<dhhead>DIRECTORS’ REPORT</dhhead>
To the Members,
The Dirsctors are pleased to present the Thirty-Seventh Annual Report
of the Company and the Audited Financial Statements for the year ended 31% March 2023.
FINANCIAL HIGHLIGHTS
in Lakhs)
| Particulars |
Standalone |
Consolidated |
|
FY 2023 |
FY 2022 |
FY 2023 |
FY 2022 |
| Total Income |
6302.10 |
10,183.01 |
6304.36 |
10,183.10 |
| Profit (Loss) befors Tax and Depreciation |
1303.70 |
2,313.08 |
1292.90 |
2,310.16 |
| Depreciation |
(68.29) |
(74.47) |
(77.90) |
(84.08) |
| Provision for Taxes |
(335.85) |
(571.86) |
(336.07) |
(572.15) |
| Profit (Loss) for the Year After Tax and
Depreciation {including other Comprehensive Income) |
914.63 |
1,552.44 |
894.00 |
1,539.63 |
| Earnings per share (in X) |
21.22 |
39.31 |
20.73 |
39.01 |
COMPANYS PERFORMANCE
During the year under review, your Company achieved Total Income of
6302.10 Lakhs on a Standalone basis as compared to T 10,183.01 Lakhs during the previous
Financial Year. After considering Interest, Depreciation, Foreign Exchange {Loss} / Gain
and Tax, the Company has Net Profit of T 914.63 Lakhs for the current Financial Year as
against Net Profit of T 1,552.44 Lakhs in the previous Financial Year.
On a Consolidated basis, your Company achieved Total Income of T
6304.36 Lakhs during the year under review as comparsd to T 10,183.10 Lakhs during the
previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss)
/ Gain and Tax, the Company has Net Profit of T 894.00 Lakhs for the current Financial
Year as against Net Profit of T 1,539.63 Lakhs in the previous Financial Year.
DIVIDEND
The Directors of your Company recommend a dividend of 24.00 per equity
share of 210.00 subject to the approval of the members, payable to those shareholders
whose names appear in the Register of Members as on the book closurs dats.
TRANSFER TO GENERAL RESERVE
No amount is proposed to be transferred to the general reserve for the
year under review.
SUBSIDIARY & ASSOCIATE COMPANIES
The Company has 3 subsidiaries and 1 associate as on March 31,2023.
Thers has been no matsrial change in the naturs of the business of the
subsidiaries/associates during the period under review.
During the year, the Board of Directors (“the Board”)
reviewed the affairs of the subsidiaries/associates. In accordance with Section 129(3),
consolidated financial statsments of the Company have been prepared, which forms a part of
this Annual Report. Further, a statement containing salient features of the financial
statement of the Companys subsidiaries/associate in Annexure 1-Form AOC-1 is appended to
the Boards report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Company has received necessary declaration from each independent
director under Section 149(7) of the Companies Act, 2013 {the “Act”} that they
meet the criteria of indspendencs laid down in Section 149(6) of the Act and Regulation 25
of the SEBI (Listing Obligations and Disclosure Requirements} Regulations, 2015
(“SEBI Listing Regulations”).
During the year, the Non-Executive Directors of the Company had no
pscuniary relationship or transactions with the Company, other than sitting fees and
expenses incurred for attending mestings of the Company.
The Board based on the recommendations made by the Nomination &
Remuneration Committee, recommends the
1. Re-appointment of Mr. Rajeev Sikka as Chairman and Wholetime
Director for a period of three years from 01% April 2024 to 31% March 2027 as detailed in
the Notice.
2. Reappointment of Mr. Kunal Sikka as Managing Director & CEO for
a period of three years from 01% April 2024 to 31% March 2027 as detailed in the Notice.
3. Recommended the re-appointment of Mrs. Anuradha Sikka who retires by
rotation at the ensuing Annual General Meeting and, being eligible, has offered herself
for re-appointment, as a Director of the Company.
Further, during the year:
1.The Members, further to the recommendations made by the NRC and
Board, had approved the appointment of Mr. Garimella Bhaskar Venkata Satya (DIN: 08181557)
on 28" September 2023 through Special Majority, as Non-Executive Independent
Director, for a period of 5 years from 13t October 2022 to 30% September 2027.
