seya industries ltd Directors report

To the Members of Seya Industries Ltd

The Directors hereby presents their Thirtieth Annual report together with the Audited Financial Statements for the Financial Year (FY) 2019-20

Financial Performance

Rs in Lakhs

Financial Results
	Year Ended 31-Mar-19	Year Ended 31-Mar-20
Total Revenue	41,493.62	25,819.52
Profit Before Interest, Depreciation & Taxes	14,041.86	7,650.40
Profit Before Tax	10,624.46	5,196.68
Profit After Tax	8,848.76	4,701.98
Earnings Per Share – Basic (Rs )	35.97	19.10
Earnings Per Share – Diluted (Rs )	35.97	17.69

During the year under review, despite exceptional business conditions, extremely challenging backdrop of economic environment due to Covid-19 inception in Q3FY20 in China and other challenges faced due to shortage of Nitric acid, Effluent disposal and water scarcity which impacted Companys manufacturing operations and performance, your Company has delivered competitive and profitable performance with Sales Turnover of Rs 258.19 Cr, EBIDTA of Rs 76.50 Cr, EBIT of Rs 59.88 Cr and PAT of Rs 47.02 Cr. Lowering of EBIDTA spreads, reduction in Unit sale price of Products, resumption of Supplies from China are various factors which affected the Revenue and Profitability.

The traction from Modernization and Upgradation initiatives taken by your Company to improve operating sustaining profitable performance, maintain high quality standards, timely servicing of Customers. Your company is working on priority to mitigate the restriction on Effluent discharged imposed by NGT establishing its own captive ZLD based ETP plant. Once completed the company shall be able to ramp up its manufacturing capacities to optimum levels.

State of Company Affairs: COVID-19 Impact

Your Company is in the business of manufacture of speciality chemical intermediates having applications in the manufacture of

Pharmaceuticals (like Paracetamol, floxacins, etc), Personal & Health Care Products (like Hair dyes), Printing Inks & Paints (used in Laser/

Ink jet Printers, for Road markings, etc), Agrochemicals (like DDT, etc) Insecticides/Pesticides (like Quinalphos, Mortein, Baygon, etc),

Rubber chemicals (for Leather protection), Textile dyes, Thermic fluids (used as heating medium), etc.

The Operations of the Company have been severely impacted due to the Covid -19 pandemic. The Government of India declared a nationwide lockdown w.e.f. 21 March, 2020 and hence the manufacturing operations of the Company were halted. Upon obtaining necessary permissions from the concerned authorities and after taking all safety measures as prescribed in the said permissions, though the Company have resumed operations in a phased-wise manner w.e.f. May-2020, several International and State governments continue to restrict distribution operations which impact the Companys operations. As a result, the revenues continue to be materially impacted. Subsequent to the period under review, your Company has received notices of Force Majeure from certain suppliers and customers and similarly the Company has also issued notices of Force Majeure to customers and suppliers. However, based on the preliminary legal evaluation of these notices, the Management does not anticipate any material economic outflow of resources which would impact its cash position and the carrying value of its assets. The Company however continued to incur committed expenditure with respect to its Employees, Plant related expenditures and Other expenditures. This has significantly impacted the profitability. Covid-19 hasalsohad significantimpact on customers and their ability to meet their committed obligations. The extent and duration of COVID-19 is currently unknown and depends on future developments that are uncertain. Any resultant outcome and impact on business, due to this, is unpredictable. The Management in process of evaluating the possible effects if any that may result from COVID-19 pandemic on the carrying amounts of Trade receivables and Inventories. In developing the assumptions and estimates relating to the uncertainties as at the balance Sheet date in relation to the recoverable amounts of these assets, the management has used internal and external sources of information to the extent determined by it. The Impact of the same may differ from that estimated as at the date of approval of these financial statements due to the impact of the pandemic and the Management will continue to closely monitor the developments.

We have taken several actions to mitigate theeffectof Covid-19 on our business. We have taken steps to reduce our unit costs and increase our liquidity by making our operations more efficient and nimbler, putting on hold discretionary expenses, deferring certain capital expenditures, etc. In order to sustain operations, we also had to take actions to cut employee costs through pay cuts, leave without pay and reduction in workforce. We are ramping up our operations in a phased manner, subject to Government directions. The unprecedented nature of the pandemic makes the future business environment uncertain, however, we will continue to carry out the impact assessment on our assets and closely monitor any material changes to future economic conditions.

