મેટ્રિક્સ
 
 
ઇન્સીલ્કો ડિરેક્ટર્સ રિપોર્ટ, ઇન્સીલ્કો ડિરેક્ટર્સ દ્વારા રિપોર્ટ

ઇન્સીલ્કો

બીએસઈ: 500211  |  ઍનઍસઈ : INSILCO  |  ISIN: INE901A01011  |  Chemicals

શોધો ઇન્સીલ્કો કનેક્શન � Mar 16
ડિરેક્ટર્સ રિપોર્ટ વર્ષાન્ત : Mar '18

Dear Members,

The Directors are pleased to present the 30th Annual Report together with the Audited Accounts for the Financial Year ended March 31, 2018.

1. EXTRACTS OF THE ANNUAL RETURN

I. Registration and Other Details

Corporate Identity Number (CIN)

L34102UP1988PLC010141

Name of the Company

Insilco Limited

Registration Date

19th October 1988

Category/Sub category of the Company

Limited by Shares and having share capital

Address of the Registered Office and Contact Details

A-5, UPSIDC Industrial Area, P.O. Bhartiagram, Gajraula, Uttar Pradesh-244 223, India

Contact Details :

Contact No. : 09837923893, 09837823893,

Fax No. : (05924) 252348 Email : Insilco@evonik.com Website : www.insilcoindia.com

Whether Listed Company, if yes, name of the Stock Exchange where listed

Yes, at Bombay Stock Exchange Limited (BSE)

Scrip ID at BSE

500211

Name, Address and Contact details of Registrar and Transfer Agent

MCS Share Transfer Agent Limited

F-65, 1st Floor, Okhla Industrial Area, Phase - I,

New Delhi - 110020

Contact Details :

Contact No. : (011) 41406149-52

Fax No. : (011) 41709881

E-mail : helpdeskdelhi@mcsregistrars.com

II. Principal Business Activity of the Company

Business activity contributing 10% or more of the total turnover of the Company.

Name and Description of main products/services

NIC Code of the Product/ Service

% to total turnover of the Company

Precipitated Silica

20116

100%

III. Particulars of Holding, Subsidiary and Associate Companies

Name & Address of the Company

CIN/GLN

Holding/Subsidiary/Associate

% of Shares held

Applicable

Section

Evonik Degussa GmbH Rellinghauser Strasse 1-1145128, Essen, Germany

Not Applicable

Holding

73.11

2(46)

Your Company does not have any Subsidiary or Associate Company.

IV. Shareholding Pattern (Equity Share Capital Breakup as Percentage of Total Equity)

i) Category-wise Shareholding

S.

No.

Category of Shareholder

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

%

Change during the year

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

(A)

Promoters

Foreign

Bodies

Corporate

11,357,645

34,495,670

45,853,315

73.11

45,853,315

0

45,853,315

73.11

0.00

Total Share holding of Promoter (A)

11,357,645

34,495,670

45,853,315

73.11

45,853,315

0

45,853,315

73.11

0.00

(B)

Public

shareholding

(1)

Institutions

(a)

Mutual Funds/ UTI

0

14,060

14,060

0.02

0

14,060

14,060

0.02

0.00

(b)

Financial

Institutions/

Banks

330

23,350

23,680

0.04

330

23,350

23,680

0.04

0.00

(c)

Foreign

Institutional

Investors

0

0

0

0.00

0

0

0

0.00

0.00

Sub-Total (B)(1)

330

37,410

37,740

0.06

330

37,410

37,740

0.06

0.00

(2)

Non

institutions

(a)

Bodies

Corporate

(i)

Indian

2,364,504

82,880

2,447,384

3.90

2,229,881

82,280

23,12,161

3.69

(0.21)

(ii)

Overseas

165,080

0

165,080

0.26

165,080

0

165,080

0.26

0.00

(b)

Individuals

(i)

Individual shareholders holding nominal share capital up to Rs 1 lakh

7,447,011

2,633,027

10,080,038

16.08

7,674,245

2,556,947

10,231,192

16.31

0.23

(ii)

Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

4,063,275

0

4,063,275

6.48

3,992,840

0

3,992,840

6.37

(0.11)

(c)

Any Other

(i)

Non Resident Indians

66,858

1,270

68,128

0.11

121,362

1,270

122,632

0.20

0.09

(ii)

Trust

40

0

40

0.00

40

0

40

0.00

0.00

Sub-Total (B)(2)

14,106,768

2,717,177

16,823,945

26.83

14,183,448

2,640,497

16,823,945

26.83

0.00

Total Public Shareholding (B)= (B)(1) (B)(2)

14,107,098

2,754,587

16,861,685

26.89

14,183,778

2,677,907

16,861,685

26.89

0.00

GRAND TOTAL (A) (B)

25,464,743

37,250,257

62,715,000

100

60,037,093

2,677,907

62,715,000

100

0.00

ii) Shareholding of promoters

Shareholding at the beginning of the year

Shareholding at the end of the year

Share

holders Name

No. of Shares

% of total shares of the Company

% of Shares Pledged / encumbered to total shares

No. of Shares

% of total shares of the Company

% of Shares Pledged / encumbered to total shares

% change in shareholding during the year

Evonik Degussa GmbH

45,853,315

73.11

0.00

45,853,315

73.11

0.00

0.00

iii) Change in Promoters’ Shareholding: There was no change in the promoters'' Shareholding during the Financial Year 2017-18. As on 31st March 2017, the dematerialized shares of promoter were 11,357,645 out of a total shareholding of 45,853,315. By 31st March 2018, the entire shareholding was converted into dematerialsed mode.

iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): The shareholding pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) is attached as Annexure 1.

v) Shareholding of Directors and Key Managerial Personnel: Directors or Key Managerial Personnel did not have any shareholding in the Company during the Financial Year 2017-18.

V. Indebtedness

Your Company did not have any secured loans, unsecured loans or deposits at the beginning of the year and at the end of the year.

VI. Remuneration of Directors and Key Managerial Personnel:

A. Remuneration to Managing Director and Whole-time Director

(Amount in Rs.)

Name of Managing Director (MD)/ Whole-time Director

S.

Particulars of Remuneration

Mr. Brijesh Arora

Total

No.

(MD)

1

Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961

6,048,640

6,048,640

(b) Value of perquisites u/s 17(2) of Income-tax Act, 1961

489,233

489,233

(c) Profits in lieu of salary under section 17(3) of

-

-

Income-tax Act, 1961

2

Stock Option

-

-

3

Sweat Equity

-

-

4

Commission

a. As % of profit

-

-

b. Other, specify

-

-

5

Other, please specify

-

-

Total (A)

6,537,873

6,537,873

Ceiling as per the Act1

16,800,000

16,800,000

1Remuneration paid is within the limit calculated as per provisions of Section II, Part II of Schedule V of the Companies Act, 2013 , which does not include (i) contribution to PF, superannuation fund or annuity fund to the extent either singly or put together are not taxable under the Income-tax Act, 1961, (ii) Gratuity payable at a rate not exceeding half a month''s salary for each completed year of service and (iii) encashment of leave at the end of the tenure.