2.Mr. Sathish K S, on recommendation of the NRC, was appointed as Chief
Financial Officer of the Company effective 11% July 2022.
3.During the year, Ms. Sriee Aneetha, had resigned from the position of
Company Secretary and Compliance Officer effective 12% August 2022. Subsequently, Mr.
Barun Pandey, on recommendation of the NRC, was appointed as Company Secrstary and
Compliance Officer of the Company effective 13" September 2022.
Board Msetings- Six mestings of the Board of Directors were held during
the year. For details of the mestings of the Board, reference may be made to the corporate
governance report, which forms part of this report.
The disclosures pertaining to the above as required by Schedule V of
the Act are provided in the Explanatory Statsment accompanying the AGM Notices.
CHANGE IN NATURE OF BUSINESS:
During the year under review, there were no changes in the natures of
business as prescribed in Rule 8 (5)ii} of the Companies {Accounts} Rules, 2014.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:
There have been no material changes and commitments for the likely
impact affecting financial position between the end of the financial year and the date of
the Report.
AUDIT COMMITTEE AND OTHER BOARD COMMITTEES:
The dstails pertaining to the composition of the Audit Committee and
its role are included in the Corporate Governance Report, which is a part of this Annual
Report. In addition to the Committees mentioned in the Corporate Governance Report, the
Company has a Corporate Social Responsibility Committees, the details of which are covered
in Annexuredll to this Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuantto the provisions of Section 134(5) of the Act, the
Directors’ Responsibility Statement is given hersunder:
i In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material departures
if any; ii The Dirsctors have, in the selection of the accounting policies, consulted the
statutory auditors and have applied them consistently and mads judgments 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; iii The Directors have taken proper and sufficient care, for the maintenance of
adequate accounting records in accordance with the provisions of the Act, for safeguarding
the assets of the Company and for preventing and dstecting fraud and other irregularities;
iv The Dirsctors have prepared the annual accounts on a going concern basis;
\% The Dirsctors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively; vi The Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are adequats and
operating effectively.
BOARD EVALUATION
SEBI Listing Regulations mandates that the Board shall monitor and
review the Board evaluation framework. The structure includes the evaluation of directors
on various parameters such as board dynamics and relationships, information flow, decision
making, relationship with stakeholders, company performancs, tracking board and
committees’ effectiveness, and peer evaluation.
As per the provisions of the Actincluding Schedule IV, the evaluation
of all the directors and the Board as a whole was conducted based on the criteria and
framework adoptsd by the Board. The evaluation process has been explained in the corporate
governance report. The Board approved the evaluation results as collated by the nomination
and remuneration committee.
The above criteria are broadly based on the Guidance Note on Board
Evaluation issued by the SEBI on January 5, 2017. In a separate Mesting of Independent
Directors, performances of Non-Independent Directors, the Board as a whole and the
Chairman of the Company was evaluated, taking into account the views of Executive
Directors and Non-Executive Directors
Web link where familiarisation programmes imparted to Independent
Directors is as below:
The dstails of familiarisation programmes for Independent Directors can
be accessed at www.sikaglobal.com/uploads/sikaad/30.pdf
POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION
The Board has, on the recommendation of the Nomination &
Remuneration Committee framed a policy for selection and appointment of Directors, Key
Managerial Personnel and their remuneration, which is stated in the corporate governancs
report that forms part of this report. The same has been disclosed on the Companys
website at www.sikaglobal.com/uploads/sikaad/NRC%20%20Policy.pdf
AUDIT AND AUDITORS: a. Statutory Auditors
At the 32" AGM, Messrs. B. N. Subramanya & Co., Chartered
Accountants (Firm Registration No. 004142S) (“BNS”) were appointed as Statutory
Auditors of the Company for their second term, as defined in the Act, for a period of five
consecutive years from the conclusion of the 32" AGM till the conclusion of the
371" AGM. Consequently, BNS will complete their second term as the Statutory Auditors
of the Company at the conclusion of this AGM. Given the limit of two consecutive terms set
by the Act, BNS is not eligible to be re-appointed for a third consecutive term.
