I. Industry Structure & Development :-
The chemical industry is a key enabler for other industries. As chemicals are consumed
in varying proportion by every industry (rightly from electronics to paints, from
pharmaceuticals to cosmetics), without chemicals sustainable development of other sectors
is not possible.
The Chemical Industry is a crucial constituent of the growing Indian Economy, providing
the key material for several industries. The Company is operating only in one Segment,
namely Specialty Chemicals. Specialty Chemicals are particular chemical products which
provide a wide variety of effects on which many other industry sectors rely.
The Company manufactures a wide range of specially formulated and customized products
for various Industrial applications. Companys customers are well recognized and located
not only in India but all over the World especially in America, Europe, and Far- East.
Our customers represent a wide range of Industries such as Wire Insulation Enamel, PVC
stabilizers, Inks, Colours, Coatings, Textiles, Agro Chemicals, Polymers, Plastics,
Rubber, Latex, Tyre and Tubes, Conveyor belts, Lubricants, Additives, Home care, Cosmetic,
Soaps detergents, Fertilizers and many more.
Our Customers are always seeking innovative products formulation for their current
process needs, which is fullfilled by Companys R&D, application, knowledge and
experience. Solvay Group which represents this worldwide, in specialty chemicals supports
the Sunshield team.
Companys main products belongto:
a. Specialty Surfactant applications, which are predominantly Ethylene Oxide (EO) based
products. The technologies developed involve surfactants, Esters, Amides, and other
complementary processes.
b. Specialty Anti-Oxidants for Lubricants, Polymers, Rubber, Tyre & Latex and other
Industries involving Aminic& Phenolic technologies and
c. Other Non-EO technologies & customized blends for various applications.
II. Outlook
The Companys products continue to be well received by Worlds leading users of
specialty chemicals for a diverse range of industrial applications. The Company has been
recognized as a reputable and dependable supplier to many Indian and global consumers of
specialty products developed in-house.
Company remains optimistic on its future outlook however, there is need to watch out
for Implementation of GST Act and transition from current regime of indirect tax to GST,
ability of the Company to develop new business in new business segments and effect of
production cut announcement by Organization of the Petroleum Exporting Countries (OPEC) on
crude oil prices.
III. Risks and Concerns
The Present and future risks are reviewed by the management of the Company at regular
intervals. Adequate risk management is a key success factor, to mitigate risks associated
with the solutions we provide.Major risks identified by the business and functions are
systematically addressed through mitigating actions on continuous basis. These are
discussed at Audit Committee and Board of Directors Meetings. Following risks are
considered as high risks areas:
i. Foreign Exchange Fluctuations
ii. Procurement Risk
iii. Competition Risk
iv. MarketVolatility
Major Risk arises from main raw material viz., Ethylene Oxide (EO). EO is currently
consistently available from only one manufacturer in the country. Some of the major raw
materials are hazardous and inflammable. The Company has ensured that Safety equipments
and infrastructure are in place as per statutes and global safety standards.
In addition to above, the Company feels that current geopolitical situation may affect
demand from user industry in certain economies which can bring pressures all over and the
aggressive pricing can cause concerns about margins.
IV. Internal Financials Controls and its adequacy
Internal Checks and Controls covering operations of the Company are in place and are
constantly being improved upon. The Company had laid down internal financial controls to
be followed by the Company and such policies and procedures adopted by the Company for
ensuring the orderly and efficient conduct of its business, including adherence to
Companys policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information.
V. Human Resources
Employee relationships at all levels continued to be satisfactory. The management would
like to record its appreciation of dedicated and strong support provided to your Company,
by its employees at all levels. During the year under review, the Company successfully
entered into wage settlement agreement with workers of the Company. The number of
employees on rolls as on 31stMarch 2017 is 98.
(The statement in this report including Managements Discussions & Analysis Report
reflects Companys projections, estimates, expectations or predictions. These may be
forward looking statements within the meaning of applicable securities laws and
regulations. Actual results could differ materially from those expressed or implied, since
your Companys operations are influenced by many external and internal factors beyond the
control of the Company.)
5. BOARDMEETINGS
The Board meets at regular intervals to discuss and decide on Company / business policy
and strategy apart from other Board business.
The Board metfour times in the financial year 2016-17 i.e on 30th May 2016,
9th August 2016, 14th November 2016 and 10th February
2017.
6. BOARDCOMMITTEES
There are currently six Committees of the Board, which are given below:
• Audit Committee
Audit Committee includes six Directors viz., Mr. Ajit Shah (Chairman/Independent
Director), Mr. Sanjeev Mukerjee (Independent Director),, Mrs. Aruna Soman (Independent
Director) (effective from 1stJune 2017), Mr. Ranjal Laxmana Shenoy (Independent
Director), Mr. Manoj Khullar (Managing Director) and Mr. Satish Kelkar (NonExecutive
Director).
