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Directors Report of Sika Interplant Systems Ltd.

Mar 31, 2016

The Directors are pleased to present the Thirtieth Annual Report of the Company and the Audited Statement of Accounts for the year ended 31st March 2016.

FINANCIAL HIGHLIGHT (Rs. in lakhs)

Standalone

Consolidated

FY 2016

FY 2015

FY 2016

FY 2015

Total Income

4178.68

3049.21

4212.42

3091.26

Profit (Loss) before Tax and Depreciation

332.48

286.03

308.04

287.92

Provision for Taxes

93.49

77.79

93.70

75.16

Depreciation

48.48

51.14

49.69

51.53

Profit (Loss) for the Year After Tax and Depreciation

190.51

157.10

164.65

161.23

Earnings per Share (in '')

4.49

3.71

4.10

3.80

OPERATIONAL REVIEW

During the year under review, your Company achieved Total Income of Rs. 4,178.68 Lakhs on a Standalone basis as compared to Rs. 3,049.21 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) / Gain and Tax, the Company has Net Profit of Rs. 190.51 Lakhs for the current Financial Year as against Net Profit of Rs. 157.10 Lakhs in the previous Financial Year.

On a Consolidated basis, your Company achieved Total Income of Rs. 4,212.42 Lakhs during the year under review as compared to Rs. 3,091.26 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) / Gain and Tax, the Company has Net Profit of Rs. 164.65 Lakhs for the current Financial Year as against Net Profit of Rs. 161.23 Lakhs in the previous Financial Year.

DIVIDEND

The Directors of your Company recommend a dividend of 8% (Rs. 0.80 per share) subject to the approval of the members.

TRANSFER TO GENERAL RESERVE

No amount is proposed to be transferred to the general reserve.

SUBSIDIARY COMPANIES

The Company has 4 subsidiaries as on March 31, 2016. There are no associate companies within the meaning of section 2(6) of the Companies Act, 2013 (“Act”). There has been no material change in the nature of the business of the subsidiaries during the period under review.

During the year, the Board of Directors (“the Board”) reviewed the affairs of the subsidiaries. In accordance with Section 129(3), consolidated financial statements of the Company have been prepared, which forms a part of this Annual Report. Further, a statement containing salient features of the financial statement of the Company''s subsidiaries in Form AOC-1 is appended to the Board''s report.

Policy for determining material subsidiaries of the Company has been provided via the following link: http://sikaglobal.com/www.sikaglobal.com/PDF/AU/2.pdf.

During the year, Aerotek Sika Aviosystems Private Limited was incorporated on 26th June 2015 in partnership with Aerotek Aviation Engineering Limited, UK (“Aerotek UK”), with equity holding in the ratio of 51:49 between your Company (including subsidiaries) and Aerotek UK (including its promoters), to undertake the manufacture and maintenance, repair and overhaul of aeronautical products and systems.

DIRECTORS & KEY MANAGERIAL PERSONNEL

The Company has received necessary declaration from each independent director under Section 149 (7) of the Act that he meets the criteria of independence laid down in Section 149 (6) of the Act and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

As per the provisions of the Act, Mr. Kunal Sikka retires by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment. The Board recommends his re-appointment.

Four meetings of the board were held during the year. For details of the meetings of the Board, reference may be made to the corporate governance report, which forms part of this report.

During the financial year 2015-16, there were no changes in the Board and Key Managerial Personnel of the Company.

Pursuant to the provisions of Section 134(5) of the Act, the Directors'' Responsibility Statement is given hereunder:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

ii. The Directors have, in the selection of the accounting policies, consulted the statutory auditors and have 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 of the Company for that period;

iii. The Directors have taken proper and sufficient care, 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. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

BOARD EVALUATION

SEBI Listing Regulations mandates that the Board shall monitor and review the Board evaluation framework. The structure includes the evaluation of directors on various parameters such as board dynamics and relationships, information flow, decision making, relationship with stakeholders, company performance, tracking board and committees'' effectiveness, and peer evaluation.

As per the provisions of the Act including Schedule IV, the evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the corporate governance report. The Board approved the evaluation results as collated by the nomination and remuneration committee.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration, which is stated in the corporate governance report that forms part of this report.

AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which forms part of this report.

