सिकाजेन इंडिया निदेशकों की रिपोर्ट, सिकाजेन इंडिया निर्देशकों द्वारा रिपोर्ट

सिकाजेन इंडिया

बीएसई: 533014  |  NSE: SICAGEN  |  ISIN: INE176J01011  |  Trading

खोजें सिकाजेन इंडिया कनेक्शन Mar 17
निदेशकों की रिपोर्ट वर्षांत : Mar '18

The Directors are pleased to present the 14th Annual Report and the Audited Financial Statements of the Company for the year ended 31st March 2018.


Financial performance of the Company for the year ended 31st March 2018 is summarized below:

(Rs. Lakhs)

Year ended 31s1 March 2018

Year ended 31st March 2017

Revenue from operations



Other Income



Total Revenue



Profit before Finance Cost, Depreciation and Tax



Finance Cost






Profit before Tax



Provision for Tax



Profit after Tax



Other Comprehensive Income



Total Comprehensive Income for the year



Balance in other Equity



Amount available for Appropriations




General Reserve



Dividend on Equity shares



Tax on Dividend



Balance carried to the Balance Sheet



Earnings per share (EPS) in Rs.




Building Materials Division

This is ISO 9001 - 2015 certified division of Sicagen.

The Building Materials division has a rich legacy of being in the business for over seven decades. This business has been partnering with some of the best brands in trading of building materials like Tata steel, JSW, Jindal, APL Apollo, SAIL in steel segment; Dalmia and Penna brands in Cement; Jain, Astral and Ajay in PVC and Finolex for cables as major sourcing channels amongst many others. This division also provides infrastructure solutions to customers on a case to case basis and well received in the market. During the year, the division faced number of challenges including Govt. policies of GST and RERA. Excise duty which was hitherto part of the cost of purchase and sales revenue has been removed as excise duty has been subsumed into GST. Therefore, sales value dropped substantially from July 2017, which was coupled with lower sales on account of GST transition process. The business environment was already at its lowest rung of the ladder with economy reeling under demonetisation which adversely affected the steel, construction and real estate sectors. The Realty sector has passed through one of the toughest times with lack of funds with customers, uncertainty on the compliance with various statutes. However, the major push from the Government on the roads, railways, and urban infrastructure segments has supported our division to improve their order book position in H2.

This division achieved a total turnover of Rs.48,097 Lakhs with a net profit of Rs.284 Lakhs against previous year turnover of Rs.50,203 Lakhs and a net profit of Rs.748 Lakhs. Continuous innovative ideas, efforts from the sales team and effective business strategies by management together with addition of new customers and expansion to new markets had provided necessary impetus to the business to remain buoyant despite many challenges. The Company is planning to expand the operations to other high potential geographical territories while adding various new product portfolios. Further, plans are in place to strengthen the current market share and continue to focus on catering to the existing markets.

Power & Control Systems Division

This is ISO 9001 - 2015 certified division of Sicagen. This division caters to the Power Generating companies, other industries that deal with equipment in the handling of control units segment. This division has an established relationship due to expertise in providing superior quality service with many public sector power generating companies and also earned reputation of being the exclusive authorised service provider for Woodward Governors. This division caters to a variety of customers spread majorly in power, oil refineries, shipping, sugar and fertilizer industries. This business faces competition from the OEM suppliers and is dependent on the capex funds allocated by corporates. During this year the division has grown by 36%.

The revenue of this division during the year under review was Rs.3,759 Lakhs and net profit was Rs.418 Lakhs as compared to the revenue of Rs.2,860 Lakhs and net profit of Rs.332 Lakhs in the previous year. Adequate plans are initiated for expansion to new product portfolios and new markets especially, the overseas market to enhance the turnover. Currently the Company is already servicing some customers in African continent and earned good reputation as quality service providers.

