saint gobain sekurit india ltd Directors report


The Members

Your Directors are pleased to present the 50th Annual Report of the Company along with audited financial statements for the year ended March 31,2023.

FINANCIAL HIGHLIGHTS

( lakhs)

2022-23 2021-22

Revenue from operations

18,631.66 15,128.65

Operating Profit

3,922.40 3,339.95

Finance Costs

40.19 48.93

Profit before exceptional items and tax

3,882.21 3,291.02

Exceptional gain

- 2,789.99

Profit before Tax

3,882.21 6,081.01

Tax Expense

995.02 1,311.85

Profit after Tax

2,887.19 4,769.16

Other Comprehensive Income (Net of Tax)

(57.97) 2.31

Total Comprehensive Income

2,829.22 4,771.47

DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of ?1.50/- per equity share of the face value of ?10/- each for the financial year ended March 31, 2023. The dividend on equity shares, if approved by the Members would involve a cash outflow of ?1,366.59 lakhs against the cash outflow of ?2,733.17 lakhs in the previous year (the previous year dividend of ?3/- was inclusive of ?1.50/- per equity shares as a onetime special dividend, consequent to exceptional gains reported previous year).

TRANSFER TO RESERVES

Your Directors do not propose to transfer any amount to the reserves.

OPERATIONS

Your Companys growth during the year 2022-23 was fuelled by recovery in commercial vehicles, 3 Wheelers and growth in replacement market. The demand will persist, however, there can be potential impact due to global recession and higher interest rates. Margins were eroded due to the high inflationary impact from raw glass costs, rupee depreciation against dollar, high-cost imports, cost increased by almost all raw material suppliers. Simultaneously, plant operated at its saturation level. Consequent to this, the Companys sales increased by 23% and profit before tax excluding the exceptional gains has increased by 18% as compared to the previous financial year 2021-22. Your Company also positively progressed on the supply of Industrial Vehicle windshields to Europe. Your Company is well aligned with the Saint-Gobains “Grow and Impact” strategic plan.

FUTURE PROSPECTS

Your Company is focused on the growing After-market Glass Replacement business, targeting the growing Electric Vehicle segment and exploring opportunities in the Bus & Coach segment. The emphasis of your Company is also on developing value-added products that improve the safety and comfort of passengers while traveling in vehicles. Your Company is positioned for increasingly utilize green energy and make a significant contribution to sustainability. With unwavering conviction, both your directors and the Companys management exhibit tremendous faith in the future of your Company.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes or commitments that have had an impact on the financial position of the Company have emerged between financial year-end and the date of this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

HUMAN RESOURCES

The Companys primary focus is to provide a professional work culture that fosters innovation, ensures high performance, and empowers employees to grow and develop individually. The Company strives to become a leader in all the businesses it operates in and places a strong emphasis on enhancing employee capabilities through training. The hiring and onboarding practices of the Company adhere to the best industry standards, and a fair and transparent performance evaluation process is followed. To improve organizational efficiency, employee engagement, and skill levels, the Company encourages participation in various training programs and mandatory e-learning courses.

More generally, employee relations were cordial and productive at all sites of your Company. At the end of the financial year, there were 93 employees.

The Company is dedicated to establishing and maintaining a positive work environment that is free from any kind of discrimination or harassment. The Company firmly believes that all employees have the right to be treated with dignity and respect, and it maintains a zero-tolerance policy towards any violations of its Code of Conduct, particularly with regards to sexual harassment. To address any such issues, the Company has formed an Internal Complaints Committee (ICC) in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. The Company did not receive any complaint related to sexual harassment during the year.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act and read with Rule 8 of the Companies (Accounts) Rules, 2014, is set out in the Annexure 1 of this Report. Your Company is committed to ensure a clean and green, pollution-free environment as well as a safe and healthy workplace at its plant location and work sites. The Company adheres strictly to the Environment, Health, and Safety Charter, policies, and procedures established under the Saint-Gobain Group. The Companys plants have been certified under ISO 14001:2015, ISO 45001:2018 and these certifications and various awards acknowledges the efforts put in and outcome achieved in enhancing the Environment, Health and Safety across all its work sites.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 2(A) to 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) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure 2(B) forming part of this Report. The Annual Report including the aforementioned information are accessible on the Companys website, www.sekuritindia.com.