AUDITORS a) Statutory Auditors

Pursuant to Section 139 of the Act and the rules framed there under, Messrs B. N. Subramanya & Co, Chartered Accountants (Firm Registration No. 004142S) were appointed as Statutory Auditors of the Company from the conclusion of the twenty ninth annual general meeting (AGM) of the Company held on September 25, 2014 till the conclusion of the thirty second AGM to be held in the year 2018, subject to ratification of their appointment at every AGM. They have confirmed their eligibility under Section 141 of the Act and the rules framed there under for re-appointment as Auditors of the Company.

b) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs N. K. Hebbar & Associates, a firm of Company Secretaries in Practice to under take the Secretarial Audit of the Company. The report on the Secretarial Audit is annexed herewith.

c) Auditor''s Report and Secretarial Auditor''s Report

The Auditor''s Report and Secretarial Auditor''s Report do not contain any qualifications, reservations or adverse remarks.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention of the accounting records, and the timely preparation of reliable financial disclosures.

RISK MANAGEMENT

The Company has a robust Risk Management framework commensurate with the size and scale of its operations to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 (the “Act”) are given in note 36 to the Financial Standalone Statements forming part of this report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, KMP or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval, wherever required. Prior omnibus approvals of the Audit Committee were obtained for the transactions of repetitive nature, as applicable. None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company. Information on transactions with related parties pursuant to section 134 (3) (h) of the Companies (Accounts) Rules, 2014 are annexed herewith in Form AOC-2 and the same forms part of this report.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of the annual return in the prescribed form MGT-9 is annexed herewith.

DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules there under for prevention and redressal of complaints of sexual harassment at workplace. During the financial year 2015-16, the Company had received zero complaints on sexual harassment, and accordingly nil complaints remain pending as of 31st March 2016.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Act.

PARTICULARS OF EMPLOYEES

The information required under section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a) The ratio of remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Name of the Director

Ratio

Dr. C.G. Krishnadas Nair

0.87

Mr. R.N. Chawhan

0.87

Mr. S. Santhanam

0.87

Mrs. Krishna Sikka

N.A

Mr. Rajeev Sikka

8.69

Mr. Kunal Sikka

7.90

b) The percentage increase in remuneration of each Directors and KMPs in the financial year:

Name

% change

Dr. C.G. Krishnadas Nair

-

Mr. R.N. Chawhan

-

Mr. S. Santhanam

-

Mrs. Krishna Sikka

-

Mr. Rajeev Sikka, Chairman & Managing Director

31%

Mr. Kunal Sikka, Whole Time Director & CFO

20%

Mrs. Sriee Aneetha M, Company Secretary

N.A.

c) The percentage increase in the median remuneration of employees in the financial year 2015-16 over 2014-15:15%

d) The number of permanent employees on the rolls of Company: 47

e) The explanation on the relationship between average increase in remuneration and Company performance: The average increase takes into account the Company performance, inflation rate, market salary increase and trends.

f) Comparison of the remuneration of the KMP against the performance of the Company:

Aggregate remuneration of KMP in FY''16 ( Rs. in Lakhs)

52.52

Revenue ( Rs. In Lakhs)

4123

Remuneration of KMPs (as a % of revenue)

1.30

Profit before Tax (PBT) ( Rs. in Lakhs)

284

Remuneration of KMP (as a % of PBT)

18.49

g) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars

March 31, 2016

March 31, 2015

% Change

a. Market Capitalization ( Rs. in crores)

51.09

59.40

-13.99

b. Price Earnings Ratio

26.84

37.76

-28.92

h) Percentage increase / decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

The Company''s share price as at March 31, 2016 has increased 1205% in comparison to the rate at which the Company came out with the last public offer, i.e. Rs. 10/- at the time of the IPO in March 1986.

i) Average percentile increase already made in the salaries of employees other than the managerial personnel in the FY 2015-16 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Managerial Remuneration was refixed for CMD & WTO at 2014 AGM, hence the variance in remuneration.

j) Comparison of each of the remuneration of the KMP against the performance of the Company:

(Rs. in lakhs)

Mr. Rajeev Sikka, Chairman & Managing Director

Mr. Kunal Sikka, Whole Time Director & CFO

Mrs, Sriee Aneetha .M Company Secretary

Remuneration in FY 16

24.81

21.97

5.74

Revenue

4123

Remuneration as % of revenue

0.6

0.5

0.2

Profit before Tax (PBT)

284

Remuneration (as % of PBT)

8.74

7.73

2.02

k) The key parameters for any variable component of remuneration availed by the Directors:

Not applicable as no variable component of remuneration was availed by the Directors.

l) The ratio of the remuneration of the highest paid Director to that of employees who are not Directors, but receive remuneration in excess of the highest paid Director during the year: 0.93

m) Affirmation that remuneration is as per the Remuneration Policy of the Company:

The Company affirms remuneration is as per the Remuneration Policy of the Company.

PUBLIC DEPOSITS

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

DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certificate on corporate governance are appended, which form part of this report.

