The Board of Directors ("Board") of the Company have great pleasure inpresenting the 33rd Annual Report and Audited Financial Statements of the Company for theFinancial Year ("FY") ended March 31 2021.
FINANCIAL SUMMARY AND HIGHLIGHTS
| || ||(Rs. in Lakhs) |
|Particulars ||FY 2020-21 ||FY 2019-20 |
|Total Income ||17944.69 ||13886.72 |
|Profit Before Interest and Depreciation & Tax ||2420.15 ||1617.50 |
|Interest & Finance Costs ||598.59 ||634.92 |
|Depreciation & Amortization and Impairment ||441.50 ||400.80 |
|Profit Before Tax & Exceptional Items ||1380.06 ||581.78 |
|Tax Expenses ||411.26 ||184.27 |
|Profit After Tax ||968.80 ||397.51 |
|Other Comprehensive Income (Net of Taxes) ||2.67 ||(0.94) |
|Total Comprehensive Income ||971.47 ||396.57 |
|Earnings Per Share || || |
|Basic ||8.02 ||3.29 |
|Diluted ||8.02 ||3.29 |
OVERVIEW OF COMPANY PERFORMANCE
Total Income and Operating Profit for the year under review amounted to Rs. 17944.69Lakhs and Rs. 2374.53 Lakhs respectively as compared to Rs. 13886.72 Lakhs and Rs.1570.90 Lakhs in the previous financial year.
The Net Profit of the Company for the FY under review was increased to Rs. 971.47Lakhs as against Rs. 396.57 Lakhs during the previous year 2019-20.
MIGRATION OF EQUITY SHARES FROM BSE SME PLATFORM TO BSE MAINBOARD PLATFORM
The equity shares of the Company which were listed on SME Platform of BSE has now beenmigrated & admitted to dealings on the Mainboard Platform of BSE w.e.f. May 27 2020.
TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE ACT
There is no amount proposed to be transferred to General Reserves for the FY 2020-21.
In line with the practice of returning the surplus funds to shareholders and based onthe Company's performance the Board at their meeting held on May 27 2021 recommended afinal dividend of Rs. 0.20/- per equity share of the face value of Rs. 10 each (@ 2%) forthe FY 2020-21 which is subject to approval of the members at the ensuing Annual GeneralMeeting ("AGM") of the Company. The dividend if approved at the AGM will bepaid to those shareholders whose names appear in the Register of Members as on the RecordDate i.e. Thursday September 9 2021.
CHANGE IN NATURE OF BUSINESS
There has been no change in nature of business of the Company during the FY underreview.
SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE COMPANY
The Company does not have any Subsidiary Joint venture or an Associate Company. MATERIALCHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the FY 2020-21 and the date of this report.
The Company's paid-up Equity Share Capital continues to stand at Rs. 120.72 Lakhs as onMarch 312021.During the FY under review the Company has not bought back any of itssecurities or issued any Sweat Equity Shares or provided any Stock Option Scheme to theemployees.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act 2013("Act") the Annual Return as on March 312021 is available on the Company'swebsite on www.mitsuchem.com
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of the Company is duly constituted in accordance with the requirements of theAct read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations").
Retirement by rotation
Mr. Sanjay Dedhia (DIN: 01552883) Managing Director of the Company retires by rotationat the forthcoming AGM in accordance with provisions of Section 152 of the Act and theArticles of Association of the Company and being eligible offers himself forre-appointment.
Change in Composition of Board
During the year there was no change in the composition of the Board.
The Shareholders through postal ballot voting had approved the re-appointment of Mr.Dilip Gosar (DIN: 07514842) as an Independent Director of the Company for a second term of5 (five) consecutive years w.e.f. June 13 2021 and the appointment of Mr. Hasmukh Dedhia(DIN: 07510925) as an Independent Director for a tenure of 5 (five) consecutive yearsw.e.f. June 1 2021.
