The Shareholders (Members) of MMP Industries Limited
The Board of Directors of the Company hereby present the Forty-Eighth (48th) AnnualReport together with the Audited Financial Statements (Standalone and Consolidated) of theCompany for the year 2020-21.
1. COMPANY SPECIFIC INFORMATION
1.1 FINANCIAL SUMMARY AND HIGHLIGHTS
The summarized financial results (standalone) of the Company are as follows:-
|PARTICULARS ||FY 2020-21 ||FY 2019-20 |
| ||(Rupees in Lakhs) |
|Revenue from Operations (Gross) ||23073.35 ||24182.26 |
|Other Income ||104.13 ||292.79 |
|Profit / loss before Depreciation Finance Costs Exceptional Items and ||2704.68 ||3056.61 |
|Tax Expenses || || |
|Less: Depreciation / Amortization / Impairment ||453.54 ||310.75 |
|Profit / loss before Finance Costs Exceptional items and Tax Expense ||2251.14 ||2745.86 |
|Less: Finance Costs ||169.61 ||231.41 |
|Profit / loss before Exceptional items and Tax Expense ||2081.53 ||2514.45 |
|Add/(less): Exceptional items ||-- ||-- |
|Profit / loss before Tax Expense ||2081.53 ||2514.45 |
|Less: Tax Expense (Current & Deferred) ||503.32 ||585.41 |
|Profit / loss for the year (1) ||1578.20 ||1929.05 |
|Total Comprehensive Income / loss (2) ||3.12 ||11.00 |
|Total (1+2) ||1581.32 ||1940.05 |
|Balance carried forward ||1581.32 ||1940.05 |
During FY 2020-21 the total revenue from operations was at Rs 23177.48 Lakhs asagainst Rs 24475.05 Lakhs during FY 2019-20. Revenue from operations during FY 20-21 wasmainly impacted because of COVID-19 restrictions in H-1 of FY 2020-21 and poor demand inthe aluminium conductor division.
During FY 2020-21 under review the share of profits from the associate companies wasRs 166.64 lakhs as compared to loss of Rs (74.78 lakhs) pertaining to FY 2019-20.
1.2 AMOUNT IF ANY WHICH THE BOARD PROPOSES TO CARRY TO ANY RESERVES - TRANSFER TORESERVES (BALANCE SHEET)
The sum/s transferred to reserves and surplus (balance sheet) account/s viz. CapitalReserve (Special Capital Incentives) Securities Premium Retained Earnings and closingbalance/s thereof as at 31st March 2021 (FY 2020-21) [Previous Year FY 2019-20) is asfollows:-
|Sr. PARTICULARS ||FY 2020-21 ||FY 2019-20 |
|No. ||(Rupees in Lakhs) |
|1. Capital Reserve || || |
|a. Opening Balance ||40.32 ||40.32 |
|b. (Add) Additions during the year ||-- ||-- |
|c. (Less) Transferred during the year ||-- ||-- |
|Closing Balance ||40.32 ||40.32 |
|2. Securities Premium || || |
|a. Opening Balance ||6789.49 ||7636.24 |
|b. Addition during the reporting period ||-- ||-- |
|c. Expenses for Issue of Bonus Shares ||-- ||846.75 |
|d. Expenses for Issue ||-- ||-- |
|Closing Balance ||6789.49 ||6789.49 |
|3. Retained Earnings || || |
|a. Opening Balance ||8564.67 ||6629.12 |
|b. (Add) Net Profit for the year ||1578.20 ||1929.05 |
|c. (Add) Re-measurement of benefit of defined benefit plans (Net) ||3.13 ||11.00 |
|d. Expenses for Increase in Authorized Share Capital ||-- ||4.50 |
|Closing Balance ||10146.00 ||8564.67 |
As the members are aware Company has completed projects as set out as per the objectof the Initial Public Offering of the Company in April 2018 and with a view to reward itsMembers for showing faith in the management the Board of Directors recommended its maidenFinal Dividend @ 10% i.e. Rs 1/- per equity share of face value of Rs 10/- each subjectto approval by the Shareholders at the ensuing 48th Annual General Meeting. Your Companyhas no formal dividend distribution policy; however the said dividend pay-out is incompliance with the applicable Secretarial Standard -3 (SS-3) on Dividend issued by theInstitute of Company Secretaries of India (ICSI).
1.4 MAJOR EVENTS OCCURRED DURING THE YEAR a) STATE OF COMPANY'S AFFAIRS
The overall performance of the respective division/s of the Company during the FY2020-21 are provided hereunder:-
ALUMINIUM POWDERS AND PASTES
In-spite of the lower aluminium metal prices and loss of revenue due to Covid-19 theCompany achieved a marginal growth in revenue of this division.
The revenue for the segment in the FY 2020-21 was Rs 21055.88 Lakhs (up 4.72% over therevenue of Rs 20106.00 Lakhs in FY 2019-20). This revenue growth was achieved despite theCOVID situation during H-1 of FY 2020-21.
As the Members are aware commercial production at conversion section of Aluminium FoilPlant started in February 2021 and very nominal sales of Rs 188.64 Lakhs was achieved inthe Financial year.