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

Conservation of Energy:

The operations of the Company are not energy intensive. However, adequate measures have been taken to conserve and reduce the energy consumption. Initiatives to integrate energy efficiency into overall operations are undertaken through design considerations and operational practices. The key initiatives towards energy conservation were:

a) Improved monitoring of energy consumption;

b) Creating awareness within the Company on energy conservation;

c) Increased focus on procurement of energy efficient equipment; and

d) Exploring options towards utilization of solar energy.

Technology Absorption, Adaptation and Innovation

a) Technology absorption and adaptation continues to be at core of the Company''s objectives and associated strategy. The Company continues to use the latest technologies for improving productivity and the quality of its products and services. During the year the Company has made continued efforts in developing new designs to meet requirements of customers.

b) The research and development efforts of the Company are customer need based and hence it is a continuous process. Because of its in-house R&D efforts the Company was able to deliver the best solutions to the customers in a cost effective manner, including for participation in import substitution programs for aerospace and defence projects capitalizing on new business opportunities and improvement of existing designs.

c) The Company has not imported any technology during the last three years.

d) The expenditure incurred on Research and Development during the year was Rs. 68.04 lakhs.

Foreign Exchange Earning and Outgo

During the year under review, the Company earned Rs. 972.24 Lakhs in foreign exchange and spent Rs. 3083.48 Lakhs.

MATERIAL CHANGES AND COMMITTMENTS

There have been no significant material changes and commitments affecting the financial position between the end of the financial year and the date of the report.

SIGNIFICANT AND MATERIAL ORDERS

There were no significant orders passed by any regulators or courts or tribunals during the year under review impacting the going concern status and Company''s operations in the future.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the support which the Company has received from its promoters, shareholders, customers, lenders, business associates, vendors, and the employees of the Company.

On behalf of the Board of Directors

Rajeev Sikka

Chairman & Managing Director

Bengaluru,

28th July 2016


Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty-Ninth Annual Report of the Company and the Audited Statement of Accounts for the year ended 31st March 2015.

FINANCIAL HIGHLIGHTS (Rs. in lakhs) Standalone

FY 2015 FY 2014

Total Income 3,061.16 2,203.26

Profit (Loss) beforeTax and Depreciation 286.04 239.41

Provision for Taxes 77.79 67.39

Depreciation 51.14 33.87

Profit (Loss) for the Year After Tax and Depreciation 157.11 138.14

Earnings per Share (in Rs.) 3.71 3.26

Consolidated

FY 2015 FY 2014

Total Income 3,104.26 2,251.27

Profit (Loss) beforeTax and Depreciation 287.92 240.44

Provision for Taxes 75.16 70.12

Depreciation 51.53 35.31

Profit (Loss) for the Year After Tax and Depreciation 161.23 135.01

Earnings per Share (in Rs.) 3.80 3.18

OPERATIONAL REVIEW

During the year under review, your Company achieved Total Income of Rs. 3,061.16 Lakhs on a standalone basis as compared to Rs. 2,203.26 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) / Gain and Tax, the Company has Net Profit of Rs.157.11 Lakhs for the current year as against Net Profit of Rs.138.14 Lakhs in the previous year.

As can be seen, both your Company's turnover and net profit increased as compared to the previous year, despite a persisting weakness in the domestic macroeconomic environment during the last Financial Year. The continuation of your Company on a strong growth path was driven by the positive returns from a customer focused business development approach combined with the on-time execution of major orders.

Like in previous years, the last Financial Year also saw balancing investments being made in building infrastructure, design software, information systems, and design and development activities for the future benefit of your Company.

RECOGNITION

As your Company continues to be involved in advanced research and development (R&D), your Directors are pleased to report that the Company has recently obtained approval as a recognised R&D Centre from the Department (DSIR) of Scientific and Industrial Research, Department of Science & Technology, Government of India.

DIVIDEND

The Directors of your Company recommend a dividend of 8% (Rs. 0.80 per share) subject to the approval of the Members.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 (the "Act") are given in the Financial Statements.

TRANSFER TO GENERAL RESERVE

No amount is proposed to be transferred to the general reserve.

RISK MANAGEMENT

The Company has a robust Risk Management frame work commensurate with the size and scale of its operations to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal controls and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

SUBSIDIARY COMPANIES

As on the date of this report, the company has the following subsidiary companies:

1. Sikka N Sikka Engineers Private Limited

2. EMSAC Engineering Private Limited

3. Sika Tourism Private Limited

The annual accounts of these subsidiary companies were consolidated with the accounts of the Company for 2014-15. The Annual Accounts of the subsidiary companies and other relevant information shall be made available for inspection at the Company's Registered Office.

