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Fluidomat Ltd.

BSE: 522017 Sector: Engineering
NSE: N.A. ISIN Code: INE459C01016
BSE 00:00 | 27 Jan 149.70 -8.85
(-5.58%)
OPEN

164.00

HIGH

164.00

LOW

146.60

NSE 05:30 | 01 Jan Fluidomat Ltd
OPEN 164.00
PREVIOUS CLOSE 158.55
VOLUME 11521
52-Week high 168.90
52-Week low 75.00
P/E 16.88
Mkt Cap.(Rs cr) 74
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 164.00
CLOSE 158.55
VOLUME 11521
52-Week high 168.90
52-Week low 75.00
P/E 16.88
Mkt Cap.(Rs cr) 74
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Fluidomat Ltd. (FLUIDOMAT) - Director Report

Company director report

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#MDStart#

MANAGEMENT DISCUSSION AND ANALYSIS

To

The Members of

Fluidomat Limited.

Your Directors have pleasure in presenting 45th Annual Report on the businessand operations of the Company along with the Standalone & Consolidated AuditedFinancial Statements for the financial year ended March 31st 2021.

FINANCIAL RESULTS:

Financial performance of the Company is summarized in the table below:-

(Rs. In Lakhs)

Particulars

Standalone Year ended on

Consolidated Year ended on

31.03.2021 31.03.2020 31.03.2021 31.03.2020
Revenue from Operations 2827.34 2549.09 2827.34 2549.09
Other Income 135.04 167.91 136.33 167.66
Total Income 2962.38 2717.00 2963.67 2716.75
Total Expenditure except Interest and 2356.76 2222.82 2357.76 2223.77
Depreciation
Profit before Interest Depreciation & Tax 605.62 494.18 605.91 492.98
(EBIDTA)
Less: Interest 2.26 0.70 2.26 0.70
Less: Depreciation 64.11 66.01 64.11 66.01
Profit before Tax 539.25 427.47 539.54 426.27
Less: (a) Current Tax 136.38 124.24 136.38 124.24
(b) Deferred Tax 4.53 (17.02) 4.53 (17.02)
Net Profit for the year 398.34 320.25 398.63 319.05
Other Comprehensive Income/(Loss) 41.40 (21.17) 41.40 (21.17)
Total Comprehensive Income for the year 439.74 299.08 440.03 297.88
Reserves & Surplus 3225.90 2786.16 3224.99 2784.96
EPS (Equity Shares of Rs. 10/- each) Basic & 8.93 6.07 8.93 6.05
Diluted (in Rs.)
Paid up Equity Share Capital 492.70 492.70 492.70 492.70

REVIEW OF OPERATIONS /STATE OF AFFAIRS:

Standalone:

During the financial year 2020-21 the Company has posted a total revenue fromoperations of Rs. 2962.38 lakhs as against Rs. 2717.00 lakhs in the previous financialyear 2019-20 representing increase in total revenue of 9.03%.

Company has booked the orders of Rs.3856.53 lakhs during the current financial year asagainst the order booking of Rs.3194.87 lakhs in the previous financial year which ishigher by 20.71%.

During the year ended on March 31 2021 the Earnings before Interest Depreciation andTax (EBIDTA) has been increased to Rs. 605.62 lakhs as against the EBIDTA of Rs. 494.18lakhs in the corresponding previous financial year.

The Net Profit of the Company for the financial year 2020-21 has been increased to Rs.439.74 lakhs as compared to Rs. 299.08 lakhs during the previous financial year. Earningper share (EPS) for the year increased to Rs. 8.93 as compared to EPS of Rs. 6.07 inprevious financial year.

Consolidated:

Your company having a wholly owned foreign subsidiary in the name of Fluidomat UKPrivate Limited (WOS) in UK incorporated on 26th June 2019. During the year under reviewtotal expenses was Rs. 1.00 lakhs and the said subsidiary is yet to commence commercialoperations therefore there is no operating income during the year. However WOS havingforeign currency fluctuation gain in the financial statement Rs. 1.29 lakhs due toconversion of foreign currency into functional currency net gain of Rs. 0.29 lakhs duringthe year has been reported.