ALUMINIUM CONDUCTORS & CABLES
The revenue for the segment in the FY 2020-21 was Rs 1686.36 Lakhs (down 52.27% overthe revenue of Rs 3532.90 Lakhs of FY 2019-20). The demand for conductors & cables wasextremely subdued due to lack of activities in electrical infrastructure sector speciallyso in Maharashtra
FUTURE PLANS / PROSPECTS:- (A) ALUMINIUM POWDERS
The demand outlook in the user segments like explosives AAC Blocks pesticides andpigments continues to be very favourable and many of our customers are in expansion mode.The government focus on low cost housing is expected to translate into major growth in theAAC block sector. Further with decreasing coal imports and government's focus onAatmanirbhar Bharat' mining sector demand of coal and other minerals will showstrong growth. The Company is well placed with its product capacities to exploit thisfuture potential.
(B) ALUMINIUM FOILS
The Company commenced commercial operations in the month of February 2021 in theconversion section and is currently operating at approx. 50% capacity. The Company's totalpresent capacity in the conversion section is 3600 MT per year and rolling mill capacity(for bare foil) is 4200 MT out of which 2900 MT is expected to be for captive consumptionin the conversion section and the balance 1300 MT is expected to be sold in the openmarket.
Our foil project is one of the few integrated plants in the country where capacitieshave been put in place for rolling converting (coating & lamination) and printing.The building has been designed such that the capacities in both the rolling and convertingsections can be doubled with the addition of machineries only.
Our manufacturing/quality control facilities have been designed and installed to servethe pharmaceutical multinational companies which will also give the highest valueaddition. An integrated plant is of great value to the pharma companies who prefer tosource (after stringent audits) all their needs from under one roof.
The Company has recently commenced Rolling Mill to manufacture bare foil will giveadded advantage and value addition in the coming quarters. The Company is in the processof becoming an approved vendor to large pharmaceutical companies. The foil division isexpected to be a major growth driver in the coming months. In the FY 2021-22 the Companyexpects to achieve 65-70% capacity utilization in the conversion section and overallutilization of 50% for the rolling mill.
Our product has been well received in the market and the Company is in very goodposition to take advantage of the very buoyant market conditions. The pharma sector isexpected to be on a multiyear high growth curve and this should enable the Company toconsistently target very strong growth in the coming years. Furthermore the governmenthas extended the anti-dumping duty on import of foil (presently existing on imports fromChina) to many south-east Asian countries which is likely to benefit Indian foilmanufacturers in a big way.
(C) ALUMINIUM CONDUCTORS & CABLES
This segment has seen a very long slump in demand. Sooner than later governmentspending in the electrical infrastructure field will show major increase since at presentit is at the bottom of the curve. We see an upswing in demand from H-2 of FY 2021-22. TheCompany is well placed in terms of capacities for both conductors and cables to meet thisexpected demand. b) COVID-19 PANDEMIC
The entire global economy faced unprecedented disruption due to outbreak of COVID-19pandemic during the year under review and its disruptive impact is still being felt in theoverall economy. The pandemic has impacted the smooth operations of the Company during H-1of FY 2020-21. The exact impact of outbreak of the pandemic on the performance of theCompany is not possible to quantify in terms of statistics however such global outbreakhas resulted in an unprecedented interruption in supply chain halted production andlock-down and had an obvious impact on the overall performance of the Company. The Companycontinues to follow stringent safety protocols to ensure wellbeing of its employees and isin continuous process of dynamically adopting to the ever changing global and domesticmacro-economic environment as and when the same is required due to this outbreak of thepandemic. c) CHANGE IN NATURE OF BUSINESS
During the FY 2020-21 under review the Board of Directors though exploring additionto existing business and commercial activities had neither been explored any change innature of business and commercial activities for the Company nor there is a change innature of business and commercial activities of the Company. As such no specific detailsregarding change in nature of business activities are required to be given or provided.
d) MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT
During the FY 2020-21 under review there are no material changes and commitmentsaffecting the financial position of the Company which have occurred between the end of thefinancial year of the Company to which the financial statements relates and the date ofthis report. As such no specific details are required to be given or provided.
1.5 DETAILS OF REVISION OF FINANCIAL STATEMENT OR THE REPORT
There is no occasion whereby the Company has either revised or required to revise theFinancial Statement or the Board's Report of the Company for any period prior to the FY2020-21. As such no specific details are required to be given or provided.
2. GENERAL INFORMATION
OVERVIEW OF THE INDUSTRY
The details discussion on the overview of the industry is covered under ManagementDiscussion and Analysis which forms part of this report
The details discussion on the Global Economic outlook is covered under ManagementDiscussion and Analysis which forms part of this report
3. CAPITAL AND DEBT STRUCTURE
During the FY 2020-21 under review there was no change in the capital structure of theCompany. The existing capital Structure of the Company is as follows:
|Particulars ||31st March 2021 ||31st March 2020 |
| || |
Amount (Rupees in Lakhs)
|Authorised Share Capital || || |
|26000000 (26000000) Equity Shares of Rs 10/- (Rupees Ten) each ||2600.00 ||2600.00 |
|Issued Subscribed and Paid-Up Share Capital || || |
|25402613 (25402613) Equity Shares of Rs 10/- (Rupees Ten) each ||2540.26 ||2540.26 |
Further the Company has neither issued any convertible or non-convertible securitiesdebentures bonds warrants shares with differential voting rights as to dividend votingor otherwise nor issued or granted ESOP stock option sweat equity during the FY2020-21.