Speciality Chemicals Division

This is 9001 - 2015 certified division of Sicagen. Specialty Chemicals division has achieved major strides in its turnover with a substantial increase by 114% to Rs.1,098 Lakhs and earned a net profit of Rs.211 Lakhs this year as compared to turnover of Rs.546 Lakhs and a net profit of Rs.92 Lakhs in 2016-17. During the year, this division has expanded its operations to new territories in northern India and bagged many orders from sugar manufacturing companies with strengthened operations that commenced last year. Trading business of some of the related products has contributed to the revenue during the year. This division has set up the road map to explore into many areas including overseas markets in order to diversify its operations to the wide customer base. During the year, the R & D laboratory extended great support by providing a very detailed analysis of our own manufactured products as well as other products to excel the customer satisfaction.

Industrial Packaging Division

This is ISO 9001 - 2015 certified division of Sicagen. During the year, this division had registered reasonable growth by 47% over the earlier year. This division has introduced new product by diversifying to manufacture of cable reel drums and supplied about 200 drums to overseas market. Unstable raw material (Steel) prices with increase in prices month on month, short fruit pulp season and intense competition from unorganised/ entrepreneur type of businesses continued to be the challenges to the operations. Strategic planning, Improvement in the quality of the barrels, prompt delivery and enhanced productivity ensured higher sales. Turnover during the year stood at Rs.3,327 Lakhs as compared to Rs.2,513 Lakhs in 2016-17.

The net profit of this division has improved over the previous year due to the implementation of many cost reduction measures and higher productivity. This division registered a net profit of Rs.198 Lakhs for the year 2017-18 as against Rs.150 Lakhs in the previous year 2016-17. This division falls under MSME category and is certified under BIS for all product categories as at the year end. Expansion plans are laid out to foray into many other areas of packaging and excel in the customer requirements.

Engineering Division

No operational income was posted during the year 2017-18 due to lack of new orders for boat building operations. However, this division has participated in the tenders floated during the year, negotiating with many customers. Also discussions are going on with BEML and Ministry of Fisheries to tap new business opportunities. Our company anticipates few orders in the ensuing financial years.

During the year, Indian Navy has approved Sicagen India limited as a supplier for Yard craft/ Ferry Craft/ Barges etc.


Your Directors are pleased to recommend a dividend of Rs.0.60 per equity share (6% on equity capital of the Company) for the financial year 2017-18 despite a very mixed year with multiple challenges, volatility in raw material prices and financial instability, continued uncertainty in the business environment for most part of the year. Total dividend is Rs.237 Lakhs and dividend distribution tax amounts to Rs.48 Lakhs. The dividend shall be paid to the eligible shareholders whose names appear in the Register of Members as on the record date fixed by the Board.

Disclosures under the Companies Act, 2013

Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the Company has complied with requirements and the details of which are disclosed hereunder.

1. Extract of Annual Return

As per the Companies Amendment Act, 2017, the details of extract of Annual Return which forms part of this report is posted on the Company''s website www.sicagen.com.

2. Number of Board Meetings

The Board of Directors met 5 (five) times in the year 2017-18. The details of the Board meetings and the attendance of the Directors are given in the Corporate Governance Report.

3. Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors report that:

(a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates which are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2018 and of the profit & loss account of the Company for year ended on that date.

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities.

(d) they have prepared the annual accounts on a going concern basis.

(e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and effective.

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

4. Statement on declaration given by Independent Directors

The Company maintains the requisite number of Independent Directors as required under Section 149(4) of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013, confirming that they meet the criteria of independence as provided in sub-Section(6) of Section 149 of the Act.

5. Remuneration Policy

The Company follows a policy on remuneration of Directors, Key Managerial Personnel and Senior Management employees including criteria for determining qualification, positive attributes and independence of Directors. The following is the Remuneration Policy for Directors.

i. For Executive Directors

The remuneration of the Whole Time Directors shall comprise of a fixed component and a performance linked pay, as may be fixed by the Nomination and Remuneration Committee and subsequently approved by the Board of Directors and Members. Performance Linked Pay shall be payable based on the performance of the individual and the Company during the year. Remuneration trend in the industry and in the region, academic background, qualifications, experience and contribution of the individual are to be considered in fixing the remuneration. These Directors are not eligible to receive sitting fees for attending the meetings of the Board and Committees.

ii. For Non-Executive Directors

The Non-Executive Directors will be paid sitting fees for attending the Board and Committee Meetings as per the stipulations in the Act, and the Articles of Association of the Company and as recommended by the Nomination and Remuneration Committee. Different scales of sitting fee may be fixed for each category of the directors and type of meeting. However, the fees payable to the Independent Directors and Woman Directors shall not be lower than the fee payable to other categories of directors. In addition to this, the travel and other expenses incurred for attending the meetings are to be met by the Company. Subject to the provisions of the Act and the Articles of Association, the Company in General Meeting may by special resolution sanction and pay to the Directors remuneration not exceeding 1% of the net profits of the Company computed in accordance with the relevant provisions of the Act. The Company shall have no other pecuniary relationship or transactions with any Non-Executive Directors.

