Your Directors have great pleasure in presenting the 25th Annual Reporttogether with audited statement of accounts for the year ended 31st March 2020.
Summary of your Company's financial performance both standaloneand consolidated for the year ended March 312020 is tabulated below:
(Rs. in Millions)
| ||STANDALONE ||CONSOLIDATED |
|PARTICULARS ||Year Ending 31st March 2020 ||Year Ending 31st March 2019 ||Year Ending 31st March 2020 ||Year Ending 31st March 2019 |
|Sales and other income ||7878.58 ||7714.27 ||8130.39 ||7935.08 |
|Less Expenses : || || || || |
|Cost of Materials Consumed ||3912.86 ||3931.99 ||4091.03 ||4172.29 |
|Purchase of Stock in Trade ||- ||3.34 ||- ||3.34 |
|Change in Inventories of FG/WIP/Stock in trade ||-124.40 ||-142.01 ||-124.40 ||-142.01 |
|Employee Benefit Expense ||1003.77 ||954.97 ||1027.17 ||976.36 |
|Other Expenses ||1307.20 ||1243.22 ||1358.83 ||1295.20 |
|Total Expenses ||6098.77 ||5991.49 ||6352.63 ||6305.18 |
|Profit before Interest Depreciation Tax & Amortisation ||1779.15 ||1722.78 ||1777.76 ||1629.90 |
|Less: - Interest ||1074.80 ||922.02 ||1074.88 ||922.02 |
|- Depreciation ||900.59 ||1040.48 ||900.59 ||1040.48 |
|-Extra Ordinary item ||- ||-829.36 ||- ||-829.36 |
|Profit/Loss before Tax ||-195.61 ||589.2 ||-197.71 ||496.77 |
|Less - Provision for Deferred Tax ||8.22 ||169.94 ||8.18 ||169.92 |
|- Income tax adjustment of previous year ||4.04 ||33.35 ||4.04 ||33.54 |
|- Current ||- ||- ||1.90 ||3.82 |
|Profit/Loss After Tax (A) ||-207.87 ||385.80 ||-211.84 ||288.64 |
|Amount B/F from previous year (B) ||-492.64 ||-874.44 ||-517.40 ||-806.04 |
|Profit/Loss after tax available for appropriations (A+B) ||-700.52 ||-492.64 ||-740.24 ||-517.40 |
|Balance carried forward to Balance sheet ||-700.52 ||-492.64 ||-740.24 ||-517.40 |
OPERATIONS AND BUSINESS PERFORMANCE
During the financial year 2019-20 the Company has achieved a turnoverof RS. 7518.37 Millions against the turnover of RS. 7244.27 Millions during financial year2018-19. The Company has achieved Net loss of RS. 207.87 Millions in 2019-20 against Netprofit of RS. 385.80 millions in 2018-19. The Company's export has increased to RS.5508.27 Millions in 2019-20 as compared to RS. 5163.96 Millions in 2018-19. There has beenno change in the nature of business of the Company during the year under review. Kindlyrefer to Management Discussion & Analysis & Corporate Governance Report whichforms part of this report.
CONSOLIDATED FINANCIAL PERFORMANCE
Your company recorded a consolidated turnover of RS. 7796.43 Millionsduring 2019-20 against the turnover of RS. 7566.02 Millions during 2018-19. Inconsolidated terms the Company earned a Net loss of RS. 211.84 Millions during 2019-20against profit of RS. 288.64 Millions in 2018-19. The Consolidated financial figuresinclude the respective financial figures of the company's three subsidiaries and oneassociate company. As required under the provisions of the Companies Act 2013 and SEBI(LODR) Regulations 2015 Audited Consolidated Financial Statements form part of theAnnual Report and the same are annexed to this Report.
