Directors of your Company are pleased to present its 26th (Twenty Sixth)Annual Report together with the Audited Financial Statements of your Company for thefinancial year ended 31st March 2020.
summarized Financial Performance of your Company for the financial year ended 31stMarch 2020 is as follows:
(Rs. in lacs)
|Particulars ||For the year ended 31st March 2020 ||For the year ended 31st March 2019 |
|Total Turnover (Gross) ||12016.98 ||15406.47 |
|Operating Profit ||452.22 ||521.67 |
|Less : Depreciation ||55.83 ||63.58 |
|Less: Finance Cost ||9.76 ||50.18 |
|Less: Provision for Tax and Adjustment ||101.16 ||100.58 |
|Profit for the year ||285.47 ||307.33 |
PERFORMANCE REVIEW AND STATE OF AFFAIRS OF THE COMPANY
The revenue from operations of the Company for the year ended 31st March2020 decreased to Rs.12017 lacs as compared to Rs.15406 lacs in the previous year. YourCompany registered a marginal decrease in profit to Rs.285 Lacs as compared to Rs.307 lacsin the previous year. is downtrend amongst other things was attributable to lowerrevenue generation due to worldwide outburst of covid-19 which not only resulted in directloss in sales revenue in the second half of March 2020 on account of lockdown but alsokept the profitability under pressure towards the end of the year and as a result led to aslight decline in the profits of the Company.
Your Directors feel that it is prudent to plough back the profits for future growth ofthe Company and do not recommend any dividend for the year ended 31st March2020.
TRANSFER OF UNCLAIMED / UNPAID DIVIDEND AMOUNTS TO THE INVESTOR EDUCATION ANDPROTECTION FUND (IEPF):
Pursuant to the applicable provisions of the Companies Act 2013 read with InvestorsEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 as amended from time to time all unpaid or unclaimed dividend are required to betransferred by the Company to the Investor Education and Protection Fund("IEPF") established by the Central Government of India after the completion ofseven years from the date of transfer to Unpaid Dividend Account of the Company. Furtheraccording to Section 124(6) of the Companies Act 2013 and the rules made there in allshares in respect of which dividend has not been paid or claimed for seven consecutiveyears or more shall be transferred by the Company in the name of IEPF.
It may be noted that the unclaimed dividend of Rs.600306/- for the financial year2011-12 declared on September 28 2012 along with 348974 shares have been transferred tothe IEPF in accordance with the applicable provisions of the Act read with relevant rulesmade there under within the prescribed time limit. The details of such unclaimed dividendtransferred are available on the Company's Website i.e.www.mcil.net.
The shares and unclaimed dividend transferred to the IEPF can however be claimed backby the concerned shareholders from IEPF Authority after complying with the procedureprescribed under the IEPF Rules. The Member/Claimant is required to make an onlineapplication to the IEPF Authority in Form No. IEPF -5 (available on www.iepf.gov.in) alongwith requisite fees as decided by the IEPF Authority from time to time.
The following table gives information of future dates when the amount of dividend isdue for transfer to IEPF:
|Financial Year Ended ||Date of Declaration of Dividend ||Due to be Transferred to |
IEPF Fund in
|31st March 2014 ||23.09.2014 ||November 2021 |
|31st March 2015 ||24.08.2015 ||October 2022 |
|31st March 2016 ||21.09.2016 ||November 2023 |
|31st March 2017 ||22.09.2017 ||November 2024 |
|31st March 2018 ||19.09.2018 ||November 2025 |
|31st March 2019 ||24.09.2019 ||November 2026 |
TRANSFER TO RESERVES
No amount has been proposed to be carried to any Reserves. Entire amount of profit ofRs.273 lacs is proposed to be retained in the Surplus.
The paid up Equity Share Capital as at March 31 2020 is Rs.732.68 lacs comprising of7326800 Equity Shares of Rs.10 each. There is no change in the issued & subscribedcapital of the Company of the year. Further during FY 2019-20 your Company has neitherissued any shares with differential voting rights nor has granted any stock options orsweat equity. As on March 31 2020 none of the Directors or Key Managerial Personnel ofthe Company holds instruments convertible into equity shares of the Company. All theShares of the Promoters which are held in the Company are in dematerialized Form.
MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year to which thefinancial statements relate and the date of the report.