4. CREDIT RATING OF SECURITIES
During the FY 2020-21 under review the Company has neither issued nor required toobtain credit rating of its securities. As such no specific details are required to begiven or provided.
CREDIT RATING FOR DEBT
CRISIL in their review for total credit facilities has maintained the credit rating ofthe Company that of the previous year. The details of credit rating assigned to theCompany for its credit facilities are given below:-
|Credit Facilities ||Credit Rating |
|Long-Term Rating ||CRISIL BBB+/Stable |
|Short-Term Rating ||CRISIL A2 |
5. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the FY 2020-21 under review there were no amount/s which is required to betransferred to the Investor Education and Protection Fund by the Company. As such nospecific details are required to be given or provided.
6.1 DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
The changes amongst the Director/s including Executive Director/s and Key ManagerialPersonnel during the period are as follows:-
(A) CHANGES AMONGST THE PROMOTER DIRECTOR/S
There were no changes took place amongst the Promoter Director/s of the Company duringthe FY 2020-21.
(B) CHANGES AMONGST THE EXECUTIVE DIRECTOR/S
There were no changes took place amongst the Non-Promoter Executive Director/s of theCompany during the FY 2020-21.
(C) CHANGES AMONGST KEY MANAGERIAL PERSONNEL (KMP)
There were no changes took place amongst the Key Managerial Personnel (KMP) of theCompany during the FY 2020-21.
As such Mr. Arun Raghuveer Raj Bhandari [DIN 00008901] Managing Director[Category Promoter & Executive] Mr. Lalit Ranjeet Raj Bhandari [DIN 00010934] Whole-time Director [Category Promoter & Executive] Mr. TennetiNarasimham Murthy [DIN 08342116] Whole-time Director [Category Non-Promoter & Executive] CA Sharad Mohanlal Khandelwal [ICAI Membership No. FCA 047999 IT PAN ADCPK2636D] Chief Financial Officer and CS Milind SuryakantRao [ICSI Membership No. ACS 48012 IT PAN AJZPR1361H] Company Secretary& Compliance Officer of the Company continued to act as the Key Managerial Personnel(KMP) of the Company pursuant to the provisions of Section 203 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(as amended).
(D) DIRECTOR RETIREMENT BY ROTATION
Pursuant to the provisions of Section 152 of Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 (as amended) Mr. LalitRanjit Raj Bhandari [DIN 00010934] [Category Promoter & Executive] ofthe Company retires by rotation and being eligible offers himself for re-appointment.The Board recommends his re-appointment as a Director (Whole-time Director) [Category Non-Promoter & Executive] of the Company in the interest of the Company.
The Company has received the self-declaration/s from all the Executive Director/s ofthe Company to the effect that he (i) was or is not disqualified from being appointedand/or continued to act as a Director of the Company in terms of the provisions ofSection 164 of the Companies Act 2013; and (ii) was or is not debarred from holding theoffice of a Director pursuant to any order of the SEBI or such other authority in terms ofSEBI's Circular No. LIST/ COMP/14/2018-19 dated 20th June 2018 on the subject"Enforcement of SEBI Orders regarding appointment of Directors by listedcompanies" The information (details) of Director/s of seeking appointment /re-appointment at the Forty-Eighth (48th) Annual General Meeting of the Company pursuantto Regulation 26(4) and 36(6) of the Listing Regulations and Secretarial Standards onGeneral Meetings (SS-2) is annexed to the Notice convening the Forty-Eighth (48th) AnnualGeneral Meeting of the Company].
6.2 INDEPENDENT DIRECTORS
CHANGES AMONGST THE INDEPENDENT DIRECTOR/S
Mr. Vijay Singh Bapna [DIN 02599024] and Mr. Sunil Khanna [DIN 00907147]were appointed as Director [Category Non-executive Independent] of the Company atthe 45th Annual General Meeting held on 31st August 2018 to hold the office for a firstfixed term of three (3) consecutive years i.e. from the conclusion of Forty-fifth (45th)Annual General Meeting up to the conclusion of Forty-eighth (48th) Annual General Meetingof the Company to be held for the financial year 2020-2021.
Accordingly their first term as an Independent Director are expiring on 15thSeptember 2021. The Board of Directors at their meeting held on 29 July 2021 based onthe recommendation of Nomination and Remuneration Committee recommends a Mr. Vijay SinghBapna [DIN 02599024] and Mr. Sunil Khanna [DIN 00907147] for the approval ofMembers at 48th Annual General Meeting.
Except the above there is no change in the composition of the Board of Directors ofthe Company during the period under review and accordingly the Director/s namely Mr.Ajay Sadashiv Gokhale [DIN 00550452] Mr. Karan Yudhishtir Varma [DIN 06923525] Mrs. Sudha Sukesh Gandhi [DIN 06611145] Mr. Vijay Singh Bapna [DIN 02599024} and Mr. Sunil Khanna [DIN 00907147] are continued as theDirector/s [Category - Non-executive Independent] of the Company.