Accordingly, The Board at their meeting held on 9th August 2023, on the
recommendation of the Audit Committes, has recommended the appointment of M/s. Rao &
Emmar (Firm Registration No. 003084S) (R&E} as the new Statutory Auditors of the
Company, for the approval of the Members at the 37th AGM of the Company for a term of five
consecutive years from the conclusion of 37th AGM till the conclusion of the 42nd AGM to
be held in the year 2028, on such remuneration as may be mutually agreed between the Board
and the Statutory Auditors.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies
{Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed Messrs. N. K. Hebbar & Associatss, a firm of Company Secretaries in Practice
to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed
herswith as an Annexurs -IVV and forms part of this Report.
[5 Statutory Auditor’s Report & Secretarial Auditors Report
The Statutory Auditors Report and Secretarial Auditors Report for the
financial year 2022-23, which are annexed hereto as part of the financial statsments and
Secretarial Audit report as Annexurs IV to this report respectively, do not contain any
qualifications, reservations or adverse remarks.
d. Details of frauds reported by the Auditors under sub-section (12) of
section 143 other than those which are reportable to the Central Government -
During the year under review, neither the Statutory Auditors nor the
Secretarial Auditors have reported to the Audit Committee, any instances of fraud
committed against the Company by its officers or employees.
e. Internal Auditors -
The Board had appointed Messrs Bharath & Co., Chartered
Accountants, Bangalore as the Internal Auditors of the Company to conduct the audit on
basis of a detailed intsrnal audit plan which is reviewed each year in consultation with
the management and the Audit Committee. On a quartsrly basis also, Internal Auditors give
presentations and provide a report to the Audit Committee of the Company.
f. Cost Audit -
The maintenance of cost records as specified by the Central Government
pursuant to Section 148(1) of the Act, is not required by the Company and accordingly,
such accounts and records are not made and maintained.
CORPORATE SOCIAL RESPONSIBILITY {CSR}
The Corporate Social Responsibility Committee has formulated and
recommended to the Board, a CSR Policy indicating the activities to be undertaken by the
Company, which has been approved by the Board. The CSR Policy of the Company is aligned
with the Act and is available on the website of the Company at
www.sikaglobal.com/uploads/sikaad/CSR %20Policy.pdf
Your company have spent Rs.6.00 Lakhs towards ongoing projects, the CSR
obligation for the Financial Year 21-22 of Rs.31.65 Lakhs transferred to “Unspent CSR
Account” for ongoing projects. The Annual Report on CSR activities is appended as
Annexure-lll to the Boards report.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Board has adopted policies and procedures for ensuring the orderly
and efficient conduct of its business, including adherence to the Companys policies, the
safeguarding of its assets, the preservation of the accounting records, and the timely
preparation of reliable financial disclosures.
RISK MANAGEMENT
The Company has a robust Risk Management framework commensurate with
the size and scale of its operations to identify, evaluate business risks and
opportunities. This framework seeks to create transparency, minimize adverse impact on the
business objectives and enhance the Company’s compstitive advantage.
The development and implementation of risk management policy has been
covered in the Management Discussion and Analysis which is a part of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of Loans, Guarantess and Investments covered under the
provisions of Section 186 of the Act are disclosed in note 38 of the Financial Standalone
Statements forming part of this report. The same was given to a wholly owned subsidiary of
the Company for mesting its statutory requirements.
During the year, the Company provided loans to M/s. Aerotek Sika
Aviosystems Private Limited as approved at the 32" AGM and to its wholly owned
subsidy M/s. Sika Tourism Private Limited for meeting statutory dues which is at arm
length basis.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on arm’s length basis and were in the ordinary course of
business. There are no materially significant related party fransactions made by the
Company with Promoters, Directors, KMP or other designated persons which may have a
potential conflict with the interest of the Company at largs.
All Related Party Transactions are placed before the Audit Committee as
also the Board for approval, wherever required. Prior omnibus approvals of the Audit
Committee were obtained for the transactions of repetitive nature, as applicable. None of
the Directors have any pecuniary relationships or transactions vis-a-vis with the Company.
