DIRECTORS' REPORT Dear Members, Your Directors are pleased to present the 27th Annual Report together with the Audited Accounts for the financial year ended March 31, 2015. 1. EXTRACTS OF THE ANNUAL RETURN i) Change in Promoters’ Shareholding: There was no change in the promoters’ Shareholding during the Financial Year 2014-15. ii) Shareholding of Directors and Key Managerial Personnel: Directors or Key Managerial Personnel did not have any shareholding in the Company during the Financial Year 2014-15. iii. Indebtedness Indebtedness of the Company including interest outstanding / accrued but not due for payment: 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. iv. Penalties / Punishment / Compounding of Offences: There was no penalty / punishment / compounding fee imposed on the Company / Directors / any other officer of the Company. 2. NUMBER OF MEETINGS OF THE BOARD The Board duly met 4 times in Financial Year 2014-15 on 29th April, 2014, 14th August, 2014, 13th November, 2014 and 12th February, 2015. 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 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 this Act 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 49 of the Listing Agreement with the Stock Exchange, the Board of Directors has constituted 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 Agreement. The said policy of the Company is attached as Annexure-I to this report. 5. SECRETARIAL AUDIT M/s. Nityanand Singh & Co., a firm of Company Secretaries having their address at 14, 2nd Floor, Arjun Nagar, Safdarjung Enclave, New Delhi - 110029 has conducted the Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report issued by the said firm is attached to this report as Annexure-II. 6. EXPLANATION OR COMMENTS BY THE BOARD ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE (i) BY STATUTORY AUDITOR The members are informed that there were no qualifications, reservation or adverse remark or disclaimer made by Statutory Auditor in the Audit Report. Hence no explanation/comments are required to be given by the Board. (ii) BY THE COMPANY SECRETARY IN PRACTICE IN HIS SECRETARIAL AUDIT REPORT The members are informed that there were no qualifications, reservation or adverse remark or disclaimer made by Secretarial Auditor in the Secretarial Audit Report. Hence no explanation/comments are required to be given by the Board. 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-III to this report. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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: www.insilcoindia.com — Investors — Policies 9. THE STATE OF COMPANY'S AFFAIRS A. Results of Operations Sales of Precipitated Silica during the year were 9,527 MT (previous year 11,128 MT) and were lower than the target of 13,797 MT. The Production during the year was 10,062 MT (previous year 11,207 MT). Due to lower sales, your Company achieved a sales turnover of Rs. 632 Million during the year as compared to Rs. 686 Million in the previous year and recorded a profit before depreciation & exceptional items of Rs. 26 Million as against a loss of Rs. (20) Million in the previous Financial Year. The Company had reserves of Rs. 268 Million as on 1st April, 2014. During the year the Company has transferred accumulated depreciation of Rs. 14 Million to reserves of the Company as per requirement of Schedule II of the Companies Act, 2013 resulting in reduction in reserves. The profit for the Financial Year 2014-15 was Rs. 14 Million. Therefore the closing balance of reserves and surplus as on 31st March, 2015, amounted to Rs. 268 Million. The Company is endeavored to increase its turnover and increase its profit. The Company is looking for optimum utilization of its assets and other resources so that journey of profitable growth is continued. With the support of Evonik, we continue to make efforts to optimize energy utilization, improve working capital management and achieve better realization from customers. Several customers value the quality, application & technical support and overall service of the Company and have continued to support it by accepting higher prices. B. Future Outlook The Indian economy is improving and showing the potential for growth. The market is showing positive signs since the formation of new government in India. The Company continues to enjoy a high standing with its customers because of its quality and value added services. Besides, it is actively exploring options to reduce the energy costs and pursuing all growth opportunities so as to improve the results. Several quality conscious customers have supported us till date and pay us a premium for our quality products. However, future growth of the company will depend upon our ability to optimize our costs by making our products more