6.3 DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF CODE OF CONDUCT
The Company has received the self-declaration/s from all the Independent Director/s ofthe Company to the effect that he / she (i) meets the criteria of independence asprovided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (as amended) ["ListingRegulations"] and also duly complied with Code of Conduct prescribed in Schedule IVto the Act; (ii) was or is not disqualified from being appointed and/or continued to actas a Director of the Company in terms of the provisions of Section 164 of the CompaniesAct 2013; and (ii) was or is not debarred from holding the office of a Director pursuantto any order of the SEBI or such other authority in terms of SEBI's Circular No.LIST/COMP/14/2018-19 dated 20th June 2018 on the subject "Enforcement of SEBI Ordersregarding appointment of Directors by listed companies".
The Company has received the self-declaration/s from all the Director/s and SeniorManagement Personnel of the Company as to the due compliance of Company's Code ofConduct. As such the Company do hereby confirm that the Company has duly complied withthe Company's Code of Conduct namely (i) MMP Code for Prohibition of Insider Trading andMMP Code of Fair Disclosure and (ii) MMP Code of Business Principles and Conduct.
6.4 BOARD MEETINGS
Four (4) meeting/s of the Board of Directors of the Company were held during the FY2020-21 under review on 1) 29th June 2020 (2) 12th August 2020 (3) 6th November 2020 and(4) 12th February 2021.
The Company has constituted all the requisite Committee(s) of the Board namely AuditCommittee Nomination & Remuneration Committee Stakeholders' Relationship CommitteeCorporate Social Responsibility (CSR) Committee Share Transfer Committee Risk ManagementCommittee and Project Monitoring Committee pursuant to the provisions of the CompaniesAct 2013 read with the rules made there under and Listing Regulations. The details of itsconstitution objective or terms of reference and other related information has beenprovided under the Corporate Governance Report which forms part and parcel of the Board'sReport.
6.6 RECOMMENDATIONS OF AUDIT COMMITTEE
There is no occasion wherein the Board of Directors of the Company has not accepted anyrecommendation/s of the Audit Committee of the Company during the FY 2020-21. As such nospecific details are required to be given or provided.
6.7 COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Company's policy on Director's appointment and remuneration and such other relatedinformation has been provided under the Corporate Governance Report which forms part andparcel of the Board's Report.
6.8 BOARD EVALUATION
The Company's policy on Board Evaluation and such other related information has beenprovided under the Corporate Governance Report which forms part and parcel of the Board'sReport.
6.9 REMUNERATION OF DIRECTORS AND EMPLOYEES OF LISTED COMPANIES
The information required under Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (as amended)are given below:-
(A) The ratio of the remuneration of each Executive Director to the median remunerationof the employees of the Company for the Financial Year :
|Executive Directors ||Ratio to Median remuneration |
|Mr. Arun Raghuveer Raj Bhandari Managing Director ||43.52 |
|Mr. Lalit Ranjeet Raj Bhandari Whole-time Director ||9.31 |
(B) The percentage increase in remuneration of each Director/s Chief ExecutiveOfficer Chief Financial Officer Company Secretary in the FY 2020-21:-
|Executive Director/s Chief Financial Officer and Company Secretary ||% increase in remuneration in the FY 2020-21 |
| || |
|Mr. Arun Raghuveer Raj Bhandari Managing Director ||-- |
|Mr. Lalit Ranjeet Raj Bhandari Whole-time Director ||-- |
|Mr. Tenneti Narasiham Murthy Whole-time Director ||-- |
|CA Sharad Mohanlal Khandelwal - Chief Financial Officer ||-- |
|CS Milind Suryakant Rao - Company Secretary ||-- |
(C) The percentage increase in the median remuneration of employees in the FY 2020-21:-1.17%. (D) The number of permanent employees on the rolls of Company as on 31st March2021:- 421.
(E) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: The averagepercentage increase in the last financial year 2020-21 made in the salaries of employeesother than the managerial personnel was nil. The impact of COVID-19 was very much evidentthis year so the Management's focus was mainly on retaining employees and timely salarydisbursement and this was consistently maintained throughout the year.
(F) Affirmation: Remuneration paid to Director/s Key Managerial Personnel andEmployees of the Company is as per the remuneration policy of the Company.
(G) Information as per Section 197 of the Companies Act 2013 ("the Act") andRule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 (as amended) forms part of this report. However in terms of Section 136(1) of theAct the Report and Financial Statements are being sent to all the shareholders and othersentitled to receive the same excluding the statement of particulars of employees. Thestatement is available for inspection by the Shareholders (Members) at the RegisteredOffice of the Company during business hours on any working day up to the date of theensuing Forty-Eighth (48th) Annual General Meeting. If any Shareholder (Member) isinterested in obtaining a copy thereof such Shareholder (Member) may write to the CompanySecretary whereupon a copy would be sent to the concerned Shareholder (Member) of theCompany.
6.10 REMUNERATION RECEIVED BY MANAGING / WHOLE TIME DIRECTOR FROM HOLDING OR SUBSIDIARYCOMPANY
The Company do not have any Holding or Subsidiary Company. Moreover the Managing orWhole-time Director have not received any remuneration from any other company during theFY 2020-21.
6.11 DIRECTORS' RESPONSBILITY STATEMENT
The Board of Directors confirms:-
(i) That in the preparation of the Annual Accounts (Financial Statements) theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures; (ii) That the Directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profits of the Company for that financial year; (iii) Thatthe 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;(iv) That the Directors had prepared the Annual Accounts (Financial Statements) on goingconcern basis; (v) That the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls were adequate andoperating effectively; and
(vi) That the Directors had devised proper system to ensure compliance with theprovisions of all applicable laws and regulations and that such systems were adequate andoperating effectively.