Covid-19 Impact:

The outbreak of COVID-19 second wave pandemic across the world including India andother countries resulted in the Governments taking significant measures to contain thespread of the virus including imposing mandatory lockdowns by states and restrictingeconomic activities.

The impact of the second wave on the real economy seems to be limited so far incomparison with the first wave. Evidently the localised nature of lockdowns betteradaptation of people to work-from home protocols online delivery models e-commerce anddigital payments were at work. Real economy indicators moderated in April and May 2021as many states-imposed restrictions to arrest the renewed surge in infections. It hasspread rapidly across states regions and into rural pockets.

However their is no impact on Company's manufacturing and distribution operations andbased on the preliminary estimates the Company does not anticipate any major challenge inmeeting the financial obligations on the long term basis.

Further the company does not carry any risk in the recoverability and carrying valuesof its assets including Property Plant and Equipment trade receivables InventoriesInvestments and there is no material impact on the financial results of the Company duringthe year 2020-21.

The impact assessment of Covid-19 is a continuing process given the uncertaintiesassociated with its nature and duration accordingly the impact may be different from thatestimated as at the date of approval of these financial results. The company will continueto monitor any material changes to future economic conditions.

DIVIDEND:

Your Board of Directors are pleased to recommend a dividend of Rs. 3.25 (32.50%) onEquity Share of Rs.10/- each for the year ended March 31 2021. (Previous year Rs. 2.25(22.50%) per Equity Share of Rs.10/- each). The above dividend would be paid subject toapproval by the Members in the ensuing Annual General Meeting. The proposed dividend willabsorb Rs.160.13 Lakhs.

TRANSFER TO RESERVES:

During the year your company has voluntarily transferred Rs 100.00 Lakhs (Previousyear Rs. 100.00 Lakhs) to the General Reserves. Except this the company has nottransferred any funds to any kind of Reserves during the year (Previous Year: Nil)

SHARE CAPITAL:

The paid up Equity Share Capital of the Company as at 31st March 2021 was Rs. 492.70Lakhs divided into 49.27 Lakhs equity shares of Rs. 10/- each. There is no change inEquity share Capital of the Company during the year. Your company does not hold anyinstruments convertible into the equity shares of the Company.

CHANGE IN CONTROL AND NATURE OF BUSINESS

There is no change in control and nature of business activities during the period underreview.

BUSINESS TRANSFER

There is no transfer of business during the period under review.

DIRECTORS & KEY MANAGERIAL PERSONNELS:

Executive Directors and KMPs:

The Company is having adequate Key Managerial Personnel's as per requirements ofsection 203 of the Companies Act 2013 as well as the SEBI (LODR) Regulations 2015. Thereis no change in the key managerial personnel's during the year under review.

Declaration for Independency of Independent Directors:

The Company have received necessary declaration from all the independent directors asrequired under section 149(6) of the Companies Act 2013 confirming that they meet thecriteria of Independence as per the SEBI (LODR) Regulation 2015 and the Companies Act2013. In the Opinion of the Board all the independent directors fulfills the criteria ofthe independency as required under the Companies Act 2013 and the SEBI (LODR)Regulations 2015. All the Independent Directors have also registered themselves withIndependent Directors' Databank.

The members of the Company in their 42nd Annual General Meeting held on 26th September2018 has reappointed all Independent Directors of the Company for a second term of fiveconsecutive years w.e.f. 1st April 2019 not liable to retire by rotation.

Directors liable to retire by rotation and seeking re-appointment:

Shri Ashok Jain (DIN 00007813) the Chairman & Managing Director is liable toretire by rotation at the ensuing Annual General Meeting and being eligible offers himselffor re-appointment.

Your Board of Directors and Nomination & Remuneration Committee has recommended toincrease the remuneration payable to Shri Ashok Jain Chairman & Managing DirectorShri Kunal Jain Whole-time Director designated as Executive Director and Mrs. RadhicaSharma Whole-time Director designated as Deputy Managing Director w.e.f. 1st October2021 for the remaining part of their tenure.

