place of profit.

o As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors’ Certificate thereon and the Management Discussion and Analysis are attached, which forms part of this report.

o Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3) (c) of the Companies Act, 2013).

o As per Regulation 32(4) of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, deviation of proceeds of public issue is not applicable to the Company.

ACKNOWLEDGMENT

Your Directors convey their deep appreciation for the co-operation received from the employees, Company’s bankers, Customers and Government Authorities during the year under review. The Directors also place on record their appreciation for the confidence reposed by the shareholders.

	For and on behalf of the Board of Directors
	P. K. Kheruka
Place : Mumbai	Chairman
Date : November 13, 2019	DIN-00016909

ANNEXURE A

Policy relating to remuneration for the Directors, Key Managerial Personnel and other employees

OBJECTIVE

The Nomination and Remuneration Committee had in its Meeting held on June 18, 2018 formulated revised policy relating to remuneration for the Directors, Key Managerial Personnel and Other employees in terms of the Section 178 of the Companies Act, 2013 and Rules made thereunder and the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015

The remuneration policy for members of the Board of Directors, Key Managerial Personals and Other Employees has been formulated pursuant to Section 178 of the Companies Act, 2013, which strive to ensure:

i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;

ii) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

iii) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

REMUNERATION OF THE BOARD OF DIRECTORS

The Board of Directors of the Company comprises of Executive and Non-Executive Directors, for which separate policies have been framed:

1. Executive Directors comprising of Promoter Directors and Professional Directors;

2. Non-Executive Directors comprises of Promoter (Non Independent) Director and Independent Directors

Remuneration of Executive Directors

Fixed remuneration:

All Executive Directors viz Executive Chairman, Executive Vice Chairman, Managing Director and Whole-time Director will have a component of Fixed Salary, which may be fixed for the whole tenure or in a graded pay scale basis. In addition, they will be entitled to usual perks which are normally offered to top level executives, such as Furnished/Unfurnished house / House Rent Allowance, Medical / Hospitalization reimbursement, Personal accident insurance, club fees, car with driver and retrial benefits including leave encashment as per the Policy of the Company at the end of the tenure.

Variable Components:

Commission:

Subject to the approval of the shareholders and within the overall limits prescribed in Section 197 of the Companies Act, 2013, the Executive Directors shall be paid commission based on nature of duties and responsibilities, as may be determined by the Board of Directors on year to year basis.

Employee Stock Option: The Company has implemented Gujarat Borosil Employee Stock Option Scheme 2018 and the Executive Directors (other than promoters) will be eligible along with the employees of the Company.

Reimbursement of Expenses:

Directors will be entitled for actual entertainment and travelling expenses incurred for business purposes.

The above payments shall be subject to such approvals as may be necessary under the Companies Act, 2013 and the Listing Agreement.

Remuneration of Non- Executive Directors:

Fees:

Non- Executive Directors shall be entitled to payment of fees for attending each Board and Committee Meetings as may be decided by the Executive Directors (members) of the Board, within the limit prescribed under the Rules made under the Companies Act, 2013. The fees may be on uniform basis, as the committee views that all directors affectively contribute to the benefit/growth of the Company.

Separate fees may be decided in respect of Board Meetings and Committee Meetings.

Variable Components:

Commission:

Subject to the approval of the shareholders and within the overall limit of 1% as prescribed by the Companies Act, 2013, the Non-Executive Directors may be paid commission on a pro rata basis.

Reimbursement of Expenses:

For Non-Executive Directors actual expenses in connection with Board and Committee Meetings are to be reimbursed. In addition, if a Non-Executive Director is travelling on Company’s business, as permitted by the Board, he/she shall be entitled for his/her travelling and lodging expenses on actual basis.

Key Managerial Personnel:

Key Managerial Personnel shall be paid salary and perquisites, like other employees of the Company based on their qualification, job experience, as may be applicable and as may be applicable to the grade, to which they belong.

Other Employees:

The Company has a performance management system in place in form of software that is known as ‘Formula HR’, for assessing the performance and competence in order to fix the remuneration and determination of increments of the employees.

The Company has various grades starting from Officers Level to Senior Vice President. There are different departments like Production, Marketing, Finance, HR & Administration, Legal, Secretarial and IT, with departmental heads of each departments of the level of Vice President / General Manager with their respective teams/subordinates of different grades.