Dividend

For the year under review, given the developments with regard to the COVID-19 pandemic and its fallout, the Board of Directors prudently decided to conserve cash for the quarters ahead.

Share Capital been vertebrae of

During the period under review the Company has issued and allotted 19,70,540 Compulsory Convertible Preference Shares (CCPS) face value of Rs 10 per share with a premium of Rs 513 per share.

Management Discussion & Analysis and Corporate Governance Reports

Pursuant to Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"),

Management Discussion & Analysis and the Corporate Governance Report are presented in a separate section forming part of the Annual Report.

Capacity Expansion, New Projects & Diversification

Capacity Expansions: The Company had completed the capacity of one of its product in Q1FY20, however due to unavailability of one of the critical raw material ie. Conc. Nitric Acid and restriction over permitted effluent discharge due to pending implementation of

MIDC CETP the capacity could not be ramped up.

De-bottlenecking & Efficiency Improvement:The said brown-field project has been completed to the extent of 30% and shall be completed once the funds tied-up with Lender shall be released. Once completed, the

Company shall have parallel capacities for select products to align the production plants and processes on new Technologies. In addition to this, considering the restriction imposed on all industries in MIDC Tarapur on permitted Effluent discharge, the Company shall on top priority be upgrading its Effluent Treatment Plant to Zero Liquid Discharge(ZLD) to permanently circumvent restriction imposed by NGT and support its capacity expansions. The de-bottlenecking and exercises under implementation are expected to boost production volumes and margins. The estimated capital expenditure for above Capital expansion and de-bottlenecking project is Rs. 70 – 75 Crores which is being funded through Debt.

Mega Green-Field Project Under Implementation: Your Company is addressing cost issues of raw materials and its price volatility and high energy costs which shall result in reduction in energy and fixed costs, yield better cash flows which will result in long-term value creation for its stakeholders. Cash generation through operational excellence and to realize the synergies of being a fully integrated facility shall drive efficiencies and effectiveness in transitioning to value-added products. With a clearly defined vision to emerge as an Integrated Global producer for Speciality Chemicals and having invested Rs. 5 Bn in Capex in last 6 years, Company took its next step forward to start next round of expansion at cost of Rs. 7.35Bn to set-up additional installed capacity of 527,900 MTPA. The project is expected to contribute additional Rs. 10-12Bn in Revenue at an estimated capacity utilization of 80%. The project is in close vicinity of Seyas existing manufacturing operations at MIDC Tarapur, Boisar in State of Maharashtra and is presently awaiting disbursement from its Lenders who failed to keep up their commitment. The Company has filed representation in Honble High

Court and based on its directions has submitted the funding plan to the Lenders which is under consideration with the Lenders.

The Equity has been fully introduced by the Promoters and is forming part of present Share Capital/Equity Structure of the Company. The Project is being built under the supervision of highly experienced and reputed EPC contractors, German Technology Suppliers and PMCs holding successful track-record of more than 105 years backed by performance guarantee. It involves latest state-of-the-art, cutting edge, continuous, fully automated process technology which will enable Seya to be the lowest cost producer in the World for the products under set-up. The installed capacities of proposed products under set-up will be the largest in the world at a single location. Seya has safeguarded any copy of the Technology by executing confidentiality and copyright agreements with its technology suppliers restricting sale of technology acquired, for next 20 years from the Contract date. Almost 50% of the installed capacity in the proposed greenfield mega project is to be captively consumed as intermediates. Out of balance 50%, 30% of the proposed installed Capacity is contracted to existing customers on long term supply contract and balance 20% is envisaged to provide as import substitute to cater to the increasing demand arising from Supply disruptions and geographical shift from China.

Finance, Term Loans and Working Capital

During the year under review, the debt pertaining to the manufacturing operations of your Company decreased due to certain repayments. CARE Ratings Limited had wrongfully & illegally committed breach of mandatory terms of the Contract which had been terminated by the Company much prior to the period under review. Despite such termination, CARE released an un-authorised rating downgrade report with malafide intent. The Company has filed a suit & complaint to SEBI against such unauthorised downgrade by

CARE. During the period certain Lenders have initiated formal legal communication, with a view to protect their interest. The Company has contested and continues to defend such action by the Lenders.

