Saint-Gobain Sekurit India Ltd

The Members

Your Directors are pleased to present the 51^st Annual Report of the Company along with audited financial statements for the year ended March 31, 2024.

FINANCIAL HIGHLIGHTS

( Lakhs)

DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of 2/- per equity share of the face value of 10/-each for the financial year ended March 31, 2024. The dividend on equity shares, if approved by the Members would involve a cash outflow of 1,822.11 Lakhs against the cash outflow of the previous 1,366.59 Lakhs in previous year.

TRANSFER TO RESERVES

Your Directors do not propose to transfer any amount to the reserves.

OPERATIONS

Another strong year 2023-24 for automotive industry with the passenger vehicles growing by 6%. The light commercial vehicles also witnessed robust growth of 20%. The medium and heavy commercial segment also continued its growth with a robust 6%. Post pandemic, the domestic 3-wheeler segment demonstrated remarkable growth of 24%. Many sustainability projects were completed, and various digital applications were introduced, AI cameras were implemented for safety, and Data Analytics was initiated for decision making. The high inflationary impact from raw glass costs, the rupee depreciation against dollar, high-cost imports, cost increases by almost all raw material suppliers were partly offset with price increase. Consequent to this, the Company's sales increased by 7.7% and achieved a profit before tax of 9.9% as compared to the previous financial year 2022-23.

FUTURE PROSPECTS

The Indian economy is expected to grow over 7% in the upcoming year, mainly driven by strong public demand and resilient private consumption. The push in capital expenditure and infrastructure development will sustain the growth in the auto sector. Your Company is dedicated to enhancing the culture of value creation for customers and end-users by offering innovative solutions. Additionally, the Company places great emphasis on sustainability and value chain solutions for green mobility while promoting a circular economy with all stakeholders. In the coming year, the industry is expected to see significant growth in the 3-wheeler segment, driven by the rise in electric vehicles. Commercial vehicles will offer added value opportunities due to new regulations. The bus segment is likely to experience strong growth due to increased travel, fleet purchases, and the shift to electric vehicles in public transport.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes or commitments that have had an impact on the financial position of the Company have emerged between financial year-end and the date of this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

HUMAN RESOURCES

The Company's primary focus is to provide a professional work culture that fosters innovation, ensures high performance, and empowers employees to grow and develop individually. The Company strives to become a leader in its industry and places a strong emphasis on enhancing employee capabilities through training. The hiring and onboarding practices of the Company adhere to the best industry standards, and a fair and transparent performance evaluation process is followed. To improve organizational efficiency, employee engagement, and skill levels, the Company encourages participation in various training programs and mandatory e-learning courses.

More generally, employee relations were cordial and productive at work sites of your Company. At the end of the financial year, there were 98 employees.

The Company is dedicated to establishing and maintaining a positive work environment that is free from any kind of discrimination or harassment. The Company firmly believes that all employees have the right to be treated with dignity and respect, and it maintains a zero-tolerance policy towards any violations of its Code of Conduct, particularly with regards to sexual harassment. To address any such issues, the Company has formed an Internal Complaints Committee ("ICC") in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. The Company did not receive any complaint related to sexual harassment during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS, AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act and read with Rule 8 of the Companies (Accounts) Rules, 2014, is set out in the Annexure 1 of this Report. Your Company is committed to ensure a clean and green, pollution-free environment as well as a safe and healthy workplace at its plant location and work sites. The Company adheres strictly to the Environment, Health, and Safety Charter, policies, and procedures established under the Saint-Gobain Group. The Company's plants have been certified under ISO 14001:2015 and ISO 45001:2018, and these certifications acknowledges the efforts put in and outcome achieved in enhancing the Environment, Health and Safety across its work sites.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 2(A) to this Report. The Statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure 2(B) forming part of this Report. The Annual Report including the aforementioned information are accessible on the Company's website, www.sekuritindia.com/investor_information>Annual Reports.

PUBLIC DEPOSITS

The Company has not accepted any public deposits, and thus, there were no outstanding amounts due on account of principal or interest on public deposits as on the date of the balance sheet.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment/Re-appointment Retirement

As per the policy of the Company, Mr. Joseph Andrew Jude Pereira (Director Identification No. 00130239), Independent Director of the Company retired with effect from close of business hours of May 4, 2024 and there were no other material reasons for relinquishing the position of Independent Director of the Company. At 46^th AGM of the Company, Mr. Joseph Andrew Jude Pereira was appointed for a term of five (5) consecutive years commencing from May 9, 2019 and valid till May 8, 2024.