competitive and increasing capacity utilization. There are inherent opportunities available for the Company in the target industries such as Tyres, Automotive Components, Mechanical rubber goods, Footwear, Agrochemicals and Food. The silica applications in all these industries are growing rapidly. The Company is actively pushing growth opportunities to use the unutilized production capacity and improve product mix. 10. TRANSFER TO RESERVES The Company had reserves of Rs. 268 Million as on 1st April, 2014. During the year the Company has transferred accumulated depreciation of Rs. 14 Million to reserves of the Company as per requirement of Schedule II of the Companies Act, 2013 resulting in reduction in reserves. The profit for the Financial Year 2014-15 was Rs. 14 Million. Therefore the closing balance of reserves and surplus as on 31st March, 2015, amounted to Rs. 268 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 FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF REPORT There is 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 the 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 regular review of energy generation, consumption and effective control on utilization of energy. During the year the Company has also made a capital investment on DG Set as an alternate source of energy. The electricity is the preferred source of generating energy for the business needs of the Company. However, during electricity cuts/non-availability DG Set is used as a back-up source for generation of energy. We have reduced product change over time in production process and improved energy efficiency. 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 last three years The Company has not imported any technology during 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 earning in terms of actual inflows during the year and the foreign Exchange outgo during the year in terms of actual outflows were as follows: 14. STATEMENT ON RISK MANAGEMENT POLICY The Board of Directors has developed and implemented a risk management policy for the Company. A risk management committee has also been formed for identification & assessment of risks and minimization of risks by adopting various measures. The Company has taken proper initiatives to mitigate risks however in the opinion of the Board there are following risk 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; and 3. Environmental Risk if stringent norms introduced by government for chemical industry near to Ganga River. The risk management policy of the Company is available on the website of the Company at the following path: www.insilcoindia.com — Investors — Policies 15. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE The Board of Directors of the Company has also laid down a policy on prevention of sexual harassment at workplace. A complaint committee has also been formed by the 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: www.insilcoindia.com — Investors — Policies 16. 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. 17. STATEMENT ON ANNUAL EVALUATION OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS The Board has laid down manner and criteria of evaluation of 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 evaluation includes various criteria including performance, targets, sincerity towards 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 performance upto the mark and satisfactory. The Nomination and Remuneration Committee has also evaluated individual performance of each Director and found it satisfactory. Evaluation criteria for the Individual Directors are also detailed in Annexure-I attached to this report which is also available on the website of the Company. 18. WHISTLE BLOWER POLICY Pursuant to the provisions of Section 177(10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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. The copy of the said policy is available on the website of the Company at the following path: www.insilcoindia.com — Investors — Policies 19. CHANGE IN THE NATURE OF BUSINESS, IF ANY During the year your Company has not changed the nature of its business. 