CHANGE IN THE NATURE OF BUSINESS
During the year there was no change in the nature of business of the Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Appointment and/or Re-Appointment
The Board of Your Company is duly constituted which is in compliance with therequirements of the Act the SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015 [hereinafter referred to as "SEBI Listing Regulations"] andprovisions of the Articles of Association of the Company.
In accordance with the provisions of Section 152 of the Act and the Articles ofAssociation of the Company Mr. Ramesh Chander Khandelwal (DIN: 00124085) Chairman &Whole Time Director of the Company being liable to retire by rotation shall retire at theensuing AGM and being eligible offers himself for re-appointment.
As already reported last year Ms. Preeti Khatore had resigned from the post of CompanySecretary & Compliance Officer and was relieved from the services of the Company fromthe close of business hours of 11th April 2019. In her place Mr. Piyush Jainwas appointed as the Company Secretary & Compliance Officer of the Company with effectfrom 12th April 2019 who has also resigned from the services of the Companyeffective from 20th June 2020. The Board placed on record the valuableguidance and support received from them during their tenure.
The Board of Directors of the Company at its meeting held on 29th July 2020based on the recommendation of Nomination and Remuneration Committee has appointed Mr.Kapil Sharma as the Company Secretary & Compliance Officer of your Company.
The brief resume and other details as required under the Regulation 36(3) of the SEBIListing Regulations of the Director seeking re-appointment at the ensuing AGM is providedin the Notice of the AGM of the Company which forms part of the Annual Report.
Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel (hereinafterreferred to as KMP') of the Company in accordance with the provisions of Section2(51) and Section 203 of the Act read with the Rules framed there under.
1. Mr. Ramesh Chander Khandelwal Chairman & Whole-time Director;
2. Mr. Pramod Khandelwal Managing Director;
3. Mr. Ram Awtar Sharma Chief Financial Officer; and
4. Mr. Kapil Sharma Company Secretary & Compliance Officer
None of the Whole-Time Directors / KMP of the Company is holding office in any otherCompany as KMP and none of the Directors/ KMP of Company are disqualified.
Statement of Declaration given by Independent Directors
The Company has received necessary declaration of independence from all the IndependentDirectors of the Company under Section 149(7) of the Act that he/she meets the criteriaof Independent Directors envisaged in Section 149(6) of the Act and rules made thereunderand SEBI Listing Regulations and are not disqualified from continuing as IndependentDirectors. Further Company has also received statements from all the Independent Directorsthat they have complied with Code of Conduct for Independent Directors prescribed inSchedule IV to the act and also statement on compliance of code of conduct for Directorsand Senior Management Personnel formulated by Company. The same is attached in Corporategovernance Section of this Annual Report.
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and SEBIListing Regulations. The performance of the board was evaluated by the board after seekinginputs from all the directors on the basis of criteria such as the board composition andstructure effectiveness of board processes information and functioning etc. Theperformance of the committees was evaluated by the board after seeking inputs from thecommittee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc. The above criteria are based on the Guidance Noteon Board Evaluation issued by the Securities and Exchange Board of India on January 52017.
As required under the provisions of the Act a separate meeting of IndependentDirectors was held during the year on 17th January 2020. In the meetingperformance of Non-Independent Directors the Board as a whole and the Chairman of theCompany was evaluated taking into account the views of Executive Directors andNon-Executive Directors. The Board and the Nomination and Remuneration Committee reviewedthe performance of individual directors on the basis of criteria such as the contributionof the individual director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc. In the board meeting the performance of the board its committees and individualdirectors was also discussed. Performance evaluation of independent directors was done bythe entire board excluding the independent director being evaluated. The Board opinesthat Independent Directors have got integrity expertise and relevant experience requiredin industry in which Company operates.
The evaluation of all the Directors and the Board as a whole was found to besatisfactory. The flow of information between the Company management and the Board istimely qualitative and adequate.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) & 134(5) of the Act yourBoard of Directors' to the best of their knowledge and ability hereby confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March2020 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls for the Company and theseinternal financial controls were adequate and operating effectively;
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
During the year under review your Company has not accepted any deposits within themeaning of Chapter V of Companies Act 2013 read together with the Companies (Acceptanceof Deposits) Rules 2014 from the public and as such no amount of principal or interestremained unpaid or unclaimed at the end of the financial year 31st March 2020.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loan or guarantee as covered under the provisions ofSection 186 of the Act during the financial year ended 31st March 2020. Theinvestment made by the Company during the financial year ended 31st March 2020is with in the limits as specified under section 186 of the Act.