The role includes oversight of Companys financial reporting process and disclosure of
financial information to ensure that the financial statements are correct, sufficient and
credible; recommending the appointment, re-appointment, remuneration and terms of
appointment of auditors and approval of payment for any other services rendered by
statutory auditors; reviewing with the management quarterly results and annual financial
statements before submission to the Board for approval; approval or any subsequent
modification of any transactions of the Company with related parties; review and monitor
the auditors independence and performance and effectiveness of audit process; scrutiny of
inter corporate loans and investments, if any; evaluation of internal financial controls
and risk management system; and reviewing the functioning of the whistle blower mechanism.
• Nomination and Remuneration Committee
The Board has constituted Nomination and Remuneration Committee which comprises of
Independent Directors viz. Mr. Ranjal Laxmana Shenoy, Mr. Ajit Shah, Mr. Sanjeev Mukerjee
and Mrs. Aruna Soman (effective from 1stJune2017)
The role of the committee include the Formulation of the criteria for determining
qualifications, positive attributes and independence of a director and recommend to the
Board a policy, relating to the remuneration of the directors, key managerial personnel
and other employees; formulation of criteria for evaluation of Independent Directors and
the Board; devising a policy on Board diversity; and identifying persons who are qualified
to become directors and who may be appointed in senior management in accordance with the
criteria laid down, and recommend to the Board theirappointmentand removal.
• Stakeholders Relationship Committee
Stakeholders Relationship Committee comprises of Mr. Sanjeev Mukerjee (Independent
Director), Mrs. Aruna Soman (Independent Director) (effective from 1st June
2017), Mr. Ajit Shah (Independent Director) and Mr. Manoj Khullar (Managing Director).
The Committee focuses primarily on monitoring and ensuring that all shareholder and
investor services operate in an efficient manner and that shareholder and investor
grievances / complaints including that of all other stakeholders are addressed promptly
with the result that all issues are resolved rapidly and efficiently.
• Corporate Social Responsibility Committee
The Board has constituted Corporate Social Responsibility Committee comprising of Mr.
Ajit Shah (Independent Director), Mr. Arun Roy(Director), Mr. Chidananda Bhagwat
(Director) and Mr. Manoj Khullar (Managing Director).
The Committee focuses on formulation and Review of CSR policy indicating activities to
be undertaken by the Company; recommendation of the amount of expenditure to be incurred
on CSR activities and monitoring and implementing this policy from time to time.
During the year under review, the Company was not required to spend on CSR activities.
Asa part of societal action, the Company has spent on CSR activities during the year under
review.
The CSR policy of the Company and Annual Report on CSR activities is annexed herewith
as Annexure A.
• Risk Management Committee
The Board has constituted Risk Management Committee comprising of Mr. Manoj Khullar
(Managing Director), Mr. Arun Roy (Director), Mr. Chidananda Bhagwat, (Director) and Mr.
Shekhar Pattekar (Manager Factory).
The role of Risk Management Committee includes reviewing and approving the risk
management policies of the Company; assessment and monitoring of all risks associated with
the operations of the Company and development and implementation of internal compliance
and control systems and procedures to manage risk.
• Committee for Issue of Duplicate Share Certificates
The Board has constituted a Committee for the purpose of issuance of duplicate share
certificates. The Committee comprises of one Non-Executive Director viz Mr. Satish Kelkar
and three Executive Directors Mr. Arun Roy, Mr. Chidananda Bhagwat, and Mr. Manoj Khullar.
7. DIRECTORS RESPONSIBILITYSTATEMENT
In pursuance of section 134 (3)(c )of the Companies Act, 2013, the Directors hereby
confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistently
and made 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 and loss of the company for that period;
(c) 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 detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors, had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and operating effectively;
(f) the directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems are adequate and operating effectively.
8. FRAUDREPORTINGBYAUDITORS
As required under Section 134(3) (ca) of the Companies Act, 2013, there are no
instances of Fraud being reported by the Auditors.
9. DECLARATION FROM INDEPENDENT DIRECTORS ONANNUALBASIS
The Company has received necessary declaration from each Independent Director of the
Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of
the Company meet with the criteria of their Independence laid down in Section 149(6).
10. DIRECTORS AND KEYMANANGERIAL PERSONNEL
In accordance with the provision of the Companies Act, 2013 Mr. Satish Kelkar and Ms.
Valdirene Licht, Directors of the Company, retire by rotation and being eligible, offer
themselves, for re-appointment. The profiles of the Directors seeking re-appointment form
part of the Annexuretothe Notice.
The Board of Directors appointed Mr. Chidananda Bhagwat as an Additional Director to
hold office as Director of the Company with effect from 26th May 2017 and Mrs.