INDIAN ACCOUNTING STANDARDS
The financial statements for the year ended on March 31 2020 has beenprepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies(Indian Accounting Standards) Rules 2015 and the Companies (Indian Accounting Standards)Amendment Rules 2016 notified under section 133 of Companies Act 2013 and other relevantprovisions of the Act. The estimates and judgments relating to the Financial Statementsare made on a prudent basis so as to reflect in a true and fair manner the form andsubstance of transactions and reasonably present the Company's state of affairsprofits and cash flows for the year ended March 31 2020.
The Notes to the Financial Statements adequately covers the AuditedStatements and form an integral part of this Report.
STATE OF AFFAIRS OF THE COMPANY
The state of affairs of the Company is presented as part of theManagement Discussion & Analysis Report in a separate section forming part of thisreport as required under the SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015.
The main business of your Company is manufacturing PharmaceuticalProducts especially Active Pharmaceutical Ingredients (APIs) & Advanced Intermediates.We are presently in both domestic and export markets. In view of the scenario described inthe management discussions your Company is expected to grow with wide range of productsand manufacturing expertise barring unforeseen circumstances.
IMPACT OF COVID-19 PANDEMIC
Government of India declared the Lockdown w.e.f. 24th March 2020 dueto Corona Virus pandemic which affected all of the India and the World. The Factory of theCompany was also closed from 25th March2020. By 10th April 2020 the Company re-startedthe operations and Company brought the attendance at the plant back to 70% level and inMay2020 it was brought to the level of 80% of the Pre-Covid levels.
Being manufacturers of pharmaceuticals and hence provider of essentialservices and exempted from lockdown the manufacturing facilities of your Companycontinued with the manufacturing operations at all its manufacturing sites albeit withinitial challenges such as shortage of manpower availability of raw materials packingmaterials and disruptions in the logistics and supply chain.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Post restructuring of the Board in April 2019 the Board of the Companywas expanded in February 2020 by inducting two more Directors. Sh. Sahil Munjal son ofSh. N.R.Munjal was appointed as an Executive Director w.e.f. 13.02.2020. Dr. Ashwani KumarVig was appointed as an Independent Director w.e.f. 13.02.2020. At present the Board ofthe Company Consists of Sh. N.R.Munjal Chairman and the Managing Director Sh. HimanshuJain Joint Managing Director Sh. Rishav Mehta Executive Director Sh. Sahil MunjalExecutive Director Sh. S.P.Sharma- Independent Director Sh. Prabhat Khurana- IndependentDirector Dr. Ashwani Kumar Vig- Independent Director & Ms. NeerjaChathley-Independent Women Director. The Chairman of the Company is an Executive PromoterDirector. The composition of the Board is in conformity with the provisions of theCompanies Act 2013 and Regulation 17 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Company has received necessary declaration from all the IndependentDirectors under Section 149(7) of the Companies Act 2013 confirming that they meet thecriteria of independence as laid down in Section 149(6) of the Companies Act 2013 and theListing Regulations. The Independent Directors have also confirmed compliance with theCode of Conduct laid down under Schedule IV of the Act.
Pursuant to Section 149 152 and other applicable provisions of theCompanies Act 2013 in the ensuing AGM of the Company Sh. Himansu Jain Director retiresby rotation and being eligible offers himself for reappointment.
Pursuant to Section 149 and other applicable provisions of theCompanies Act 2013 Shri S. P. Sharma whose first term expired on 4th July 2020 wasre-appointed by the Board of Directors on 20th June 2020 for a further period of 5 yearsw.e.f. 5th July 2020 and the Board further recommends the same to shareholders for theirapproval.
In the opinion of the Board the independent Director possessappropriate balance of skills experience and knowledge as required.
Details and brief resume of the Directors seeking reappointment/appointments required by Regulation 26 (4) and 36 (3) of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015(Listing Regulations') and Secretarial Standards issued by "The Instituteof Company Secretaries of India" are furnished in the Notice convening the AnnualGeneral Meeting forming part of the Annual Report.
a) Key Managerial Personnel
During the year Mr. Sahil Munjal was re-appointed as an ExecutiveDirector for a period of 5 years w.e.f. 13th February 2020.