The Company has not defaulted in payment of interest and repayment of loan to any ofthe financial institutions and / or banks during the period under review.
RELATED PARTY TRANSACTIONS
As required under the SEBI Listing Regulations and the Act prior omnibus approval wasobtained for Related Party Transactions which are of repetitive nature and/or entered inthe ordinary course of business and are at Arm's Length basis in the first meeting ofAudit Committee for the Financial year 2019-20.
All transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee of the Company for its review.The details of the related party transactions are set out in Note No. 33 to the FinancialStatements of the Company. The particulars of contracts entered with related parties areshown in the prescribed form AOC-2 which is enclosed at Annexure 1. TheRelated Party Transactions Policy as approved by the Board is uploaded on the Company'swebsite i.e. www.mcil.net.
AUDITORS AND AUDITOR'S REPORT
(I) STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules framedthereunder the Company in its 22nd Annual General Meeting had appointed M/s.Vinod Kumar & Associates Chartered Accountants (Firm registration No. 002304N) asthe Statutory Auditors for a second term of 5 (five) consecutive years which is valid till27th Annual General Meeting of the Company. They have confirmed theireligibility for the Financial Year 2020-21 under Section 141 of the Companies Act 2013and the Rules framed there under.
The report of the Statutory Auditors on Financial Statements for the year under reviewforms part of the Annual Report and there are no auditor's qualifications in the auditreport for the financial year ended 31st March 2020.
There have been no instances of fraud reported by the Statutory Auditor under Section143(12) of the Companies Act 2013 read with rules framed there under either to theCompany or to the Central Government.
(II) SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rulesframed there under the Company has re-appointed M/s. CPA & Co. a firm of CompanySecretaries in Practice to conduct the Secretarial Audit of the Company for the financialyear 2020-21.
The Secretarial Audit Report for the financial year 2019-20 forms integral part of thisReport as Annexure II'. There are no qualifications observations oradverse remark or disclaimer in the said report.
(III) COST AUDITORS & COST RECORDS
The Board of Directors of your Company on the basis of provisions of Section 148 ofthe Act read with Companies (Audit and Auditors) Rules 2014 as amended from time to timeand as per the recommendations provided by the Audit Committee has re-appointed Mr.Ramawatar Sunar Cost Accountant (Firm registration No. 100691) as Cost Auditor of yourCompany for conducting the Audit of Cost records of the Company for the financial year2020-21. Company has received written consent from Mr. Ramawatar Sunar Cost Accountant tothe effect that his appointment if made will be in accordance with the applicableprovisions of the Act and rules framed there under.
As per Section 148(3) of the Act the remuneration payable to the Cost Auditorsrequires ratification by Shareholders. An appropriate Resolution to this effect is beingproposed at the ensuing AGM.
As per Section 148(1) of the Act the cost records as specified by the CentralGovernment are being made and maintained by your Company. Your Company has filed the CostAudit Report for the financial year 2018-19 with the Registrar of Companies Ministry ofCorporate Affairs in the XBRL mode during the year under review.
(I) MEETING OF THE BOARD
The notices of Board / Committee meetings are given well in advance to all theDirectors. The Agenda for the Board and Committee Meetings include detailed notes on theitems to be discussed at the meeting to enable the Directors to take an informed decision.All observations recommendations and decisions of the Committees are placed before theBoard for consideration and approval. Six (6) Meetings of the Board of Directors were heldduring the year 2019-2020 viz. 12.04.2019 24.05.2019 12.08.2019 14.11.2019 17.01.2020and 14.02.2020 and the gap between two meetings did not exceed one hundred and twentydays. The necessary quorum was present at all the meetings. The particulars of meetingsheld and attended by each Director are detailed in the Corporate Governance Report.
(II) AUDIT COMMITTEE
The Audit Committee of the Board as on 31st March 2020 comprisesIndependent Directors namely Mr. Satish Kumar Gupta (Chairman) Ms. Neha Gupta and Mr.Santosh Khandelwal as members.The powers role and terms of reference of the AuditCommittee covers the areas as contemplated under Regulation 18 of SEBI ListingRegulations Section 177 of the Act and such other functions as may be specificallydelegated to the Committee by the Board from time to time. During the year 4 (Four) AuditCommittee meetings were held the details of which are provided in the CorporateGovernance Report which forms part of this Annual Report. The maximum interval between thetwo meetings did not exceed 120 days as prescribed under the Companies Act 2013 and theSEBI Listing Regulations. During the year all the recommendations made by the AuditCommittee were accepted by the Board.