B. Remuneration to Other Directors (Amount in Rs.)

S.

No.

Particulars

Fee for attending Board & Committee Meetings

Commission

Others,

please

specify

Total

I.

Independent Directors

1

Mr. Dara Phirozeshaw Mehta

500,000

-

-

500,000

2

Ms. Sonia Prashar

340,000

-

-

340,000

Total (I)

840,000

-

-

840,000

II.

Other Non-executive Directors

1

Ms. Meng Tang

-

-

-

-

2

Mr. Harish Kumar Kanaiyalal Davey2

-

-

-

-

3

Mr. Christian Schlossnikl

-

-

-

-

4

Mr. Sanjeev Taneja3

-

-

-

-

Total (II)

-

-

-

-

Total (I II) (B)

840,000

-

-

840,000

Overall ceiling as per the Companies Act, 2013

The ceiling for independent directors are such sum as may be decided by the Board of directors thereof which shall not exceed one lakh rupees per meeting of the Board or committee thereof.

The ceiling for other non-executive directors are 1% of the net profits of the Company calculated as per Section 198 of the Companies Act, 2013.

Total Managerial Remuneration (A B)

7,377,873

D. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (Amount in Rs.)

S.

No.

Particulars of Remuneration

Key Managerial Personnel

Total

Ms. Shivangi Negi (CFO)

Mr. Sarvesh Kr. Upadhyay (Company Secretary)

1

Gross salary

(a) Salary as per the provisions

1,265,880

1,112,400

2,378,280

contained in Section 17(1)

of the Income-tax Act, 1961

(b) Value of perquisites under section

67,871

6,055

73,926

17(2) of Income-tax Act, 1961

(c) Profits in lieu of salary under

-

-

-

section 17(3) of Income-tax Act, 1961

2

Stock Option

-

-

-

3

Sweat Equity

-

-

-

4

Commission

a. As % of profit

-

-

-

b. Other, specify

-

-

-

5

Other, specify

-

-

-

Total (A)

1,333,751

1,118,455

2,452,206

VII. Penalties / Punishment / Compounding of Offences: There was no penalty / punishment / compounding fee imposed on the Company / Directors / any other officer of the Company under the provisions of the Companies Act, 2013.

2 Mr. Davey ceased to be a Director w.e.f. 10th July 2017 due to his unfortunate death.

3 Mr. Sanjeev Taneja was appointed as an Additional Director w.e.f. 1st February 2018.

2. NUMBER AND DATES OF MEETINGS OF THE BOARD AND ATTENDANCE OF THE DIRECTORS

The Board duly met 5 times in the Financial Year 2017-18 on 16th May 2017, 18th July 2017, 5th September 2017, 4th December 2017 and 1st February 2018. The attendance of the Directors in the Board meetings is given in clause no. 2.3(C) of Corporate Governance Report.

3. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors'' state that;

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with a proper explanation relating to material departures;

(b) the directors had 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 had 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 for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliances with the provisions of all applicable laws and that such systems were adequate and operating effectively.

4. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF DIRECTORS ETC.

Pursuant to Section 178(1) of the Companies Act, 2013 and Clause 19 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the “Listing Regulations”), the Board of Directors has constituted a Nomination and Remuneration Committee. A Nomination and Remuneration Policy of the Company has also been laid down and approved by the Nomination and Remuneration Committee and the Board. The said policy lays down the criteria for the appointment of Directors, Key Managerial Personnel and Senior Management Personnel. The said policy also specifies the appointment and remuneration including criteria for determining qualification, term/tenure, positive attributes, independence of Directors, criteria for performance evaluation of Executive and Non-executive Directors (including Independent Directors), removal, policy on Board diversity, Directors and Officers'' Insurance and other matters as prescribed under the provisions of the Companies Act, 2013 and the Listing Regulations. The said policy of the Company is attached as Annexure-2 to this report.

5. SECRETARIAL AUDIT

Nityanand Singh & Co. a firm of Company Secretaries having its address at 14, 2nd Floor, Arjun Nagar, Safdarjung Enclave, New Delhi - 110029 has conducted the Secretarial Audit of the Company for the Financial Year 2017-18. The Secretarial Audit Report issued by the said firm is attached to this report as Annexure-3.

6. EXPLANATION OR COMMENTS BY THE BOARD ON QUALIFICATIONS, RESERVATIONS, ADVERSE REMARKS OR DISCLAIMERS MADE BY STATUTORY AUDITOR AND SECRETARIAL AUDITOR IN THEIR RESPECTIVE REPORTS

The reports of Statutory Auditor and Secretarial Auditor do not contain any qualifications, reservations, adverse remarks or disclaimers.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year, the Company had not entered into any transaction of loan, guarantee or investment under Section 186 of the Companies Act, 2013.

8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of Contracts or arrangements with related parties are given in form AOC 2 which is attached as Annexure- 4 to this report.

Pursuant to the provisions of the Companies Act, 2013 and Clause 23 of the Listing Regulations, the Board has laid down a policy on dealing with related party transactions and the same is available on the website of the Company at the following link: http://www.insilcoindia.com/policies.htm.

9. THE STATE OF THE COMPANY’S AFFAIRS

A. Financial Highlights

The summarized results for the year, rounded off to Rupees in millions, are given below:

Particulars

Year Ended 31.03.2018

Year Ended 31.03.2017

Gross Turnover

888.04

957.85

Less: Excise duty

(22.17)

(91.43)

Turnover (net of excise duty)

865.87

866.42

Other Income

39.77

66.90

Total Expenditure (excluding excise duty)

(886.05)

(855.68)

Profit before Depreciation & Exceptional Items

19.59

77.64

Depreciation

(19.17)

(17.17)

Profit/ (Loss) for the year before exceptional items

0.42

60.47

Exceptional items

-

(4.16)

Profit/(Loss) before tax

0.42

56.31

(Provision for)/Release of Taxation

3.22

(7.24)

Profit/(Loss) after tax

3.64

49.07

Other comprehensive income

1.65

(2.63)

Total comprehensive income for the year

5.29

46.44

B. Results of Operations

Sales of Precipitated Silica during the year were 15,207 MT (previous year 14,939 MT). The Production during the year was 14,857 MT (previous year 15,023 MT).

Your Company achieved a sales turnover of Rs. 888 million during the year as compared to Rs. 958 million in the previous year. The sales turnover during the year includes excise duty of Rs. 22 million as compared to Rs. 91 million in previous year. The excise duty of Rs. 22 million is for 3 months (April 17 to June 17) as it was discontinued effective 1st July 2017 upon implementation of the Goods and Service Tax (GST) in India whereas Rs. 91 million is for 12 months (April 16 to March 17). GST is not considered as part of sales turnover. The sales turnover (net of excise duty) during the year is Rs. 865.87 million as compared to Rs. 866.42 million in previous year. The Company recorded a profit before depreciation and exceptional items of Rs. 19.59 million as compared to profit of Rs. 77.64 million in the previous Financial Year. The Company had reserves of Rs. 380 Million as on 1st April 2017. The total comprehensive income for the Financial Year 2017-18 was Rs. 5 Million.

