DIRECTORS' REPORT

The Members,

Saint-Gobain Sekurit India Limited

Your Directors present the 42nd Annual Report of your Company along with the Financial Statements for the year ended 31st March, 2015.

Appropriations:

The Company proposes to retain an amount of Rs. 674.82 Lacs in Profit and Loss Account.

Operations:

While the auto sector witnessed little growth, two segments which are important for your Company (the 3-wheeler segment and medium and heavy commercial vehicles) saw higher growth. Consequently, your Company's sales volumes increased during the year. At the same time, your Company's management was successful in obtaining price increases from the major OEMs. The price increases partially offset the significant cost increases of the previous year. Thanks to higher volumes and prices, your Company's sales increased by 28% during the year under review.

During the last few years, your Company has taken several initiatives to improve its technical performance and operating efficiencies. These measures have started yielding results which is one of the reasons for the improved performance. The improved operating efficiencies combined with higher volumes and prices and stable input costs led to a significant rise in your Company's operating profit from Rs. 90 Lacs in 2013-14 to Rs. 776 Lacs in 2014-15.

Material changes and commitments after the end of financial year:

There have been no material changes and commitments, if any, affecting the financial position of the Company, which have occurred between the end of the financial year and date of the report.

Particulars of loans, guarantees or investment:

The Company does not have any loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013.

Human Resource

The Company continues to place significant importance on its human resources and enjoys cordial and peaceful relations at all levels.

The Directors are pleased to place on record their appreciation of the services rendered by the employees at all levels. As at March 31, 2015, there were 196 employees.

The Company follows best practices in hiring and on-boarding of employees. The Company adopts fair and transparent performance evaluation processes. In order to improve the organizational efficiency and employee engagement, various process change initiatives were undertaken during the year. Your Company believes in conducting its business in a highly transparent and ethical way. To ensure this and also to improve skill levels, employees participate in various training programs and mandated e-learning courses.

Your Company is committed in creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company believes that all employees have a right to be treated with dignity and has zero tolerance towards sexual harassment at the workplace. The Company has a Policy on Sexual Harassment which is widely disseminated. During the year under review, the Company has not received any complaint of Sexual Harassment.

Particulars of Employee:

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of the Annual Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is available on the website of the Company.

There is no information required to be given pursuant to Section 197 (12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Environment, Health & Safety:

Your Company is committed to ensure a clean and green pollution-free environment as well as a healthy and safe work place at all its plant locations. Environment, Health & your Company's plants at Bhosari & Chakan continue to remain certified under ISO 14001 and OHSAS 18001. On the strength of these systems and the continuous focus of the Operations team, your Company is confident of not just meeting but exceeding all regulatory requirements. The Operations teams in both the plants are working on environmental friendly initiatives like tree plantation, energy saving projects, and waste reduction initiatives. The teams have also initiated World Class Manufacturing (WCM) initiatives under the Saint-Gobain's program of Operational Excellence. Strict adherence to all regulatory requirements and safety guidelines are maintained at all times.

Environment, Energy Conservation, Technology Absorption, Foreign Exchange Earnings & Outgo:

Energy conservation is a key element of your Company's overall strategy for cost competitiveness. Energy consumption is closely monitored at each Work Centre level in both the Plants and variances with respect to benchmarks are rigorously scrutinized to reduce the specific energy consumption. Various energy conservation measures in the form of unity power factor, innovative design of toolings, improving stuffing efficiencies and optimized loading of Furnaces have ensured reduction of energy consumption per square meter of value added glass produced.

Your Company continuously works on upgrading its process technology to manage its cost and also to meet new demands of customers. Saint-Gobain Sekurit International's technical assistance in these initiatives through sharing of best international practices and deputation of its experts helps in these endeavours. Development of new products as per the new demands from Auto OEMs is managed with active support from Saint-Gobain Sekurit International.

The Information on conservation of energy, technology absorption and foreign exchange earning and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure D" which forms the part of the report.

Deposits:

The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Directors:

As per the provisions of Section 149(1), 161 and other applicable provision under the Companies Act, 2013, the Board appointed Ms. Anupama Vaidya as an additional, Non-Executive, woman Director of the Company on 30th January, 2015. The above appointment was based on the recommendation of the Nomination and Remuneration Committee and is subject to approval of the Shareholders of the Company at the forthcoming Annual General Meeting.

As per the provisions of the Companies Act, 2013, and the Articles of Association, Mr. A.Y. Mahajan is liable to retire by rotation at the 42nd Annual General Meeting. Mr. Mahajan has confirmed his eligibility and willingness to accept the office of Directorship of your Company, if appointed. In the opinion of your Directors, Mr. Mahajan has the requisite qualifications and experience which would be of value to your Company and would enable him to contribute to the Company in his capacity as the Director of the Company.