Mr. Ashish Doshi (DIN: 07551775) ceased to be an Independent Director of the Companywith effect from the close of business hours of June 24 2021 upon completion of hisfirst term of 5 (five) consecutive years. The Board places on record its deepest gratitudeand appreciation towards valuable contribution made by Mr. Ashish Doshi to the growth andgovernance of the Company during his tenure.
Number of meetings of the Board
During the year four Board meetings were convened and held in accordance with theprovisions of the Act and the details of which are given in the Corporate GovernanceReport which forms a part of this Report.
Board Performance Evaluation
Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out an annual evaluation of its own performance its Committees and individualdirectors. The Nomination and Remuneration Committee has laid down the manner in whichformal annual evaluation of the performance of the Board its Committees and IndividualDirectors has to be made. It includes circulation of evaluation forms separately forevaluation of the Board and its Committees Non-Executive Directors/ Executive Directorsand the Chairman of the Company.
The Company has received declarations from all the Independent Directors of the Companyaffirming compliance with the criteria of independence laid under the provisions ofSection 149(6) of the Act and under Regulation 16 (1)(b) of Listing Regulations.
As per the Companies (Appointment and Qualifications of Directors) Fifth AmendmentRules 2019 all the Independent Directors of the Company have registered with the IndianInstitute of Corporate Affairs for inclusion of their names in the comprehensiverepository maintained by the Ministry of Corporate Affairs.
As stipulated by the Code of Independent Directors pursuant to the Act and the ListingRegulations a separate meeting of the Independent Directors of the Company was held onFebruary 2 2021 inter alia to:
(i) Evaluate the performance of Non-Independent directors and the Board as a whole;
(ii) Evaluate the performance of the Chairman and Managing Directors of the Company;and
(iii) Evaluate the quality quantity and timelines of flow of information between theexecutive management and the Board.
All Independent Directors were present at the meeting. The Directors expressed theirsatisfaction with the evaluation process.
Familiarization Program for Independent Directors
All Independent Directors are familiarized with the operations and functioning of theCompany. The details of the training and familiarization program are provided in theCorporate Governance Report forming part of this Report.
Key Managerial Personnel
Mr. Manish Dedhia Managing Director & Chief Financial Officer and Ms. DrishtiThakker Company Secretary & Compliance Officer are the Key Managerial Personnel ofthe Company.
COMMITTEES OF THE BOARD
With a view to have a more focused attention on various facets of business and forbetter accountability the Board has constituted various committees. The statutorilymandated committees constituted under the provisions of the Act and Listing Regulationsare Audit Committee Nomination and Remuneration Committee Stakeholders' RelationshipCommittee and Corporate Social Responsibility Committee.
The Committees have been mandated to operate within their terms of reference approvedby the Board to focus on the specific issues and ensure expedient resolution on diversematters.
The composition terms of reference and other details of the above mentioned committeesare provided in the Corporate Governance Report forming part of this Report.
Whistle Blower Policy /Vigil Mechanism
As per the provisions of Section 177(9) and (10) of the Act and Regulation 22 of the
Listing Regulations the Company has adopted a Whistle Blower Policy for establishing avigil mechanism for Directors and Employees to report genuine concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct andprovide adequate safeguards against victimisation of persons who use such mechanism andmakes provision for direct access to the chairman of the Audit Committee in appropriate orexceptional cases. The said policy has been hosted on the Company's website atwww.mitsuchem.com
Pursuant to the provision of Section 178 of the Act and Regulation 19 of ListingRegulations the Board has on the recommendation of the Nomination and RemunerationCommittee framed a policy relating to remuneration of the Directors Key ManagerialPersonnel Senior Management Personnel and other employees along with the criteria forappointment and removal of the Directors Key Managerial Personnel and Senior ManagementPersonnel of the Company. The said policy has been is annexed to this Report and marked as"Annexure-I" and has been hosted on the Company's websitewww.mitsuchem.com.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Actthe Directors of the Company state and confirm that:
a. in the preparation of the annual accounts for the financial year 2020-21 theapplicable accounting standards had been followed and there are no material departuresfrom the same;
b. the directors had 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 as at March 31 2021 and of the profitand loss of the company for that period;
c. the directors had 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 had prepared the annual accounts on a going concern basis;
e. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS GUARANTEE AND INVESTMENTS:
The particulars of loans guarantees and investments as per Section 186 of the Act readwith the Companies (Meeting of Board and its powers) Rules 2014 as on March 312021 havebeen disclosed in the Notes to the Financial Statements of the Company.