Your Board recommend to pass necessary resolutions as proposed in the Item No. 4 to 6of the AGM Notice.

BOARD MEETING AND THE BOARD:

A. Number of meetings of the Board:

Total Four (4) meetings of the Board were held during the year. The intervening gapbetween any two meetings was not exceeding 120 days as prescribed by the Companies Act2013 and the SEBI (LODR) Regulations 2015 except for the exemption granted by the MCA andSEBI for extension of holding of Board Meeting. For further details of the meetingsplease refer the Corporate Governance Report which forms part of this report.

B. Policy on Directors' appointment and remuneration:

The Board has on the recommendation of the nomination and remuneration committeeframed a nomination remuneration and evaluation policy which lays down the criteria foridentifying the persons who are qualified to be appointed as directors and or seniormanagement personnel of the company along with the criteria for determination ofremuneration of directors KMP's and other employees and their evaluation and includesother matters as prescribed under the provisions of section 178 of Companies Act 2013and Regulation 19 of SEBI (LODR) Regulations 2015. Policy of the Company has been given atthe website of the Company at Link:-https://www.fluidomat.com .The details of the same arealso covered in Corporate Governance Report forming part of this annual report.

C. Board Evaluation:

The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategy.

The Nomination & Remuneration Committee and the Board carried out an annualperformance evaluation of the Board Committees Individual Directors and the Chairman.The Chairman of the respective Committees shared the report on evaluation with therespective Committee members. The performance of each Committee was evaluated by theBoard based on report on evaluation received from respective Committees.

The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board & Nomination & Remuneration Committee and feedback was givento Directors.

COMMITTEES OF THE BOARD:

In accordance with the Companies Act 2013 and the SEBI (LODR) Regulations 2015 andother purposes the Board has the following Four (4) committees as on 31.03.2021:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholders' Relationship Committee

d) Corporate Compliance Committee

Committee dissolved during the year:

Corporate Social Responsibility Committee (CSR):

As per the provision of section 135 (9) "where the amount to be spent by acompany under sub-section (5) does not exceed fifty lakh rupees the requirement undersub-section (1) for Committee shall not be applicable and the functions of such Committeeprovided under this section shall in such cases be discharged by the Board of Directorsof such company." In line of aforesaid amendment Company had dissolved CSRCommittee in the board meeting held on 12th February 2021. The Board shall review the CSRexpenses of the Company.

Apart from the aforesaid committees under the Companies Act 2013 and the SEBI (LODR)Regulations 2015 the Company has also constituted Internal Complaints Committee (ICC)under the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013.A detailed note on the Board and its committees is provided under theCorporate Governance Report section in this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of Section 134(3)c of the Companies Act 2013 your directors to the best oftheir knowledge and belief and according to the information and explanations obtained bythem in the normal course of their work state that in all material respects;

a) In the preparation of the annual financial statements for the year ended March 312021 the applicable accounting standards have been followed;

b) Appropriate accounting policies have been selected applied consistently andjudgment and estimates have been made that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the company as at March 31 2021 and of theprofit of the company for the year ended on that date;

c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) The annual financial statements have been prepared on a going concern basis;

e) Proper internal financial controls were in place and the financial controls wereadequate and operating effectively; and

f) Proper systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.

AUDITORS AND THEIR REPORT:

A. Statutory Auditors:

In terms of the provisions of section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. C.P. Rawka & Co. CharteredAccountants (Firm Registration No. 000518C) was appointed as the statutory auditors ofthe Company to hold office for one term of 5 years commencing from conclusion of the 41stAnnual General Meeting upto the conclusion of the Annual General Meeting of the Company tobe held in the calendar year 2022.

The Standalone and Consolidated Auditors Report and the Notes on financial statementfor the year 2020-21 referred to in the Auditor's Report are self-explanatory and does notcontain any qualification reservation or adverse remark therefore do not call for anyfurther comments.