Mr. N. R. Munjal Chairman and Managing Director Mr. Himanshu JainJoint Managing Director Mr. Rishav Mehta Executive Director Mr. Sahil Munjal ExecutiveDirector Mr. Gagan Aggarwal Chief Financial Officer and Mr. Pardeep Verma AVP-CorporateAffairs & Company Secretary are the Key Managerial Personnel of the Company. There wasno change in the Key Managerial Personnel during the financial year.
b) Relationship/Transaction of Non-Executive Directors with the Company
The Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company other than taking sitting fees andreimbursement of expenses incurred by them to attend meetings of the Company.
c) Number of Meetings of the Board
During the year Six Board meetings were held on 23.04.201929.05.2019 10.08.2019 11.11.2019 08.01.2020 & 13.02.2020. The details regarding themeetings are given in the Corporate Governance Report.
d) Performance evaluation of the Board its Committees and IndividualDirectors
Pursuant to applicable provisions of the Companies Act 2013 and SEBI(LODR) Regulations 2015 the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria for performanceevaluation of the entire Board of the Company its Committees and Individual Directorsincluding Independent Directors.
The Independent Directors had met separately without the presence ofNon-Independent Directors and the members of management and discussed inter-alia theperformance of non- Independent Directors and Board as a whole and the performance of theChairman of the Company after taking into consideration the views of executive andNon-Executive Directors.
The Nomination and Remuneration Committee has also carried outevaluation of every Director's performance. The performance evaluation of all theIndependent Directors have been done by the entire Board excluding the Director beingevaluated. On the basis of performance evaluation done by the Board it is determinedwhether to extend or continue their term of appointment whenever the respective termexpires.
e) Familiarization Programme
The details of programmes for familiarization of Independent Directorswith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates the business model and related matters are postedon the website of the Company at https://www.indswiftlabs.com/storage/2018/07/Familiarisation-Programme-for- Independent Directors.pdf
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the annual financial statements for theyear ended March 31 2020; the applicable accounting standards have been followed alongwith proper explanation relating to material departures if any;
b) that such accounting policies as mentioned in Notes to the FinancialStatements have been selected and applied consistently and judgment and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2020 and of the profit of the Company for theyear ended on that date;
c) that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) that the annual financial statements have been prepared on a goingconcern basis; e) that proper internal -financial controls were in place and that thefinancial controls were adequate and were operating effectively.
f ) that systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
In compliance with the provisions of Section 177(9) of the CompaniesAct 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014and SEBI (LODR) Regulations 2015 your Company has in place a WhistleblowerPolicy/Vigil Mechanism' which provides an opportunity to the directors and employeesto raise concerns about unethical and improper practices or any other wrongful conduct inor in relation to the Company. The details of the Whistleblower Policy are stated in theCorporate Governance Report and the said Policy has been uploaded on the Company'swebsite www.indswiftlabs.com
SUBSIDIARIES JOINT VENTURES & ASSOCIATE COMPANIES
As on 31.03.2020 your Company had 3 Subsidiaries and 1 associatecompany. The US subsidiary of the Company viz. Ind-Swift Laboratories Inc. achieved netsales of USD 9612234 and recorded a net Profit of USD 307781 as on 31.03.2020. TheSingapore Subsidiary Viz. Meteoric Life Sciences PTE Ltd. has no sales during theFinancial Year. There is no significant transaction in the Company's Dubai Subsidiaryviz. Ind-Swift Middle East FZE during the period under review.
Pursuant to the first proviso to Section 129(3) of the Companies Act2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules 2014 the salient features ofthe financial statements performance and financial position of each subsidiary jointventure & associate is given in Form AOC - 1 as Annexure-I to this report. TheCompany has framed a policy for determining material subsidiaries which has been uploadedon the Company's website www.indswiftlabs.com
NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIESJOINT VENTURES OR ASSOCIATES.
During the Year Mohali Green Environment Private Limited (MGEPL)ceased to be an Associate Company as Company's investment in Mohali Green EnvironmentPrivate Limited (MGEPL) fell from 25.30% to 19.95%. as on 31st March 2020.