Cessation

Mr. Deepak Chindarkar (Director Identification No. 03573562), Non-Executive Director of the Company relinquished the position of Non-Executive Director with effect from close of business hours of May 4, 2024, consequent to his retirement from the service of Saint-Gobain Group. Mr. Venugopal Shanbhag (Director Identification No. 08888359), Managing Director of the Company relinquished the position of Managing Director with effect from close of business hours of May 4, 2024, consequent to new role and responsibility within the Saint-Gobain Group.

The Board and management place on record their gratitude for the contributions made by them during their tenure with the Company.

Re-appointment/ Appointment

In accordance with the Act and the Articles of Association of the Company, Mr. B. Santhanam (Director Identification No. 00494806), Non-Executive Director, retires by rotation and, being eligible, has offered himself for re-appointment. The Board of Directors recommends his re-appointment and a resolution to seek Members approval, along with other essential details, is included in the Notice.

The Board of Directors on the recommendation of the Nomination and Remuneration Committee appointed Dr. Sundar Parthasarathy (Director Identification No. 00119337) as an Additional Director (Non-Executive, Independent) on the Board of the Company with effect from May 5, 2024. Further, basis recommendation of the Nomination and Remuneration Committee and subject to approval of the Members, the Board, In accordance with the provisions of Section 149 read with Schedule IV to the Act, and Regulation 16 of the Listing Regulations, appointed Dr. Parthasarathy as an Independent Director of the Company, not liable to retire by rotation, for a term of 5 (five) years commencing from May 5, 2024 to May 4, 2029. The Company has received a Notice from a Member in writing under Section 160(1) of the Act proposing his candidature for the office of Director. Dr. Parthasarathy possesses skills, expertise, knowledge and competencies in the context of the Company's business, required for the role of an Independent Director of the Company, having wide experience in Strategic Management, Project Management, Operations, Human Resources and General Management and his induction on the Board will immensely benefit your Company.

In accordance with Section 161(1) of the Act and Articles of Association of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board of Directors appointed Mr. Hari Singudasu (Director Identification No. 10455516) as an Additional Director (Non-Executive) of the Company with effect from May 5, 2024, Mr. K.S. Gopalakrishnan (Director Identification No. 10601515) as an Additional Director of the Company with effect from May 5, 2024. Mr. Hari Singudasu and Mr. K.S. Gopalakrishnan will hold office only up to the date of the ensuing AGM. Notices under Section 160(1) of the Act have been received from Members proposing their candidature for the office of Directors of the Company. Mr. Hari Singudasu is liable to retire by rotation.

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee and in accordance with provisions of the Act and Listing Regulations, also appointed Mr. K.S. Gopalakrishnan (Director Identification No. 10601515 ) as the Managing Director of the Company for a period of three (3) years with effect from May 5, 2024, subject to approval of the Members. Mr. K. S. Gopalakrishnan is not liable to retire by rotation.

Mr. Joseph Andrew Jude Pereira, Ms. Padmasudha Chandrasekhar and Dr. Sundar Parthasarathy have submitted declarations that each of them meets the criteria of independence as provided in Section 149 (6) of the Act and Regulation 16(1) and 25 (8) of the Listing Regulations. There has been no change in circumstances affecting their status as Independent Directors of the Company during the year. The disclosures required pursuant to Regulation 36 of the Listing Regulations, Clause 1.2.5 of the Secretarial Standard on General Meetings are given in the Notice of AGM, forming part of the Annual Report and Schedule V of the Listing Regulations are given in the Corporate Governance Report, forming part of the Annual Report. The Members are also requested to refer to the pertinent items listed in the Notice of the AGM.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Act, the Key Managerial Personnel of the Company are: Mr. Venugopal Shanbhag, Managing Director (ceased to be Managing Director with effect from close of business hours of May 4, 2024), Mr. K.S. Gopalakrishnan, Additional Director and Managing Director appointed with effect from May 5, 2024, Mr. Manigandann R, Whole-Time Director and Chief Financial Officer and Mr. Girish T. Shajani, Company Secretary. Consequent the relinquishment of the office of Managing Director by Mr. Venugopal Shanbhag, the Board of Directors appointed Mr. K.S. Gopalakrishnan as the Managing Director of the Company, effective May 5, 2024.

