TO THE MEMBERS
MIVEN MACHINE TOOLS LIMITED
The Directors present the Thirty Sixth Annual Report and the Audited FinancialStatements of Miven Machine Tools Limited ("Company") for the Financial Year("FY") ended March 31 2021.
1. FINANCIAL SUMMARY/HIGHLIGHTS
(Rs. in lakhs)
|FINANCIAL RESULTS ||Financial Year ended 31-03-2021 ||Financial Year ended 31-03-2020 |
|Gross Income ||50.99 ||577.52 |
|Other income ||8.67 ||871.52 |
|Total income ||59.66 ||1449.03 |
|Operating Expenses ||192.94 ||878.37 |
|Profit (Loss) ||(133.28) ||570.66 |
|Finance Cost ||3.71 ||2.64 |
|Net Profit / (Loss) ||(129.57) ||573.30 |
2. OPERATIONS AND STATUS OF COMPANY'S AFFAIRS
During the year under review your company achieved a turnover of Rs. 50.99 lakhs frommanufacturing operations as against previous year's turnover of Rs. 577.52 lakhs. Companyhas incurred a loss of Rs.129.57 lakhs as against profit of Rs. 570.66 lakhs during theprevious financial year.
The second wave of COVID-19 pandemic cast its adverse effects and had severe impact onthe operations of the Company as the customers did not come forward to pick up thedeliveries fo the machines. In addition to this the machine tools industry continues tobe passing through a prolonged period of recession and as a result the Company has beenincurring losses year after year.
Since the company has incurred losses during the year under review the company is notin a position to consider payment of any dividend.
4. AMOUNT PROPOSED TO BE CARRIED TO RESERVE:
In view of the financial position of the Company during the FY 2020-21 the companydoes not
5. TEMPORARY SUSPENSION OF MANUFACTURING ACTIVITIES OWING TO THE SECOND WAVE OF COVID19 PANDEMIC
The country saw unprecedented economic crisis as a result of outbreak of second waveCOVID 19 pandemic. Owing to the curfew and complete lockdown with several restrictions onmovement of persons absence of transport facilities as directed by the Government ofIndia Government of Karnataka and several other state governments and municipalcorporations company was compelled to temporarily spend the manufacturing operations.With the lifting of the particial lock down company re-started the operations on alimited scale towards the end of the financial year.
6. MATERIAL IMPACT OF SECOND WAVE OF COVID-19 PANDEMIC ON OPERATIONS AND PERFORMANCE
With the various restrictions imposed since beginning of March 2020 and thelockdown announced during the previous financial year in the State of Karnataka andnation-wide all the operations including field and manufacturing operations came tostandstill since then. Company restarted its manufacturing operations on May 25 2020 withlimited number of employees on a restricted scale. The restart of operations has been slowdue to various reasons such as restrictions on movement interruption in transportfacilities bottleneck in infrastructure lack of labour restriction on employees andsuppliers a large number of areas under red zone etc.
Steps taken to ensure smooth functioning of operations:
Sanitisation of workplace as well as company transport per the norms
Ensured availability of mask sanitizers and liquid hand wash to all employeesat workplace
Continuous communication on caution to be exercised
Facilitated safe distance at workplace canteen company transport
Capital and Financial Resources:
The Company does not propose to raise any further capital / debt as the currentfinancial position of the Company is sound. Liquidity position of the Company is stableand is being maintained to meet its commitments. Salaries to all the employees includingcasual and contract workmen were paid up to March 31 2021. The vendor payments are beingreleased in a staggered manner. All statutory dues were paid on respective due dates. TheCompany with focus on its dues from customers has managed to collect part of its dueamounts though the credit period remains elongated due to the nation-wide lockdown.
Ability to service debt and other financial arrangement:
Company has does not have any outstanding loans or working capital limits with banksand any financial institutions. Company may have temporary difficulty to service the debtin the form of Inter corporate deposits taken from sister concerns or directors and theremay be delay in making payment of interest due thereon. None of the assets of the Companyhave been impacted or impaired.