A statement containing the salient feature of the financial statements of Company's aforesaid subsidiaries is annexed in the prescribed Form AOC-1 to this report.

Sterling Technologie Pte Ltd ceased to be a subsidiary of the Company during the period under review.

FIXED DEPOSITS

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

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis, Corporate Governance Report and Auditors' Certificate are appended to this report.

DIRECTORS

During the year, Dr. J.M. Deb Nath,(DIN: 00902929) Director, tendered his resignation due to personal commitment, which was accepted in the Board Meeting held on 30thMarch 2015.The Board places on record its appreciation of the valuable contributions and guidance provided by Dr. J.M. Deb Nath.

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, during the year, Mrs. Krishna Sikka was appointed as Additional Director on 30th March 2015, and she holds office only up to the date of forthcoming AGM of the Company. Her experience of over 40 years in management and administration will be of immense value to the Company. The Resolution seeking approval of the Members for her appointment have been incorporated in the Notice along with brief details.

At the 28th Annual General Meeting of the company held on 25th September 2014, the company appointed Dr.C.G.Krishnadas Nair, Mr.R.N.Chawan and Mr.S.Santhanam as Independent Directors and they have all given declaration that, they meet the criteria of independence as laid down under section 149(6) of the Act and Clause 49 of the Listing Agreement.

BOARD EVALUATION

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the individual directors as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration, which is stated in the Corporate Governance Report.

MEETINGS

During the year five Board Meetings were convened and held, the details of which are given more specifically in the Corporate Governance Report.

COMMITTEES OF THE BOARD

The details of all the Committees of the Board including the Audit Committee are provided in the Report on Corporate Governance which forms part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act, the Directors' Responsibility Statement is given hereunder:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

ii. The Directors have, in the selection of the accounting policies, consulted the statutory auditors and have 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 of the Company for that period;

iii. The Directors have taken proper and sufficient care, 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. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

KEY MANAGERIAL PERSONNEL

The Company has complied with the requirement of having Key Managerial Personnel ("KMP") as per the provisions of Section 203 of the Act.

AUDITORS

a) Statutory Auditors

Shekar & Yathish, Chartered Accountants, Bangalore (ICAI Firm Registration No. 008964S) have resigned from the office of Statutory Auditors of the Company due to other engagements, resulting into a casual vacancy in the office of Statutory Auditors. Subsequently, the Audit Committee and Board in their respective meetings held on 8thAugust 2015 have recommended appointing B. N. Subramanya & Co, Chartered Accountants, Bangalore (ICAI Firm Registration No. 0041425), as Statutory Auditors of the Company to fill the casual vacancy. The Resolution seeking approval of the Members for their appointment has been incorporated in the Notice along with brief details.

The Auditors' report on the Financial Statements of the Company for the financial year 2014-15 does not contain any qualifications, reservations or adverse remarks.

b) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. N K Hebbar & Associates, Company Secretaries in practice, to undertake the Secretarial Audit of the Company. The report on the Secretarial Audit is annexed herewith.

The Secretarial Audit Report confirms that the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines etc., subject to the observations listed therein, which arose due to there being differing interpretation of the provisions of the new Act during the transition period. Further to the same, the Directors' clarifications on the same are as follows.

Observation (a): As per clarification provided by the Ministry of Corporate Affairs vis-a-vis Section 185 of the Act vide General Circular No. 03/2014 dated 14/02/2014 loans made by a holding company to a subsidiary are permitted "in the ordinary course of business" and such clarification will "be applicable to cases where loans so obtained are exclusively utilized by the subsidiary for its principal business activities," which is this case here and hence these loans were in accordance with the said provisions of the Act.

Observation (b): The complete information as required to be given were included in the Notice, Explanatory Statement, Board's Report or the accompanying Audited Financial Statements and hence the same was in accordance with the said provisions of the Act.

Observation (c): The elaboration provided by Secretarial

Auditors in their report is self- explanatory, i.e. "the Board of Directors have appointed the Company Secretary at their meeting held on 30.03.2015," and hence the same is in accordance with the Act.

Observation (d): The required e-forms have subsequently been filed as advised and hence the same is in accordance with the Act

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, KMP or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval, wherever required. Prior omnibus approvals of the Audit Committee are obtained for the transactions of repetitive nature, as applicable. None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company. The Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1)of Section 188 of the Act in Form AOC-2 is annexed herewith.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section197(12) read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided on request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars mentioned in Rule 5 of the said Rule which is available for inspection by the members business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

CONSERVATION OF ENERGY

The operations of the Company are not energy intensive. However, adequate measures have been taken to conserve and reduce the energy consumption.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

Technology absorption and adaptation continues to be at core of the Company's objectives and associated strategy. During the year the Company has developed new designs to meet requirements of customers. The research and development efforts of the Company are customer need based and hence it is a continuous process. Because of its in-house R&D efforts the Company was able to deliver the best solutions to the customers in cost effective manner.