(III) NOMINATION AND REMUNERATION COMMITTEE
Nomination and Remuneration Committee of the Board as on 31st March 2020comprises Independent Directors namely Mr. Satish Kumar Gupta (Chairman) Ms. Neha Guptaand Mr. Santosh Khandelwal as members. The powers role and terms of reference of theNomination and Remuneration Committee covers the areas as contemplated under Regulation 19of SEBI Listing Regulations and Section 178 of the Act besides other terms as may bereferred by the Board of Directors. During the year 1 (one) Nomination and RemunerationCommittee meeting was held the details of which are provided in the Corporate GovernanceReport which forms part of this Annual Report. The Board has accepted all recommendationsmade by the Nomination and Remuneration Committee during the year.
(IV) STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee of the Board as on March 31 2020 comprisesof Mr. Satish Kumar Gupta (Chairman) Mr. Ramesh Chander Khandelwal and Mr. PramodKhandelwal as members. The Committee inter-alia reviews and ensures redressal ofinvestor's grievances.During the year 6 (Six) Stakeholders Relationship Committeemeetings were held the details of meetings and other details are provided in theCorporate Governance Report which forms part of this Annual Report.
SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES
The Company doesn't have any Subsidiary Joint Venture or Associate Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY
The Company continued to give major emphasis for conservation of Energy and themeasures taken during the previous years are continued. The Efficiency of EnergyUtilization in manufacturing Unit is monitored at the Corporate level every quarter inorder to achieve effective conservation of energy. The significant Energy Conservationmeasures during the year were:
Use of transparent roof sheets wherever possible to make use of natural lighting.
Monitoring of utilization of energy in lighting and other auxiliary equipments.
Creating awareness among employees about the necessity of energy conservation bycelebrating energy conservation week.
B. TECHNOLOGY ABSORPTION
The technology being appropriate for current need and as such no research developmentand up gradation is required at this stage.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
There are no foreign exchange earnings and outgo.
CORPORATE SOCIAL RESPONSIBILITY
Provisions of Section 135 of the Companies Act 2013 are not applicable to the Company.
EXTRACT OF ANNUAL RETURN
As provided under Section 92 of the Companies Act 2013 and rules framed thereunderthe extract of annual return in Form MGT-9 is given in Annexure III'which forms part of this report. In compliance with Section 134(3)(a) of the Act MGT-9can be accessed on the website of the Company viz. www.mcil.net.
(a) Policy of Appointment & Re-appointment
The Company has in place a Nomination and Remuneration policy duly adopted and approvedby the Board. The Nomination and Remuneration Policy of the Company includes the terms andconditions for appointment and payment of remuneration to the Directors and KMP and othersenior management personnel including criteria for determining qualifications positiveattributes independence of a director as per Section 178 and Schedule IV of the Act.There have been no changes in the said policy during the year. The said policy may beaccessed on the website of the Company viz. www.mcil.net.
(b) Vigil Mechanism/Whistle Blower Policy
The Company has formulated a Whistle Blower Policy relating to Vigil Mechanism in termsof Section 177 of the Act and Regulation 22 of SEBI Listing Regulations for Employees andDirectors to keep high standards of ethical behaviour and provide safeguards to whistleblower. The policy safeguards the whistle blowers to report concerns or grievances andalso provides a direct access to the Chairman of the Audit Committee. The Whistle BlowerPolicy is available on the website of your Company viz. www.mcil.net.
(c) Risk Management Policy
The Company has developed and implemented the Risk Management Policy and the AuditCommittee of the Board reviews the same periodically. The Risk Management policy may beaccessed on the website of the Company viz. www.mcil.net.
The information required pursuant to Section 197(12) of the Act read with Rule 5 (1) ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company and Directors are furnished hereunder:
|Name ||Designation ||% Increase/(Decrease) of remuneration in 2019-20 as compared to 2018-19# ||Ratio of Remuneration to MRE# |
|1 Mr. Pramod Khandelwal ||Managing Director ||16.23% ||100.29 |
|2 Mr. Ramesh Chander Khandelwal ||Chairman and Whole-time director ||16.23% ||100.29 |
|3 Mr. Satish Kumar Khandelwal ||Independent Director ||20% ||0.23 |
|4 Ms. Neha Gupta ||Independent Director ||(33.33%) ||0.08 |
|5 Mr. Santosh Khandelwal ||Independent Director ||200% ||0.08 |
|6 Mr. Ram Awtar Sharma ||Chief Financial Officer ||(4.27%) ||- |
|7 Mr. Piyush Jain* ||Company Secretary & Compliance Officer ||N.A. ||- |
MRE : Median Remuneration of Employees.