6. Explanation of Board on qualification of statutory auditors & secretarial auditor, if any

During the year ended 31st March 2018, there was no qualification, reservation or adverse remark made by the statutory auditor on the financial statements of the company and by the Practicing Company Secretary in their respective reports.

7. Particulars of loans, guarantees or investments given or made by the Company

During the year 2017-18, the Company has not given any loan or given any guarantee or provided security in connection with a loan to any person/body corporate except the loans to parties covered in the register maintained under Section 189 of the Companies Act, 2013. Investment in Danish Steel Cluster Private Ltd (Danish Steel) was made during the year for acquiring the remaining 40% of equity capital of Danish Steel. Upon completion of 40% acquisition, Danish Steel has become a Wholly Owned Subsidiary of the Company with effect from 28thDec 2017.

8. Related Party Transactions

The related party transactions entered into with related parties are on arm''s length basis and in compliance with the applicable provisions of the companies act and the listing agreement. There are no materially significant related party transactions made by the company with promoters, directors or key managerial personnel etc., which may have potential conflict of interest with the interest of the company at large.

All the related party transactions were placed before the Audit Committee and the Board specifying the nature, value and terms and conditions of the transactions. In principle approval is obtained for the transactions which are foreseen and are, repetitive in nature.

9. Amount transferred or proposed to transfer to any reserves

The Company has not transferred or proposed to transfer any amount to any reserves as there is no necessity to transfer such amount as required under the Companies Act, 2013.

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

There are no material changes and commitments affecting the financial position of the company between the end of the financial year 31st March 2018 and the date of this report.

11. Transfer of unclaimed dividend / Shares to the Investor Education and Protection Fund

As required under the provisions of Section 124, other applicable provisions of Companies Act, 2013, and the rules and amendment made thereunder, the Company is required to transfer the dividends that remain unpaid/ unclaimed for a period of seven years to Investor Education and Protection Fund (IEPF) and also all the equity shares in respect of which unpaid/unclaimed dividend pertaining to those shares remains unclaimed/ unpaid for a period of seven consecutive years to an IEPF account administered by the Central Government. On transfer of the amounts to IEPF account, no claim shall lie in respect of those amounts against the Company. As on 31st March 2018, an amount of Rs.9.82 Lakhs pertaining to the financial year 2010-11, which was lying in the unclaimed dividend account of the Company is required to be transferred to the IEPF account on 28th August 2018.

Members who have so far not encashed their dividend warrant(s) or those yet to claim their dividend amounts pertaining to the financial year 2010-11, may write to the Company/RTA (Cameo Corporate Services Limited) for claiming the same before 28th August 2018.

12. Particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo

Particulars required to be disclosed under Section 134 of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure I, which forms part of this Report.

13. Risk Management Committee

The Company has constituted a Risk Management Committee which comprises of 3 Directors and finance head as members for implementing, monitoring and reviewing of risk management plan periodically. The Committee constituted by the Company has been delegated with powers to oversee the risk management process, risk identification, effective implementation of mitigation plan and risk reporting.

14. Composition of Audit Committee

The Board has constituted an Independent Audit Committee which comprises four members namely Mr.B.Narendran, Mr.Sunil Deshmukh, Mr.Harish Chandra Chawla and Mrs.Sashikala Srikanth. More details on the Audit Committee are given in the Corporate Governance Report.

15. Evaluation of Board

Pursuant to the provisions of Section 134 of the Companies Act, 2013 read with Schedule IV of the Act and also in line with Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Independent Directors of the Company met on 07th February 2018 without the attendance of NonIndependent Directors and Members of Management and reviewed the performance of Non-Independent Directors and the Board as a whole. They also reviewed the performance of the Chairperson.