The Company is endeavoring to increase its turnover and profit. The Company is looking for optimum utilization of its assets and other resources so that the journey of profitable growth is continued. With the support of Evonik, we continue to make efforts to optimize energy utilization, manufacture high quality products, improve plant safety, improve efficiency and higher capacity utilization. We are providing quality product, application and technical support and overall service to the Customers.

C. Future Outlook

The financial year 2017-18 has been a year marked with both excitement and challenges for the Indian economy. Structural changes have been made in the indirect tax system by the introduction of Goods and Service Tax (GST). The effect of demonetization and implementation of Goods and Service Tax seems to be over now and it is expected that it will boost the economy. Organized players like us would be long term beneficiaries of the same. GST data shows significant rise in the number of taxpayers. The GDP growth for Financial year 2018-19 is expected in the range of 7% to 7.5%. The Indian economy is improving and showing potential for growth.

Your Company continues to enjoy a high standing with its customers because of its quality, value added services and strong technical support from parent Company. Besides, it is actively considering the installation of a “Propane LPG project” at its plant to reduce the energy costs and is pursuing all growth opportunities to improve the results. The quality conscious customers are showing faith in our quality products. The Company is actively trying to increase its customer base. It has added some new customers and also regained some lost customers. However, the future growth of the Company will depend upon our ability to optimize our costs by making our products more competitive, increasing capacity utilization, optimal product mix, efficiency improvement and the willingness of customers to pay a premium for our high quality products. There are inherent opportunities available for the Company in the target industries such as Tyres, Automotive Components, Mechanical Rubber Goods, Footwear, Battery Separators, Agrochemicals, Food and Feed. The silica applications in all these industries are growing rapidly. The Company is continuously improving safety, plant condition, efficiency and yield. The Company is actively pushing growth opportunities to use the unutilized production capacity and improve product mix.

Others

- Evonik India Private Limited (EIPL) is handling the marketing and sales promotions of the products of the Company in India, Bangladesh and Srilanka. Until 30th June 2017, EIPL was getting a commission of 2% on the net sales of Insilco Limited within India excluding sales made through dealers/distributors in India, though EIPL was responsible for the sales of dealers/distributors in India. EIPL was also responsible for the sales in Bangladesh and Srilanka, however, they were not eligible for any commission on the same. W.e.f. 1st July 2017, EIPL has become eligible for commission of 3.25% on the net sales of Insilco Limited within India including sales through dealers/distributors in India. Commission for sales in Bangladesh and Srilanka has been introduced at the rate of 1.5% and 1% respectively with effect from 1st July 2017.

- The Board has approved capital expenditures for Propane LPG Project, Distributed Control System, roof of Dryer Chamber, Autoclave Weighing System, and Firefighting Equipments etc. Our parent Company Evonik is providing technical support wherever required.

- These financial statements are the first financial statements of the Company under Indian Accounting Standard (IND AS) as per the Companies (Indian Accounting Standards) Rules, 2015. The financial statements up to the year ended 31st March 2017 were prepared in accordance with the accounting standards notified under the Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act.

- Please refer to note 38 of the audited financial results for the financial year 2017-18 for an explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows.

10. TRANSFER TO RESERVES

The Company had reserves of Rs. 380 Million as on 1st April 2017. The total comprehensive income for the Financial Year 2017-18 was Rs. 5 Million. Therefore, the closing balance of the reserves and surplus as on 31st March 2018 amounted to Rs. 385 Million.

11. DIVIDEND

No dividend is recommended considering the operational performance of the Company.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF REPORT

There are no material changes and commitments 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 this report.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The details of conservation of energy, technology absorption, foreign exchange earning and outgo during the year are as follows:

A. Conservation of Energy

Your Company always emphasizes on conservation of Energy and Natural Resources. The Company is giving priority to energy conservation measures including a regular review of energy generation, consumption and effective control on utilization of energy.

The Company has reduced product change over time in the production process and improved energy efficiency. During the financial year 2017-18, the Board has approved a switch in the source of energy from High Speed Diesel to propane-LPG system for drying activity by implementing propane-LPG system at the Gajraula Plant of the Company. This will result in a significant cost reduction.

Due to plant upgradation system, fuel efficiency has improved and overall energy consumption (Power & HSD) has reduced per ton of Silica.

B. Technology Absorption

1. The effort made towards technology absorption

The technology for manufacture of various grades of Precipitated Silica has been supplied by the parent Company, Evonik Degussa GmbH, Germany. We believe that it is important, that in future we can offer an even broader technology support/base to meet our customers'' growing long-term needs. The modification of process, equipment and products are carried out to meet changes in market requirements and to improve operational efficiency.

2. Benefits derived from the above efforts

Focus on value added products, technical support to customers, optimum utilization of resources for production and higher yield.

3. Technology imported during the last three years

The Company has not imported any technology during the last three years reckoned from the beginning of the Financial Year.

4. Expenditure on Research and Development

The Company has not incurred any expenditure on Research and Development.

C. Foreign Exchange earnings and outgo

The Foreign Exchange earnings in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows were as follows:

(Rs. in ‘000)

Total Foreign Exchange used

Year ended

Year ended

and earned

31st March 2018

31st March 2017

a) Total Foreign Exchange earned

8,671

3,939

b) Total Foreign Exchange used

10,104

9,152

14. STATEMENT ON RISK MANAGEMENT POLICY

The Board of Directors has developed and implemented a Risk Management Policy for the Company. The Company has taken proper initiatives to mitigate risks. In the opinion of the Board there are following risks which could threaten the existence of the Company:

1. Risk of HSD (Diesel) prices going up substantially.

2. Loss of Market Share if our product rates are significantly higher than competitors.

3. Environmental Risk if more stringent norms are introduced by government for chemical industries near the Ganga River.

The Board has also taken certain steps to minimize the same and its current status are given below:

Risks

(i) Risk of HSD (Diesel) prices going up substantially; and

(ii) Loss of Market Share if our product rates are significantly higher than those of competitors

Current Status of Action Taken :

To minimize the aforesaid risk, the Board had earlier approved to switch the source of energy from High Speed Diesel to Coal for drying activity by implementing a Coal Fired Hot Air Unit at Gajraula Plant of the Company. Accordingly, the following activities were completed in respect of the Coal project:

1. NOC for Coal Project has been received from UPPCB, Lucknow.

2. Basic & Extended basic engineering of tube bundle is completed.

3. Required information for HAZOP safety analysis has been provided to Evonik and it is under evaluation.

Meanwhile on 18th July 2017, the Board resolved to explore other sources of energy for the drying activity in the manufacturing process besides the Coal Project to reduce existing cost of energy. Accordingly, after evaluation by Evonik, Germany, the installation of propane-LPG system was approved by the Board of Insilco on 4th December 2017. In this regard, the Company has received approval from Petroleum & Explosives Safety Organisation (PESO), Ministry of Commerce & Industry. The Company had applied to Uttar Pradesh Pollution Control Board (UPPCB) for a No Objection Certificate in December 2017. The Company is also in the process of obtaining approvals from other appropriate authorities.