20. DIRECTORS & KEY MANAGERIAL PESSONNEL (KMP) Change in Directors and KMPs During the year, your Directors had appointed Mr. Guido Johannes Christ as an Independent Director w.e.f. 29th April, 2014. Mr. Guido Johannes Christ was appointed as an Independent Director to hold the office till the conclusion of 26th AGM. In the 26th AGM held on 14th August, 2014, the members of the Company had appointed Mr. Christ as an Independent Director w.e.f. 29th April, 2014 for a non rotational term of upto five consecutive years. Mr. Guido Johannes Christ has studied Mechanical Engineering at the University of Karlsruhe, Germany and graduated as M.Sc. Engineering with focus on turbo machinery and material handling. He has extensive experience of about 39 years in the field of Research & Development and Sales & Marketing. Since June 2008, he is the Deputy Director General at the Indo-German Chamber of Commerce at New Delhi. Mr. Roberto Martin Vila Keller resigned from the Board w.e.f. 14th August, 2014 due to his other preoccupations. The Board records its appreciation for the valuable services rendered by Mr. Roberto Martin Villa Keller during his tenure as a Director of the Company. Mr. Brijesh Arora designated as Vice President (Finance & Accounts) and Company Secretary was re-designated and appointed as Chief Financial Officer of the Company w.e.f. 14th August, 2014 and he resigned from the position of Company Secretary of the Company from that date. Consequent to the resignation of Mr. Brijesh Arora as Company Secretary, Ms. Sheetal Saluja was appointed as Company Secretary of the Company w.e.f. 14th August, 2014. Ms. Sheetal Saluja is a commerce graduate from Delhi University and an associate member of Institute of Company Secretaries of India. She has also done Bachelors of Law (LL.B) from Kurukshetra University, Haryana, India. She has an experience of 5 years in Company Secretarial and legal field and was already working with the Company as an Asst. Manager (Legal & Secretarial) since April, 2013. However she had resigned from the position of Company Secretary and all other positions of the Company w.e.f. 19th February, 2015 as she had to relocate to uAe due to some personal reasons. The Board wishes to place on record its appreciation for valuable contribution made by Ms. Sheetal Saluja during her tenure in the Company. Pursuant to the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Ms. Meng Tang was appointed as an Additional Director w.e.f. 13th November, 2014. Ms. Meng Tang has done Bachelor of Science in Chemical Engineering from Xi'an Jiaotong University, China and Master of Biochemical Engineering from East China University of Science and Technology, China. She has also done an International MBA - General Management from Rotterdam school of Management at Netherlands. She is having an experience of about 17 years in the field of Research, Development and Marketing. She is presently a Business Director, Asia Pacific region at Evonik Degussa, China. She is holding the office as an Additional Director up to the date of next AGM of the Company. It is proposed to appoint Ms. Meng Tang as a Director liable to retire by rotation in the upcoming AGM. The contract of Mr. Pankaj Khandelwal as Managing Director of the Company has been completed on 28th February, 2015. Mr. Khandelwal opted to take retirement to devote time for personal interest on completion of his contract on 28th February, 2015. Consequent to same, Mr. Pankaj Khandelwal retired from all positions of the Company including Managing Director w.e.f. close of working hours on 28th February, 2015. The Board recorded its appreciation of the valuable services rendered to the Company by Mr. Pankaj Khandelwal as its Managing Director. Consequent to the retirement of Mr. Pankaj Khandelwal the position of Managing Director was vacant and Mr. Frank Heinz Lelek, an existing Director of the Company, was appointed as Managing Director w.e.f. 1st March, 2015 for a period of three years. Mr. Frank Heinz Lelek is President of Region - India of Evonik Industries, AG. He is Managing Director of Evonik India Private Limited (a subsidiary of Evonik Degussa GmbH) and is already on the Board of Insilco Ltd. He has done Apprenticeship/Vocational Training on Industrial Business Administration, from Germany and Continuing Education, Export Academy Baden-Wurttemberg and having 27 years experience in the field of Sales, Marketing and General Management. He is also a member of the Corporate Social Responsibility Committee of Evonik India Private Limited. Mr. Brijesh Arora was appointed as an Additional Director of the Company w.e.f. 1st March, 2015. Consequently, he tendered his resignation as Chief Financial Officer of the Company w.e.f. close of working hours of 28th February, 2015. Mr. Brijesh Arora was also appointed as Whole-time Director designated as Joint Managing Director w.e.f. 1st March, 2015 for the period of three years. Mr. Brijesh Arora is an MBA and Alumnus of the Indian Institute of Management, Calcutta (IIMC)'s Senior Management Program (SMP). He has also done Chartered Accountancy Course from the Institute of Chartered Accountants of India (ICAI), Master of Financial Analysis (MFA) from Institute of Chartered Financial Analyst (ICFAI) and Company Secretary course from Institute of Company Secretaries of India (ICSI). He has successfully completed Executive Development Program-Advanced (EDP Advanced module) of