Aruna Soman as an Additional Director to hold office as an Independent Director of the
Company with effect from 1stJune 2017.
Mr. Bhagwat and Mrs. Soman shall hold office of Director upto the date of the
forthcoming Annual general meeting of the Company. The Company has received a notice in
writing from a member along with the deposit of requisite amount under Section 160 of the
Act proposing the candidature of Mr. Bhagwat and Mrs. Soman for the office of Director of
the Company.
Details of the proposal for appointment of Mr. Chidananda Bhagwat and Mrs. Aruna Soman
are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of
the Notice of the 30th Annual General Meeting.
None of the Directors is disqualified from being appointed as Directors as specified in
Section 164(2) of the Companies Act, 2013.
The Company has recognized pursuant to Sections 2 (51) and 203 of the Act, Mr. Manoj
Khullar, Managing Director, Mr. Chidananda Bhagwat, Director, Mr. Rajeev Gupte Chief
Financial Officer and Mr. Amit Kumashi Company Secretary of the Company as Key Managerial
Personnel of the Company.
11. ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 the Board has carried out an
annual performance evaluation of its own performance, the Directors individually, as well
as the evaluation of the working of its Committees. The Independent Directors have
evaluated the performance of the non-independent Directors and the Board as a whole. They
also assessed the quality, quantity and flow of information between Companys management
and the Board that they are necessary for the Board to effectively and reasonably perform
theirduties.
12. COMPANYS POLICY ON DIRECTORS APPOINT- MENTAND REMUNERATION
In accordance with Section 178 of the Companies Act, 2013 the Nomination and
Remuneration Committee has formulated Remuneration Policy ("the policy").
The objective of the policy is to ensure that Executive Directors and other employees
are sufficiently compensated for their performance. The Policy seeks to provide criteria
for determining qualifications, positive attributes and independence of a director.
Remuneration Policy Directors
Nomination and Remuneration Committee shall recommend the remuneration, including the
commission based on the net profits of the Company for the Non-Executive Directors and
Managing Director and other Executive Directors. This will be then approved by the Board
and shareholders. Prior approval of shareholders will be obtained wherever applicable in
case of remuneration to non-executive directors.
The Company pays remuneration by way of salary, perquisites and allowances (fixed
component) and variable pay to Wholetime Director. Salary is paid within the range
approved by the Shareholders. Annual increments effective 1st January each
year, as recommended by the Nomination and Remuneration Committee, and is approved by the
Board. Within the prescribed ceiling, the perquisites package is approved by the
Remuneration Committee.
The remuneration paid to Executive Directors is determined keeping in view the industry
benchmark and the relative performance of the Company to the industry performance.
Perquisites and retirement benefits are paid according to the Company policy as applicable
to all employees.
Independent Non-Executive Directors are appointed for their professional expertise in
their individual capacity as independent professionals / Business Executives. Independent
Non-Executive Directors receive sitting fees for attending the meeting of the Board and
Board Committees and commission as approved by the Board and shareholders.
The remuneration by way of commission paid to the Independent Non-Executive directors
is determined periodically & reviewed based on the industry benchmarks.
Key Managerial Personnel and Other Employees
The remuneration of employees largely consists of basic salary, perquisites, allowances
and performance incentives. Perquisites and retirement benefits are paid according to the
Company policy, subject to prescribed statutory ceiling.
The components of the total remuneration vary for different grades and are governed by
the industry pattern, qualification & experience / merits, performance of each
employee. The Company while deciding the remuneration package takes into consideration
current employment scenario and remuneration package of the industry.
The annual variable pay of managers is linked to the performance of the Company in
general and their individual performance for the relevantyear measured against Companys
objectives fixed in the beginning of the year.
Criteria for Board Membership Directors
The Company shall take into account following points:
• Director must have relevant experience in Finance/ Law/ Management/ Sales/
Marketing/ Administration/ Research/ Corporate Governance/ Technical Operations or the
other disciplines related to companys business.
• Director should possess the highest personal and professional ethics, integrity
and values.
• Director must be willing to devote sufficient time and energy in carrying out
their duties and responsibilities.
Independent Director
Independent Director is a director who has no director indirect material relationship
with Sunshield or any of its officers, other than as a director or shareholder of
Sunshield.
Independent Director shall meetall criteria specified in Section 149(6) of the
Companies Act, 2013 and rules made thereunder.
13. RISK MANAGEMENT POLICY AND INTERNAL CONTROLADEQUACY
The Company has in place a mechanism to identify, assess, monitor and mitigate various
risks to key business objectives. Major risks identified by the businesses and functions
are systematically addressed through mitigating actions on a continuing basis. These
are discussed at the meetings of the Audit Committee and the Board of Directors of the
Company.
The Companys internal control systems are commensurate with the nature of its business
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.