CORPORATE SOCIAL RESPONSIBILITY
As a part of its initiative under the Corporate Social Responsibility ("CSR")drive the Company has undertaken projects in accordance with Schedule VII of the Act andthe Company's CSR policy. The Report on CSR activities as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 is annexed and marked as 'Annexure-II'which forms an part of this Report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of conservation of energy technology absorption and foreign exchangeearnings and outgo as required under section 134(3)(m) of the Act read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 are as below:
A. CONSERVATION OF ENERGY
The Company is making continuous efforts on ongoing basis to conserve the energy byadopting innovative measures to reduce wastage and optimize
consumption. Some of the specific measures undertaken are:
(i) Steps taken or impact on conservation of energy:
a. Harmonic Filters installed increasing the power factor which resulted into energysaving of approx. 8.22%.
b. Energy efficient heaters and lugs heaters installed resulting into energy saving ofapprox. 11%.
(ii) Steps taken by the company for utilizing alternate sources of energy includingwaste generated:
Transparent Polycarbonate sheets used for roofing in working place for letting naturallight and increase day lights in the manufacturing units resulting in saving approx. 12%of electricity consumption of lights.
(iii) The capital investment on the energy conservation equipment's: Rs. 44.70Lakhs
B. TECHNOLOGY ABSORPTION ADAPTION AND INNOVATION
(i) The efforts made towards technology absorption:
a. Devices like Thermal image camera Humidity meter electromagnetic flow meters andsmartflow valve are used for efficient mould cooling study which has improved productivityof various mould ranging between 3% to 5%.
b. Automatic wadding machine is used for wadding of caps which has increasedproductivity and resulted into reduction in cost by approx. 40%.
c. Automatic labelling machine is used for stickering on cans and bottles which hasincreased productivity and resulted into reduction in cost by approx. 40%.
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution:
Many single moulds upgraded into family moulds which in turn has increased productivityby approx. 40%.
(iii) The details of Imported Technology (imported during the last three years reckonedfrom the beginning of the financial year): Not Applicable.
(iv) The expenditure incurred on Research & Development: Rs. 9 Lakhs
C. FOREIGN EXCHANGE EARNING AND OUTGO:
|Particulars ||Amount (Rs. In Lakhs) |
|Foreign exchange earnings ||16.29 |
|Foreign exchange outgo ||4004 |
The Audit Committee has been delegated the responsibility for monitoring and reviewingrisk management assessment and minimization procedures developing implementing andmonitoring the risk management plan and identifying reviewing and mitigating all elementsof risks which the Company may be exposed to.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review there are no significant and material orders passed bythe Regulators/Courts that would impact the going concern status of the Company and itsfuture operations.
a) Statutory Auditors & their Report
At the 32nd AGM held on September 9 2020 the Members approved appointment of M/s.Gokhale & Sathe Chartered Accountants (Firm Registration No. 103264W) as StatutoryAuditors of the Company to hold office for a period of five years from the conclusion ofthat AGM till the conclusion of the 37th AGM.
The Auditors' Report to the Shareholders for the FY under review is annexed to thisReport and it does not contain any reservation qualification or adverse remark. Thecomments in the Auditors' Report read with notes to the accounts
b) Secretarial Auditor & their Report
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Mr. Haresh Sanghvi Practicing Company Secretary (CoP No. 3675) for conductingSecretarial Audit of the Company for the FY ended on March 31 2021.