The Board recommends that the resolution relating to the re-appointment of Mr. Mahajan as Director of your Company be approved.

None of the Directors or Key Managerial Personnel has any pecuniary relationships or transactions with the Company, other than salaries, commission, sitting fees.

During the year, the following changes in the roles and designations of the Directors have taken place with effect from 30th January, 2015.

Mr. A.Y. Mahajan - from Chairman of the Board to Member of the Board.

Mr. M.G. Ramakrishna - from Member of the Board and Chairman of the Audit Committee and the Nomination & Remuneration Committee to Chairman of the Board and Member of the Audit Committee and the Nomination and Remuneration Committee.

Mr Padmanabha Shetty - from Member of the Audit Committee and the Nomination and Remuneration Committee to Chairman of both these Committees.

Declaration given by Independent Directors:

All Independent Directors have given declarations under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Familiarisation programme for Independent Directors:

The Company's familiarisation program for Independent Directors provides orientation and training at the time of joining to enable them to understand the operations, business and other details of the Company. The Independent Directors are regularly briefed on the developments that are taking place in the Company and its operations, etc.

Number of meetings of the Board:

The Board meets at regular intervals to review the Company's businesses and discuss its strategy and plans. A tentative annual calendar of the meetings is circulated to the Directors in advance to enable them to plan their schedule and to ensure effective participation.

During the year, four board meetings were convened and held. The maximum interval between the meetings did not exceed the period prescribed under the Companies Act, 2013 and the Listing Agreement.

Committees of the Board:

During the year, in accordance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has constituted or reconstituted its Committees.

Currently, the Board has the following Committees: Audit Committee

Nomination and Remuneration Committee Stakeholders Relationship Committee Corporate Social Responsibility Committee

Details of the Committees along with their constitution and other details are provided in the "Report on Corporate Governance".

Directors' Responsibility Statement:

To the best of their knowledge and belief and according to the information and explanations obtained, your Directors make the following statements in terms of Section 134(3)(C) of the Companies Act, 2013:

(i) That in the preparation of annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

(ii) That such accounting policies have been selected and applied consistently and judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2015 and of the profit of the Company for that year;

(iii) That proper and sufficient care has been taken 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;

(iv) That the annual financial statements have been prepared on a 'going concern' basis.

(v) That proper internal financial controls are in place and that the financial controls are adequate and are operating effectively.

(vi) That systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and are operating effectively.

With reference to the point number (v), the Board believes the Company has sound Internal Financial Controls ("IFC") commensurate with the nature and size of its business. However business is dynamic and IFC are not static, and evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and or improved controls wherever the effect of such gaps would have a material effect on the Company's operations.

Director's Appointment and Remuneration:

The Nomination and Remuneration Committee has laid down the criteria for Directors' appointment and remuneration. The Nomination and Remuneration Policy is set out in Annexure E.

Annual Evaluation of Performance by the Board:

The Board, on recommendation of the Nomination and Remuneration Committee, has adopted a framework for performance evaluation of the Board, its Committees, individual directors and chairperson through a survey questionnaire. The survey questionnaire broadly covers various aspects of board functioning, composition of Board and its committees, culture, execution and performance of specific duties, obligation and governance.

Remuneration Policy:

The Board has, on recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors and Senior Management and their remuneration. The Remuneration Policy is set out in the Annexure E to this Report.

Related Party Transaction:

All the related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. All Related Party Transaction  are placed before the Audit Committee as also the Board for its approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis which is for transactions of a known and of repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all the related party transaction is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. Pursuant to Section 188 and Clause 49 (VII) (E), the Company has placed an Ordinary Resolution for 'material' related party transactions for the approval by the Members at the forthcoming Annual General Meeting.

As per Clause (h) of Sub-Section (3) of Section 134 of Companies Act, 2013 and Rule 8(2) of Companies (Accounts) Rule, 2014, the details of the related party transactions in Form AOC - 2 is annexed as Annexure F.

The Company has also placed a Special Resolution for the approval of a proposed related party transaction, which is not in the ordinary course of business, by the Members at the forthcoming Annual General Meeting.

The policy on the Related Party Transactions, as approved by the Board, is uploaded on the website of the Company www.sekuritindia.com/Investor Information.html.