FOREIGN EXCHANGE EARNING AND OUTGO

Foreign Exchange Earnings and Outgo are reported in Notes to Accounts No.32 forming part of the Audited Financial Statements for the year ended 31stMarch, 2015.

SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by any Regulators or Courts or Tribunals during the year under review impacting the going concern status and company's operations in future.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the support which the Company has received from its promoters, shareholders, customers, lenders, business associates, vendors, and the employees of the Company.

On behalf of the Board of Directors



Rajeev Sikka Chairman & Managing Director Bangalore, 8th August 2015 DIN : 00902887


Mar 31, 2014

To the Members,

The Directors are pleased to present the Twenty-Eighth Annual Report of the Company and the Statement of Accounts for the year ended 31st March 2014.

FINANCIAL HIGHLIGHTS (Rs. in lakhs)

Year ended Year ended 31st March, 2014 31st March, 2013

Total Income 2203.26 750.29

Profit (Loss) beforeTax and Depreciation 239.41 117.30

Provision for Taxes 67.39 26.50

Depreciation 33.87 25.79

Profit (Loss) for the Year After Tax and Depreciation 138.14 64.01

Earnings per Share (in Rs.) 3.26 1.51

OPERATIONAL REVIEW

During the year under review, your Company achieved Total Income of Rs. 2203.26 Lakhs as compared to Rs. 750.29 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) / Gain and Tax, the Company has Net Profit of Rs. 138.14 Lakhs for the current year as against Net Profit of Rs. 64.01 Lakhs in the previous year.

As can be seen, both your Company''s turnover and net profit increased as compared to the previous year, despite a continued deterioration in the domestic macroeconomic environment during the last Financial Year. The return of your Company to a strong growth path was driven by the positive returns from a customer focused business development approach combined with the successful completion of "unrealised" engineering effort relating to ongoing orders at the end of the previous Financial Year.

Like in previous years, the last Financial Year also saw significant investments have been made in building infrastructure, design software, information systems, and design and development activities for the future benefit of your Company.

DIVIDEND

The Directors of your Company recommend a dividend of 8% (Rs. 0.80 per share) subject to the approval of the Members. The dividend has been increased (from 6% in the previous year) in view of the good financial performance of the Company.

FIXED DEPOSITS

Your Company has not accepted any deposits from the public under section 58A of the Companies Act 2013.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement executed with the Stock Exchange, a Management Discussion and Analysis,

Corporate Governance Report and Auditors'' Certificate are included in the Annual Report.

DIRECTORS

Dr. J.M. Debnath, Director, retires by rotation and being eligible, has offered himself for reappointment.

The Company had, pursuant to the provisions of Clause 49 of the Listing Agreements entered into with Stock Exchanges, appointed Dr. C.G. Krishnadas Nair and Mr. R.N. Chawhan as Independent Directors of the Company. In line with this, during the year, Mr. S. Santhanam was appointed as Additional Director on 29th March 2014, and as per the provisions of Companies Act, 1956, he holds office only up to the date of forthcoming AGM of the Company. In this regard, the Company has the received requisite notice in writing from a Member proposing Mr Santhanam for appointment as an Independent Director of the Company.

As per section 149(4) of the Companies Act, 2013 (Act), which came into effect from 1st April 2014, every listed public company is required to have at least one-third of the total number of directors as Independent Directors. In accordance with the provisions of section 149 of the Act, these Directors are being appointed as Independent Directors to hold office for a period of 5 (five) consecutive years from the conclusion of this AGM as mentioned in the Notice.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act 2013, the Directors'' Responsibility Statement is given hereunder:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

ii. The Directors have, in the selection of the accounting policies, consulted the statutory auditors and have 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 of the Company for that period;

iii. The Directors have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis.

SUBSIDIARY COMPANIES

As on the date of this report, the company has the following subsidiary companies:

1. Sikka n Sikka Engineers Private Limited

2. EMSAC Engineering Private Limited

3. Sika Tourism Private Limited

4. Sterling Technologie Pte Ltd (Singapore)

The Ministry of Corporate Affairs, Government of India, has granted a general exemption to Companies from attaching the Annual Accounts in respect of its subsidiary companies. The Annual Accounts of the subsidiary companies and other relevant information shall be made available for inspection at the Company''s Registered Office.

As required under the Listing Agreement with the Stock Exchange, in accordance with the Accounting Standard (AS 21), the audited consolidated financial statement of the Company forming part of this report is attached hereto.