Meanwhile the Company also continues to engage with lenders with a view to arrive at a resolution to ongoing matters. Due test are yet to to ongoing dispute with the lenders in relation to their failure to comply with committed lending obligations and outstanding, the Company has, basis of legal advice, not provided for interest costs on certain loans outstanding, amounting to INR 807.98 Lacs in respect of Operating Assets and INR 2884.00 Lacs in respect of Project Assets. The Company continues to believe in the merits of the litigation, however there continues to remain material uncertainties in relation to the outcome of the said litigations.

The Company manages liquidity through surplus and financing facilities by continuously monitoring actual cash flows. The Company has obtained fund and non-fund based working capital lines from various Banks/FI/Others. The Company monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility. Save and except as stated above, all payments are generally made along due dates and requests for early payments are entertained after due approval and availing early payment discounts.

Reserves & Surplus and aid in debt reduction, all of

During the period under review, there has been no transfer to the general reserve. There has been addition in the Securities Premium Reserve on account of Issue of 19,70,540 Compulsorily Convertible Preference Shares of Face Value of Rs 10/- each at a Premium of Rs 513/- each. There has been transfer from the Other Reserves to Capital Redemption Reserve on account of redemption of Non-Convertible Redeemable Preference Shares of Rs 15,126.17 Lakhs. Total reserves and surplus increased by a 17.9% to Rs 94,509.24 Lakhs as compared to previous year of Rs 80,133.46 Lakhs.

Deposits from Public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on date of the Balance Sheet.

IT Initiatives

The Companys Information Technology (IT) infrastructure is continuously reviewed and renewed in line with the development in technology and its requirements.

Directors and Key Managerial Personnel Directors

In Accordance with the provision of the Act and the Articles of Association of the Company, Mr. Asit Kumar Bhowmik is liable to retire by rotation and being eligible offered himself for reappointment.

The Board of Directors on recommendation of Nomination and Remuneration Committee, has appointed Mr. Ronen Joshi (DIN: 08167071) as an Additional Director in category of Non-Executive

Independent Director with effectfrom February 06, 2020. Brief resume regarding his appointment at the ensuing Annual General Meeting is given in the Notice convening the ensuing Annual General Meeting. The Company has received declarations from all the Independent

Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Section 149(6) of the Act and Regulation 16 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). In the opinion of the Board, they fulfil the conditions of independence as specified in the Act, and the Rules framed there under and are independent of the management.

The brief resume and other details relating to the Director who is proposed to be appointed / re-appointed as required to be disclosed under Regulation 36(3) of Listing Regulations is mentioned in the explanatory Statement annexed to the Notice of 30th Annual General Meeting.

The Board is of the opinion all the Independent Directors hold highest degree of integrity and are individuals who are experts in their respective fields with enormous experience. One of Independent

Directors of the Company who are required to appear and clear proficiency appear for the same. However, the same shall be carried out before the timeline prescribed by the Companies Act, 2013.

Key Managerial Personnel (KMP)

In terms of the Provisions of Section 2(51) and Section 203 of the Act, the following are KMP of the Company

• Mr. Ashok G Rajani – Chairman & Managing Director

• Mr. Asit Kumar Bhowmik – Executive Director

• Mr. Amrit Rajani Chief Financial Officer

• Ms. Manisha Solanki – Company Secretary

Independent Directors

The Independent Directors are not liable to retire by rotation in terms of Section 149 (13) of the Act. In accordance with Section 149 (7) of the Act, each independent Director has given a written declaration, to the Company confirming that he / she meets the criteria of independence as mentioned under Section 149 (6) of the Act and the Listing Regulations.

Performance evaluation of Board, its committees and of Directors

The Board recognise the Importance of reviewing and improving upon its performance. For this purpose, they discuss the effectiveness of the functioning of the Chairman, Executive Directors, and other Directors and to agree ways in which performance can be further improved looking at the likely needs in future.

A structured questionnaire was prepared after taking into consideration, various aspect of the Boards functioning, composition of the Board and its committees, culture, execution and performance of specific duties, obligation and governance.

The Performance evaluation of the Chairman and Non-independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process of Board.

Familiarization Programme for Independent Directors

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industries.

The Details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are put up on the website of the Company under the link http://www.seya.in/wp-content/ uploads/2011/06/Familiarization-Program_for-Independent-Directors-Seya.pdf

Governance Guidelines

The Company has adopted governance guidelines on Board effectiveness. The governance guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directors term, retirement age and committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors,

Director Remuneration, Code of Conduct, Board Effectiveness Review and mandates of Board committees.