The Company is well positioned to fulfil its obligations and existingcontracts/arrangements. Since the Government has declared CoVID-19 pandemic
as natural calamity most of supply contracts will be subject to force majeure clause.
Estimation of the future impact of COVID-19 on its operations:
The Covid19 pandemic situation is unprecedented and exceptional. The futureimpact of the pandemic on the operations the Company can't be gauged with certainty as thesame hinges upon future development the Governments response to the situation to mitigateor contain its impact on the economies and the probable medical treatment discovery.
However the Company is confident about adopting to the changing businessenvironment and gear up to overcome the challenges.
12. RISK MANAGEMENT
The Company has developed and implemented a Risk Management Policy for the Companyincluding identification therein of elements of risk which in the opinion of the Boardmay threaten the existence of the Company. Company has been making constant efforts tocontinue its status as a going concern.
13. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Directors of the company have laid down internal financial controls in terms of thepolicies and procedures for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information. Such internalfinancial controls are adequate with the size and operations of the Company and wereoperating efficiently.
14. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has no tolerance for Sexual Harassment at Workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at Workplace("Policy"). The Company has not received any complaints under the Prevention ofSexual Harassment Act for the FY 2020-21.
15. VIGIL MECHANISM
The Company has established a Vigil Mechanism ("Mechanism") by way of aWhistle Blower Policy for reporting of genuine concerns and/or grievances. The saidMechanism provides adequate safeguards against victimization of persons who use themechanism and also provides direct access to the Chairman of the Audit Committee inappropriate or exceptional cases.
The Company has not accepted any deposits from the public at the beginning of the yearnor has it accepted any public deposits during the year under review.
17. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year under review the Company has not given any loans or guarantees orprovided security in connection with any loan or acquired securities of any other bodycorporate in terms of Section 186 of the Companies Act 2013 ("Act").
18. REAPPOINTMENT OF DIRECTOR
In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mrs Alka V. Sirur (DIN 06717649) is liable to retire byrotation at the ensuing Annual General Meeting and being eligible offers himself forreappointment.
19. NUMBER OF MEETINGS OF THE BOARD
During the financial year 2020-21 Company held 4 meetings of the Board of Directors.Details of attendance by the Directors at the Board Meetings during their tenure duringthe financial year and the previous Annual General meeting held on September 14 2020 arefurnished below:
|No Name of Director ||No of Board Meetings held during the tenure of Director ||No of Board Meetings attended ||Attendance at the last AGM |
|1 Mr. Vikram R Sirur ||4 ||4 ||Yes |
|2 Mr. Shyam M Sirur ||4 ||4 ||Yes |
|3 Mr. Nandan M Balwalli ||4 ||3 ||Yes |
|4 Anand Bindurao Kamalapur ||4 ||4 ||Yes |
|5 Mrs. Alka Vikram Sirur ||4 ||4 ||Yes |
20. DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149 OFCOMPANIES ACT 2013
As required under the provisions of Section 149(6) of the Companies Act 2013 Companyhas received declarations from the independent Directors viz. Mr AnandKamalapur and MrNandan M Balwalliduring their tenure stating that they have met the criteria ofindependence. In the opinion of the Board MrAnand Kamalapur and Mr Nandan M Balwalli havefulfilled the conditions specified in the Act and rules for appointment as IndependentDirectors and they are independent of management of the Company.
21. EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Board has carried out an evaluation of the performance of individual directorsCommittees constituted by the Board and the Board as a whole during the financial yearunder report through a process of personal discussions followed by a review to determineand enhance the effectiveness of the individual Directors Committees and the Board.
22. POLICY ON APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY OF THE COMPANY
The Nomination and Remuneration Committee ("NRC") recommends thereconstitution of the Board as and when required. It also recommends to the Board theappointment of Directors having good personal and professional reputation and conductsreference checks and due diligence of all Directors before recommending them to the Board.