B. Cost Auditors and Records:

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 amended time to time the provision regarding Cost Auditand maintenance of Cost Records is not applicable to Company during the year 2020-21.

C. Secretarial Auditors:

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasre-appointed M/s D.K.Jain & Co. Company Secretaries to undertake the SecretarialAudit of the Company for the year 2020-21. The Secretarial Auditors in their report forthe year 2020-21 has made certain observations which has been replied by the Management ofthe company. The Report of the Secretarial Audit for the year 2020-21 in the Form MR-3 isannexed herewith as "Annexure-1".

Observations of the Secretarial Auditors:

a) There are 2 (Two) Charges for Charge ID No. 90205616 and 90204976 reflecting in theIndex of Charges at the portal of MCA. However the loan amount was repaid and satisfiedlong back but no evidence for the filing of Forms for satisfaction were produced beforeus.

b) Mr. Surendra Shantilal Kothari (Member of Promoter Group) pledged his 17200 Equityshares on 25th Sept. 2020 but failed to report to the company about such event within twotrading days in terms of Circular No. SEBI/HO/ MIRSD/DOP/CIR/P/2 dated 25th Feb. 2020.The said disclosure has been given to the company on 19th Oct. 2020 and the company hasreported to the Stock exchange on 19th October 2020.

Management Reply:

a) The company is trying to get the charge satisfied however the company could notfind where about the charge holders therefore the filing of Form CHG-4 with the digitalsignature of the charge holder could not be uploaded however the management trying tofind suitable way to file the same and comply with the requirement of law.

b) The aforesaid pledge is in compliance of SEBI circular SEBI/HO/MIRSD /DOP/CIR/P/2020/28 dated 25th February 2020 for Margin obligations to be given by way ofPledge/ Re-pledge in the Depository System.

Further the same is exempted by SEBI under SEBI (Substantial Acquisition of Shares andTakeover) Regulations 2011 vide its circular No. SEBI/HO/CFD/DCR-2/CIR/P/2020/164 dated2nd September 2020. Please also note that the promoter has not pledged their shares toany financial institution against any security/ hypothecation towards any type of creditfacilities.

D. Disclosure of frauds against the Company:

There were no instances for other than reportable fraud to the Central Governmentcovered under section 134(3)(ca) of the Companies Act 2013. Further that the auditorshave not found any fraud as required to be reported by them under section 143(12) to theCentral Government during the year 2020-21.

TRANSACTIONS WITH RELATED PARTIES:

The Company has not entered into any material contracts with the related partiesduring the year 2020-21 and other contracts or arrangements wherein the ordinary course ofbusiness on arms length basis which were approved by the Audit Committee and the Boardfrom time to time. Therefore there is no particulars of contracts or arrangements withrelated parties referred to in section 188(1) of the Companies Act 2013 which needs todisclose in the prescribed form AOC-2 and may be treated as not applicable. However therelated party transactions as covered under Indian Accounting Standards (Ind AS 24) havebeen disclosed in the Note of the financial statements for the year under review.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators/Courts of law whichwould have impact on the going concern status of the Company and its future operations.

CONSOLIDATED FINANCIAL STATEMENTS:

Company is having one Wholly Owned Subsidiary incorporated in UK. Therefore company ispresenting Consolidated Financial Statement for the year 2020-21. Pursuant to section 136of the Companies Act 2013 the Standalone financial statements and consolidated financialstatements along with relevant documents and separate unaudited accounts of Fluidomat UKPrivate Limited are available on the website (www.fluidomat.com) of the company.

PERFORMANCE OF SUBSIDIARIES ASSOCIATE COMPANIES AND JOINT VENTURES:

Your company have one Wholly Owned Subsidiary (WOS) incorporated in UK in the name andstyle of Fluidomat UK Private Limited on 26th June 2019. There was no associate companyor/and joint venture within the meaning of Section 2(6) of the Companies Act 2013.

The WOS is yet to commence the commercial activities. However pursuant to Section129(3) of the Companies Act 2013 a statement containing salient features of the financialstatements of the Company's subsidiaries in Form AOC-1 is annexed herewith as "Annexure-2".