Procedure for Nomination and Appointment of Directors

NRC is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The

Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial conditions and compliance requirements.

NRC conducts a gap analysis to refresh the Board on a periodic basis, including each time a Directors appointment or re-appointment is required. The Committee is also responsible for reviewing the profiles of potential candidates vis--vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

During the period under review, the Board has also identifiedthe list of core skills, expertise and competencies of the Board of Directors as are required in the context of the business and sectors applicable to the Company and those actually available with Board.

Policy on Directors Appointment and Remuneration Including criteria for determining Qualifications, Positive Attributes and

Independence of a director

The Company has in place Remuneration Policy for the Directors, KMP and other employees pursuant to the provisions of the Act and the listing Regulations which is set out in Annexure I which forms part of the Board Report.

Meetings of the Board

During FY 2019-20, Seven (7) Board Meetings were held. The details of the Board Meetings with regard to their dates and attendance of each of the Directors thereat have been set out in the Report on Corporate Governance.

Employee Stock Option/Sweat Equity/Preferential Allotment

The Company has not issued any Employee Stock Options/Sweat Equity or Shares as Preferential allotment during the period under review.

Directors Responsibility Statement

Based on framework of the internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory and the reviews performed by

Management and the relevant Board Committees, including the Audit & Risk Management Committee, the Board is of the Opinion that the Companys internal financial controls were adequate and effective during the financial year 2019-20. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, based on the representations received from the Operating Management and to the best of their knowledge and ability, confirms that for the year ended March 31, 2020: a. In the preparation of the Annual accounts the applicable accounting standards have been followed and that there are no material departures; b. They 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 at the end of the Financial year and of the Profit of the Company for that period; c. They have taken proper and their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. They have prepared annual accounts on a ‘going concern basis. e. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f. Proper system has been devised to ensure compliance with provisions of all applicable laws and that such systems are adequate and operating effectively.

Redemption of Shares/ Debentures

During the period under review, your Company has fully redeemed the Non-Convertible Redeemable Preference Shares of Rs 15,126.17 Lakhs and accordingly, there has been transfer from the Other Reserves to Capital Redemption Reserve on account of redemption. Additionally, S. C. India Credit Fund (SCICF) became a shareholder vide invocation of shares pledged by Mr. Ashok G Rajani, which were offered as collateral in relation to Non-Convertible Debentures (NCD) issued by the Company to SCICF. The Company has contested this wrongful invocation and initiated appropriate legal proceedings. However, pending outcome such legal proceedings, the company has acknowledged SCICF as a shareholder in full settlement of its outstanding NCD in accordance with the Terms of the Debenture subscription agreement as entered with SCICF and accordingly the NCD issued to SCICF have been fully redeemed.

Disqualification of Director

No Director of the Company is disqualified under any law to act as a Director.

Insider Trading Proceedings/ Enquiry

No such enquiry/proceeding has ever been initiated/pending against the Company.

Contracts & Arrangements with Related Parties

All related party transactions (if any) entered into were on an arms length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations.

Further, there were no transactions with related parties which qualify as material transactions under the Listing Regulations. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on companys website at the link http://www.seya.in/wp-content/uploads/2011/06/ Related-Party-Transactions-Policy-Seya.pdf The details of the transactions with related parties are provided in the accompanying financial statements.

Corporate Social Responsibility (CSR)

The CSR committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company as approved by the Board.

The CSR activities are being undertaken by your Company directly and through various Implementing agency with area specific need and focus to reach out to marginalised and deprived section of the society and bridge the gap between the haves and have nots by promotion of building health, livelihood and education. The interventions of some implementing agency were spread across India. During FY 2019-20, your Company has spent Rs 46.72 Lacs on CSR activities, against the requirement of Rs 151.15 Lacs, being 2% of average of the net profits for the preceding three years. However on account of COVID-19 in the month of March-20, the Company will fulfil its shortfall in obligation during FY 20-21.

The Companys overall CSR initiative focuses on the following sectors and issues:

• Poverty alleviation, livelihood enhancement and infrastructure support, including programs on agriculture growth animal husbandry development and promotion of social enterprises.

• Education and vocational skill development

• Environment sustainability by investing in biodiversity, natural resource management, awareness and environment education, and mitigation of climate change impact.