Evaluation of the Board was carried out through a structured evaluation process covering various aspects of the Board''s functioning such as composition of the Board & Committees, competencies, duties and responsibilities, attendance, value of contribution made to the Company''s progress etc.

16. Corporate Social Responsibility (CSR)

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has to spend at least 2% of last three years of its average NP profit before tax for carrying out appropriate CSR activities as referred under Schedule VII of the Act. The Company has constituted a CSR Committee and framed a policy for implementation of CSR initiatives.

The Company is a member of the new Not-For-Profit Company formed under Section 8 of the Companies Act, 2013 to carry out necessary CSR activities. A report on CSR activities forming part of this report is attached herewith as separate Annexure II.

17. Vigil Mechanism

Pursuant to the provisions of Section 177 (9) of the Companies Act, 2013 read with the Rule 7 of the Companies (Meetings of Board and its powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Company has established a vigil mechanism for its directors and employees to report their grievances or genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct. In order to prevent fraudulent activities and also to ensure a corruption free work environment, a detailed Whistle Blower policy has been laid down by the Board. Brief details of the Whistle Blower policy are given in the Corporate Governance Report.

18. Internal Complaints Committee

The Company has constituted an Internal Complaints Committee to prevent and prohibit any form of sexual harassment at workplace and provide redressal for woman employees as required under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, the members of Internal Complaints Committee met on 20th Nov 2017 and noted that there was no event affecting any of the women employees on account of any sexual harassment at the work place.

19. Particulars required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) & (3) of the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014

The particulars required under Section 197(12) read with Rule 5(1), (2) & (3) of the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014 are given in Annexures III & IV, and form part of this Report.

20. Corporate Governance Report

A Report on Corporate Governance as stipulated under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part of this Annual Report. The requisite certificate from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as required under the above Regulation is attached to this Report.

21. Management Discussion & Analysis Report

Management Discussion & Analysis Report for the year under review, as stipulated under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is attached along with this report.

22. Directors/KMPs

Mr.Ashwin C Muthiah, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-election.

Due to personal reasons, Mr.Shridhar Gogte, Whole Time Director and Mr.R.Achuthan, Company Secretary have resigned on 3rd April 2018 and 15th February 2018 and they have been relieved from the services of the Company on 15th May 2018 and 9th March 2018 respectively.

Mr.G.Arunmozhi has been appointed as Company Secretary and Compliance Officer w.e.f 15th May 2018.

23. Auditors

(a). Statutory Auditors

At the 13th Annual General Meeting (AGM), M/s.SRSV & Associates, Chartered Accountants, were appointed as statutory auditors of the Company for a period of 5 years and they will hold office until the conclusion of 18th AGM as per Section 139 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014. M/s.SRSV & Associates, Chartered Accountants, Chennai have also confirmed that the appointment is within the limits as specified under the Companies Act, 2013. Consequent to the amendment made in the provisions of Section 139 of the Act, the ratification of statutory auditors'' appointment at the ensuing AGM does not arise.

(b). Cost Auditor and Cost Audit Report

The Company had appointed Mr.J.Karthikeyan, Cost Accountant as Cost Auditor of the Company for the financial year 2017-18 to carry out necessary cost audit in respect of manufacturing activities of the Company such as speciality chemicals division, drums manufacturing division and Goodwill Governor Services division etc.

Pursuant to Section 148 of the Companies Act, 2013 read with the amended rules thereof, the Board of Directors on recommendation of the Audit Committee, appointed Mr.J.Karthikeyan, Cost Accountant, as Cost Auditor of the Company for the financial year 2018-19 and has recommended his remuneration to the shareholders for their ratification at the ensuing Annual General Meeting.

(c). Secretarial Auditor

The Company has appointed Mr.R.Kannan, Practicing Company Secretary to carry out necessary secretarial audit for the financial year 2018-19 as required under Section 204 of the Companies Act, 2013. As required under Section 204 of the Act, the Secretarial Audit Report issued by Mr.R.Kannan, Company Secretary in practice is given in the Annexure V.