In view of inadequacy of profits the Board has not recommended anydividend for the Financial Year 2019-20.
There is no unpaid dividend outstanding as on 31.03.2020.
During the year the Company has not transferred any amount toReserves.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (TheRules') all unpaid or unclaimed dividends are transferred to Investor Education andProtection Fund (IEPF) established by the Central Government after the completion ofseven years. Further according to the said rules the shares in respect of which dividendhas not been paid or claimed by the shareholders for seven consecutive years or more shallalso be transferred to the demat account created by the IEPF Authority.
The Company has transfered all the outstanding dividend and thecorresponding shares to the IEPF Authority and now there is no dividend or shares thatneed to be transferred to IEPF Authority.
The Company has appointed its Company Secretary as Nodal Officer underprovisions of IEPF.
The aggregate amount of fixed deposits outstanding as on 31st March2020 was RS. 11.23 crores approx. (previous year RS. 21.72 crores).
The Hon'ble Company Law Board vide its order No.CP27/01/2013 dated30th September 2013 had granted extension of time in repayment of deposits. Now theCompany is making repayment to the fixed deposit holders in terms of the aforesaid orderof Hon'ble CLB.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSEWHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors Cost Auditors and Secretarial Auditors of theCompany have not reported any frauds to the Audit Committee or to the Board of Directorsunder Section 143(12) of the Companies Act 2013 including rules made there under.
RELATED PARTY TRANSACTIONS DISCLOSURE UNDER THE COMPANIES ACT 2013
All related party transactions entered into during the financial yearwere on an arm's length basis and in the ordinary course of business. No relatedparty transaction was in conflict with the interest of the Company. No materiallysignificant related party transaction was made by the Company with the Key ManagerialPersonnel. As prescribed by Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) ofthe Companies (Accounts) Rules 2014 particulars of related party transactions are givenin Form AOC-2 as "Annexure-II" to this Report. The policy on RelatedParty Transactions as approved by the Board has been uploaded on the Company'swebsite www.indswiftlabs.com
RELATED PARTY TRANSACTIONS DISCLOSURE UNDER SEBI (LODR) REGULATIONS2015
The necessary Related Party Disclosures as required under Schedule VPart - A of SEBI (LODR) Regulations 2015 are given in Note XXXI of the Standalone andConsolidated Financial Statements.
DISCLOSURE OF TRANSACTIONS WITH PROMOTER/ PROMOTER GROUP
As per Schedule V of the SEBI LODR Regulations 2015 every listedCompany shall disclose the transactions with any person or entity belonging to thepromoter/ promoter group which holds 10% or more shareholding in the listed entity.
As on 31st March 2020 M/s Essix Biosciences Limited and M/s Ind SwiftLimited being the Promoter entities are holding 21.71% and 16.08 % respectively of totalequity of the Company. The details of all the transactions with Essix Biosciences Limitedand Ind Swift Limited are already given in Form AOC-2 forming part of this Annual Report.
Even though the provision of Regulation 21 of the SEBI (LODR)Regulations 2015 regarding constitution of Risk Management Committee are not applicableon the Company the Board has constituted a Risk Management Committee. The details of theCommittee and its terms of reference are set out in the Corporate Governance Report.
The Company's Risk Management Policy is available onCompany's Website i.e. www.indswiftlabs.com and the weblink of the same ishttps://www.indswiftlabs.com/storage/2018/07/ Risk-Management-Policy.pdf
CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES
The paid up Equity Share Capital of the Company as on March 31 2020was RS. 5908.69 Lakhs. The Company's shares are listed on the National Stock Exchangeof India Limited (NSE) and Bombay Stock Exchange Limited (BSE) and are actively traded.The Company has not issued any shares with differential voting rights or sweat Equityduring the year. The details of the allotments made by the Company during the year is asunder: a) Allotment of 11517670 Equity Shares to the Optionally ConvertibleDebenture Holders pursuant to the conversion of Optionally Convertible Debentures(s)(OCDs).