• Health Care, nutrition, sanitation and safe drinking water.

• Women empowerment

• Responding to any disasters, depending upon where they occur and its ability to respond to meaningfully.

The CSR Policy is available on the Companys website. The Annual Report on CSR activities is enclosed as Annexure - II

Material changes and commitments, if any, affecting the financial position of the Company

No material changes and commitments affecting the financial Position of the Company occurred between the ends of the financial year to which this financial statement relate on the date of this report.

Significant or Material orders passed against the Company

Pursuant to the requirement of Section 134(3)(q) of the Companies Act, 2013 read with Rule 8(5)(vii) of the Companies (Accounts) Rules, 2014, it is confirmed that during FY 2019-20therewerenosignificantor material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and your Companys operations in future.

Internal Financial Control

Internal Financial control systems of the Company are commensurate with its size and the nature of its operations, these have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable accounting standards and relevant status, safeguarding assets from unauthorised use, executing transactions with proper authorisation an ensuring compliance of corporate policies. The Company has well defined delegation of power with authority limits for approving revenue as well as expenditure, both capital and revenue. The Company uses an established ERP System to record day to day transaction for accounting and financial reporting.

The Companys internal audit function monitors and assesses the adequacy and effectiveness of the internal financial control. The audit Committee deliberated with the members of management considered the systems as laid down and met the internal auditors and statutory auditors to ascertain, inter alia, their views on the internal financial control systems. The Audit Committee satisfied itself of the adequacy and effectiveness of the internal financial control system as laid down and kept the Board of Directors informed.

Details of internal control system are given in the Management Discussion and Analysis Report, which forms part of this Annual Report.

Auditors

Statutory Auditors & Its Report

M/s. Anil Chauhan & Associates, Chartered Accountant, (Firm Registration No. 140786W), present statutory Auditor of the Company have expressed his in-ability to continue as Statutory auditor of the Company with effect from 30 th Annual General Meeting, as they are winding up their operations in India and settling abroad As per provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013, if any, read with the Companies (Audit & Auditors) Rules, 2014, including any statutory enactment or modification thereof, the Board of directors of the Company proposing to appoint S. S. Patwardhan & Co., Chartered Accountant (Firm Registration No. 119155W) as the Statutory Auditors of the Company and to hold the office from the conclusion of this Annual General Meeting till the conclusion of 33rd Annual General Meeting of the Company, at a remuneration to be decided by the Board of Directors in consultation with the Auditors plus applicable service tax and reimbursement of travelling and out of pocket expenses incurred by them for the purpose of audit.

The Company has received a writtenconsentandcertificatefrom

M/s. S.S. Patwardhan & Co., confirming that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder.

The Statutory Auditors report read together with relevant notes thereon form an integral part of the Financial Statement of this Annual Report and are self-explanatory and hence do not call for any comments. There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their Report.

Cost Auditors

As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. The Board on Recommendation of the Audit Committee & Risk Management has appointed Manish Shukla & Associates (Firm Registration No. 101891) as the Cost Auditor of the Company for FY 2020-21 under Section 148 and all other applicable provisions of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014.

M/s. Manish Shukla & Associates have confirmed that they are free from disqualification specified under Section 141 (3) and proviso to Section 148 (3) read with Section 141 (4) of the Act and that the appointment meets the requirements of Section 141 (3)(g) of the Act.

They have further confirmed their independent status and an arms length relationship with the Company;

The Remuneration payable to the Cost Auditors is required to be placed before the members in a general meeting for their ratification. Accordingly, a Resolution for seeking members ratification for the remuneration payable to M/s. Manish Shukla & Associates is included at the Notice Convening the AGM.

Secretarial auditor & Its Report

In terms of Section 204 of the Act and Rules made there under, M/s. TRS & Associate, Practising Company Secretary have been appointed as Secretarial Auditor of the Company. The Report of the Secretarial Auditors is enclosed as Annexure – III to this report.

Reporting of Fraud by Auditors

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act details of which needs to be mentioned in this report.

Secretarial Standards of ICSI

Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of Company Secretaries of India and approved by the Central Government.

Audit & Risk Management Committee

The Board has accepted the recommendations made by the Audit & Risk Management Committee from time to time. Details about the meetings held during the year is provided in the Corporate Governance Report.