Secretarial Audit Report issued by Mr. Haresh Sanghvi in Form MR-3 forms part to thisReport as "Annexure- III". The said report does not contain anyobservation or qualification requiring explanation or adverse remark.
c) Internal Auditor
Pursuant to the provisions of Section 138 of the Act read with the Companies (Accounts)Rules 2014 the Company has appointed M/s. V. J. Shah & Co. Chartered Accountants asthe Internal Auditor of the Company.
The Internal Audit reports are reviewed by the Audit Committee on quarterly basis.
d) Reporting of Frauds
There was no instance of fraud during the year under review which required theAuditors to report to the Audit Committee and / or Board under Section 143(12) of Act andRules framed thereunder.
DISCLOSURE UNDER PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT:
The Company has zero tolerance towards sexual harassment at the workplace and hencehas constituted an Internal Complaints Committee and have formulated Sexual HarassmentPolicy in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder whichis available at the Registered Office of the Company and is accessible to all theemployees of the Company. During the FY under review the Company has not received anycomplaint.
During the FY under review the Company has not accepted any deposits from the publicand as such there are no outstanding deposits in terms of the Companies (Acceptance ofDeposits) Rules 2014.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as requiredunder Regulation 34 read with Schedule V of the Listing Regulations is annexed to thisReport as "Annexure-IV".
Report on Corporate Governance and Certificate of the Auditor of the Company regardingcompliance of the conditions of Corporate Governance as stipulated in Part C of Schedule Vof the Listing Regulations are provided in a separate section forming part of this Reportas "Annexure V".
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has in place adequate internal financial controls with reference to thefinancial statements. Internal audits are undertaken on a quarterly basis by InternalAuditors covering all units and business operations to independently validate the existingcontrols. Reports of the Internal Auditors are regularly reviewed by the management andcorrective action is initiated to strengthen the controls and enhance the effectiveness ofthe existing systems. The Audit Committee evaluates the efficiency and adequacy of thefinancial control system in the Company and strives to maintain the standards in theInternal Financial Control.
PREVENTION OF INSIDER TRADING:
In compliance with the provisions of the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations 2015 as amended the Board hasformulated code of conduct for regulating monitoring and reporting of trading of sharesby Designated Persons. This code lays down guidelines procedures to be followed anddisclosures to be made by the Designated Persons while dealing with shares of the Companyand cautioning them on consequences of non-compliances. The code is available on thewebsite of the Company at www.mitsuchem.com
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY TRANSACTIONS
All transactions entered into with related parties as defined under the Act during theFY were in the ordinary course of business and on an arm's length pricing basis and do notattract the provisions of Section 188 of the Act. There were no materially significanttransactions with the related parties during the FY which were in conflict with theinterest of the Company and hence enclosing of Form AOC-2 is not required. Suitabledisclosure as required by the Accounting Standard (AS 18) has been made in the notes tothe Financial Statements.
PARTICULARS OF EMPLOYEES:
Disclosures pertaining to remuneration and other details are required under Section197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Report as "AnnexureVI".
During FY 2020-21 no employee whether employed for whole or part of the year wasdrawing remuneration exceeding the limits mentioned under Section 197(12) of the Act readwith Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable mandatory Secretarial Standards.
APPRECIATION & ACKNOWLEDGEMENTS
The Board wishes to express its gratitude and record its sincere appreciation for thecommitment and dedicated efforts put in by all the employees more particularly ensuringbusiness as usual in spite of COVID-2019 impact. The Directors take this opportunity toexpress their grateful appreciation for the encouragement cooperation and supportreceived from all the stakeholders including but not limited to the Governmentauthorities bankers customers suppliers and business associates. The Directors arethankful to the esteemed shareholders for their continued support and the confidencereposed in the Company and its management.
| ||For and on behalf of the Board |
| ||Jagdish Dedhia |
|Date : August 12 2021 ||Chairman & Whole-Time Director |
|Place : Mumbai ||DIN: 01639945 |