In accordance with the provisions of Section 178 of the Act the Board of Directorshave adopted a Policy on Board Diversity and Director Attributes and the RemunerationPolicy. The Policy on Board Diversity and Director Attributes has been framed to encouragediversity of thought experience knowledge perspective age and gender in the Board.
23. KEY MANAGERIAL PERSONNEL
The following persons continue to be the Key Managerial Personnel of the Companypursuant to the provisions of Section 203 of the Companies Act 2013:
1) Mr. Vikram R Sirur: Managing Director
2) Mr. S G Gadagkar - Chief Financial Officer
3) Ms. Arpita Dhakane as Company Secretary
24. DIRECTORS' RESPONSIBILITY STATEMENT
Based on the internal financial controls and compliance systems of the Company workperformed by the internal statutory and secretarial auditors and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2020-21.
Accordingly pursuant to the provisions of Section 134(3) and 134(5) of the Act theBoard of Directors to the best of their knowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the loss ofthe Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the company andthat such internal financial controls were adequate and operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
25. EXEMPTIONS TO SMALL COMPANIES FROM CORPORATE GOVERNANCE
Since the paid up capital of the company is less than Rs 10 crore and the networth isless than Rs 25 crore the Company is exempted from the provisions of corporate governanceas specified in Regulations 17 to 28 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which came into force from December 1 2015. In view ofthe same details relating to compliance with the provisions of Corporate Governance havenot been furnished in this Report.
26. Board and its Committees
Four Board Meetings were held during FY 2020-21.
b. Audit Committee
The Audit Committee of Directors at the beginning of the financial year comprised ofMr Nandan M Balwalli Mr Anand Kamalapur and Mr Shyam Sirur. The Audit committee hasreviewed the financial statements of the Company for the financial year 2020-21 and thereport of the auditors thereon before they were submitted to the Board for approval.. Thecomposition of the Committee is in line with the provisions of Section 177 of the Act.
c. Nomination and Remuneration Committee ("NRC")
The NRC of Directors at the beginning of the financial year comprised of Mr Nandan MBalwalli Mr Anand Kamalapur and Mr Shyam Sirur.The composition of the Committee is inline with the provisions of Section 178 of the Act.
d. Corporate Social Responsibility Committee
As regards the applicable provisions of the Act and the Rules framed there under theCompany is not required to constitute a Corporate Social Responsibility Committee.
27. STATUTORY AUDITORS
At the 32nd Annual General Meeting held on September 29 2017 the members hadappointed M/s Rao Associates as the statutory auditors for a term of 5 years i.e. from theconclusion of the 32nd Annual General Meeting upto the conclusion of the 37th AnnualGeneral Meeting.
28. ACCOUNTING STANDARDS FOLLOWED BY THE COMPANY
Company has adopted the Indian Accounting Standards pursuant to the provisions of IndAS Rules with effect from April 12017.
29. EXPLANATION ON STATUTORY AUDITORS' REPORT
The Independent Auditors Report received from the Statutory Auditors does not containany qualifications reservations adverse remarks or disclaimers pursuant to theprovisions of Companies Act 2013 and hence there is no need to furnish any explanation bythe Board of Directors thereon.
30. SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors had appointedMr. Umesh P Maskeri
Practicing Company Secretary to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report in Form MR-3 received from the said Secretarial auditor isannexed to this report:
The Company has furnished the management comments to the Secretarial Auditor and thesame have been incorporated in the Secretarial Audit Report.
Article 141 of the Articles of Association of the Company provides for appointment ofminimum number of six directors whereas the number of directors as on March 312021 wasfive.
Management Comments :
Company has informed that it is going to place the proposal of altering the articles ofassociation to reduce the minimum number of directors from six to three in the ensuingAnnual General Meeting.
33. INFORMATION ON MATERIAL CHANGES AND COMMITMENTS
No material changes have taken place during the year.