PUBLIC DEPOSITS

The Company has not accepted any public deposits, and thus, there were no outstanding amounts due on account of principal or interest on public deposits as on the date of the balance sheet.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/Re-appointment

In accordance with the Act and the Articles of Association of the Company, Mr. Deepak Chindarkar (Director Identification No. 03573562), Non-Executive Director of the Company retires by rotation and, being eligible, has offered himself for re-appointment. The Board of Directors recommends his re-appointment and a resolution to seek shareholders approval, along with other essential details, is included in the Notice.

Mr. Joseph Andrew Jude Pereira and Ms. Padmasudha Chandrasekhar have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1) and 25(8) of the Listing Regulations. There has been no change in circumstances affecting their status as Independent, Non-Executive Directors of the Company during the year.

The disclosures required pursuant to Regulation 36 of the Listing Regulations, Clause 1.2.5 of the Secretarial Standard on General Meetings are given in the Notice of AGM, forming part of the Annual Report and Schedule V of the Listing Regulations are given in the Corporate Governance Report, forming part of the Annual Report. The Members are also requested to refer to the pertinent items listed in the Notice of the AGM.

Pursuant to Section 203 of the Act, the Key Managerial Personnel of the Company are: Mr. Venugopal Shanbhag, Managing Director, Mr. Manigandann R, Whole-Time Director and Chief Financial Officer and Mr. Girish T Shajani, Company Secretary.

None of the Directors or Key Managerial Personnel has any pecuniary relationships or transactions with the Company, other than salaries, sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

DIRECTORS APPOINTMENT AND REMUNERATION

The Nomination and Remuneration Committee has laid down the criteria for Directors appointment and remuneration. These are set out in the Nomination and Remuneration Policy which is annexed as Annexure 3 to this Report and is also accessible on the Companys website at www.sekuritindia.com.

ANNUAL EVALUATION OF PERFORMANCE BY THE BOARD

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has adopted a framework for performance evaluation of the Board, its committees, individual directors and the chairperson through a survey questionnaire. The survey questionnaire broadly covers various aspects of board functioning, the composition of the Board and its committees, culture, execution and performance of specific duties, obligations and governance. The evaluation parameters are based on execution of specific duties, quality of deliberation at the meeting, independence of judgement, decision making, the contribution of directors at the meetings and functioning of the Committees. The performance of the Board, its committees, individual directors, and chairperson was assessed by the Nomination and Remuneration Committee and the Board. In addition, the Independent Directors conducted an evaluation of the performance of Non-Independent Directors, Chairperson, and the Board, as a whole. The Board of Directors also appraised the performance of the Independent Directors, their fulfillment of independence criteria specified by the Act and Listing Regulations, and well as their independence from management. The Director being evaluated did not participate in the evaluation process.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The purpose of the familiarisation programme is to acquaint the Independent Directors with the Companys business model and the industry in which it operates. Details of the familiarisation programme are accessible on the Companys website, www.sekuritindia. com/investor-information. Furthermore, the Independent Directors are periodically briefed on the latest developments in the Company and its operations. Also, independent directors were familiarized with the operations, products, process through factory visits.

NUMBER OF MEETINGS OF THE BOARD

The Board meets at regular intervals to review the Companys business and discuss strategy and plans. A tentative annual calendar of the meetings is circulated to the Directors in advance to enable them to plan their schedule and ensure effective participation.

During the year, four board meetings were held and one meeting of Independent Directors was also held. The maximum interval between the board meetings did not exceed the period stipulated under the Act and the Listing Regulations.

COMMITTEES OF THE BOARD

The Board has constituted or reconstituted its Committees in compliance with the Act and Regulation 18 to 21 of the Listing Regulations during the year. The Committees currently in place are the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, and Share Transfer Committee.

The Corporate Governance Report provides information about the Committees, their composition, meetings, and other relevant details.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained, your Directors make the following statements in terms of Section 134 of the Act,

i. that in the preparation of the annual financial statements for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. that such accounting policies have been selected and applied consistently and judgments and estimates have been made; 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 on March 31,2023 and of the profit of the Company for the year ended on that date;

iii. that proper and sufficient care has been taken 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 detecting fraud and other irregularities;

iv. that the annual financial statements have been prepared on a going concern basis;

v. that proper internal financial controls are in place and that such internal financial controls are adequate and are operating effectively;

vi. that systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and are operating effectively.With reference to the point number

(v), the Board believes that the Company has sound Internal Financial Controls (“IFC”) commensurate with the nature and size of its business. However, the business is dynamic and IFC are not static, and evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as the business evolves. The Company has established a mechanism to consistently detect such deficiencies and implement updated or enhanced controls wherever the potential impact of such gaps on the Companys operations is significant.