Evonik. Mr. Brijesh Arora has approximately 23 years of rich experience in different fields of Business management, Controlling, Finance, Accounts, Legal and Compliances. Mr. Brijesh Arora has been associated with your Company for more than 8 years at different senior positions. Consequent to the resignation of Mr. Brijesh Arora from the position of Chief Financial Officer, Mrs. Shivangi Negi was appointed as Chief Financial Officer of the Company w.e.f. 1st March, 2015. Mrs. Shivangi Negi has been a member of the Institute of Chartered Accountants of India since 2006 and holds a Bachelor's degree in Commerce (Hons.) from Delhi University. She is studying to become a Chartered Financial Analyst (CFA) from Institute of Chartered Financial Analysts of India (ICFAI). She is working with the Company since September 2008, in Finance & Accounts department. She has an experience of 12 years (including post qualification experience of 8 years) in different fields of Finance, Accounts and Taxation. Term of Independent Directors The two Independent Directors of the Company i.e. Mr. Dara Phirozeshaw Mehta and Mr. Guido Johannes Christ were appointed for their first term in the 26th AGM of the Company held on 14th August, 2014. The first term of Mr. Dara Phirozeshaw Mehta has started w.e.f. 1st April, 2014 for five consecutive years. The first term of Mr. Guido Johannes Christ has started w.e.f. 29th April, 2014 for five consecutive years. Directors retiring by rotation In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Frank Heinz Lelek, Managing Director and Dr. Mustafa Siray, Director of the Company shall retire by rotation at the ensuing AGM of the Company and being eligible offer themselves for re-appointment. The Board recommends their re-appointment to the members of the Company in the ensuing AGM. Statement on declaration given by Independent Directors The members are informed that both the Independent Directors i.e. Mr. Dara Phirozeshaw Mehta and Mr. Guido Johannes Christ 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 above two 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 conducted a program on familiarization of the Independent Directors with the Company. In this regard they were also provided with a note on the same consisting profile of the Company, nature of Companyin which Company operates, business philosophy & model of the Company, Roles, rights, responsibilities of Independent Directors in the Company and Policies/Rules and Regulations of the Company. The details of such note of Familiarization of Independent Directors with the Company are also displayed on the website of the Company at the following link: www.insilcoindia.com — Investors — Notes 21. DISCLOSURES RELATED TO REMUNERATION OF DIRECTORS AND KMPs a. Disclosures as per provisions of Schedule V, Part II, Section II (B)(iv) Mr. Brijesh Arora was appointed as Whole-time Director designated as Joint Managing Director 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. Pankaj Khandelwal13 to median remuneration of employees during the Financial Year 2014-15 was 15.02:1. - Ratio of remuneration of Mr. Brijesh Arora to median remuneration of employees during the Financial Year 2014-15 was 15.51:1. d. Percentage increase in the median remuneration of employees The percentage increase in the median remuneration of employees in the Financial Year 2014-15 was 6.56%. e. No. of employees of the Company As on 31st March, 2015, your Company had 117 permanent employees on the rolls of the Company. The same does not include contractual employees. f. Relationship between average increase in remuneration and Company Performance The Company achieved a sales turnover of Rs. 632 Million during the Financial Year 2014-15 as compared to Rs. 686 Million in the previous year and recorded a net profit of Rs. 14 Million approx. as against net loss of Rs. (103) Million approx. respectively. The average increase in remuneration of employees of the Company was 5.56% during the Financial Year 2014-15. g. Comparison of remuneration of KMP against the performance of the Company Considering the performance of the Company, as explained in clause (f) above, during the Financial Year sales in MT reduced by 14.39% and net profit was increased by Rs. 117 Million approx., the remuneration of KMP, Managing Director and Whole-time Director as explained in clause 1(VI)(A) & (D) are moderate and can be termed as reasonable. l. Comparison of the remuneration of each KMP against the performance of the Company Considering the performance of the Company, as explained in clause (f) above, the remuneration of each KMP (including Managing Director and Whole-time Director) as explained in clause 1(VI)(A)&(D) is moderate and can be termed as reasonable. m. Key parameters of variable component of