34. RELATED PARTY TRANSACTIONS
During the year the Company has not entered into any transactions with Related Partieswhich are not in its ordinary course of business or not on an arm's length basis and whichrequire disclosure in this Report in terms of the provisions of Section 188(1) of the Act.
However the details of material contracts or arrangements or transactions with RelatedParties on an arm's length basis with respect to transactions covered under Section 188(1)of the Act are attached to this report in the prescribed Form No. AOC-2. Further detailsof Related Party Transactions as required to be disclosed by Accounting Standard - 18 on"Related Party Disclosures" specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014 are furnished in the Notes to theFinancial Statements.
35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
During the year under review no significant and material orders were passed.
36. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 134(3)(a)
The auditors of the company have not reported any fraud under sub- section (12) ofSection 143 of the Companies Act 2013 whether reportable to the Central Government orotherwise and hence no details are furnished in this regard.
37. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO
Information required Rules 8(3)(A) and (B) of the Companies (Accounts) Rules 2014concerning conservation of energy technology absorption and foreign exchange outgo havebeen furnished in Annexure to this report.
38. CHANGE IN THE NATURE OF BUSINESS:
There was no change in the nature of business during the year.
39. DETAILS PERTAINING TO REMUNERATION AND OTHER DETAILS AS REQUIRED UNDER SECTION197(12) OF THE ACT READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
The information stipulated under Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is furnished below:
i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2020-2021:
Not applicable as the company has been incurring operating losses.
ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary - if any in the financial year 2020-21:
There was no increase in remuneration of any Director CFO or Company Secreary duringthe financial 2020-21.
iii) The percentage increase in the median remuneration of employees in the financialyear 2020-21:
There was no increase in remuneration of employees during the year.
iv) The number of permanent employees on the roles of the Company:
v) The explanation on the relationship between average increase in remuneration andCompany performance:
There was no increase in remuneration and since the company is under loss explanationis not necessary.
vi) Comparison of the remuneration of the key managerial personnel against theperformance of the company:
Since the Company is making operating loss no comparison is possible.
vii) The key parameters for any variable component of remuneration availed by thedirectors: Not Applicable.
viii) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year:
ix) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the past 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:
There was no increase in the salaries of employees other than managerial personnel andalso managerial personnel hence no comparison is possible.
x) During the year under review there was no employee who was in receipt of aremuneration of Rs.500000/- per month or Rs.6000000/- per annum and hence theparticulars of the employees as required in terms of Sub Rule 2 of Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are not attracted.
xi) Variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer in case of listedcompanies.
The equity shares of the company are listed on BSE Ltd. These shares are very thinlytraded on Stock Exchange. The opening price during the financial year under report was Rs.8.05 and the closing price was Rs. 7.34. The market capitalization of the company as onMarch 31 2021 was Rs 220.45 lakhs as against Rs 241.78 lakhs on March 31 2020.
Since the company has been incurring losses the computation of price earnings ratio isnot applicable.
40. EXTRACT OF THE ANNUAL RETURN
In terms of the amended provisions of Section 134 (3)(a) of the Companies Act 2013 anextract of the Annual Return in the prescribed Form mGt-9 has been displayed on thewebsite of the company i.e. at www.mivenmachinetools.in. Members are requested to accessthe information by referring to the link MGT-9 for FY 2020-21 /investorrelations/www.mivenmachinetools.in. In view of the amended provisions mentioned aboveextract of annual return is not attached to this Report.
41. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and analysis report as required under Para (B) of Schedule V readwith Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is attached in Annexure B and forms part of this Report.
42. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/UNCLAIMED SUSPENSE ACCOUNT
The company does not have any shares in the demat suspense account or unclaimedsuspense account and hence the question of making any disclosure in this regard does notarise.
The Directors place on record their appreciation of the continuing support of thestakeholders of the Company. The Board also records its appreciation of the servicesrendered by the management of the Company.