AUDITORS

M/s. Shekar & Yatish (ICAI Firm Registration No. 008964S), Chartered Accountants, who are the Statutory Auditors of the Company, hold office until the conclusion of the forthcoming AGM, and being eligible offer themselves for reappointment.

As required under Section 224 of the Companies Act, 2013, M/s. Shekar & Yathish have furnished a certificate of its eligibility for reappointment.

PARTICULARS OF EMPLOYEES

There is no employee whose particulars are required to be given under Section 217(2A) (a) of the Companies Act 2013 read with the Companies (Particulars of Employees) Rules, 1975.

DISCLOSURES PURSUANT TO SECTION 217 (1) (e) OF THE COMPANIES ACT, 2013

The information as required under the above Section is given in Annexure and forms part of this Report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the support which the Company has received from its customers, shareholders, promoters, lenders, business associates, vendors, and the employees of the Company.

For and on behalf of the Board of Directors Rajeev Sikka Bangalore, 06thAugust, 2014 Chairman & Managing Director


Mar 31, 2013

The Directors are pleased to present the Twenty-Seventh Annual Report of the Company and the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIALS HIGHLIGHTS

(in ,akhs)

Year ended Year ended 31s''March, 2013 31s''March, 2012

Total Income 75029 1,185.23

Profit (Loss) before Tax and Depreciation 226.84

Provision for Taxes 2650 66 30

Depreciation 2579 19.14

Profit (Loss) for the Year After Tax and Depreciation 6401 13174

"Earnings per Share (inn 1.51 3.11

OPERATIONAL REVIEW

During the year under review, your Company achieved Total Income of X 750.29Lakhs as compared to Rs. 1185.23 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) /Gain and Tax, the Company has Net Profit of Rs. 131.74 Lakhs in the previous year.

Both your Company''s turnover and net profit decreased as compared to the year earlier period, due to a continued deterioration in the macroeconomic environment during the last Financial Year coupled with the projects-driven nature of your Company''s business. Delays in receiving certain design-related approvals from customers led to execution rescheduling, which meant your Company had a material amount of "unrealised" engineering effort relating to ongoing orders at the end of the last Financial Year. The successful execution of these orders in the current Financial Year is likely to see your Company return to the growth path barring any unforeseen circumstances.

Like previous years, last Financial Year also, significant investments have been made in building infrastructure, purchase design software information systems, and design and development activities for the future benefit of your Company.

DIVIDEND

The Directors of your Company are pleased to maintain a dividend of 6% (Rs. 0.60 per share) subject to the approval of the share holders. This will amount to a total dividend payout of Rs. 25,44,105/- (excluding dividend distribution tax) for the Financial Year ended 31st March, 2013 for shareholders whose names appear in the Register of Members as on date of AGM.

The Dividend has been kept unchanged as the Company wants to finance its expansion program through internal accruals. It is expected that the benefits of this expansion will be reflected in the performance of the Company in theyearstocome.

SUBSIDIARY COMPANIES

As on the date of this report, the company has the following subsidiary companies:

1. Sikka n Sikka Engineers Private Limited

2. EMSAC Engineering Private Limited

3. Sika Tourism Limited

The Ministry of Corporate Affairs, Government of India, has granted a general exemption to Companies from attaching the Annual Accounts in respect of its subsidiary companies. The Annual Accounts of the subsidiary companies and other relevant information shall be made available for inspection at the Company''s Registered Office.

As required under the Listing Agreement with the Stock Exchange, in accordance with the Accounting Standard (AS21),the audited consolidated financial statement of the Company forming part of this report is attached hereto.

DIRECTORS

Dr. C. G. Krishnadas Nair, Director retires by rotation in the forthcoming Annual General Meeting, and being eligible, offers himself for re-appointment.

AUDITORS

M/s. Shekar & Yathish, Chartered Accountants, who are the Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting, and being eligible offer themselves for re-appointment.

As required under under Section 224 of the Companies Act, 1956, M/s. Shekar & Yathish has furnished a certificate of its eligibility for re-appointment.

CORPORATEGOVERNANCE

To comply with conditions of Corporate Governance, pursuant to Clause 49 of the Listing Agreements with the Stock Exchange, a Management Discussion and Analysis Statement, Report on Corporate Governance and Auditors'' Certificate, are included in the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors'' Responsibility Statement is given hereunder:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

ii. The Directors have, in the selection of the accounting policies, consulted the Statutory Auditors and have 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 of the Company for that period;

iii. The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis.

FIXED DEPOSITS

YourCompany has not accepted anydeposits from the publicunder section 58Aofthe Companies Act, 1956.