PUBLIC DEPOSITS:

DEPOSITS

Your Company has not accepted deposit from the public falling within the ambit ofsection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 and there were no remaining unclaimed deposits as on 31st March 2021. Further theCompany has not accepted any deposit or loans in contravention of the provisions of theChapter V of the Companies Act 2013 and the Rules made there under.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL RESULTS:

S. No. Particulars Amt in Rs.
1 Details of Deposits accepted during the year Nil
2 Deposits remaining unpaid or unclaimed at the end of the year Nil
3 Default in repayment of deposits N.A.
At the beginning of the year
Maximum during the year
At the end of the year
4 Deposits not in compliance with law N.A.
5 NCLT/ NCLAT orders w.r.t. depositors for extension of time and penalty imposed N.A.

The Board of Directors has devised systems policies and procedures / frameworks whichare currently operational within the Company for ensuring the orderly and efficientconduct of its business which includes adherence to Company's policies safeguardingassets of the Company prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation. In line with best practices the Audit Committee reviews these internalcontrol systems to ensure they remain effective and are achieving their intended purpose.Where weaknesses if any are identified as a result of the reviews new procedures areput in place to strengthen controls. These controls are reviewed at regular intervals.

Nothing has come to the attention of the Directors to indicate that any materialbreakdown in the function of these controls procedures or systems occurred during theyear under review. There have been no significant changes in the Company's internalfinancial controls during the year that have materially affected or are reasonably likelyto materially affect its internal financial controls. There are inherent limitations tothe effectiveness of any system of disclosure controls and procedures including thepossibility of human error and the circumvention or overriding of the controls andprocedures.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

The outbreak of the novel corona virus pandemic (Covid-19) is causing significantdiscrepancies in economic activities the impact of which has been discussed in Review ofOperations and the Management Discussion and Analysis report which forms part of thisAnnual Report

Except the above no material changes and commitments affecting the financial positionof the Company occurred during the Financial Year to which this financial statementsrelate and the date of report.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:

The Company has not provided any loans and guarantees pursuant to section 186 of theCompanies Act 2013. However The Company has made investments in Mutual funds and inSubsidiary company and given advance against salary or otherwise to the employees of theCompany as per the Company's policy. Details of the existing investment is provided in theFinancial Statement and hence not reproduced here.

ANNUAL RETURN:

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act 2013 read withRule 12(1) of the Companies (Management and Administration) Rules 2014 the Annual Returnin form MGT-7 for the year ended 31st March 2021 is hosted on www.fluidomat.com. The sameshall be filed to Registrar of Companies after annual General Meeting to be held on 25thSeptember 2021

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company is not required to make any new budget for CSR expenses for the year2020-21 as the company is not falling under the eligibility criteria under section 135 ofthe Act read with Companies (CSR Policy) Rules 2014 as amended from time to time.However the company is required to spend remaining balance amount of previous years ofRs. 9.89 Lakhs out of which the company has spent Rs.9.89 Lakhs towards CSR activities asspecified in Schedule VII of the Act in the current year and there is no CSR amount due atthe end of financial year.

Report on CSR as per Rule 8 of the Companies (CSR Policy) Rules 2014 is enclosed as "Annexure-3"of this Report.

CORPORATE GOVERNANCE:

Your Company firmly believes and adopts the highest standard of practice underCorporate Governance. A separate section on Corporate Governance and a certificateobtained from Auditors of the Company and Practicing Company Secretary relatedDis-qualification of Directors form part of Corporate Governance Report.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND

OUTGO:

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "Annexure-4".

INTERNAL COMMITTEE ON PREVENTION OF SEXUAL HARASSMENT:

The Company has framed ‘Anti Sexual Harassment Policy' at workplace and hasconstituted Internal Complaints Committee (ICC) as per the requirement of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andRules made thereunder. No complaints with allegations of sexual harassment were reportedduring the year under review.