The Company is also continuing a system of tracking of its vendor''s raw material cost to correlate the prices of the Company''s purchases with them.

(iii) Environmental Risk if more stringent norms are introduced by government for the chemical industry near the Ganga River

We are presently complying with all the existing pollution control norms and water/air consent conditions.

The introduction of any new more stringent norms, if any, is beyond the control of the company and it is impossible to comment on likely impact or mitigation measure at this stage for these risks.

In this regard, the shareholders are hereby informed about the following:

NGT Matter

The members are hereby further informed that there was a case pending in the Hon''ble National Green Tribunal (NGT) for cleaning of river Ganga. The NGT has pronounced its detailed judgement dated 13th July 2017 in the said matter. The complete details of this matter is given below in point no. 15 i.e. “Ganga Cleaning Matter with NGT”.

Water and Air Consent

The Company has already received electronic approval in May 2018. The physical copy of the consent orders alongwith detailed conditions are yet to be received.

The Board has also approved a Risk Management Policy, which is available on the website of the Company at the following path: http://www.insilcoindia.com/policies.htm .

15. GANGA CLEANING MATTER PENDING IN THE NATIONAL GREEN TRIBUNAL

The members are hereby informed that your Company received a letter from Uttar Pradesh Pollution Control Board (UPPCB) dated 27th January 2017 calling upon it to appear before the National Green Tribunal (NGT) on 6th February 2017 in the matter of M. C. Mehta Vs. Union of India and Others (Original Application No. 200/2014) i.e. matter of cleaning of Ganga. The said letter was issued to various industrial units located near the Bagad River. On 6th February 2017, NGT issued a show cause notice to all the industrial units at Gajraula on the ground of pollution including Insilco Limited and asked as to why they should not be directed to shut down their units forthwith. The Company had filed its detailed reply with NGT.

However, the matter was not heard and on 24th April 2017, the NGT formed a special high power inspection team consisting of various high level government officials (hereinafter referred as ‘Joint Inspection Team'') and directed them to visit Industries in Gajraula Industrial Area on 25th April 2017 and to report their observations on 26th April 2017 to NGT. The Joint Inspection Team visited 13 industries in Gajraula and submitted their observations verbally to the NGT on 26th April 2017. The NGT passed its order dated 26th April 2017 on the basis of the verbal observations explained to the NGT. For Insilco Limited, the order of NGT dated 26th April 2017 inter-alia stated that Insilco is using fresh water for dilution of treated effluent which is impermissible. Insilco is prescribed with the limit of Sodium Absorption Ratio (SAR). Since Insilco has to maintain that ratio, rather than treating the same appropriately, it is diluted by adding fresh water and with Magnesium Sulphate so that it does not exceed the prescribed limit. This is practically a fraud being played. Similarly, the said order included various negative comments for other industries in Gajraula.

Based on these observations, the NGT ordered the shut down of all the 13 units including Insilco Limited in Gajraula Industrial Area. NGT has given an option to them to come up with future plans of compliance for resuming operability of the Company and in this regard the matter was scheduled to be heard on 8th May 2017.

The shareholders are hereby informed that the aforesaid order of the NGT dated 26th April 2017 was not on the merits and that our plant at Gajraula has always been in full compliance with the applicable pollution norms.

The report of the Joint Inspection Team was uploaded on the website of Central Pollution Control Board on late evening of 4th May 2017.

The observations of the said report for Insilco were that:

1. The industry generates effluent having high Total Dissolved Solid (“TDS”);

2. The unit should opt for Zero Liquid Discharge (ZLD);

3. The unit should adopt recovery of salt (Na2SO4) with any appropriate system and explore possibilities of re-use of treated water at nearby industries; and

4. The unit should stop using fresh water dilution for reducing SAR in order to comply with the consent condition.

The report recommended that (i) the unit shall stop using fresh water dilution for reducing the SAR in order to comply with the consent condition; (ii) the treated water may be used at nearby industries so that the overall stress on the ground water in the area is reduced. This approach shall be through MoU and consent of UPPCB.

Insilco Limited filed its reply in the NGT on 5th May 2017 along with a reply to the observations/recommendations made in the report of the Joint Inspection Team. The reply of Insilco Limited filed with NGT, inter alia, included the following points reply to the observations of the said report:

1. That no TDS limit has been prescribed for Insilco Limited in the water consent conditions and all such applicable conditions of consent to operate are being complied with.

2. That Insilco Limited does not fall within the Red Category of Industries of Central Pollution Control Board (CPCB) / Ministry of Environment and Forest (MOEF) and is also not included in the 17 categories of highly / seriously polluting industries identified by CPCB and MOEF, such as Pharmaceuticals, Chlor Alkali, Fertilizers,

Pesticides, Petrochemicals, Large Power Plants, Cement, Aluminum, Zinc, Copper, Iron & Steel, Large Pulp & Paper, Distillery, Sugar, Oil Refinery, Dye and dye intermediate and Tannery. That the CPCB as per the advice of NGT has come out with ZLD requirement for industries and ZLD is prescribed only for 5 industries i.e. Distillery, Tannery, Textiles, Pharmaceuticals and Dye and Dye Intermediaries. Insilco Limited does not fall under these prescribed industries and hence the requirement of ZLD is not applicable on Insilco.

3. That for recovery of salt (Na2SO4) with any appropriate system and exploring the possibilities of re-use of treated water, Insilco Limited has reached out to various recognized scientific institutions of the country, including Delhi Technological University (DTU) (Formerly known as Delhi College of Engineering); The Indian Institute of Technology (IIT), Kanpur; and the Department of Chemical Engineering, Malaviya National Institute of Technology, Jaipur for availing of their assistance and expertise in finding some techno-commercial viable method for the following:

i. Reducing Sodium Sulphate to the maximum extent possible and recover the same for other uses in terms of the suggestion made in the Report;

ii. Reduce water consumption in the manufacturing process in terms of the suggestion made in the Report; and

iii. Recycle and reuse of treated water in terms of the suggestion made in the Report.

4. That Insilco is complying with the conditions of water consent including conditions with respect to SAR.

This matter was heard on 8th May 2017. The Company pleaded that the recommendations with regard to ZLD were not practical for our plant and pollution authority should prescribe some appropriate method. After the hearing, the Plant of the Company was allowed to resume operations subject to the following directions:

1. The industry would pay a sum of INR 1.5 Million voluntarily and it is only upon payment of that amount to the Central Pollution Control Board (CPCB) that it would be permitted to operate.

2. The industry will comply with all the recommendations and directions contained in the Joint Inspection Report immediately and without delay and default.

3. In regard to Zero Liquid Discharge (ZLD) and whether the dilution of 1/1 should be permitted, the industry would put forward it case before the Joint Inspection Team which will offer its comments and place the Report before the Tribunal.