14. VIGILMECHANISM
The Company has established a vigil mechanism named as Whistle Blower Policy within the
Company. The policy of such mechanism has been circulated to all employees within the
Company, which provides a framework to the employees for guided & proper utilization
of the mechanism. The Whistle Blower Policy has been published on the Companys website
http://www.solvayindia.in/en/solvay-in/sunshield- chemical-limited. There have been no
instances of any personnel seeking access to the Audit Committee.
15. SIGNIFICANTAND MATERIALS ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
No significant or material orders were passed by the Regulators or Courts or Tribunals
which impacts the going concern status and Companys operations in future.
16. AUDITORS Statutory Auditors
The Statutory Auditors, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants,
hold office for a term of Five (5) years subject to ratification by members at every
Annual General Meeting. Accordingly, a Resolution seeking Members ratification for the
appointment of M/s. Deloitte Haskins & Sells LLP is included at Item No. 4 of the
Notice convening the Annual General Meeting.
They have issued necessary certificate as required under Section 141 of the Companies
Act, 2013.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost
Records and Audit) Rules, 2014, the Company has appointed M/s. Kishore Bhatia &
Associates, Cost Accountant as the Cost Auditor of the Company for the financial year
2016-17.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed M/s. Alwyn DSouza & Co., Company Secretaries to undertake the Secretarial
Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure
B. The Report does not contain any qualification, reservation or adverse remark.
Internal Audit
M/s. Nikhil Narkar & Associates, Chartered Accountants has been appointed as
Internal Auditor of the Company.
17. COMMENTS ON AUDITORS REPORT
There are no qualifications, reservations or adverse remarks or disclaimers made by
Deloitte Haskins & Sells LLP, Statutory Auditors, in their report and by Mr. Alwyn
Dsouza, Company Secretary in Practice, in his secretarial audit report.
18. EXTRACTOFANNUALRETURN:
The details forming part of the extract of the Annual Return in form MGT 9 is annexed
herewith as Annexure C.
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not provided any loans, Guarantees or made investments under Section
186 of the Companies Act, 2013
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN
SECTION 188(1)
All Related Party Transaction (RPT) entered into by the Company during the year under
review were in the ordinary course of business and on arms length basis.
All RPT are placed before the Audit Committee for its review and approval. Prior
omnibus approval of the Audit Committee is obtained for transactions which are of
repetitive nature. Pursuant to the provisions of the Listing Regulations 2015 as well as
the Rule 6A of the Companies (Meetings of Board and its Power) Rules 2014, Audit Committee
at its meeting held on 10th February 2016 had granted omnibus approval for the
proposed RTP to be entered into during the year under review. Since there are no material
RTP and also all the transactions with related parties are at arms length and are in
ordinary course of business, no transactions need to be reported in AOC-2.
21. FIXEDDEPOSITS
The Company has not accepted any fixed deposits during the year.
22. SUBSIDIARY,ASSOCIATESANDJOINTVENTURES
The Company does not have any subsidiary or associates or jointventures as on the date
of this report. Therefore separate section for report on the performance and financial
position of Subsidiaries, Associates and Joint Venture Companies is not required.
23. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, if any, affecting the financial
position of the Company which have occurred between the end of the financial year of the
Company to which the financial statements relate and the date of the report.
24. EMPLOYEES
The information required pursuantto Section 197 read with Rule 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees
of the Company, is annexed herewith as Annexure D.
25. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The status of complaints received from female employees with regard to sexual
harassment during the year is as under:
| Number of Complaints of sexual harassment received during the period April 2016 to
March 2017 |
Number of complaints disposed off during the period April 2016 to March 2017 |
Nature of action taken by the employer |
| NIL |
Not applicable |
Not applicable |
26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSANDOUTGO
As required by Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the
Companies (Accounts) Rules, 2014, relevant data pertaining to Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo, is annexed herewith as
Annexure E to this Report.
27. CORPORATEGOVERNANCE REPORT
Regulation 15 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015 with respect to Corporate Governance report and certain regulations are not
applicable to Sunshield Chemicals Limited ("Company"), since Companys paid-up
Capital is less than 10croresand net worth is less than 25crores.
28. ENVIRONMENT, HEALTH AND SAFETY
Your Company recognizes importance of Health and Safety of its employees and its
neighborhood. Regular Safety Audits are being conducted. Your Company has adopted a
Health, Safety and Environment (HSE) Policy, which applies to all employees and
activities.
29. APPRECIATION
Your Directors place on record their sincere appreciation of the wholehearted support
extended by the Companys bankers, business associates, employees union, shareholders,
auditors and various statutory authorities, both, central and state Government.
|
For and On Behalf of the Board of Directors |
|
R L Shenoy |
|
Chairman |
| Mumbai, 26th May 2017 |
DIN No. 0074761 |
+91-9892691696