During the year the Company has allotted 11517670 (One CroreFifteen Lakhs Seventeen thousand Six hundred and Seventy) Equity Shares to the optionallyconvertible debenture(s) holders pursuant to the conversion of 11517670 OCDs of facevalue of RS. 10/- each. The OCDs were issued by the shareholders in its ExtraordinaryGeneral Meeting held on 9th June 2018 at a price of RS. 65.50 per OCD (including premiumof Rs. 55.50 per OCD).
b) Employee Stock Option Scheme
During the year the Company did not issue any stock options to itsemployees. Further there has been no change in the Employees Stock Option Plan (EmployeeIncentive Scheme 2014) of the Company. Further it is confirmed that the ESOP Scheme ofthe Company is in compliance with SEBI (Share Based Employee Benefits) Regulations 2014.
The applicable disclosures as stipulated under Regulation 14 of SEBI(Share Based Employee Benefits) Regulations 2014 and rule 12(9) of Companies (ShareCapital and Debentures) Rules 2014 with regard to Employees Stock Option Plan of theCompany are given as Annexure III.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year underreview as stipulated under Regulation 34(2)(e) of the SEBI (LODR) Regulations 2015 ispresented in a separate section forming part of the Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OFTHE COMPANIES ACT 2013
Pursuant to the provisions of Section 134(3)(g) of the Companies
Act 2013 (Act) particulars of loans/ guarantees/ investments/securities given under Section 186 of the Act are given in the related notes to theFinancial Statements forming part of the Annual Report.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 (3) of the Companies Act2013 extract of the Annual Return in Form MGT-9 is given in Annexure-IV'to this Report and is also available on the website of the Company vizwww.indswiftlabs.com
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has a policy on Directors' Appointment &Remuneration. In compliance with the provisions of Sections 134(3)(e) and 178 of theCompanies Act 2013 and Regulation 19 read with Part D of Schedule II of the SEBI (LODR)Regulations 2015 the Nomination & Remuneration Committee:
i) Has formulated criteria for determining qualifications positiveattributes and independence of a director and recommends to the Board Policy relating toremuneration for directors KMP and other employees;
ii) Has formulated the evaluation criteria for performance evaluationof independent directors and the Board;
iii) Has devised a policy on Board diversity;
iv) Identifies persons who are qualified to become directors or may beappointed in Senior Management in accordance with criteria laid down and recommend to theBoard their appointment and removal;
v) Recommends to the Board whether to extend or continue the term ofappointment of the independent director on the basis of the report of performanceevaluation of independent directors.
During the Financial Year 2019-20 the company has obtained the creditrating from CARE which had granted CARE C' credit rating to the Company whichdenotes-Stable Ranking.
CORPORATE SOCIAL RESPONSIBILITY
Company is committed to and fully aware of its Corporate SocialResponsibility(CSR) the guidelines in respect of which are more clearly laid down in theCompanies Act 2013. The Company's vision on CSR is that the Company being aresponsible Corporate Citizen would continue to make a serious endeavor for a qualityvalue addition and constructive contribution in building a healthy and better societythrough its CSR related initiatives and focus on education environment health care andother social causes.
During the year under review the company had incurred expenditure onCSR activities of RS. 3597572/- in areas specified in schedule VII of Companies Act2013.
The disclosure related to the CSR activities pursuant to Section 134(3)of the Companies Act 2013 read with Rule 9 of Companies (Accounts) Rules 2014 andCompanies (Corporate Social Responsibility) Rules 2014 is annexed hereto and form part ofthis report as "Annexure V".
ENVIRONMENT/POLLUTION CONTROL HEALTH AND SAFETY
The Company is conscious of the importance of environmentally clean andsafe operations. The Company's policy requires conduct of operations in such a mannerso as to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.
RESEARCH & DEVELOPMENT AND QUALITY CONTROL
The activities of R&D consist of improvement in the processes ofexisting products and to develop new products. The Quality Control is the strength of theCompany. All raw materials and finished products pass through stringent quality checks forbetter results.