RISK MANAGEMENT:

The company is not required to have risk management Committee therefore the saidcommittee was dissolved. However the Audit Committee will frame implement and monitorthe risk management plan for the Company.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Your company has a Vigil Mechanism in place which also includes a whistle blower policyin terms of the SEBI (LODR) Regulation 2015 for Directors and employees of the Company toprovide a mechanism which ensures adequate safeguards to employees and Directors from anyvictimization on raising of concerns of any violations of legal or regulatoryrequirements incorrect or misrepresentation of any financial statements and reports etc.

The Vigil Mechanism/Whistle Blower Policy of the Company can be accessed on theCompany's website at the link:(http://www.fluidomat.com) and the same is being attachedwith this Report as "Annexure-5".

All the employees have the right/option to report their concern/grievance to theChairman of the Audit Committee. During the year under review no protected disclosure fromany Whistle Blower was received by the designated officer under the Vigil Mechanism.

PARTICULARS OF EMPLOYEES:

The information required under section 197(12) of the Companies Act 2013 read withRule 5(1) and 5(2) of the Companies (Appointment & remuneration of ManagementPersonnel) Rules 2014 as amended are given below:

A. Ratio of the remuneration of each director to the median employee's remunerationand the percentage increase in remuneration of each Director & Key ManagerialPersonnel:

S. No. Name Designation Remuneration for the year 2020-21 (Rs.) Remuneration for the year 2019-20 (Rs.) Increase In Remuneration (Rs.) Percentage of Increase I in Remuner- ation Ratio Between Director's Remuneration and Median Employee \ Remuneration
1 Shri Ashok Jain CMD 4448828 5084651 NA NA 16.93
2 Shri Kunal Jain WTD 4276203 4377525 NA NA 16.87
3 Mrs. Radhica Sharma WTD 3724393 3372518 351875 10.43% 14.73
4 *Shri Khushal Chandra Jain Independent Director Nil Nil NA NA NA
5 *CA Mahendra Kumar Shah Independent Director Nil Nil NA NA NA
6 *Shri Praful R Turakhia Independent Director Nil Nil NA NA NA
7 Mrs. Monica Jain CFO 1297008 1261686 35322

2.80%

5.01
8 CS Devendra Kumar Sahu CS 718206 607978 110228 18.13% 2.94

*Shri Khushal Chandra Jain CA Mahendra Kumar Shah and Shri Praful R. TurakhiaIndependent Directors were paid sitting fees for attending the Meetings of the Board.

B. The percentage increase in the Median remuneration of employees in the financialyear: 9.08%.

C. The number of permanent employees on the Roll of the Company as on 31st March 2021:186.

D. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Based on Remuneration Policy of the Company salary of the employees was increased at10% and managerial remuneration was increased at 10.43% this is based on RemunerationPolicy of the Company that rewards people based on their contribution to the success ofthe company and also ensures that external market competitiveness and internalrelativities are taken care of.

E. Affirmation that the remuneration is as per the Remuneration Policy of the Company:

The Company affirms that remuneration is as per the remuneration policy of the Company:

F. Name of the top 10 employees in terms of remuneration drawn in the financial year2020-21:

A statement of top-10 employees in terms of remuneration drawn as per rule 5(2) readwith rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended is annexed with the report as "Annexure-6".

G. Details of employees who received remuneration in excess of Rs. One crore and Twolakh or more per annum:

i. During the year none of the employees received remuneration in excess of Rs.102.00 Lakh or more per annum or Rs.8.50 per month for part of the year. In accordancewith the provisions of section 197 of the Companies Act 2013 read with Rule 5(2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thereforethere is no information is available to disclose.

ii. During the year none of the employees received remuneration in excess of thatdrawn by the Managing Director or Whole-time director and none of the employees hold twopercent of the equity shares of the Company.

TRANSFER OF SHARES AND DIVIDEND AMOUNT TO IEPF:

Pursuant to the provisions of the Companies Act 2013 read with the IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 ("the Rules") notified bythe Ministry of Corporate Affairs the unclaimed and unpaid dividends amount for the year2013-14 is required to be transferred to IEPF in the due date as specified in the Noticeof the AGM and shares of the respective shares on which no dividend is claimed for aconsecutive 7 years will also be transferred to IEPF Authority as per the requirement ofthe IEPF rules on due date.