RELATED PARTY TRANSACTIONS

All related party transactions entered during the financial year were in the ordinary course of business and on an arms length basis. The Company has obtained the necessary approvals towards the related party transactions, as prescribed by the Act and the Listing Regulations.

The policy on related party transactions, as approved by the Board, is available on the website of the Company at www.sekuritindia.com.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in prescribed Form AOC-2, is annexed as Annexure 4 to this Report.

The details of the transactions with related parties are provided in the accompanying financial statements.

CORPORATE SOCIAL RESPONSIBILITY

Your Company believes that its primary objective is to cater to the requirement of its customers, while simultaneously create job opportunities, providing livelihood and income for all its stakeholders (including suppliers, vendors, service providers, employees, lenders, shareholders etc.). In addition, it aims to contribute to the governments revenue. According to your Companys belief, meeting its obligations to society entails pursuing its main objective while upholding the highest standards of corporate governance and ethical conduct in its business operations. Against the backdrop of this belief, your Company is committed to executing the objectives outlined in its CSR policy.

In accordance with Section 135 of the Act, a Corporate Social Responsibility Committee of the Board, having an Independent Chair, has been constituted to monitor the CSR policy and programs. The CSR policy and initiatives were undertaken during the year, in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, are set out in Annexure 5 to this Report.

RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROLS

Your Company recognises that managing risk is an integral part of good management practice and an essential element of good corporate governance. It aims to have a common, formalised and systematic approach for managing risk and implementing risk management processes across the Company. The Company ensures effective communication and management of risk across all risk categories. The Company has identified elements of risk, which may threaten the existence and financial position of the Company and are set out in Management Discussion and Analysis.

The Companys Internal Financial Control Systems are commensurate with the nature of its business, financial statements and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow-up actions thereon are reported to the Audit Committee.

WHISTLEBLOWER POLICY AND VIGIL MECHANISM

Your Company has adopted and disseminated its Whistle Blower Policy to provide a secure environment and encourage employees and others to report unethical, unlawful or improper practices, acts or activities including a leak or suspected leak of Unpublished Price Sensitive Information and to prohibit any adverse personnel action against those who report such practices, acts or activities, in good faith. The Whistle Blower Policy is accessible on the website of the Company, www.sekuritindia.com.

AUDITORS

a. Statutory Auditors

M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018), were appointed as Statutory Auditors of your Company at the 49th AGM of the Company held on August 8, 2022, till the conclusion of the 54th AGM of the Company. The Statutory Auditors have confirmed they are not disqualified from continuing as Auditors of the Company.

b. Cost Auditor

In accordance with Section 148 of the Act and Rules framed thereunder, the cost audit records are maintained by the Company in respect of the products which are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed Mr. G. Thangaraj, Cost Accountant, to conduct the audit of the cost records maintained by the Company for the financial year ending March 31, 2024. Mr. G. Thangaraj, Cost Accountant, has under Section 139(1) of the Act and the Rules framed thereunder furnished a certificate of their eligibility and consent for the appointment.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor as recommended by the Audit Committee and approved by the Board of Directors have to be ratified by the Members of the Company. Accordingly, an appropriate resolution forms part of the Notice convening the AGM. The Board of Directors seeks your support in approving the proposed remuneration of 1,70,000/- (Rupees one lakh seventy thousand only) plus taxes and out of pocket expenses at actuals payable to the Cost Auditor for the financial year ending March 31,2024. Mr. G. Thangaraj, Cost Accountant, has vast experience in the field of cost audit and has conducted an audit of the cost records of the Company for the past several years.

c. Secretarial Auditor

In accordance with Section 204 of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. V. N. Deodhar & Co., Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year ended March 31,2023. The Secretarial Audit Report for the financial year ended March 31,2023, in Form No. MR-3 is set out in Annexure 6 of this Report.

The Board has also appointed M/s. V. N. Deodhar & Co., Company Secretaries as Secretarial Auditor to conduct Secretarial Audit of the Company for the financial year 2023-24.

COMMENTS ON AUDITORS REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Deloitte Haskins & Sells LLP, Statutory Auditors, in their Auditors Report and by M/s. V. N. Deodhar & Co., Company Secretaries, in their Secretarial Audit Report.

The Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year ended March 31, 2023.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Companys operations in the future.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is accessible on the Companys website, www.sekuritindia.com.