6.12 INTERNAL FINANCIAL CONTROLS
Messers Manish N. Jain & Company Chartered Accountants Nagpur the StatutoryAuditors of the Company has reviewed and accordingly issued their Report on the InternalFinancial Controls over the Financial Reporting in terms of Clause (i) of Sub-section 3of Section 143 of the Act which is annexed as an Annex B' to the IndependentAuditors' Report of the Company. The Report on the Internal Financial Controls over theFinancial Reporting for the FY 2020-21 do not contain any qualification or adverseremarks. The observations made by the Statutory Auditors in their report areself-explanatory and have also been further amplified in the notes to the financialstatements and as such do not call for any explanations.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place adequate internal control systems and procedures commensuratewith the size and nature of business. These procedures are designed to ensure:-
(a) that all assets and resources are used efficiently and are adequately protected;(b) that all the internal policies and statutory guidelines are complied with; and
(c) the accuracy and timing of financial reports and management information ismaintained.
6.13 FRAUDS REPORTED BY AUDITOR
During the FY 2020-21 under review:-
(a) there is no fraud occurred noticed and/or reported by the Statutory Auditors underSection 143(12) of the Companies Act 2013 read with the Companies (Audit and Auditors)Rules 2014 (as amended); (b) the observations made by the Statutory Auditors on thefinancial statements including the affairs of the Company are self-explanatory and do notcontain any qualification reservation adverse remarks or disclaimer thereof.
As such no specific information details or explanations required to be given orprovided by the Board of Directors of the Company.
7. DISCLOSURES RELATING TO SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
7.1 REPORT ON PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARIES ASSOCIATES ANDJOINT VENTURES
STAR CIRCLIPS AND ENGINEERING LIMITED (SCEL')
Star Circlips & Engineering Limited is largest manufacturer of Circlips retainingrings and carbon steel fasteners in India. During the FY 2020-21 under review the totalrevenue was at Rs 9692.62 lakhs. The EBIDTA at Rs 1938.32.16 lakh and PAT at Rs 729 Lakhs.SCEL recovered strongly after COVID lockdown in Q-1 of FY 2020-21. The revenue of FY2020-21 exceeded the revenue of previous financial year in-spite of the poor Q-1. SCEL haslined up capital expenditure of
Rs 20 crore for the FY 2021-22 in order to expand capacity. The Company has gainedsignificant market share in USA Germany and China. SCEL is currently having a record highexport order book.
The Company continued to hold 26.06% shareholding in Star Circlips during the FY2020-21 and by virtue of shareholding the share of profit of Rs 190 lakhs is consideredin the Consolidated Financial Statement of the Company.
TOYAL MMP INDIA PRIVATE LIMITED (TMI)
Toyal MMP India Private Limited manufactures high grade specialty aluminium pastes usedin automobile decorative inks and paint industry During the FY 2020-21 under review thetotal revenue of TMI was at Rs 3927.06 lakh. The EBIDTA at Rs 290.30 Lakhs and PAT at (Rs90.10 Lakh).
The Company continued to hold 26.00% shareholding in TMI during the FY 2019-20 and byvirtue of shareholding the share of loss of (Rs 23.43) lakh is considered in theconsolidated financial statements of the Company. TMI has shown a remarkable turnaroundin-spite of COVID induced loss of Q-1 operations. There has been a strong growth inexports to ASEAN region and the Company has achieved a breakthrough in the US market wheresupplies have begun. There is a clear preference in the domestic market for the TOYALbrand resulting in good increase in share of business in the major paint companies.
All the requisite information (details) have been provided in the prescribed Form No.AOC-1 attached as an Annex - A which forms part and parcel of the Board's Report.
7.2 COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES ASSOCIATES AND JOINTVENTURES
During the FY 2020-21 under review the Company is neither a Holding Company nor aSubsidiary Associates or Joint Venture Company of any other Company or Companies pursuantto the provisions of the Companies Act 2013 read with relevant rules made thereof.
However Star Circlips & Engineering Limited [CIN U 24110 MH 1974 PLC017301] and TOYAL MMP India Private Limited [CIN U 36990 MH 2016 FTC 281521] werecontinued to be the Associate Companies of the Company during the FY 2020-21.
8. DETAILS OF DEPOSITS
During the FY 2020-21 under review the Company has neither invited nor accepted anypublic deposits within the meaning of Section 73 and 74 of the Companies Act 2013 readwith the Companies (Acceptance of Deposits) Rules 2014 (as amended). As such no specificdetails prescribed in Rule 8(1) of the Companies (Accounts) Rules 2014 (as amended) arerequired to be given or provided.
9. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the FY 2019-20 under review the Company has neither granted loan/s (secured orunsecured) provided guarantees or securities in connection with any loan/s availed byothers nor made any investments pursuant to the provisions of Section 185 and 186 theCompanies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules 2014(as amended). As such no specific details are required to be given or provided.