The details related to dividend remains unpaid-unclaimed from the Company has beengiven in the Corporate Governance Report attached with the annual report of the Company.

PROVISION OF VOTING BY ELECTRONIC MEANS:

Your Company is providing E-voting facility under section 108 of the Companies Act2013 read with Rule 20 of the Companies (Management and Administration) Amendment Rules2015. The ensuing AGM will be conducted through Video Conferencing/OVAM and no physicalmeeting will be held and your company has made necessary arrangements with CDSL toprovide facility for remote e-voting and e-voting at AGM. The details regarding e-votingfacility is provided with the notice of the Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Economic Scenario and Outlook:

The Covid 19 Pandemic and its continuity in periodic waves has substantial adverseimpact on economies all over the World including India.

In India the service sector tourism and aviation industry are largely hit.

Various Governments in the world took measures to control and manage pandemic and spentlarge amount of money in various ways to manage the pandemic providing subsidies andsocial security. Thus the economic uncertainty world over continue.

With very good management of Union Government of India the spread of pandemic in Indiais grossly under control and industrial and agriculture activities continue unhinderedexcepting the first major lockdown from March to June in 2020. The work from home workinghas been able to run large industries management to a satisfactory level. Similarly theinfrastructure work development and growth activity are at a satisfactory level providingbusiness to industry and transport sector.

For our company the financial year 2020-21 witnessed improved performance inspite ofhindrances caused by pandemic. The company's business witnessed satisfactory performancewith improved order inflow and favorable product mix.

In the present situation our company with various measures of management and team workis able to improve sales and productivity and cost reduction. Company continues withactivity of development of new types of couplings and R&D for deeper penetration inthe market.

Company continues enjoy accreditation of ISO 9001-2015 ISO 14001-2015 & ISO :45001-2018.

B. Industry structure and developments:

Your Company deals only in the one segment i.e. manufacturing and sale of the hi-techproducts "Fluid Couplings" which are mainly used in various sector of industriesincluding Thermal Power Plants Steel Metal Cement Paper Chemical Fertilizers Coaland Ore-mining and Port handling facilities etc. New projects in these sectors haveimportant contribution towards growth and profitability of the Company.

C. Quality Management System:

The company continued to be certified under ISO: 9001:2015 by British StandardInstitution BSI Management system for the Company's quality system. The Quality ManagementSystem in the Company is well defined and is well in place.

D. Internal Control System:

The Company has adequate internal control systems and procedures in place for effectiveand smooth conduct of business and to meet exigencies of operation and growth. Thetransactions are recorded and reported in conformity with generally accepted accountingpractices. The internal control systems and procedures ensure reliability of financialreporting compliance with the Company's policies and practices governmental regulationsand statutes. Internal Audit is conducted by independent firm of auditors. InternalAuditors regularly check the adequacy of the system their observations are reviewed bythe management and remedial measures as necessary are taken. Internal Auditors reportdirectly to the Chairman of the Audit Committee to maintain its objectivity andindependence.

E. Opportunities and Threats:

Since your company is catering the needs of almost all sectors of Industries thereforeit has a good business cushion against recession in one or other sector as the othersector may improve concurrently.

The Indian Government focus on infrastructure growth will offer more opportunities tocapital goods sector.

The COVID-19 pandemic has disrupted demand and supply chains across industriesnegatively impacting the business of companies and driving the global economy towards arecession. Governments in several countries have imposed stringent lockdown in a bid tocontain the spread of the disease. The Banking system in the domestic market is facing anunprecedented situation of uncertainty and economic challenge due to non- performingassets (NPAs). Though the Government and the central Bank are seized of the gravity of thesituation and are moving ahead with initiative to contain and resolve the problem globalmacro-economic factors beyond the control of the domestic economy can disrupt theequilibrium. In such a scenario the entire capital goods sector itself will facedifficulties due to lack of new projects and liquidity crisis.