PARTICULARS OF EMPLOYEES

There is no employee whose particulars are required to be given under Section 217(2A) (a) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

DISCLOSURES PURSUANTTO SECTION 217(1) (e) OFTHE COMPANIES ACT, 1956.

The information as required under the above Section is given in Annexure and forms part of this Report.

ACKNOWLEDGEMENTS

On behalf of the Directors of the Company, I would like to place on record our deep appreciation to our Shareholders, Customers, Business Partners, Vendors, Bankers, Defence Research and Developmental Organizations, and Central and State Governments, for their continued support. The Directors express their gratitude and since reappreciation to all the employees of the Company for their contributions, hard work, and commitment.

Bangalore, 30»May, 2013 Chairman


Mar 31, 2012

The Directors are pleased to present the Twenty-Sixth Annual Report of the Company and the Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL HIGHLIGHTS (Rs.in lakhs)

Year ended Year ended 31st March, 2012 31st March, 2011

Total Income 1,185.23 1,122.00

Profit (Loss) before Tax and Depreciation 226.84 180. 02

Provision for Taxes 66.30 53.68

Depreciation 19.14 17.49

Profit (Loss) for the Year After Tax and Depreciation 131.74 108.87

Earnings per Share (in Rs.) 3.11 2.57

OPERATIONAL REVIEW

During the year under review, your Company achieved Total Income of Rs.1185.23 Lakhs as compared to Rs.1122.00 Lakhs during the previous Financial Year. After considering Interest, Depreciation, Foreign Exchange (Loss) / Gain and Tax, the Company has Net Profit of Rs.131.75 Lakhs for the current year as against Net Profit of Rs.108.87 Lakhs in the previous year.

Both your Company's turnover and Net Profit increased as compared to the previous year, despite challenging macroeconomic backdrop that included persistent inflationary pressures with the Reserve Bank of India hiking interest rate by a cumulative of 175 basis points during the last Financial Year. In addition, the Company was also affected by the dramatic volatility in the Rupee, the significant weakening of which has also had an impact on bottom-line. Your Company is evaluating steps to mitigate the impact of these various macroeconomic factors.

During the last Financial Year, significant investments have been made in building infrastructure, purchase of advanced machinery, design software, data security, information systems, and design and development activities for the future benefit of your Company.

DIVIDEND

The Directors of your Company are pleased to maintain a dividend of 6% (Rs. 0.60 per share) subject to the approval of the shareholders. This will amount to a total dividend payout of Rs.25,44,105/- (excluding dividend distribution tax) for the Financial Year ended 31st March, 2012 for shareholders whose names appear in the Register of Members as on date of AGM.

The Dividend has been kept unchanged as the Company wants to finance its expansion program through internal accruals. It is expected that the benefits of this expansion will be reflected in the performance of the Company in the years to come.

SUBSIDIARY COMPANIES

As on the date of this report, the company has the following subsidiary companies:

1. Sikka n Sikka Engineers Private Limited

2. EMSAC Engineering Private Limited

3. Sika Tourism Limited

The Ministry of Corporate Affairs, Government of India, has granted a general exemption to Companies from attaching the Annual Accounts in respect of its subsidiary companies. The Annual Accounts of the subsidiary companies and other relevant information shall be made available for inspection at the Company's Registered Office.

As required under the Listing Agreement with the Stock Exchange, in accordance with the Accounting Standard (AS 21), the audited consolidated financial statement of the Company forming part of this report is attached hereto.

DIRECTORS

Mr R N Chawhan, Director retires by rotation in the forthcoming Annual General Meeting, and being eligible, offers himself for re-appointment.

AUDITORS

M/s. Shekar & Yathish, Chartered Accountants, who are the Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting, and being eligible offer themselves for re-appointment.

As required under under Section 224 of the Companies Act, 1956, M/s. Shekar & Yathish has furnished a certificate of its eligibility for re-appointment.

CORPORATE GOVERNANCE

To comply with conditions of Corporate Governance, pursuant to Clause 49 of the Listing Agreements with the Stock Exchange, a Management Discussion and Analysis Statement, Report on Corporate Governance and Auditors' Certificate, are included in the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors' Responsibility Statement is given hereunder:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

ii. The Directors have, in the selection of the accounting policies, consulted the Statutory Auditors and have 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 of the Company for that period;

iii. The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis.

FIXED DEPOSITS

Your Company has not accepted any deposits from the public under section 58A of the Companies Act, 1956. PARTICULARS OF EMPLOYEES

There is no employee whose particulars are required to be given under Section 217 (2A) (a) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

DISCLOSURES PURSUANT TO SECTION 217(1) (e) OF THE COMPANIES ACT, 1956

The information as required under the above Section is given in Annexure and forms part of this Report.