4. The industry will obtain positively the permission from the CGWA now without any delay.

5. The Joint Inspection Team shall place complete and comprehensive Report including the source, quantum and quality of the ground water that is being extracted.

6. The inspection report should be submitted before the Tribunal within two weeks from the date of order (i.e. 8th May 2017).

The order dated 8th May 2017 also stated that if the industry fails to comply with these directions, it should be liable to be closed without any further notice.

Pursuant to the order of NGT dated 8th May 2017, Insilco deposited INR 1.5 Million with Central Pollution Control Board on 9th May 2017 and restarted its production from late evening of 9th May 2017.

As directed by the NGT in its order dated 8th May 2017, the Joint Inspection Team visited the plant of Insilco at Gajraula on 23rd May 2017. The existing full compliance status along with the measures taken for improvement were explained by the Company to the inspection team. However, as on the date of the signing of this report, the Company is yet to receive the report of the Joint Inspection Team. The NGT, on 13th July 2017 pronounced its detailed judgement in this matter where it has given certain specific directions with respect to Bagad River (drain), besides general directions, which are as follows:

Specific Directions

a) The Bagad river (drain) inclusive of Mahua, should be cleaned, dredged and maintained as a river or storm water drain.

b) All the 12 industries located in the catchment area of this drain, which are highly polluting should be put under strict surveillance by the UPPCB as well as the Joint Inspection Team.

c) The Joint Inspection Team has already been directed to inspect these industries to conform with appropriate conditions for permitting and operating all these functions.

d) These industries have been directed to comply with the conditions of the consent order and directions issued by the Joint Inspection Team under the provisions of the Water (Prevention and Control of Pollution) Act, 1974 and the Environmental (Protection) Act, 1986.

e) In the event of these industries not complying with such directions, they shall be liable to be closed without any further notice.

f) The Joint Inspection Team and the UPPCB shall submit compliance report in relation to these industries before the Tribunal upon regular intervals.

The detailed judgement of the NGT dated 13th July 2017 can be accessed at the website of NGT at the following link: http://www.greentribunal.gov.in/judge courtI.aspx. It can be searched through ‘party name'' or ‘date of judgement'' or ‘bench judgement i.e. court-I''.

The Company has also filed a Caveat before the NGT so that no inspection reports can be taken on record / no orders be passed in the matter without service of report on the Company and nothing be done in this regard without giving an opportunity to the Company of being heard.

After the above judgement dated 13th July 2017, the following important developments/correspondence have taken place:

* The Company had received a letter dated 13th November 2017 from Central Pollution Control Board, based on inspection of special high power committee, asking for appropriate reason/clarification about high TDS effluent discharge.

Insilco had replied to the said letter stating that Insilco has been complying with the conditions under issued water consent order by UPPCB. We have further stated that no TDS level for the effluent discharge has been prescribed for the unit of Insilco and instead Insilco''s unit is required to maintain SAR limit which is being complied with along with all other conditions of water consent issued by UPPCB.

We had also shared the steps taken to improve Insilco''s infrastructure.

* The Company had received a letter dated 12th January 2018 from UPPCB intimating various observations of joint inspection team which had inspected Insilco''s factory at Gajraula on 23rd May 2017 pursuant to the order of Hon''ble NGT dated 8th May 2017.

The observations were as follows:

1. The Unit required to recalculate the dosing of magnesium sulphate to meet the SAR standard.

2. In a time bound manner the unit shall discontinue the present chemical addition (10 Tons of MgSO4) and further dilution of ground water (1800 to 2000 KLD) to meet the prescribed SAR value (26). Instead unit may switch over to complete ZLD (Zero Liquid Discharge technology) system to save ground water and wastage of chemicals for neutralization. Presence of Fluoride (5 to 6 mg/1) also indicates that rather than dilution, ZLD may be the only option for achieving and continuity of the unit.

3. Presence of inorganic pollutants in the storm water indicates poor operation and maintenance of the plant and suspected partial diversion of effluent or negligent handling of sludge by the unit, which may require further investigation.

4. The Unit shall operate STPs continuously.

5. Closure of the unit may be considered, if the unit failed to provide the time bound action plan for achieving ZLD.

Insilco had replied to the said letter on 19th January 2018. Point wise summary of the reply is as follows:

1&2. Insilco has appointed ‘Indian Institute of Technology, Roorkee'' (IIT-R) to carry on R & D activity for “investigation of a few alternative remedies to mitigate the high sulphate / high Total Dissolved Solid (TDS) in wastewater of our plant and suggestion for economical viable solution with its capex cost and operating cost. These observations will be addressed after the receipt of final report of IIT-R.

Insilco''s letter also explained to UPPCB that SAR was imposed specifically on the unit of Insilco pursuant to the order of Hon''ble Supreme Court, with which Insilco has been complying along with other applicable pollution norms and consents.

3. Insilco had mentioned that it has also been getting the samples at Effluent Treatment Plant (ETP) outlet (from V-notch) tested by a third party on a regular basis and the value of fluoride remains in the range of 1 to 1.5 mg/l. The IIT-R had also taken the sample for their testing and their interim report concludes Fluoride values as 1.6 mg/l in final discharge. Insilco had requested UPPCB, that, if required, they could collect the sample again which could be sent to testing to any independent agency or IIT-R.

4. Insilco had said that for the best interest of the Company and environment, it will operate its STPs.

5. Insilco had stated that it had appointed IIT-R to carry on R & D activity for “investigation of a few alternative remedies to mitigate the high sulphate / high Total Dissolved Solid (TDS) in wastewater of our plant and suggestion for economical viable solution with its capex cost and operating cost. After reports on the same by IIT-R, options of ZLD could be explored.

Insilco had further explained to UPPCB that on Insilco''s industry ZLD could not be achieved and the reasons of the same given were as follows:

* Central Pollution Control Board''s (CPCB''s) in one of its guidelines has instructed all pollution control boards and other departments that the ZLD requirement is possible only for the few specified industries and Insilco is not falling into those specified industries. Insilco in its letter also said that CPCB has also concluded that for other highly water consuming/polluting industry, ZLD is not techno economically viable and CPCB has only suggested water conservation and minimization procedure.

* Insilco Limited is not in the list of 17 categories of highly / seriously polluting industries identified by CPCB

* Detailed judgement of Hon''ble NGT dated 13th July 2017 in the matter of M. C. Mehta vs. Union of India (Original Application no. 200/2014), of which Insilco Limited is one of the respondent, has inter-alia, categorically instructed pollution authorities that ZLD would not be applied to the industrial units straight away and it shall be on a case to case basis particularly with reference to the load of effluent being discharged, quality of effluents, etc. This should have reference to the financial viability as well.

Insilco had also said that it had received an NOC from Central Ground Water Authority (CGWA) for Ground Water Abstraction.

Insilco had also shared the steps taken to improve Insilco''s infrastructure.

Further, requirement to achieve ZLD is a highly energy intensive process and by adopting ZLD the carbon Foot print will be increased which is against our National Climate Change Policy.

The Company has received electronic approval in response to its application for renewal of air and water consent. Physical approval of air and water consent along with detailed conditions to operate is yet to be received.