Apart from the normal risk demand-supply conditions raw material prices competitorstrategies changes in government regulations tax regimes economic developments withinthe country and globally no major risks are foreseen.

F. Human Resources:

We are committed to providing our employees with a work environment that is based onfairness openness and mutual respect. Our on-ground work force and our employees togetherare the key to successes of our Company.

The Company emphasizes on the highest level of professional ethics personal decorumadherence to deadliness compliance to standards and customer service.

The Company continues with its dedicated efforts to identify talent and has beenrecognized for its exemplary people-related parties in the Industry.

G. Health Safety and environment measures:

Company is committed to meet the highest international standards of health safety andenvironmental performance. It continues to accord highest priority to conducting safeoperations while being responsible towards the environment and ecology.

The Company focused on safe operations in line with its commitments to improve itshealth safety and environment performance. As a part of our drive to standardize ourhealth safety & environment management company has certified under occupationalhealth & safety management system (ISO:45001-2018) for the manufacture of FluidCouplings and Flexible Couplings and environment management system (ISO 14001: 2015) byBSI.

Internal and external safety audits and inspections were carried out regularly.Emergency management plans have been developed to deal with any emergency within thefactory premises.

H. Segment Reporting & Finance performance of the Product:

Company has only one segment i.e. manufacturing of fluid couplings and the financialperformance of the product is being incorporated in the Director's Report section.

I. Cautionary statement:

Statement made in the management discussion and analysis report as regards theexpectations or predictions are forward looking statements within the meaning ofapplicable laws and Regulations. Actual performance may deviate from the explicit orimplicit expectations.

J. Details of Significant Changes in Key Financial Ratios

Key Ratio 2020-21 2019-20 Variation in % Comments for Variation in ratio above 25%
Debtors Turnover Ratio 3.30 2.77 19.13% -
Inventory Turnover Ratio 3.26 3.32 -1.80% -
Interest Coverage Ratio 237.61 609.67 -61.03% Due to increase in interest expenses during the year 2020-21
Current Ratio 3.03 2.77 9.38% -
Debt Equity Ratio 0.11 0.16 -31.25% Due to payment of borrowings at the end of the period.
Operating Profit Margin (%) 18.99% 16.74% 13.44% -
Net Profit Margin (%) 15.55% 11.73% 32.56% Due to increase in profit
Return on networth (Any Change) 11.83% 9.12% 29.71% Due to increase in profit

K. Compliance with Indian Accounting Standards

In the preparation of the financial statements the Company has followed the IndianAccounting Standards as notified. The significant accounting policies which areconsistently applied have been set out in the Notes to the Financial Statements.

INDUSTRIAL RELATIONS:

Company's Industrial relations continued to be healthy cordial and harmonious duringthe period under review.

GENERAL:

Your Directors state that during the year under review:

a. The Company has not issued shares (including sweat equity shares) to employees ofthe Company under any scheme.

b. The company has not filed any application or there is no application or proceedingpending against the company under the Insolvency and Bankruptcy Code 2016 (31 of 2016)during the year under review except claim filed being the operation creditor under theAct;

c. There is no requirement to conduct the valuation by the bank and Valuation done atthe time of one-time Settlement during the period under review;

d. Neither the Managing Director nor the Whole-time Directors receive any remunerationor commission from its subsidiary.

e. The Company has complied with the applicable Secretarial Standards under theCompanies Act 2013.

ACKNOWLEDGEMENTS:

Your directors place on record their appreciation of the continued support extendedduring the year by the company's customers business associates suppliers bankersinvestors and Government authorities. They also place on record their appreciation of thededication and contributions made by all the employees for their commitment hard work andsupport. Your directors would also like to thank all their shareholders for theircontinued faith in the company and expect the same in future.

For and behalf of the Board
(ASHOK JAIN)
Place: Indore (M.P.) CHAIRMAN & MANAGING DIRECTOR
Date:14th August 2021 DIN : 00007813

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