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The details of contracts or arrangements or transactions not at arm's length basisand/or the details of contracts or arrangements or transactions at arm's length basis forthe FY 2020-21 in the prescribed Form No. AOC - 2 pursuant to Clause (h) of Sub-section(3) of Section 134 of the Companies Act 2013 read with Rule 8(2) of the Companies(Accounts) Rules 2014 (as amended) are given in the Annex - B which forms part andparcel of the Board's Report.
11. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company believes in the Corporate Social Responsibility as an integral part of itsbusiness. Education specifically Education for Girls Women Poor Under-privileged orDisabled (Divyang) Special Education Research Training & Skill DevelopmentEnvironment Health Drinking Water Rural Development are some of the most criticalproblems that our country has been facing for years. One of the most effective direct andindirect solutions to solve these is an education but a great number of peoples cannotafford to get them self-educated.
Keeping this in mind the Board of Directors through its CSR Committee has implementedcertain CSR projects either directly or through implementing agency nominated by the CSRCommittee of the Company. All the activities and programme/s covered under CSR are beingmonitored and implemented by the CSR Committee of the Company. The Company do confirmsthat the Company is in due compliance of the provisions of Section 135 of the CompaniesAct 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014.The CSR Project/s of the Company are in accordance with the provisions of Section 135 ofSchedule VII to the Companies Act 2013 read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 and the Company's CSR Policy. The Annual Report on theCSR Activities for the FY 2020-21 is given in the Annex - C which forms part and parcelof the Board's Report.
12. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to energy conservation technology absorption foreignexchange earnings and outgo for the FY 2020-21 as required to be disclosed under Section134(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts)Rules 2014 are given in the Annex - D to this report.
13. RISK MANAGEMENT
The Company has a Risk Management framework in place to identify assess monitor andmitigate various risks to its business. It has framed the Risk Management Plan and adoptedin its Risk Management Policy.
The COVID-19 pandemic this year has posed several unprecedented challenges in the formof uncertain lockdowns unlock phases health hazards and supply chain disruptions acrossthe globe. These changes and challenges have brought a mix of opportunities anduncertainties impacting the Company's objectives.
The Board of Directors based on the recommendations of the Risk Management Committee ofthe Company periodically reviews the Company's risk assessment and minimizationprocedures to ensure that management identifies and controls risks through a properlydefined framework. The details of the Risk Management Committee and its terms of referenceare set out in the Corporate Governance Report forming part of this Report.
14. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy to report genuine concerns or grievances and toprovide adequate safeguards against victimization of persons who is using this platformand direct access to the Chairman of the Audit Committee is also available in exceptionalcases. The detailed objectives of the policy are given in Corporate Governance Reportwhich forms part of this report. This Whistle Blower Policy is applicable to all theDirectors employees vendors and customers of the Company and it is also posted on theWebsite of the Company.
15. MATERIAL ORDERS OF JUDICIAL BODIES OR REGULATORS
During the FY 2020-21 under review no significant and material order is passed by anyof the Regulators or Courts or Tribunals impacting the going concern status and Company'soperations in future. As such no specific details are required to be given or provided.
(A) STATUTORY AUDITORS AND THEIR REPORT
The Shareholders (Members) of the Company as recommended by the Board of Directorsbased on the approval and recommendation of the Audit Committee of the Company hasratified and approved the appointment of M/s. Manish N. Jain & Co. CharteredAccountants Nagpur [ICAI Firm Registration No. 138430W Peer Review Certificate No.010231] as the Statutory Auditors of the Company to hold till the conclusion of theForty-ninth (49th) Annual General Meeting of the Company to be held for the FY 2021-22.
Further the Statutory Auditors have furnished a Certificate of their consentqualification and eligibility to continue to act as Statutory Auditors of the Company forthe FY 2021-22 under Section 139 and 141 of the Companies Act 2013 read with the rulesand regulations made thereunder.
Accordingly the Board of Directors of the Company based on the recommendations of theAudit Committee of the Company has approved the continuation of M/s Manish N. Jain &Co. Chartered Accountants Nagpur [ICAI Firm Registration No. 138430W Peer ReviewCertificate No. 010231] as the Statutory Auditors of the Company for the FY 2021-22.
The Auditors' Report submitted by M/s Manish N. Jain & Co. Chartered AccountantsNagpur [ICAI Firm Registration No. 138430W Peer Review Certificate No. 010231] theStatutory Auditors of the Company to the Shareholders (Members) for the FY 2020-21 do notcontain any qualification. The observations made by the Statutory Auditors in their reportare self-explanatory and have also been further amplified in the Notes to the financialstatements and as such do not call for any explanations.
(B) SECRETARIAL AUDITORS
M/s. Vaibhav Jachak & Co Company Secretaries Nagpur [ICSI Membership No. FCS-8821& Certificate of Practice No. 18495] have furnished a Certificate of their consentqualification and eligibility and also have confirmed about their not being disqualifiedfor the appointment including re-appointment as the Secretarial Auditors of the Companyfor the FY 2020-21.
Accordingly the Board of Directors on the recommendations of the Audit Committee ofthe Company has approved and appointed M/s. Vaibhav Jachak & Co CompanySecretaries Nagpur [ICSI Membership No. FCS-8821 & Certificate of Practice No.18495] as the Secretarial Auditors of the Company for the FY 2020-21.