The Board believes that the Company has a strong case in its favour as the Company continues to comply with all the current pollutions norms applicable to it as per consent letter. However, it may be possible that the pollution authorities may come up with fresh requirement(s) for compliance in the conditions of consent letter, which will then have to be examined and considered.

16. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Board of Directors of the Company has laid down a policy on prevention of sexual harassment at the workplace. A Complaint Committee has also been formed by the Board of Directors to look into the complaints received, if any. During the year, the Company did not receive any complaint under the said policy. The said policy is available on the website of the Company at the following link: http://www.insilcoindia.com/policies.htm .

17. CORPORATE SOCIAL RESPONSIBILITY (CSR) OF THE COMPANY

Pursuant to the provisions of Section 135 of the Companies Act, 2013, CSR policy does not apply to your Company. Accordingly, your Company has not formed CSR Committee.

18. STATEMENT ON ANNUAL EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

The Board has laid down the manner and criteria of evaluation of the Board of its own, Committees and Individual Directors in which annual evaluation of the Board, Committees of the Board and Individual Directors would be evaluated. The said criteria are aligned with the SEBI circular dated 5th January 2017 on ‘Guidance Note on Board Evaluation''. The evaluation includes various criteria including performance, knowledge, roles and responsibilities etc.

The Board of Directors has evaluated its Committees, Individual Directors (i.e. Executive and Non-executive Director) and the Board itself. After evaluation, the Board found their performances upto the mark and satisfactory. The Nomination and Remuneration Committee has also evaluated the individual performance of each Director and found it satisfactory.

19. WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(10) of the Companies Act, 2013 and Clause 22 of the Listing Regulations, the Company has established a “Whistle Blower Policy” for employees to report to the management instances of unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The said mechanism is available to all the employees of the Company and operating effectively. During the year, the Company has not received any complaint through such mechanism. A copy of the said policy is available on the website of the Company at the following path: http://www.insilcoindia.com/policies.htm.

20. CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, your Company has not changed the nature of its business.

21. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

Sad demise of Mr. Harishkumar Kanaiyalal Davey

With huge regret, the Shareholders are hereby informed of the sad demise of Mr. Davey on 10th July 2017. Mr. Davey joined the Board on 4th August 2016. In his short tenure, Mr. Davey made a significant contribution to the sound management of the business of the Company. The unexpected passing away of Mr. Davey will be an irreparable loss to the Company and all the directors and the employees of the Company convey deep sympathy, sorrow and condolences to his family.

We bid farewell to our esteemed Director with deep mourning and gratitude.

Change in Directors and KMP

To strengthen the Board, the Board had appointed Mr. Sanjeev Taneja as an Additional Director (Non-Executive NonIndependent Director) of the Company with effect from 1st February 2018. Mr. Sanjeev Taneja will hold office as an Additional Director up to the date of 30th AGM. In the said AGM, the Shareholders of the Company will consider the appointment of Mr. Sanjeev Taneja as a Director of the company liable to retire by rotation.

Mr. Sanjeev Taneja has approximately 30 years of rich and versatile experience, which includes extensive experience in the specialty chemicals sector. Mr. Taneja started his career in 1987 as Production & Technical Manager for Degussa A.G., Germany (part of the Evonik Group). Thereafter, he has served various key positions in Evonik. W.e.f. 1st January 2018, Mr. Taneja has been assigned with the responsibility as President of India Region & Managing Director of Evonik India Private Limited. Before his current responsibilities in India, he was working as Vice President South Asia Resource Efficiency Segment in Evonik Industries.

Extensive qualifications of Mr. Taneja include (i) MBA from University of South Alabama, USA, (ii) Chemical Process Engineering Degree from University of Applied Sciences, Germany, and (iii) INSEAD advanced management program.

Term of Independent Directors

The date of commencement of first term of five consecutive years of the below Independent directors are given below along with date of approval by Shareholders:

S. No.

Name of Independent Directors

Date of starting first term

Date of approval in AGM

1

Mr. Dara Phirozeshaw Mehta

1st April 2014

14th August 2014

2

Ms. Sonia Prashar

4th August 2016

26th September 2016

Mr. Dara Phirozeshaw Mehta was appointed as an Independent Director in the 26th Annual General Meeting held in the year 2014 to hold office for a period of 5 consecutive years effective from 1st April 2014 i.e. until 31st March 2019. In terms of Section 149 of the Companies Act, 2013 (‘Act''), an Independent Director is eligible for re-appointment on passing of a Special Resolution. Mr. Dara Phirozeshaw Mehta, being eligible and offering himself for re-appointment, is proposed to be appointed as an Independent Director for a 2nd term of 5 years with effect from 1st April 2019.

In the opinion of the Board, Mr. Dara Phirozeshaw Mehta fulfils the conditions specified in the Act and rules made thereunder for his re-appointment as an Independent Director of the Company and is independent of the management. As per the performance evaluation conducted during his 1st term by the Board (excluding Mr. Dara Phirozeshaw Mehta), his performance was satisfactory as an Independent Director of the Company. The Board and its allied Committees have benefitted from his relevant specialization and expertise. Details on his attendance of various Board and Committee Meetings held during the last financial year are included in the Corporate Governance Report of the Annual Report.

The Board of Directors of your Company recommends the Resolution in relation to the appointment of Mr. Dara Phirozeshaw Mehta as an Independent Director, for the approval by the shareholders of the Company as a Special Resolution.

Directors retiring by rotation

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Christian Schlossnikl shall retire by rotation at the ensuing AGM of the Company and being eligible offers himself for re-appointment. The Board recommends his re-appointment to the members of the Company in the ensuing AGM.

Statement on declaration given by Independent Directors

The members are informed that Independent Directors have given a declaration that they meet the criteria of independence as provided in sub-section 6 of the Section 149 of the Companies Act, 2013.

The Board of the Company also confirms that the Independent Directors fulfill the criteria of being Independent Director as specified under the provisions of the Companies Act, 2013.

Familiarization program for Independent Directors

The Company follows an induction programme for orientation and training of Directors at the time of their joining so as to provide them with an opportunity to familiarize themselves with the Company, its operations, business philosophy and model, roles, rights, responsibilities of Independent Directors in the Company and Policies/Rules and Regulations of the Company.

Thereafter, the Company continues with periodic familiarization process of Independent Directors to keep them upto date with the developments in the Company. The details of such familiarization programme is also displayed on the website of the Company at the following link: http://www.insilcoindia.com/notes.html.

22. DISCLOSURES RELATED TO REMUNERATION OF DIRECTORS AND KMPs

a. Corporate Governance - Disclosures as per provisions of Schedule V, Part II, Section II (B)(iv)(IV)

Mr. Brijesh Arora was appointed as Managing Director w.e.f. 4th August 2016 and disclosure in this regard pursuant to above provisions are given in the Corporate Governance Report attached to this report at Clause no. 3.2(D)(a).

b. Ratio of Remuneration of each Director to median remuneration of employees

Ratio of remuneration of Mr. Brijesh Arora to median remuneration of employees during the Financial Year 2017-18 was 15.61 : 1.

c. Percentage increase in remuneration of each Director and KMP

The annual increment of remuneration of employees is done every year w.e.f. 1st April. The annual increment w.e.f. 1st April 2017 of Director and KMPs are given below in % alongwith current designations i.e. designation as on the date of approval of this report.