Corporate Social Responsibility (CSR):

It is your Company's belief that its primary goal is to serve the needs of its customers and, in the process of doing so, to generate employment, livelihood and income for all its stakeholders (suppliers, vendors, service providers, employees, lenders, shareholders etc.) and, at the same time, to contribute to the revenues of Governments. Further, it is your Company's belief that by pursuing its primary goal and by ensuring that its business practices meet the highest standards of corporate governance and ethics, it best fulfills its obligations and responsibility to society. Against the backdrop of this belief, your Company is committed to implementing the agenda set out in its CSR policy. The CSR policy and the initiatives taken during the year, in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, are set out in Annexure H to this Report. In accordance with Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee of the Board, having an Independent Chair, has been constituted to monitor the CSR policy and programs and to ensure that they are in line with the Companies Act, 2013, and the Rules framed thereunder. The amount spent on eligible CSR activity for the financial year 2014-15 is around 1.50% of the average net profit of the Company during the three immediately preceding financial years.

Vigil Mechanism/Whistle Blower Policy:

Your Company has adopted and disseminated its Whistle-Blower Policy to provide a secure environment and encourage employees to report unethical, unlawful or improper practices, acts or activities and to prohibit any adverse action against those who report such practices in good faith.

The Whistle-Blower Policy is disclosed on the website of the Company.

Statutory Auditors:

M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016), Chartered Accountants, Auditors of the Company, retire at the conclusion of 42nd Annual General Meeting of the Company and have expressed their willingness to continue as Auditors of the Company. M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016), have conveyed that, if appointed, they would be eligible to act as Auditor of the Company. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and Rules framed thereunder, for re-appointment as Statutory Auditors of the Company.

Further in terms of Clause 41(1)(h) of the Listing Agreement, the statutory auditors of the Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI); and hold a valid certificate issued by Peer Review Board of ICAI. M/s. Price Waterhouse Chartered Accountants LLP have confirmed that they hold a valid certificate issued by Peer Review Board of ICAI and have provided a copy of the certificate to your Company for reference and record.

Your Directors, on recommendation of the Audit Committee, seek approval of the Shareholders, for re-appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016), as the Statutory Auditors of the Company, from the conclusion of the forthcoming Annual General Meeting till the conclusion of the next Annual General Meeting of the Company, on such remuneration as shall be fixed by the Board of Directors, as set out in the resolution included in Notice convening the Annual General Meeting of the Company.

Cost Auditors:

The Board of Directors in pursuance Section 148 and relevant rules has appointed Mr. G. Thangaraj, Cost Accountant (Registration No. M5997), for conducting the audit of the cost accounting records maintained by the Company for the financial year 2015-16.

In accordance with Section 148 of the Companies Act, 2013 and Rules framed thereunder, the cost audit records are maintained by the Company in respect of the products which are required to be audited. Your Directors, on recommendation of the Audit Committee, appointed Mr. G. Thangaraj, Cost Accountant, to audit the cost accounting records maintained by the Company for the financial year ended  31st March, 2016.

The remuneration payable to the Cost Auditor has to be ratified by the Shareholders of the Company in terms of Section 148 of the Companies Act, 2013 read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014. Accordingly, a resolution seeking ratification for the remuneration payable to Cost Accountant is included in the Notice convening the Annual General Meeting of the Company.

Secretarial Auditors:

In accordance with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed V.N. Deodhar & Co., Company Secretaries, (FCS No. 1880 and CP No. 898) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2014-15 is set out in the Annexure I to this Report.

Comments on Auditors' Report:

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Price Waterhouse, Chartered Accountants LLP, Statutory Auditors, in their Auditor's Report and by Mr. V.N Deodhar, Company Secretaries, in their Secretarial Audit Report.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.

Extract of Annual Return:

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure G."

Management Discussion & Analysis Report and Report on Corporate Governance:

(a) As per Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, the Corporate Governance Report and the Management Discussion and Analysis Report are annexed and form part of the Directors' Report (Annexures 'A' & 'C' respectively).

(b) Certificate dated 28th May, 2015 of M/s. V.N. Deodhar & Co., Company Secretaries, regarding the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange is annexed to this Report (Annexure 'B').

Acknowledgements:

Your Directors wish to place on record their sincere appreciation for the continuous support and co-operation received from customers, dealers, suppliers, financial institutions and others in successfully conducting the Company's business operations. Your Directors also wish to place on record their deep sense of appreciation for the commitment and dedicated service of the Company's employees. Your Directors also acknowledge with gratitude the encouragement and support extended by our valued shareholders.

On behalf of the Board of Directors,

Mr. A.Y. MAHAJAN   

Director

Mr. A. DINAKAR

Managing Director

Place : Mumbai

Date : May 28th, 2015