Information on transactions with related parties which were in the nature for professional
and consultancy services, pursuantto section 134 (3)}(h) of the Companies {Accounts}
Rules, 2014 are annexed herewith in Form AOC-2 and the same forms part of this report as
Annexure-I:
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 and 134 of the Companies Act, 2013 and Rule 12
of the Companies (Management and Administration) Rules, 2014, the Annual Return is
available on the website of the Company on the following link: https
://www.sikaglobal.com/investors.html
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL}) ACT, 2013 The Company has zero tolerance for
sexual harassment at workplace and has adopted a policy on prevention, prohibition and
redressal of sexual harassment at workplace in line with the provisions of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the
rules thereunder for prevention and redressal of complaints of sexual harassment at
workplace. During the financial year 2022-23, the Company had received zero complaints on
sexual harassment, and accordingly no complaints remain pending as of 31% March 2023.
PARTICULARS OF EMPLOYEES
The information required under section 197 of the Act read with rule
5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules, 2014
ars given in the Corporate Governance report that forms a part of the Report.
PUBLIC DEPOSITS
Your Company has not accepted any deposits from the public and, as
such, no amount on account of principal or interest on deposits from public was
outstanding as on the dats of the balance shest.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO Conservation of Energy:
The operations of the Company are not energy intensive. However,
adequate measures have bsen taken to conserve and reduce the energy consumption.
Initiatives to integrate energy sfficiency into overall operations are undertaken through
design considerations and operational practices. The key initiatives towards energy
conservation were: a) Improved monitoring of energy consumption; b} Creating awareness
within the Company on energy conservation; c} Increased focus on procurement of energy
efficient equipment; and d} Exploring options towards utilisation of renewable energy.
Technology Absorption, Adaptation and Innovation
a} Technology absorption and adaptation continues to be at core of the
Companys objectives and associated strategy. The Company continues to uss the latest
technologiesfor improving productivity and the quality of its products and services.
During the year the Company has made continued efforts in developing new designs to mest
requirements of customers. b} The research and development efforts of the Company are
customer need based and hence it is a continuous process. Because of its in-house R&D
efforts the Company was able to deliver the best solutions to the customers in a
cost-effective manner, including for participation in import substitution programs for
asrospacs and defence projects capitalising on new business opportunities and improvement
of existing designs. c} The Company has notimportsd any technology during the last three
years. d} The expenditure incurred on Research and Development during the year was
Rs.99.68 Lakhs.
Foreign Exchange Earning and Outgo
During the year under review, the Company earned 373.05 Lakhs in
forsign exchange and spent T 2,852.33 Lakhs.
SECRETARIAL STANDARDS:
Pursuant to the provisions of Section 118 of the Act, the Company has
complied with the applicable provisions of the Secretarial Standards issued by the
Instituts of Company Secretaries of India and notified by the Ministry of Corporate
Affairs (MCA).
OTHER DISCLOSURE REQUIREMENTS: a. As per SEBI Listing Regulations,
Management Discussion and Analysis, Corporate Governance Report and Auditors’
Certificate on corporate governance are appended, which form part of this report. b.
DISCLOSURE OF ACCOUNTING TREATMENT- The financial statements of the Company have been
prepared in accordance with Indian Accounting Standards (“Ind ~~ AS”) nofified
under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Accounting Standards) (Amendment) Rules, 2016 read with Section 133 of the Act. c.
Disclosure regarding Issue of Equity Shares with Differential Voting Rights During the
financial year under review, the Company has not issued Shares with Differential Voting
Rights. ACKNOWLEDGEMENTS
Your directors wish to place on record their appreciation of the
support which the Company has recsived from its, employees, sharsholders, customers,
lenders, business associates, vendors, and the promoters of the Company.
For and on behalf of the Board of Directors Sika Interplant Systems
Limited
|
Rajeev Sikka |
|
Executive Chairman |
|
DIN: 00902887 |
| Date:09-08-2023 |
|
| Place: Bangalore |
|
+91-9892691696