The Company has taken adequate insurance policies for its assetsagainst the possible risks like fire food public liability marine etc. The Company hasnot taken Directors and Officers Liability insurance policy as it is applicable on top 500listed Companies as on 31st March 2020 and your Company does not fulfill that criteria.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The particulars as prescribed under 134(3)(m) of the Companies Act2013 read with Rule 8 of The Companies (Accounts) Rules 2014 relating to conservation ofenergy technology absorption and foreign exchange earnings and outgo are given in "AnnexureVI".
COMMITTEES OF THE BOARD
The Company's Board has constituted the following Committeesprescribed under the Companies Act and the LODR Regulations 2015:-
a) Audit Committee
b) Stakeholders Relationship Committee
c) Risk Management Committee
d) Nomination and Remuneration Committee
e) Corporate Social Responsibility Committee
f) Compensation Committee
g) Sub-Committee of the Board
The details of the Composition of the Committees their role and termsof reference are given in Corporate Governance report.
Pursuant to the provisions of Section 139 of the Companies Act 2013and the rules framed there under the Company in its Annual General Meeting held on 26thday of September 2017 had appointed M/s Avishkar Singhal & Associates CharteredAccountants (Firm Reg. No. 017362N) as the Statutory Auditors of the Company for a periodof Five Consecutive years from the conclusion of the 22nd Annual general Meeting till theconclusion of the 27th Annual General Meeting of the Company to be held in the year 2022.The Companies Amendment Act 2017 has dispensed the ratification of auditors appointmentat every Annual General Meeting . Accordingly the Ordinary Business Agenda item relatingto the ratification of the statutory Auditors appointment is not placed in the AGM notice.
The Auditor's Report for the Financial Year 2019-20 does notcontain any qualification reservation or adverse remark. With regard to emphasis ofmatter contained in the Auditors' Report the Board is of the view that the same areself explanatory.
COST-AUDITORS AND THEIR REPORT
M/s. V. Kumar & Associates Cost Accountants have been dulyappointed as Cost Auditors of the Company for audit of cost accounting records which arecovered under the Cost Audit Rules for current financial year ending March 31 2021.
As required by Section 148 of the Companies Act 2013 necessaryresolution has been included in the Notice convening the Annual General Meeting seekingratification by the Members to the remuneration proposed to be paid to the Cost Auditorsfor the financial year ending March 31 2021.
The Cost Audit Reports are required to be filed within 180 days fromthe end of the financial year. The Cost Audit Reports for the financial year 2018-19issued by M/s V. Kumar and Associates Cost Auditors was filed with Ministry of CorporateAffairs. The Cost Audit Reports for the financial year ended 2019-20 will be filed withinthe prescribed period.
The Company has maintained all the cost records as specified by theCentral Government under sub section (1) of section 148 of the Companies Act 2013.
SECRETARIAL AUDITORS AND THEIR REPORT
Mr. Vishal Arora Practicing Company Secretary was appointed asSecretarial Auditors of the Company for the financial year 2019-20 pursuant to Section 204of the Companies Act 2013. The Secretarial Audit Report submitted by them in theprescribed form MR-3 is attached as Annexure-VII and forms part of this report.There are no qualifications or other remarks of the secretarial auditors in thesecretarial audit report as issued by them for the financial year 2019-20. There are onlytwo observations by the Secretarial Auditors which the Board considers are informatory innature.
M/s Jain and Associates were appointed as Internal Auditors of theCompany upto 31st March 2020. The Board has however approved the re-appointment of M/sJain & Associates Chartered Accountants as Internal Auditors of the Company for theFY 2020-21 as well. They will conduct the Internal Audit of the Company as required underSection 138 of the Companies Act and their reports shall be reviewed by the Auditcommittee and the Board of Directors.
INTERNAL COMPLAINTS COMMITTEE
The Company has complied with all the provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
During the year the Committee has not received any complaint relatedto Sexual harassment.