(C) COST AUDITORS
M/s Khanuja Patra & Associates Cost Accountants Nagpur [Firm Registration No.00214] have furnished a Certificate of their eligibility for appointment pursuant toSection 141(3)(g) and 148(5) of the Companies Act 2013 read with the rules made thereunder Certificate for independence and arms' length relationship with the Company andhave confirmed about their not being disqualified for such appointment includingre-appointment within the meaning of Section 141(3) of the Companies Act 2013.
Pursuant to the provisions of Section 148 of the Companies Act 2013 the Board ofDirectors on the recommendations of the Audit Committee of the Company has approved andappointed M/s Khanuja Patra & Associates Cost Accountants Nagpur [FirmRegistration No. 00214] as the Cost Auditors of the Company for the FY 2021-22 and hasalso recommended their remuneration to the Shareholders (Members) for their ratificationat the ensuing Forty-Eighth (48th) Annual General Meeting of the Company.
(D) INTERNAL AUDITORS
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 (as amended) the Board of Directors on therecommendations of the Audit Committee of the Company has approved and appointed CAPriyesh Rajesh Jobanputra [ICAI Membership No. ACA 164429] presently designated asthe Assistant Manager (Finance) of the Company as the Internal Auditors of the Companyfor the FY 2020-21. The Internal Audit Finding/s and Report/s submitted by the saidInternal Auditors from time to time during the FY 2020-21 to the Audit Committee andBoard of Directors of the Company do not contain any adverse remarks and qualificationsis self-explanatory and do not call for any further explanation/s by the Company.
Further to strength to internal audit processes of the Company the Company hasappointed M/s Nitin Alshi & Associates Chartered Accountants Nagpur as the InternalAuditors of the Company of FY 2021-22.
17. SECRETARIAL AUDIT REPORT
The Secretarial Audit Report in Form No. MR-3 submitted by M/s. Vaibhav Jachak &Co Company Secretaries Nagpur [ICSI Membership No. FCS-8821 & Certificate ofPractice No. 18495] the Secretarial Auditors of the Company do not contain any adverseremarks and qualifications is self-explanatory and do not call for any furtherexplanation/s by the Company. The Secretarial Audit Report in Form No. MR-3 submitted bythe said Secretarial Auditors of the Company for the FY 2020-21 is attached herewith asan Annex - E and forms part and parcel of the Board's Report.
18. EXPLANATIONS IN RESPONSE TO AUDITORS' QUALIFICATIONS
The Audit Report/s submitted by the Statutory Auditors Secretarial Auditors CostAuditors and Internal Auditors of the Company for the FY 2020-21 do not contain anyqualification or adverse remarks. The observations made by all the Auditors in theirrespective Report/s are self-explanatory and as such do not call for any explanations.
19. COMPLIANCE WITH SECRETARIAL STANDARDS
The Board of Directors confirms that the Company has duly complied and is incompliance with the applicable Secretarial Standard/s namely Secretarial Standard 1 (SS-1') on Meetings of the Board of Directors and Secretarial Standard - 2(SS-2') on General Meetings during the FY 2020-21.
20. CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016 (IBC)
During the FY 2020-21 under review no such event occurred by which CorporateInsolvency Resolution Process can be initiated under the Insolvency and Bankruptcy Code2016 (IBC). As such no specific details are required to be given or provided.
21. FAILURE TO IMPLEMENT ANY CORPORATE ACTION
During the FY 2020-21 under review there is no occasion wherein the Company failed toimplement any Corporate Action. As such no specific details are required to be given orprovided.
22. ANNUAL RETURN
The Annual Return of the Company as on 31st March 2021 in Form MGT - 7 in accordancewith Section 92(3) of the Act read with the Companies (Management and Administration)Rules 2014 is available on the website of the Company at www.mmpil.com.
23. OTHER DISCLOSURES
(A) AUDITED FINANCIAL STATEMENTS STANDALONE & CONSOLIDATED
For the FY 2020-21 under review the Company has prepared the audited financialstatements on standalone as well as consolidated basis after incorporating the share ofprofit or loss from its associate and joint-venture companies namely Star Circlips &Engineering Limited and TOYAL MMP India Private Limited.
(B) MATERIAL DEVELOPMENT IN HUMAN RESOURCES
During the FY 2020-21 under review industrial relations remained cordial. Employees'competencies and skills were enhanced by exposing them to several internal and externaltraining programme/s. A number of measures were taken to improve motivation level ofemployees. Additional efforts are continued to be implemented with a view to obtaincommitment and loyalty towards the organisation.
(C) INDUSTRIAL RELATIONS HEALTH AND SAFETY
The departmental safety coordinators are identified for monitoring and training onsafety related matter at shop-floor. Safety Committee and Apex Committee are available forperiodical review on health safety & environment of all departments. Regular trainingon safety is being organised for new appointee regular employees & contract labour.Mock-drills are conducted for practical exposure to meet emergency need on regular basis.Hand book on safety awareness are distributed to all employees.
(D) COST RECORDS
Pursuant to the provisions of Rule 8(5)(ix)(d) of the Companies (Accounts) Rules 2014(as amended) the Board of Directors do confirm that the Central Government hasprescribed for maintenance of cost records under Section 148(1) of the Companies Act 2013by the Company and accordingly such cost accounts and records subject to cost audithave been made and maintained by the Company during the FY 2020-21.