None of the Directors or Key Managerial Personnel has any pecuniary relationships or transactions with the Company, other than salaries, sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

DIRECTOR'S APPOINTMENT AND REMUNERATION

The Nomination and Remuneration Committee has laid down the criteria for Directors' appointment and remuneration. These are set out in the Nomination and Remuneration Policy which is annexed as Annexure 3 to this Report and is also accessible on the Company's website at www.sekuritindia.com/investor_information>Policies.

ANNUAL EVALUATION OF PERFORMANCE BY THE BOARD

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has adopted a framework for performance evaluation of the Board, its committees, individual directors and the chairperson through a survey questionnaire. The survey questionnaire broadly covers various aspects of board functioning, the composition of the Board and its committees, culture, execution and performance of specific duties, obligations and governance. The evaluation parameters are based on execution of specific duties, quality of deliberation at the meeting, independence of judgement, decision making, the contribution of directors at the meetings and functioning of the Committees. The performance of the Board, its committees, individual directors, and chairperson was assessed by the Nomination and Remuneration Committee and the Board. In addition, the Independent Directors conducted an evaluation of the performance of Non-Independent Directors, Chairperson, and the Board, as a whole. The Board of Directors also appraised the performance of the Independent Directors, their fulfillment of independence criteria specified by the Act and Listing Regulations, and well as their independence from management. The Director being evaluated did not participate in the evaluation process.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The purpose of the familiarisation programme is to acquaint the Independent Directors with the Company's business model and the industry in which it operates. Details of the familiarisation programme are accessible on the Company's website, www.sekuritindia. com/investor_information>Corporate Governance>Familiarisation Programme. Furthermore, the Independent Directors are periodically briefed on the latest developments in the Company and its operations. Also, Independent Directors were familiarized with the operations, products, process through visit to a manufacturing facility of Saint-Gobain Group Company in Bengaluru.

NUMBER OF MEETINGS OF THE BOARD

The Board meets at regular intervals to review the Company's business and discuss 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 ensure effective participation. During the year, four board meetings were held and one meeting of Independent Directors was also held. The maximum interval between the board meetings did not exceed the period stipulated under the Act and the Listing Regulations.

COMMITTEES OF THE BOARD

The Board has constituted or reconstituted its Committees in compliance with the Act and Regulation 18 to 21 of the Listing Regulations during the year. The Committees currently in place are the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, and Share Transfer Committee. The Corporate Governance Report provides information about the Committees, their composition, meetings, and other relevant details.

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 of the Act,

i. that in the preparation of the annual financial statements for the year ended March 31, 2024, 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 judgments and estimates have been made,

iii. 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 on March 31, 2024 and of the profit of the Company for the year ended on that date; that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the annual financial statements have been prepared on a ‘going concern' basis;

v. that proper internal financial controls are in place and that such internal 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 that the Company has sound Internal Financial Controls ("IFC") commensurate with the nature and size of its business. However, the 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 the business evolves. The Company has established a mechanism to consistently detect such deficiencies and implement updated or enhanced controls wherever the potential impact of such gaps on the Company's operations is significant.

RELATED PARTY TRANSACTIONS

All related party transactions entered during the financial year were in the ordinary course of business and on an arm's length basis. The Company has obtained the necessary approvals towards the related party transactions, as prescribed by the Act and the Listing Regulations. The policy on related party transactions, as approved by the Board, is available on the website of the Company at www.sekuritindia.com/investor_information>Policies. The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in prescribed Form AOC-2, is annexed as Annexure 4 to this Report.

The details of the transactions with related parties pursuant to Ind AS-24 are provided in the accompanying financial statements.

CORPORATE SOCIAL RESPONSIBILITY

Your Company's believes that its primary objective is to cater to the requirement of its customers, while simultaneously create job opportunities, providing livelihood and income for all its stakeholders (including suppliers, vendors, service providers, employees, lenders, shareholders etc.). In addition, it aims to contribute to the government's revenue. According to your Company's belief, meeting its obligations to society entails pursuing its main objective while upholding the highest standards of corporate governance and ethical conduct in its business operations. Against the backdrop of this belief, your Company is committed to executing the objectives outlined in its CSR policy.