remuneration availed by Director During the Financial Year no Director availed any variable component. However, as on 31st March, 2015, the estimated performance pay payable to Mr. Brijesh Arora (Joint Managing Director) is 14Rs. 109,375. The key parameters for variable component of remuneration to be paid to Mr. Brijesh Arora are Safety, Productivity and Management of fixed costs. n. Ratio of Remuneration of highest paid employee if it exceeds remuneration of highest paid Director There was no employee of the Company who had been paid remuneration more than the remuneration paid to Mr. Pankaj Khandelwal (Ex-Managing Director of the Company) or Mr. Brijesh Arora, Joint Managing Director of the Company. o. Policy compliance affirmation The remuneration to Directors and KMP is as per the nomination and remuneration policy of the Company. 22. AUDITORS The members are informed that pursuant to the provisions of Section 139 read with the Companies (Audit and Auditors) Rules, 2014, M/s. S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration No. with ICAI -301003E) was appointed as Statutory Auditor for its first term of two years i.e. from the conclusion of 26th Annual General Meeting till conclusion of 28th Annual General Meeting. However the above said appointment was subject to ratification by members of the Company in each Annual General Meeting. In view of the above, it is proposed to appoint M/s. S.R. Batliboi & Co. LLP as Statutory Auditor of the Company from the conclusion of 27th Annual General Meeting till the conclusion of 28th Annual General Meeting. At the conclusion of 28th Annual General Meeting their first term of two years will complete. This amount includes Rs 72,917/- as performance pay payable to Mr. Brijesh Arora for the month of Jan-Feb 2015 when he was Chief Financial Officer of the Company. M/s. S.R. Batliboi & Co. LLP, has expressed its willingness to act as Statutory Auditor of the Company and has provided the requisite documents as required under the Act. 23. COST AUDITOR Cost Audit/Cost Records for Financial Year 2014-15 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 2014-15 the Company is required to maintain cost records. However, before above said rules were notified the Board had appointed M/s. Ajay Ahuja & Associates (Registration no. 101142) as Cost Auditor in absence of clear provisions in this regard so that they could place the remuneration of Cost Auditor for the approval of members in twenty sixth AGM. Since the cost auditor has been appointed for Financial Year 2014-15, the Company will opt for the cost audit and will also comply with the above said rules. For the Financial Year 2015-16, pursuant to above said rules, the Company will maintain cost records. Cost Audit for Financial Year 2013-14 Name of Cost Auditor : M/s. Ajay Ahuja & Associates (Registration no. 101142) Contact Address 7/156, Ramesh Nagar, New Delhi-110015 E-mail cmaajayahuja@gmail.com Mobile +91 9810326644 Due date of filing Cost Audit Report : 30th September, 2014 Actual date of Filing Cost Audit Report : 30th September, 2014 24. PRACTISING COMPANY SECRETARY M/s. Nityanand Singh & Co., Company Secretaries having their office at 14, 2nd Floor, Arjun Nagar, Safdarjung Enclave, New Delhi-110029 are the present practising Company Secretary of the Company. 25. AUDIT COMMITTEE Pursuant to the provisions of Section 177 of the Companies Act, 2013 and the Listing Agreement, the Board has constituted an Audit Committee. All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company. 26. 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 during the year. 27. DEPOSITS The Company has not accepted any deposits during the year pursuant to the provisions of Chapter V of the Companies Act, 2013. 28. 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 impact the going concern status and Company's operations in future. 29. 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. 30. DELISTING OF EQUITY SHARES OF THE COMPANY The members are informed that the Company had received a proposal through a letter dated 12th November, 2014 from its holding Company i.e. Evonik Degussa GmbH, a Company incorporated under the laws of Germany ("the Acquirer") expressing its intention to provide an exit opportunity to the Public Shareholders of the Company in accordance with the SEBI Delisting Regulations in order to voluntarily delist the Company's Shares from BSE Limited (the "Delisting Proposal"). Accordingly, the Acquirer (being the Promoter of the Company) proposed to acquire all the Shares of the Company held by the Company's public shareholders in accordance with the Delisting Regulations and to voluntarily delist the Shares of the Company from BSE Limited in accordance with the Delisting Regulations. The Floor Price, determined in