Risk Management

Risk management policy of the Company promotes a proactive approach in reporting, evaluating and resolving risks associated with the business. Mechanisms for identification and prioritisation of risks include risk survey, business risk environment scanning, and inputs from the Materiality Assessment Report and focused discussions in Risk Management workshops.

Identifiedrisks are used as one of the key inputs for the development of strategy and business plan. The respective risk owner selects a series of actions to align risks with the Companys risk appetite and risk tolerance levels to reduce the potential impact of the risk should it occur and/or to reduce the expected frequency of its occurrence.

Mitigation plans are finalised, owners are identified, and progress mitigation actions are monitored and reviewed. The risk assessment update is provided to the Audit & Risk Management Committee (ARMC) on periodical basis. ARMC is appointed by the Board and comprises Directors and executives from the Company and is chaired by an Independent Director. ARMC assists the Board of Directors in overseeing the Companys risk management processes and controls.

Whistle Blower Policy and Vigil Mechanism

In accordance with the provisions of Section 177 (9) of the Act, and Regulation 22 of the Listing Regulations, your Company has a vigil mechanism which has been adopted in the form of Whistle Blower Policy. The policy has been formulated with a view to provide a mechanism for Directors and employees of the Company to report genuine concerns. The Whistle Blower Policy also provides for adequate safeguards against victimization of persons who use vigil mechanism and for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Whistle Blower Policy is uploaded on the website of Company and the link is http:// www.seya.in/wp-content/uploads/2011/06/Whistleblower-policy_ SEYA_1.pdf

Share Registrar and Transfer Agents

The Companys Registrar & Transfer agents for shares are M/s.

Universal Capital Securities Private Limited (RTA). RTA is duly registered with SEBI. The contact details of RTA are mentioned in the Report of Corporate Governance.

Investors are requested to address their queries, if any, to RTA;

however, in case of difficulties, as always, they are welcome to contact the Companys ‘Investor Services Department, the contact particulars of which are contained in the Report of Corporate Governance.

Quality Initiatives

Sustained commitment to highest levels of quality, best-in-class service management, robust information security practices and mature business continuity processes helped the Company attain significant milestones during the year.

Listing

The Companys equity shares continue to be listed at BSE and NSE.

Required listing fees is paid to both the Stock Exchanges in full.

Consolidated Financial Statements

There being no subsidiaries and associates companies, disclosure requirements pursuant to Regulation 33 & 34 of the Listing Regulation are not applicable.

Subsidiaries / Joint Ventures / Associate Companies

As on March 31, 2020, the Company did not have any subsidiary, join venture or associate company. Since the Company doesnt have any subsidiary, a policy on material subsidiary has not been formulated.

Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013, during FY 2019-20

During the period under review, the Company has not given any loans, guarantees or made investments under Section 186 of the Companies Act, 2013.

Conservation of Energy, Technology Absorption, Foreign

Exchange Earnings and Outgo

The Particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed pursuant to the provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014, are provided in Annexure – IV to this Report.

Research and Development

The Company recognizes the need to have well equipped R&D Facilities to meet customer requirements and developing cutting edge products. Detailed report on Research and Development carried out by your Companies given as an Annexure IV of this report.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of seven years.

Further, according to the rules, the shares on which Dividend has not been paid or claimed by the Shareholders for seven consecutive years or more shall be transferred to the Demat account of the IEPF Authority. No unclaimed and unpaid dividends is yet meeting the eligibility criteria and hence no amounts were transferred to IEPF.

Human Resources Management and Industrial Relations

Your Company considers human resources as the main assets of the Company as it believes that Human resources play a very critical role in its growth. Your Company continuously focus on training requirements of its employee on a continuing basis. With a view to increase the productivity, the management periodically organises various training programmes and lectures which boosts and motives the employee to give their best to the organisation.

During the year under review, your Companys industrial relations at all manufacturing and other locations have remained amicable. All these efforts are concentrated on attracting and retaining the best talent in the industry as people are at the centre of your Companys growth.

Particulars of Employees

The Information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 are given as Annexure V to this Report.

None of the Companys Employees were covered by the disclosure requirement pursuant to the provisions of Section 197 of the Companies Act, 2013 read with Rules 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Statement of Companys Affairs

The state of Companys affairs is given under the various headings in this Report and in the Management Discussion and Analysis Report.

Insurance

All the insurable interests of your Company including inventories, buildings, plant and machinery are adequately insured against risk of fire and other risks.