In accordance with Section 135 of the Act, a Corporate Social Responsibility Committee of the Board, having an Independent Chair, has been constituted to monitor the CSR policy and programs. The CSR policy and initiatives were undertaken during the year, in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, are set out in Annexure 5 to this Report. During the year, your Company has spent 57.39 Lakhs towards CSR activities, which are in line with the CSR policy of the Company.

RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROLS

Your Company recognises that managing risk is an integral part of good management practice and an essential element of good corporate governance. It aims to have a common, formalised and systematic approach for managing risk and implementing risk management processes across the Company. The Company ensures effective communication and management of risk across all risk categories. The Company has identified elements of risk, which may threaten, the existence and financial position of the Company and are set out in Management Discussion and Analysis. The Company's Internal Financial Control Systems are commensurate with the nature of its business, financial statements and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow-up actions thereon are reported to the Audit Committee.

WHISTLE-BLOWER POLICY AND VIGIL MECHANISM

Your Company has adopted and disseminated its Whistle Blower Policy to provide a secure environment and encourage employees and others to report unethical, unlawful or improper practices, acts or activities including a leak or suspected the leak of Unpublished Price Sensitive Information and to prohibit any adverse personnel action against those who report such practices, acts or activities, in good faith. The Whistle Blower Policy is accessible on the website of the Company, www.sekuritindia.com/ investor_information>Policies.

a. Statutory Auditors

M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018), were appointed as Statutory Auditors of your Company at the 49^th AGM of the Company held on August 8, 2022, till the conclusion of the 54^th AGM of the Company. The Statutory Auditors have confirmed they are not disqualified from continuing as Auditors of the Company.

b. Cost Auditor

In accordance with Section 148 of the Act 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 the recommendation of the Audit Committee, appointed Mr. G. Thangaraj, Cost Accountant, to conduct the audit of the cost records maintained by the Company for the financial year ending March 31, 2025. Mr. G. Thangaraj, Cost Accountant, has under Section 139(1) of the Act and the Rules framed thereunder furnished a certificate of their eligibility and consent for the appointment.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor as recommended by the Audit Committee and approved by the Board of Directors have to be ratified by the Members of the Company. Accordingly, an appropriate resolution forms part of the Notice convening the AGM. The Board of Directors seeks your support in approving the proposed remuneration of 1,70,000/- (Rupees one lakh seventy thousand only) plus taxes and out of pocket expenses at actuals payable to the Cost Auditor for the financial year ending March 31, 2025. Mr. G. Thangaraj, Cost Accountant, has vast experience in the field of cost audit and has conducted an audit of the cost records of the Company for the past several years.

c. Secretarial Auditor

In accordance with Section 204 of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed V. N. Deodhar & Co., Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2024. The Secretarial Audit Report for the financial year ended March 31, 2024, in Form No. MR-3 is set out in Annexure 6 of this Report. The Board has also re-appointed V. N. Deodhar & Co., Company Secretaries as Secretarial Auditor to conduct Secretarial Audit of the Company for the financial year 2024-25.

Comments on Auditors' Report

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Deloitte Haskins & Sells LLP, Statutory Auditors, in their Auditor's Report and by V. N. Deodhar & Co., Company Secretaries, in their Secretarial Audit Report. The Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year ended March 31, 2024.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company's operations in the future.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is accessible on the Company's website, www.sekuritindia.com/investor_information>Annual Reports.

DISCLOSURE REQUIREMENTS

As per Listing Regulations, the Corporate Governance Report with the Auditors' Certificate thereon, and the Management Discussion and Analysis Report are attached, which form part of this Report. As per Regulation 34 of the Listing Regulations, a Business Responsibility and Sustainability Reporting is attached and is a part of this Annual Report. The Dividend Distribution Policy of the Company as required under the Listing Regulations was adopted to set out the parameters and the circumstances that will be taken into account by the Board of Directors in determining the distribution of dividend to its shareholders. The policy is annexed as Annexure 7 of this Report and is also available on the Company's website, www.sekuritindia.com/investor_information>Policies.

Your Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by The Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

ACKNOWLEDGMENTS

Your Directors take this opportunity to acknowledge, with sincere gratitude, the support of its esteemed customers, the strength it derives from its association with Compagnie de Saint-Gobain and its subsidiaries, the unwavering support and collaboration of the employees and bankers, and the loyalty of the large family of the Company's dealers, suppliers and esteemed shareholders. On behalf of the Board of Directors