Name

Director/KMP

% increase (w.e.f. 1st April 2017)

Mr. Brijesh Arora

Managing Director

16.0%

Ms. Shivangi Negi

KMP (Chief Financial Officer)

12.3%

Mr. Sarvesh Kumar Upadhyay

KMP (Company Secretary)

14.6%

d. Percentage increase in the median remuneration of employees

The percentage increase in the median remuneration of employees in the Financial Year 2017-18 was 8.2%.

e. No. of permanent employees on the rolls of the Company

As on 31st March 2018, your Company had 109 permanent employees on the rolls of the Company. The same does not include trainees.

f. Average percentage increase already made in the salaries of employee other than the managerial personnel in the Financial Year and its comparison with the percentage increase in the managerial remuneration and justification thereof and exceptional circumstances for increase in the managerial remuneration, if any

Particulars

Financial Year 2017-18

Average percentage increase in the salaries of employee other than Managerial Personnel

10.2%

Average percentage increase in salary of Managerial Personnel (Mr. Brijesh Arora - Managing Director)

16.0%

g. Policy compliance affirmation

The remuneration of the Directors and KMP is as per the nomination and remuneration policy of the Company.

23. STATEMENT PURSUANT TO CLAUSE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

During the year, there was no employee of the Company:

- who was employed throughout the Financial Year 2017-18 and was in receipt of remuneration for that financial year of not less than Rs. 10,200,000/-; or

- who was employed for a part of the Financial Year 2017-18 and was in receipt of remuneration at a rate which was not less than Rs. 850,000/- per month; or

- who was employed throughout or part of the Financial Year 2017-18 and was in receipt of remuneration in that Financial Year, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-time Director and holds by himself or along with its spouse and dependent children, not less than two percent of the equity shares of the Company.

Top ten employees in terms of remuneration drawn during the Financial Year 2017-18

S. No.

Name (In Alphabetical Order)

Designation (as on 31st March 2018)

1

Mr. Anurag Srivastava

Senior Manager - Human Resource & Administration

2

Mr. Ashok Kumar Pandey

Vice President - Procurement & Supply Chain

3

Mr. Brijesh Arora

Managing Director

4

Dr. Madan Gopal Sinha

General Manager - Works & Plant Head

5

Mr. Manoj Kumar

Dy. General Manager - Information Technology

6

Mr. Pradeep Kumar

Senior Manager - Environment, Safety, Health and Quality (ESHQ)

7

Mr. Rajeev Agarwal

Senior Manager - Controlling

8

Mr. Sandeep Kumar Gupta

Senior Manager - Engineering

9

Mr. Sarvesh Kumar Upadhyay

Company Secretary

10

Ms. Shivangi Negi

Chief Financial Officer

24. AUDITORS

The members are hereby informed that Price Waterhouse & Co Chartered Accountants LLP, (Firm Registration No. with ICAI - 304026E/E300009) was appointed as Statutory Auditor for the first term of 5 years in the 29th AGM to hold the office from the conclusion of the 29th AGM until the conclusion of the 34th AGM of the Company. Pursuant to the provisions of Section 139 of the Companies Act, 2013, the said appointment was subject to ratification by members at every AGM.

The members are also hereby informed about an appeal of PW India firms (including Price Waterhouse & Co Chartered Accountants LLP), before the Securities Appellate Tribunal (SAT). The members are hereby informed that the Securities and Exchange Board of India (SEBI) had announced the outcome (Order) of its enquiry into audit of Satyam Computer Services Limited (Satyam) carried out by one of the Price Waterhouse (PW) India firms (which was undertaken following disclosure in 2009 of a management led fraud) on the 10th of January 2018. The audit of Satyam itself was not carried by Price Waterhouse & Co Chartered Accountants LLP, the auditors of Insilco Limited. SEBI in its Order imposed a restriction on PW Audit firms [including Price Waterhouse & Co Chartered Accountants LLP] from undertaking statutory audit and other certification work for listed companies and intermediaries registered with SEBI for a period of 2 years against which the PW India firms have filed an appeal before the SAT. The SAT, recognizing the legal principle involved vide its Order dated 15th February 2018 has allowed PW India firms to continue statutory audits and other related certification work for its existing clients until March 2019, or until final disposal of the matter by SAT, whichever is earlier.

In view of the above order, our Statutory Auditor is eligible to conduct audit for the financial year 2018-19. However, SAT may pass orders against PW firms before 31st March 2019. Based on legal opinion received by the statutory auditor, the Board of Insilco are of the view that Price Waterhouse & Co Chartered Accountants LLP will be able to serve as statutory auditor of Insilco Limited for the year ending 31st March 2019 as SAT will be under obligation to protect interest of the companies for whom PW firms are already acting as statutory auditor as per the well-established principles of law.

25. COST AUDITOR/MAINTENANCE OF COST RECORDS

Maintenance of Cost Records for the Financial Year 2017-18

Pursuant to the provisions of the Companies (Cost Records and Audit) Rules, 2014 dated 30th June 2014 as amended vide notification dated 31st December 2014, in the Financial Year 2017-18, the Company is required to maintain cost records. The Board has appointed JSN & Co., Cost Accountant (Registration No. 000455) for maintenance of Cost Records of the products of the Company for the Financial Year ended 31st March 2018. The certificate of Cost records, if any, of the Company will be presented before the Audit Committee/Board in due course of time.

The contact details of JSN & Co., Cost Accountant (Registration No. 000455) are given below:

- Address : M-11, Shastri Nagar, Near Inderlok Metro Station, Delhi - 110052

- E-mail : cwapuneetjain@gmail.com

- Mobile : 9868271940, 8076381794, 9599575690

Maintenance of Cost Records for the Financial Year 2016-17

The Company was required to maintain cost records for the Financial Year 2016-17. The Board had appointed Ajay Ahuja & Associates (Registration No. 101142) for maintenance of Cost Records of the products of the Company for the Financial Year ended 31st March 2017. The report/certificate of Mr. Ajay Ahuja was placed before the Board in its meeting dated 5th September 2017.

26. PRACTISING COMPANY SECRETARY

Nityanand Singh & Co., Practicing Company Secretary having its office at 14, 2nd Floor, Arjun Nagar, Safdarjung Enclave, New Delhi-110029 are the present practising Company Secretary of the Company.

27. AUDIT COMMITTEE

Pursuant to the provisions of Section 177 of the Companies Act, 2013 and the Listing Regulations, the Board has constituted an Audit Committee. The composition of the Audit Committee was as follows:

As on 31st March 2018

S. No.

Name of the Director

Designation in Audit Committee

1

Mr. Dara Phirozeshaw Mehta

Chairman

2

Ms. Sonia Prashar

Member

3

Mr. Sanjeev Taneja

Member

The Board of Directors of the Company has accepted all the recommendations made by the Audit Committee.