accordance with Regulation 15(2)(a) of the SEBI Delisting Regulations, was Rs. 19.39 per Equity Share. The Delisting Resolution was required to be passed as a 'Special Resolution' through a postal ballot and e-voting in accordance with the provisions of Sections 108 and 110 of the Companies Act, Clause 35B of the equity listing agreement entered into by the Company with the stock exchanges and the Postal Ballot Rules. According to Regulation 8(1)(b) of the SEBI Delisting Regulations, the Delisting Resolution may be acted upon only if the votes cast by the Public Shareholders in favour of the Delisting Resolution are at least two times the number of votes cast by the Public Shareholders against the Delisting Resolution. After receiving the proposal of such delisting of the Company, the Board at its meeting held on 13th November, 2014, has agreed to recommend the Delisting Resolution to Shareholders for approving the Delisting Proposal. The electronic voting period for passing the aforesaid resolution began on 22th December, 2014 at 9:00 am (IST) and ended on 21th January, 2015 at 5:00 pm (IST). During this period votes were cast by many of the eligible shareholders holding shares as on the cut-off date (record date) of 28th November, 2014. However the said resolution could not be acted upon as the votes cast by public shareholders in favour of the proposal did not amount to at least two times the number of votes cast by public shareholders against the Delisting Resolution. The detailed notice of postal ballot, detailed scrutinizer's report and declaration of postal ballot and e-voting results for delisting of equity shares of the Company is available on the website of the Company i.e. www.insilcoindia.com at the following path: www.insilcoindia.com — Investors — Notices 31. OPERATIONS AT PLANT The Plant operations had to be shut down a few times during the year due to lower sales orders. 32. VALUE CREATION FOR CUSTOMERS As a Company, we are committed to provide our internal and external customers products and services that always unequivocally meet the agreed quality standards. This is our declared goal and the measure of our actions. 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. 33. 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 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. 34. 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. 35. 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. During the year, we 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. 36. CUSTOMER ORIENTATION STARTS WITH TALENT DEVELOPMENT AND FAIRNESS The key to any success is a motivated and committed workforce. With support from Evonik, we have been conducting in-house skill development and training programs and we also encourage our workforce to build a more customer - oriented approach. 37. CERTIFICATIONS AND RECOGNITIONS To maintain our commitment to quality and continuous improvement, our quality certifications of ISO 9001: 2008, ISO 14001: 2004 and HACCP are being periodically re-approved through regular audits by the accredited certification agencies. We are also 'Halal' certified Company. 38. REPORT ON CORPORATE GOVERNANCE Pursuant to provisions contained in the Clause 49 of the Listing Agreement with the Stock Exchanges, 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 of conditions of Corporate Governance as per clause 49 (XI) of the Listing Agreement is enclosed as Annexure-IV to this Directors' Report. ii. Certificate by Managing Director regarding compliance of Code of Conduct by the members of Board and Senior Management as per clause 49(II)(E) of the Listing Agreement is enclosed as Annexure-V to this Directors' Report. iii. Certificate from Managing Director and Chief Financial Officer regarding the financial statements presented to the Board as per Clause 49(IX) of the Listing Agreement is enclosed as Annexure-VI to this Directors' Report. 39. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Pursuant to provisions contained in the Clause 49(VIII)(D) of the Listing Agreement with the Stock Exchanges, a Management Discussions and Analysis Report is enclosed as Annexure-VII forming part of Annual Report. 40. MATERIAL CHANGES AND COMMITMENTS EFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE YEAR AND THE DATE OF THIS REPORT None 41. INDUSTRIAL RELATIONS Your Company continued to enjoy cordial relations with all its employees. No man day was lost due to any Industrial Dispute. 42. FORWARD-LOOKING STATEMENT This Report including its annexure 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. 43. 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/- Frank Heinz Lelek Managing Director DIN : 05140529 Sd/- Brijesh Arora Joint Managing Director DIN : 00952523 Place : Noida Date : 21st May 2015 |