# : Based on annualised Salary
* : Mr. Piyush Jain was appointed effective from 12th April 2019 andtherefore his remuneration for the financial year 2018-19 is not available.
1. The percentage increase in Median remuneration of employees for the year 2019-20 is0.78%
2. The number of permanent employee on the rolls of the Company as of 31st March2020 is 79.
3. The average percentage increase in salary of the Company's employees excluding theKMP was 5.94% and including KMP was 12.91%. The salary of KMP were based on therecommendation of Nomination and Remuneration Committee to revise the remuneration as perthe Remuneration Policy of the Company.
4. In terms of the provisions of Section 197 of the Companies Act 2013 read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended from time to time a statement showing the names and otherparticulars of the top ten employees in terms of remuneration drawn set out in the saidrules are provided in AnnexureIV' to the Board's Report.
5. It is afirmed that the remuneration is as per the remuneration policy of thecompany.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY ANY REGULATORS OR COURT
During the year under review no significant and material orders were passed by theRegulators or Courts or Tribunals impacting the going concern status and Company'soperations in future.
INTERNAL FINANCIAL CONTROL
In order to align with the requirement of Section 134(5) (e) of the Companies Act2013 the Company has in place adequate internal financial controls which providesreasonable assurance regarding the reliability of financial reporting and the preparationof financial statements. In particular it ensures adequate operating controls clearpolicies and detailed procedures of operations delegation of authorities safeguarding ofassets prevention and detection of frauds and errors financial controls on financialreporting and timely preparation of reliable financial information. Nonetheless yourCompany recognizes that any Internal control framework no matter how well designed hasinherent limitations and accordingly it is ensured that systems are reinforced on ongoingbasis.
Acuit has reafirmed long-term rating of ACUITE BBB' (read as ACUITE BBB) andshort term rating of ACUITE A3+' (read as ACUITE A three plus) on the bankfacilities of the Company. The outlook is Stable'.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India ("SEBI"). The report on Corporate Governance as stipulated underthe SEBI Listing Regulations forms part of the Annual Report. The requisite certificatefrom the Practicing Company Secretaries confirming compliance with the conditions ofCorporate Governance is attached to the report on Corporate Governance.
LISTING ON STOCK EXCHANGES
The equity shares of the Company are listed on Bombay Stock Exchange Limited. TheAnnual Listing fees for the financial year 2020-21 has been duly paid to the said StockExchange. The Company is in compliance with all applicable provisions of ListingRegulations entered with BSE.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V to the SEBI Listing Regulations is presented in aseparate section forming part of the Annual Report.
During the year under review industrial relations remained harmonious at all ouroffices and establishments.
DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/UNCLAIMED SUSPENSE ACCOUNT
The Company does not have any of its securities lying in demat/unclaimed suspenseaccount arising out of public/bonus/ right issues as at 31st March 2020.Hence the particulars relating to aggregate number of shareholders and the outstandingsecurities in suspense account and other related matters are not applicable.
PREVENTION PROHIBITION & REDRESSAL OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has a zero tolerance for any abuse against Women at Workplace. The Companyhas complied with provisions relating to the constitution of Internal Complaints Committeeunder the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
COMPLIANCE WITH THE SECRETARIAL STANDARDS
Applicable Secretarial Standards i.e. SS-1 and SS-2 relating to Meeting of theBoard of Directors' and General Meetings' respectively have been duly followed bythe Company.
DISCLOSURES BY SENIOR MANAGEMENT
Senior Management has made disclosures of Interest to the Board relating to allmaterial Financial & Commercial transactions entered between Company and thirdparties. None of the Senior Management Personnel have been found to be interested in suchtransactions.
Your Directors wish to express their grateful appreciation for the valuable support andco-operation received from suppliers investors banks all regulatory and governmentauthorities and all other business associates. The Board places on record its sincereappreciation towards the Company's valued customers for the support and confidence reposedby them in the organization and looks forward to the continuance of this supportiverelationship in the future. Your Directors proudly acknowledge the contribution and hardwork of the employees of the Company at all levels who through their competence hardwork solidarity and commitment have enabled the Company to achieve consistent growth.