(d). Internal Auditor

During the year, M/s.M.K.Dandeker & Co, Chartered Accountants, Chennai, who were appointed as Internal Auditors of the Company on 01st June 2017, have conducted necessary internal audit of the functions and activities of the Company, as required under Section 138 of the Companies Act, 2013 read with the Rule 13 of the Companies (Accounts) Rules, 2014. Since the aforesaid Internal Auditors have expressed their inability to continue to act as Internal Auditors for the upcoming financial year, the Board at its meeting held on 15th May 2018, has appointed M/s.Sundar Srini & Sridhar Chartered Accountants, as new Internal Auditors of the Company in the place of outgoing auditors for the financial year 2018-19.

24. Internal Control System

A strong and robust internal control system is in place in the Company with appropriate policies and procedures to ensure reliability of financial reporting, timely feedback on the achievement of operational and strategic goals, compliance with policies, procedures, rules and regulations, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and economical and efficient use of resources. The internal auditors appointed by the Company continuously monitor the effectiveness of internal controls. Audits are conducted on an ongoing basis and significant deviations are brought to the notice of the Audit Committee and the corrective action is recommended for implementation. All these measures facilitate timely detection of any irregularities and early remedial steps. The audit committee approves the audit plan and the audit plan is reviewed annually. Further, the Audit Committee also reviews the quarterly reports submitted by the Internal Auditors.

25. Fixed Deposit

The Company has not invited or accepted any deposits during the year.

26. Dematerialization of Equity Shares

As at 31st March 2018, 3,82,14,905 equity shares representing 96.57% of the paid-up share capital of the Company have been dematerialized. The shareholders holding shares in physical form are advised to dematerialize their shares to avoid the risks associated with holding the share certificates in physical form.

27. Subsidiary & Associate Companies

In continuation of the proposal to acquire 100% equity capital of Danish Steel Cluster Private Ltd (Danish Steel), the Company has acquired the balance 40% of the equity capital of Danish Steel and completed the transaction during the year 2017-18. Consequent to the above acquisition, Danish Steel has become a 100% subsidiary of your Company with effect from 28th December 2017. Pursuant to Section 136 of the Companies Act, 2013 which has given exemption from attaching the annual reports of subsidiary companies along with the annual report of the Company, the copies of balance sheet, profit and loss account, report of Directors & Auditors and other related information of South India House Estates & Properties Ltd, Wilson Cables Private Ltd, Danish Steel Cluster Private Ltd (Subsidiary Companies) and EDAC Automation Ltd (Associate Company) are not attached with this annual report. However, a statement containing the salient features of the financial statements of the aforesaid Subsidiary Companies for the year ended 31st March 2018 is attached with the consolidated accounts section.

The Company shall make available the annual accounts of the aforesaid subsidiary Companies and Associate Company to the shareholders of the Company upon their request. The annual accounts of the said subsidiary Companies and Associate Company shall also be kept available for inspection by any member at the Registered office of the Company.

In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the Financial Statements of the Subsidiaries and Associate is attached in Form AOC-1 as separate Annexure.

28. Consolidated Financial Statements

In accordance with Indian Accounting Standard (Ind AS) 110 of Institute of Chartered Accountants of India and Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the consolidated financial statements are prepared by the Company. The audited consolidated financial statements together with auditors'' report for the financial year ended 31st March 2018 are attached with this annual report. In terms of the explanations given in Ind AS 28, the financial statement of Associate Company namely EDAC Automation Ltd, wherein the Company holds 49.99% equity stake, has not been taken into account for consolidation as the Company has no significant influence over the aforesaid Associate Company.


Your Directors take this opportunity to express their gratitude to Company''s Bankers, NBFCs, Customers, Suppliers, Govt. Departments and other business associates for their unstinted support extended to the Company. Your Directors wish to place on record, their appreciation of the efficient and dedicated services rendered by the employees at all levels across the Company. We are sincerely grateful to all the shareholders for their confidence, faith and support in the endeavours of the Company.

For and on behalf of the Board

Place : Chennai Ashwin C Muthiah

Date : 15th May, 2018 Chairman

स्रोत: रेलीगरे टेचनोवा

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