Initial remunerations are decided based on an employee’s qualification, past experience, suitability for the job and the level for which the position is intended.

At the start of every financial year, organizational strategy is converted into department goals which further get converted as individual KRAs & Competencies. At the end of every financial year, individual performance is measured against these set KRAs & Competencies. The increments then are decided on the basis of 4 parameters, viz.

1) Individual Performance

2) Organizational Performance

3) New year’s budgeted Organizational Performance

4) Industry benchmark

The Promotions are decided broadly on the basis of three parameters viz. availability of promotable position, consistent performance, potential of the incumbent to grow to the next level.

Loans / advances to employees:

The Company has policy for granting loan/advances to its employees containing such terms & conditions including regarding interest, as it may deem fit. The Company may in special cases grant loan/advances beyond the limit prescribed in the said policy. The Company may vary said policy from time to time.

CRITERIA FOR DETERMINING QUALIFICATION, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR

I QUALIFICATIONS

He/she shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations, or other disciplines related to Company’s business.

The Company will have a blend of Directors comprising of entrepreneurs, professionals and those having administrative experience like ex-IAS officers.

II POSITIVE ATTRIBUTES

• Clarity of vision

• Originality

• Objectively open to other people’s ideas/points of view.

• Is analytical, can get to the core issue quickly

• Challenges the status quo

• A good communicator, both in one-to-one and group situations.

• Has the courage of their convictions - particularly in troubled times.

• Is clear on their direction - knows where they are heading and why, and how to get there

• Minimises the casualties from their decisions

• Maintains focus on the strategic direction

• Has high standards of integrity - and insists on the same from others

• Intellect - has a high level of intelligence

• Exercises sound judgement - particularly under pressure

• Knows the questions to ask

• Is a good listener, emotionally as well

• Is numerate - can read and understand financial statements

• Has a healthy self-esteem - but does not believe they are infallible

• Is strategic in thinking and outlook - but is also aware that successful implementation is what counts

• Understands the ‘value proposition’ of the business

• Is visionary - can see the big picture and read future trends

• Fun to work with i.e. should have good working relationship with other Board Members.

• Can make substantial contributions by taking part in deliberations during Meetings.

III CRITERIA FOR INDEPENDENCE

An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director,—

(a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;

(b) (i) who is or was not a promoter of the company or its holding, subsidiary or associate company; (ii) who is not related to promoters or directors in the company, its holding, subsidiary or associate company;

(c) who has or had no pecuniary relationship, other than remuneration as such director or having transaction not exceeding ten per cent. of his total income or such amount as may be prescribed with the company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;

(d) none of whose relatives—

(i) is holding any security of or interest in the company, its holding, subsidiary or associate company during the two immediately preceding financial years or during the current financial year:

Provided that the relative may hold security or interest in the company of face value not exceeding fifty lakh rupees or two percent of the paid-up capital of the company, its holding, subsidiary or associate company or such higher sum as may be prescribed;

(ii) is indebted to the company, its holding, subsidiary or associate company or their promoters, or directors, in excess of such amount as may be prescribed during the two immediately preceding financial years or during the current financial year;

(iii) has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, its holding, subsidiary or associate company or their promoters, or directors of such holding company, for such amount as may be prescribed during the two immediately preceding financial years or during the current financial year; or

(iv) has any other pecuniary transaction or relationship with the company, or its subsidiary, or its holding or associate company amounting to two per cent. or more of its gross turnover or total income singly or in combination with the transactions referred to in sub-clause (i), (ii) or (iii);

(e) who, neither himself nor any of his relatives—

(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

Provided that in case of a relative who is an employee, the restriction under this clause shall not apply for his employment during preceding three financial years.

(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of—

(A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent. or more of the gross turnover of such firm;

(iii) holds together with his relatives two per cent. or more of the total voting power of the company; or

(iv) is a Chief Executive or director, by whatever name called, of any non-profit organisation that receives twenty-five per cent. or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent. or more of the total voting power of the company; or

(f) who possesses such other qualifications as may be prescribed.

	For and on behalf of the Board of Directors
	P. K. Kheruka
Place : Mumbai	Chairman
Date : November 13, 2019	DIN 00016909