Environment, Health and Safety

Employees Health, Safety and Environmental protection are core business values within your Company. The Companys Management believes that environment and safety of all its stakeholders including those who associated with the projects sites and manufacturing facilities is of prime importance. We believe that its our responsibility to protect our employees, property and environment in which it operates. As your Company deals in Chemicals, it has to make sure that the highest degree of safety measures is maintained in order to avoid any risk at the workplace. It strives towards excellence and aligns its growth path to make tomorrow safer, cleaner, greener and more sustainable. Your Company is committed to maintain its operations and workplace free from incidents and significant risk to the health and safety of its stake holders through improved engineering practices, strong channels of communication, safety awareness, robust checking systems and sound training practices. Your Company has well-equipped Occupational Health Centres at all its manufacturing locations to monitor health of employees on regular basis. It also monitors employees for any indications of lifestyle or work-style related diseases and provides counselling. Your Company regularly monitors the occupational health of employees working in designated hazardous areas with respect to exposure to hazardous chemicals and processes.

The employees are continuously educated and trained to improve their awareness and skills. Environment, Health and Safety (EHS) targets assigned to each division to reduce resource consumption and are regularly monitored through an EHS scorecard which is reviewed at monthly business review meetings. The manufacturing location of your Company have a well-defined Environment

Management System. It follows well mapped procedure in order to select projects, assess impacts on society and environment and mitigate any adverse impacts. EHS initiatives have been strengthened further due to formation of a core group for exchange of knowledge and standardising of systems and procedures. This core group also assess the Plants Safety and Environment protection improvement activities. Periodic audits were conducted by the core group to ensure compliance with the statutory requirements.

Special emphasis is given on resource conservation and process innovations to convert waste streams into saleable products and minimise use of water in processing. Your Company proactively fulfils the environmental requirements of customers by delivering products that match international standards. Your Company continues to focus on proper treatment of effluents and reduction of pollution as a part of its Green and eco-friendly initiatives. This has made your Company a safe and healthy place to work.

Your Company is signatory to the ‘Responsible Care initiatives and Responsible care logo holding organisation. Management System at all manufacturing plants and corporate office have been assessed and have certifications like ISO 9001:2015, ISO 14001:2015 & OHSAS

18001:2007. All raw materials and products within supply chain framework of your Company are transported in a secure manner, for the safety of its customers, carriers, suppliers, distributors and contractors. Your Company takes utmost care during transportation and ensures that it complies with all the regulations.

All safety statutory requirements like licenses, mock drills under emergency conditions and testing of manufacturing equipments etc. are being complied with. Requirements of environmental acts and regulations are complied with. Effluent treatment of waste streams and suppression of fugitive emissions through sprinklers is also carried out effectively. Massive tree plantation has been undertaken to improve the greenery all around the plant.

Green Initiatives

Electronic copies of the Annual Report and Notice of General Meetings are sent to all the Members whose email addresses are registered with the Company for communication purposes. For members who have not registered their email addresses, physical copies of the Notices and Annual Report were sent in the permitted mode. Members requiring physical copies can send a request to the Company.

Prevention of Sexual Harassment at Workplace

The Company is conscious about gender diversity and promotes equal opportunity employment to have a work where employees hold their head high with dignity.

Your Company has zero tolerance towards any act which may fall under the ambit of Sexual Harassment at work place and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at work place in line with the provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules.

The following is the summary of the Complaints received and disposed-off during the financial year 2019-20: No. of Complaints received: NIL

No. of Complaints Disposed-off: NIL

Extract of the Annual Return

Pursuant to Section 92(3) of the Act and Rules 12(1) of the Companies (Management and Administration) Rules, 2014 extract of annual return in form MGT-9 is enclosed as Annexure VI to this Report.

General

The Notes forming part of the Accounts are self-explanatory or to the extent, necessary, have been dealt with in the preceding paragraphs, of the Report.

Acknowledgement

The Board of Directors places on record its sincere appreciation for the dedicated services rendered by the employees of the Company at all levels and the cooperation extended by them. Your Directors would like to express their appreciation for the assistance and support by all Shareholders, Government Authorities, Auditors, financial institutions, employees, Customers, suppliers and other business associates.

For & on behalf of the Board of Directors

Seya Industries Ltd

ASHOK G RAJANI

Chairman & Managing Director

Mumbai, July 31, 2020