24. ADDITIONAL DISCLOSURES UNDER LISTING REGULATIONS 24.1 MANAGEMENT DISCUSSION ANDANALYSIS REPORT (MDAR)
The Management Discussion and Analysis Report (MDAR) on the affairs of the Company forthe FY 2019-20 as required under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (as amended) is provided in a separate section and formsan integral part of this Report.
24.2 CERTIFICATE OF COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE
Your Directors are pleased to report that your Company has duly complied with the SEBIGuidelines on Corporate Governance for the year 2020-21 relating to the ListingRegulations. A Certificate from M/s. Vaibhav Jachak & Co Company Secretaries Nagpur[ICSI Membership No. FCS-8821 & Certificate of Practice No. 18495] confirmingcompliance with conditions as stipulated under Listing Regulations is annexed to theCorporate Governance Report of the Company.
24.3 SUSPENSION OF TRADING
The equity shares of the Company have been listed and actively traded on Main Board ofNational Stock Exchange of India Limited. There was no occasion wherein the equity sharesof the Company have been suspended for trading during the FY 2020-21.
(A) DEMATERIALISATION OF SHARES
As on 31st March 2021 the entire 100% issued subscribed and paid-up share capital i.e. 25402613 equity shares of the Company were held in dematerialised form throughdepositories namely National Securities Depository Limited (NSDL) and Central DepositoryServices (India) Limited (CDSIL).
(B) PAYMENT OF LISTING AND DEPOSITORIES FEES
The Company has duly paid the requisite annual listing fees for the FY 2021-22 to theNational Stock Exchange of India Limited (NSE).
The Company has also duly paid the requisite annual custodian and other fees for theFY 2020-21 to the National Securities Depository Limited (NSDL) and Central DepositoryService (India) Limited (CDSIL).
(C) CODE OF CONDUCT FOR BUSINESS PRINCIPLES & ETHICS AND PREVENTION OF INSIDERTRADING AND OTHER CODE AND POLICIES OF THE COMPANY
Your Board of Directors are pleased to report that your Company has complied with the:-(i) Code of Conduct of Business Principles and Conduct;
(ii) Code of Prevention of Insider Trading in MMP securities by the designated persons(insider) (as amended from time to time); (iii) Code for Vigil Mechanism - Whistle BlowerPolicy; (iv) Code for Independent Directors; (v) Corporate Social Responsibility (CSR)Policy; (vi) Risk Management Policy; (vii) Policy on Document Preservations (Regulation 9of the SEBI (LODR) Regulations 2015); (viii) Policy for determining of material'Subsidiary (Regulation 16 of the SEBI (LODR) Regulations 2015); (ix) Policy onmateriality of related party transaction/s and on dealing with related party transactions(Regulation 23 of the SEBI (LODR) Regulations 2015); and (x) Policy for determination ofmateriality based on specified criteria and accordingly grant authorisation fordetermination of materiality of events (Regulation 30 of the SEBI (LODR) Regulations2015).
The aforesaid code/s and policy(ies) are available on the Company's websitewww.mmpil.com.
25. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
MMP Industries Limited ("the Company") has in place an Anti-Sexual HarassmentPolicy in line with the requirements of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013. Internal Complaints Committee (ICC)has been set up to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees etc.) are covered under this Policy.
The following is a summary of sexual harassment complaints received and disposed ofduring the FY 2020-21:-
|(a) Number of complaints pending at the beginning of the year ||NIL |
|(b) Number of complaints received during the year ||NIL |
|(c) Number of complaints disposed off during the year ||NIL |
|(d) Number of cases pending at the end of the year ||NIL |
The Certificate by the Managing Director and Whole-time Director of the Company tothat effect is enclosed herewith as an Annex G and forms part of this report.
|Annex A ||Form No. AOC-1 Information or Details about the Associate Companies of the Company |
|Annex B ||Form No. AOC-2 Information / Details of contracts or arrangements or transactions not at arm's length basis and/or the details of contracts or arrangements or transactions at arm's length basis |
|Annex C ||Annual Report on Corporate Social Responsibility (CSR) activities together with expenditure details |
|Annex D ||Report on Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo |
|Annex E ||Secretarial Audit Report in Form No.MR-3 |
|Annex F ||Business Responsibility Report |
|Annex G ||Certificate on Sexual Harassment of Women at the Work place and its Prevention Prohibition & Redressal |
The Board of Directors acknowledges with gratitude for the co-operation and assistancereceived from National Stock Exchange of India Limited (NSE) Securities Exchange Board ofIndia (SEBI) Auditors Advisors & Consultants other Intermediary service provider/sand other Investor/s for their continuous support for the working of the Company. TheBoard of Directors also take this opportunity to extend its sincere thanks forco-operation and assistance received by the Company from the Central State Local Government and other regulatory authorities Bankers and Members. The Directors alsorecord their appreciation of the dedication of all the employees at all levels for theirsupport and commitment to ensure that the Company continues to grow.
| ||For and on behalf of the Board || |
| ||Arun Raghuveer Raj Bhandari ||Lalit Ranjeet Raj Bhandari |
|Place: Nagpur ||Managing Director ||Whole-time Director |
|Date: 29th July 2021 ||DIN - 00008901 ||DIN - 00010934 |