To the Members of Sika Interplant Systems Limited,
The Directors are pleased to present the Thirty-Eighth Annual Report of the Company and the Audited Financial Statements for the year ended 31st March 2024.
FINANCIAL HIGHLIGHTS
( in Lakhs)
COMPANY'S PERFORMANCE
During the year under review, your Company achieved Total Income of 11139.43 Lakhs on a Standalone basis as compared to
6302.10 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) / Gain and Tax, the Company has Net Profit of 1956.27 Lakhs for the current Financial Year as against Net Profit of 911.29 Lakhs in the previous Financial Year.
On a Consolidated basis, your Company achieved Total Income of 11140.24 Lakhs during the year under review as compared to
6304.36 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) / Gain and Tax, the Company has Net Profit of 1937.07 Lakhs for the current Financial Year as against Net Profit of 894.00 Lakhs in the previous Financial Year.
DIVIDEND
Based on the Company's performance, your directors are pleased to recommend, for approval of the members, Dividend of 10 /- per equity share of face value of 10 each (i.e. @ 100%) payable to those members whose names appear in the Register of Members as on the Record Date i.e. September 06, 2024.
The dividend pay-out is subject to the approval of members at the ensuing Annual General Meeting (AGM).
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 wholly owned subsidiaries and 1 Subsidiary as on March 31,2024. There has been no material change in the nature 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/associate. In accordance with Section 129(3), consolidated financial statements 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 Company's subsidiaries/associate is appended to the Board's report. Please refer the details in Annexure - I for AOC-1 Form.
DETAILS OF DIRECTORS AND KMP APPOINTMENT/ RE-APPOINTMENT
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 independence 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 pecuniary relationship or transactions with the Company, other than sitting fees, commission and expenses incurred for attending meetings of the Company.
Mrs. Anuradha Sikka (DIN: 00902914), will be liable to retire by rotation and being eligible, offers herself for re appointment at the 38th Annual General Meeting of the Company scheduled to be held on September 20, 2024.
The Board proposed to the Members of the Company, the appointments of Mr. Parasuramachetty Jayapal (DIN: 10589149) and Mr. Sushil Chander Khanna (DIN: 01419591) as Independent Directors on the Board of the Company, not liable to retire by rotation, who shall hold office for a term of five consecutive years commencing from 20th September 2024 to 19th September 2029.
Sad demise of Mr. Santhanam Srinivasan (DIN: 02685291), Independent Director of the Company, aged 70 years, during the early hours of Tuesday, 27th February 2024. Mr. Santhanam, who was appointed on the Board of the Company on 29th March 2014 as an
Independent Director, had nearly 40 years of experience in a range of roles in the banking sector. The Company immensely benefitted from his vision and leadership during his tenure both as a Member of the Board of Directors and as a member of various Board Committees especially as Chairman of the Corporate Social Responsibility Committee. The Company deeply mourns Mr. Santhanam's passing. The Board of Directors and employees of the Company convey their heartfelt sympathy, sorrow and sincere condolences to his family
Mr. Barun Pandey had resigned from the position of Company Secretary and Compliance Officer effective from June 24, 2024. Subsequently Mr. Suraj Kumar Sahu was appointed as Company Secretary and Compliance Officer effective from August 09, 2024
BOARD MEETING
There were 4 meetings of the Board of Directors held during the financial year. For further details, please refer report on Corporate Governance section of this Annual Report
CHANGE IN NATURE OF BUSINESS
During the year under review, there were no changes in the nature of business.
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 details 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 Committee, the details of which are covered in Annexure-III to this Report.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013
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 Directors have, in the selection of the accounting policies, consulted the statutory auditors and have 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 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 detecting fraud and other irregularities;
iv The Directors have prepared the annual accounts on a going concern basis;
v The Directors 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 adequate 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 performance, tracking board and committees' effectiveness, and peer evaluation.
As per the provisions of the Act including Schedule IV, the evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted 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 Meeting of Independent Directors, performance 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 details 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 governance report that forms part of this report. The same has been disclosed on the Company's website at www.sikaglobal.com/uploads/sikaad/NRC%20%20Policy.pdf
AUDIT AND AUDITORS:
a. Statutory Auditors
At the 37th AGM, Messrs. Rao & Emmar (Firm Registration No. 003084S) ("R&E") were appointed as Statutory Auditors of the Company for their first term, as defined in the Act, for a period of five consecutive years from the conclusion of the 37th AGM till the conclusion of the 42nd AGM. As per the provisions of Section 139 of the Act. R&E have confirmed that they are not disqualified from continuing as Auditors of the Company.
The Board at their meeting held on 9th August 2023, on the recommendation of the Audit Committee, has recommended the appointment of M/s. Rao & Emmar (Firm Registration No. 003084S) (R&E) as the Statutory Auditors of the Company, which was approved by 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. As per the provisions of Section 139 of the Act. R&E have confirmed that they are not disqualified from continuing as Auditors of the Company.
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 & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as an Annexure -IV and forms part of this Report.
c. Statutory Auditor's Report & Secretarial Auditor's Report
The Statutory Auditor's Report and Secretarial Auditor's Report for the financial year 2023-24, which are annexed hereto as part of the financial statements and Secretarial Audit report as Annexure 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 internal audit plan which is reviewed each year in consultation with the management and the Audit Committee. On a quarterly basis also, Internal Auditors give presentations and provide a report to the Audit Committee of the Company.
f. Cost Audit
As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant. The Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of Mr. M Thimmarayaswamy, Cost Accountant (Membership No. F20731), as the Cost Auditors of the Company to conduct cost audits for relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 for the year ending March 31, 2025. The Board on recommendations of the Audit Committee have approved the remuneration payable to the Cost Auditor subject to ratification of their remuneration by the Members at the forthcoming AGM. Mr. M Thimmarayaswamy, Cost Accountant (Membership No. F20731),has, under Section 139(1) of the Act and the Rules framed thereunder furnished a certificate of their eligibility and consent for appointment
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 12.41Lakhs towards CSR projects, the CSR obligation for the Financial Year 22-23 of 30.71 Lakhs transferred to "Separate Unspent CSR Account" for ongoing projects. The Annual Report on CSR activities is appended as Annexure-III to the Board's 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 Company's 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 competitive 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, Guarantees 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 meeting its statutory requirements.
During the year, the Company provided loans to M/s. Aerotek Sika Aviosystems Private Limited as approved at the 32nd 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 transactions 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 large.
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-?-vis with the Company. Information on transactions with related parties which were in the nature for professional and consultancy services, pursuant to 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-II
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 2023-24, the Company had received zero complaints on sexual harassment, and accordingly no complaints remain pending as of 31st March 2024.
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 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 date of the balance sheet.
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 been taken to conserve and reduce the energy consumption. Initiatives to integrate energy efficiency 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 Company's objectives and associated strategy. The Company continues to use the latest technologies for improving productivity and the quality of its products and services. During the year the Company has made continued efforts in developing new designs to meet 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 aerospace and defence projects capitalising on new business opportunities and improvement of existing designs.
c) The Company has not imported any technology during the last three years.
d) The expenditure incurred on Research and Development during the year was 102.03 lakhs.
Foreign Exchange Earning and Outgo
During the year under review, the Company earned 111.84 Lakhs in foreign exchange and spent 4253.20 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 Institute 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") notified 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 received from its, employees, shareholders, customers, lenders, business associates, vendors, and the promoters of the Company.