ACKNOWLEDGEMENTS

On behalf of the Directors of the Company, I would like to place on record our deep appreciation to our Shareholders, Customers, Business Partners, Vendors, Bankers, Defence Research and Developmental Organizations, and Central and State Governments, for their continued support. The Directors express their gratitude and sincere appreciation to all the employees of the Company for their contributions, hard work, and commitment.

For and on behalf of the Board of Directors

Bangalore, 20th August, 2012 Rajeev Sikka

Chairman & Managing Director


Mar 31, 2010

The Directors are pleased to present the Twenty Fourth Annual Report along with Audited Statement of Accounts for the year ended 31st March 2010

FINANCIALS RESULTS

Rs in lakhs

31/3/2010 31/3/2009

Total Income 11,07,44,581 12,90,88,279 Profit (Loss) before taxa depreciation 2,83,45,960 3,69,53,754

Provision for taxes 87,35,000 1,24,84,383

Depreciation 16,20,695 16,22,000

Profit (Loss) for the year after tax and depreciation 1,76,22,344 2,28,47,371

Earning per share 4.16 5.39

OPERATIONAL REVIEW.

Your company has posted turnover of Rs.1107.44 Lakhs & profit of Rs. 267.25 lakhs before tax for the year 2009-10. There has been a reduction in turnover & profitability due to the recession. The Company would be on the growth path in the current year barring unforeseen circumstances.

Your company has taken up construction of engineering complex at Bangalore which will be completed in the current financial year.

DIVIDEND

Your Directors have recommended a dividend of 6% on 4240175 equity shares of Rs.10/- each absorbing Rs. 25,44,105/ - excluding tax for the year ended 31st March 2010 for the share holders whose name appear in the register of members as on date of book closure.

The Dividend has been kept unchanged as the Company has taken up an expansion program involving financial outlay in the current year. The benefit of the expansion project will be reflected in the performance of coming years.

SUBSIDIARY COMPANIES

The Company has following subsidiary companies: -

1) M/s.Sikka n Sikka Engineers Pvt Ltd

2) M/s.EMSAC Engineering Pvt Ltd

3) M/s.SIKA UK Ltd

Annual report of all subsidiary companies for the year ended 31st March 2010 is attached to the Balance sheet of the Company.

Sikka n Sikka Engineers Pvt Ltd is a 100% subsidiary of the Company.

EMSAC Engineering Pvt Ltd specialized in Servo systems and control systems including specialized design software, application engineering and support, Hardware etc. EMSAC is developing a competent team with specilised training in India and abroad.

SIKA UK Ltd located in UK specializes in Fasteners of exotic materials for Aerospace and Defense both for India and European markets.

As required under the listing agreements with the Stock exchange a consolidated financial statement of the Com- pany and its subsidiaries is attached. The Consolidated Financial Statements have been prepared in accordance with accounting standards 21 issued by the Institute of Chartered Accountants of India.

DIRECTORS

Mr.R.N.Chawhan, Director and Dr,J.M.Deb Nath Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The proposals regarding their re-appointment as Directors are placed for your approval.

TERM LOAN

The Company for its expansion by way of manufacturing facilities is funding the project through internal accruals and debt

CORPORATE GOVERNANCE CODE

As per Clause 49 of the listing agreement with the Stock Exchange, the Company complies with the corporate Governance practices as enunciated in the listing agreement, Corporate Governance report and Management discussions 6t analysis are annexed, which form part of this report.

OTHER PARTICULARS

Information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of the employ- ees) Rules 1975 : is NIL.

FIXED DEPOSITS

During the year ended 31st March, 2010, your Company has not accepted any deposits within the meaning of Sec.58A of the Companies Act, 1956, read with companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS RESPONSIBILITY STATEMENT.

The Directors responsibility statement, setting out the compliance with the accounting and financials reporting requirements specified under section 217(2AA) of the Companies Act, 1956 is annexed to this report.

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

Under the Companies (disclosure of particulars in the report of Board of Directors) Rules, 1988 is annexed to this report.

AUDITORS

M/s.M/s.Shekar & Yathish, Chartered Accountants & Auditors of the company retire at the conclusion of the ensuing Annual General Meeting and offers themselves for re-appointment.

ACKNOWLEDGEMENT

Your Directors would like to thank all stake holders for their co-operation Et continued support. We deeply appreciate your support and look forward to your continued support for future growth.

On Behalf of the Board of Directors

Place: Bangalore

Date : 16.08.2010 RAJEEV SIKKA

Chairman & Managing Director

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