INTERNAL FINANCIAL CONTROL
Your Company has an effective internal control and risk mitigationsystem which are constantly assessed and strengthened with new/revised standard operatingprocedures. The Company's internal control system is commensurate with its sizescale and complexities of its operations. The main thrust of internal audit is to test andreview controls appraisal of risks and business processes besides bench marking controlswith best practices in the industry.
The Audit Committee actively reviews the adequacy and effectiveness ofthe internal control systems and suggests improvements to strengthen the same. The Companyhas a robust Management Information System which is an integral part of the controlmechanism.
The Audit Committee Board of Directors Statutory Auditors and theBusiness heads are periodically apprised of the internal audit findings and correctiveactions taken. Audit plays a key role in providing assurance to the Board of Directors.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.
A Report on Corporate Governance forms part of this Annual Report. TheAuditors' certificate certifying compliance with the conditions of CorporateGovernance under Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations2015 is annexed as Annexure-VIII to this Report.
Your Company is of the -firm opinion that efficiency of its employeesplays a key role in achieving set goals and building a competitive work environment. TheCompany regularly conducts various programs at different levels so as to ensure that avibrant and motivated work-force leads to achievement of the defined goals. Employeerelations continued to be harmonious and cordial at all levels and in all the units of theCompany.
The Company is committed to provide a protective environment atworkplace for all its women employees. To ensure that every woman employee is treated withdignity and respect and as mandated under "The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013" and in its fullcompliance the Company has constituted "Internal Complaints Committee" forprevention of sexual harassment of its women employees. During the year the Committee hasnot received any complaint related to Sexual harassment.
PARTICULARS OF EMPLOYEES
The Company takes pride in the commitment competence and dedication ofits employees in all areas of the business. The relation between the management andemployees are healthy and cordial. There is a transparency in the dealings and on mattersrelating to the activities of the Company and its employees.
Particulars of remuneration of employees required to be furnishedpursuant to the provisions of Section 197 (12) of the Companies Act 2013 (Act) read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given as "Annexure IX" to this Report. Particulars ofremuneration of employees required to be furnished in terms of Rules 5(2) and 5(3) of thesaid Rules forms part of this Report which shall be provided to Members upon writtenrequest pursuant to the second proviso of Rule 5. Particulars of remuneration of employeesare available for inspection by Members at the registered office of the Company duringbusiness hours on all working days up to the date of the forthcoming AGM.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the Financial Year 2019-20 no significant/ material order waspassed by any of the Regulators/Courts or tribunal that would impact the going concernstatus of Company and its future operations.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY.
There is no material change and commitments affecting the financialposition of the company that occurred between the end of the financial year of the companyi.e. March 31 2020 and the date of the Directors Report i.e. 31st August 2020.
REGISTRAR AND SHARE TRANSFER AGENT
M/s Alankit Assignments Ltd. is the Registrar and Share Transfer Agentof the Company for the Physical as well as Demat shares and Non-Convertible Debentures ofthe Company. The members are requested to contact the Registrar directly for any of theirrequirements.
The Annual Listing fee for the year under review has been paid to TheBSE Limited and The National Stock Exchange of India Ltd.
In terms of the Listing Regulations the Certificate duly signed by Sh.Navrattan Munjal Chairman and Sh. Gagan Aggarwal Chief
Financial Officer (CFO) of the Company was placed before the Board ofDirectors along with the annual financial statements for the year ended on 31st March2020 at its meeting held on 20th June 2020.
The Company has complied with the applicable Secretarial Standardsissued by the Institute of Company Secretaries of India.
Your Directors thank all the employees for their sincere effortsactive involvement and devoted services rendered. Your Directors thank the shareholders ofthe Company for the confidence reposed in the Management of the Company. Your Directorsplace on record their gratitude to the Customers Suppliers Company's Bankers andFinancial Institutions for their support and cooperation during the year under review.
| ||On behalf of the Board of Directors |
| ||N.R. Munjal |
|Place: Chandigarh ||Chairman & |
|Date: 31.08.2020 ||Managing Director |