28. DISCLOSURE REGARDING SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES

The Company does not have any subsidiary, joint venture or associate company. During the year also there were no companies, which have become or ceased to be your Company''s subsidiary, joint venture or associate company.

29. DEPOSITS

The Company has not accepted any deposits during the year pursuant to the provisions of Chapter V of the Companies Act, 2013.

30. MATERIAL ORDERS BY GOVERNING AUTHORITIES

There were no significant or material orders passed by any governing authority of the Company including regulators, courts or tribunals, which could affect the going concern status and the Company''s operations in future.

31. ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH RESPECT TO THE FINANCIAL STATEMENT

The Company has laid down proper and adequate internal financial control with respect to internal financial statement. The same is explained in management and discussions and analysis report under the heading “Internal Control System and their adequacy”.

32. OPERATIONS AT PLANT

The Plant operations had to be shut down a few times during the year due to high inventory and low sales volume.

33. GUIDING PRINCIPLES OF COLLABORATION : RESOURCE EFFICIENCY BUSINESS UNIT OF EVONIK

Insilco Limited is a part of the Resource efficiency business unit of Evonik. All operations of Insilco Limited are carried out in accordance with the guiding principles of collaboration of Resource Efficiency, which are as follows:

- We pursue excellence by continuous development of people, organization and processes.

- We foster a culture of open, frank and constructive communication.

- We put the customer at the heart of our activities.

- We base our interactions on mutual trust, respect and acceptance.

- We foster creativity and focus on innovation as the basis for our success.

- We utilize all means of diversity for more thoughtful and complete elaboration of solutions.

- We value initiative and acknowledge and learn from failure.

- We act as exemplary role model and drive our activities through ethical and sustainable decisions.

- We work safely to protect ourselves, our colleagues and the environment.

34. VALUE CREATION FOR CUSTOMERS

In our diverse and globalized world, it is becoming more and more important to gain a better understanding of the requirements of our customers and end-customers. Changing our perspective to view the world through the eyes of our customers allows us to see things differently and thus develop exceptional solutions. Our willingness to remain open to new things and to think in a flexible manner is the key to our culture of learning and innovation. As a Company, we are committed to provide our internal and external customers products and services that always unequivocally meet the agreed quality standards.

We offer a complete package solution of product plus service. This is one of the reasons that many of our customers prefer to buy from us.

35. SOCIAL RESPONSIBILITY

Good governance demands adherence to social responsibility coupled with creation of value in the larger interest of the general public. We are committed to continuously improving our performance in the areas of environmental protection, health and safety as well as to the principles of sustainable development and responsible care. We continue to contribute to society by appropriate means. We aim to enhance the quality of life of the community in general and have a strong sense of social responsibility.

36. WE BELIEVE IN QUALITY AS A SUCCESS FACTOR

Within the scope of Total Quality Management (TQM), we are continuously striving to improve the quality of our products, services and processes.

Learning from the global best practices of our parent Evonik Industries, we offer the same to our customers. This is the most important factor that our customers value and continue to support us.

37. PROCUREMENT EFFICIENCY AND SUPPLY CHAIN

Procurement is an essential element in the value-chain. We regard intensive cross-functional collaboration within the Company as indispensable. We have integrated procurement with the overall supply-chain function at the plant to make it more efficient and part of a cross-functional team at the plant.

During the financial year 2016-17, the availability of raw materials, water and power supply remained normal.

38. CUSTOMER ORIENTATION STARTS WITH TALENT DEVELOPMENT AND FAIRNESS

The key to any success is a motivated and committed workforce. With support from Evonik and Management of Insilco, we have been conducting in-house skill development and training programmes. We also encourage our workforce to build a more customer-oriented approach.

39. CERTIFICATIONS AND RECOGNITIONS

Our plant at Gajraula is certified under the Environment Management Standard ISO 14001-2004 and Quality Management Standard ISO 9001-2008. We have also obtained HALAL & KOSHER certificates during the year for Food Safety Management System. Apart from these, we are also HACCP and FSSAI certified Company for the Food Safety Management System.

40. REPORT ON CORPORATE GOVERNANCE

Pursuant to the provisions of the Listing Regulations, the following are furnished forming part of this Directors'' Report:

i. Report on Corporate Governance together with a Certificate from Practising Company Secretary on compliance with the conditions of Corporate Governance as per provisions of Listing Regulations are attached as Annexure- 5 and 5.3 respectively.

ii. Certificate by Managing Director regarding compliance of Code of Conduct by the members of Board and Senior Management as per provisions of Listing Regulations is attached as Annexure - 5.1.

iii. Certificate from Managing Director and Chief Financial Officer regarding correctness of the financial statements presented to the Board is attached as Annexure - 5.2.

41. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to the provisions of the Listing Regulations, a Management Discussions and Analysis Report is enclosed as Annexure - 6 forming part of Annual Report.

42. COMPLIANCE OF SECRETARIAL STANDARDS

The Company has followed all the applicable compliances of the applicable Secretarial Standards.

43. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT: None

44. DISCLOSURE BY SENIOR MANAGEMENT OF CONFLICT OF INTEREST, IF ANY

Pursuant to the provisions of regulation 26(5) of the Listing Regulations, the Senior Management of the Company have made a disclosure to the Board of Director that they have no personal interest in relation to all material, financial and commercial transactions that may have a potential conflict with the interest of the Company at large.

45. REPORTING OF FRAUD BY AUDITORS PURSUANT TO SECTION 143(12) OF THE COMPANIES ACT, 2013

There was no fraud reported by the Auditor to the Audit Committee or to the Board.

46. INDUSTRIAL RELATIONS

Your Company continued to enjoy cordial relations with all its employees. No man day was lost due to any Industrial Dispute.

47. FORWARD-LOOKING STATEMENT

This Report including its annexures contains forward-looking statements that involve risks and uncertainties. The actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Significant factors that could make a difference to the Company''s operations include domestic and international economic conditions affecting demand-supply and price conditions, changes in government regulations, environmental regulations, tax regimes and other statutes.

48. ACKNOWLEDGEMENT

Your Board of Directors wish to thank and place on record their appreciation for the co-operation and support extended to the Company by the Government of India, State Government of Uttar Pradesh, other local authorities, Bankers, Suppliers, Customers, Distributors, Employees and other Stakeholders which have been a constant source of strength to the Company. The Board of Directors also expresses its sincere gratitude to all the shareholders for their continuous support and trust they have shown in the management. The dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

Your Company is thankful to the parent Company Evonik Degussa GmbH, Germany for continuously providing excellent management, technical and marketing support.

For & on behalf of the Board of Insilco Limited

Sd/- Sd/-

Dara Phirozeshaw Mehta Brijesh Arora

Chairman of the Board Managing Director

DIN : 00041164 DIN : 00952523

Place : Noida

Date : 28th May 2018

સ્તોત્ર: રેલીગેર ટેકનોવા


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