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MTAR Technologies Ltd.

BSE: 543270 Sector: Engineering
NSE: MTARTECH ISIN Code: INE864I01014
BSE 00:00 | 28 Jan 2167.70 23.85
(1.11%)
OPEN

2176.10

HIGH

2205.55

LOW

2153.90

NSE 00:00 | 28 Jan 2165.80 21.60
(1.01%)
OPEN

2165.00

HIGH

2206.90

LOW

2151.05

OPEN 2176.10
PREVIOUS CLOSE 2143.85
VOLUME 3252
52-Week high 2555.65
52-Week low 870.00
P/E 122.06
Mkt Cap.(Rs cr) 6,668
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2176.10
CLOSE 2143.85
VOLUME 3252
52-Week high 2555.65
52-Week low 870.00
P/E 122.06
Mkt Cap.(Rs cr) 6,668
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MTAR Technologies Ltd. (MTARTECH) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the Directors' Report and the AuditedStatement of Accounts of the Company for the Financial Year ended March 31 2021.

1. FINANCIAL SUMMARY/HIGHLIGHTS:

The performance of the Company during the year has been as under:

Particulars

Standalone

Consolidated

2020-2021 2019-2020 2020-2021 2019-20
Revenue from Operations 2464.32 2137.74 2464.32 2137.74
Other Income 13.10 43.68 13.10 43.68
Profit/Loss Before Depreciation finance costs Exceptional Items and 844.02 623.34 843.85 623.34
Tax expense
Depreciation/Amortisation/Impairment 125.57 120.48 125.57 120.48
Profit/Loss before finance costs exceptional items and Tax expense 718.45 502.86 718.45 502.86
Less: Finance Costs 70.01 47.53 70.01 47.53
Profit/Loss before Exceptional Items and Tax expenses 648.44 455.33 648.27 455.33
Add/(Less): Exceptional Items 0 0 0 0
Profit/Loss before tax expense 648.44 455.33 648.27 455.33
(Less): Tax Expense (Current & deferred) 187.61 142.15 187.61 142.15
Profit/(Loss) for the year (1) 460.83 313.18 460.66 313.18
Other Comprehensive Income/(Loss) (2) (6.07) (23.97) (6.07) (23.97)
Total (1+2) 454.76 289.21 454.59 289.21
Balance carried forward to balance sheet 454.76 289.21 454.59 289.21
Earnings per share 17.00 11.11 16.99 11.11

REVIEW OF OPERATIONS:

Your Company has shown consistent performance during the year under review in spite ofCovid Related challenges including a National Lockdown for almost 2 Month and achievedsales and other income of Rs. 2477.42 Mn and net profit of Rs. 460.83 Mn as compared tosales and other income of Rs. 2181.42 Mn and net profit of Rs. 313.18 Mn achieved in theprevious financial year.

BUSINESS UPDATE AND STATE OF COMPANY'S AFFAIRS:

The information on Company's affairs and related aspects is provided under ManagementDiscussion and Analysis report which has been prepared inter-alia in compliance withRegulation 34 of SEBI (Listing Obligations and Disclosure Requirements) regulations 2015and forms part of this Report.

2. INITIAL PUBLIC OFFERING

During the Year the Company has been converted from Private Limited to Public Limitedw.e.f. 02.11.2020 to come out with the IPO.

The Company's Initial Public Offering (IPO) for 10372419 equity shares of face valueof H 10 each (the "Equity Shares") of the Company for cash at a price of H 575per Equity Share aggregating up to H 5964.14 Mn consisting of a fresh issue of 2148149Equity Shares ("Fresh Issue") and an offer for sale of up to 8224270 EquityShares has recorded many milestones in terms of the subscription received quality ofinvestors etc.

There was a tremendous response from the market for the IPO of the company which openedon Wednesday March 03 2021 and closed on Friday March 05 2021. The issue wassubscribed 200.79 times with the QIB portion getting subscribed by 164.99 times thenon-institutional portion by 650.79 times and the retail portion by 28.40 times.

The Main Objects of the IPO are Repayment / prepayment in full or in part ofborrowings availed by our Company funding working capital requirements and GeneralCorporate purposes. The trading of Equity Shares of the Company commenced on BSE Limitedand National Stock Exchange of India Limited on March 15 2021. The success of IPOreflects the trust faith and confidence that investors customers business partners andmarkets have reposed in your Company.

3. IMPACT OF COVID – 19:

The COVID-19 created havoc in the world economy and severely affected the health ofpeople at large and held the world at its standstill. Accordingly the lockdowns that wereannounced from time to time across India resulting in temporary suspension of operationsand temporary closure of offices and plants/manufacturing facilities of the Company inline with the government/local authorities' directions.

However during the lockdown your Company continued to provide support to customerswith the invaluable support of Employees/workers and Management at various levels. As therestrictions were eased out your Company while closely monitoring the situation andfollowing safety guideline started staggered manufacturing at its plants and took all thenecessary steps to maintain or achieve the predetermined targets.

4. CHANGE IN THE NATURE OF THE BUSINESS IF ANY

During the period under review and the date of Board's Report there was no change inthe nature of Business.

5. RESERVES

The Closing balance of reserves including retained earnings of the Company as atMarch 31 2021 is Rs. 4459.98 in Mn.

6. DIVIDEND

The Board of Directors had declared an Interim Dividend of Rs. 3/- per share amountingto Rs. 80.28 Mn for the half year ended 30.09.2020 and the same was paid. In keeping withthis trend the Board of Directors are pleased to recommend a Final Dividend of Rs. 3/-per equity shares for the financial year 2020-21.

The final dividend is subject to approval of the Shareholders at the ensuing AnnualGeneral Meeting of the Company scheduled to be held on July 30 2021. The final dividendonce approved by

Shareholders will be paid within the stipulated time subject to deduction of tax atsource. The Record Date for the purpose of payment of final dividend will be July 232021.

In terms of Regulation 43A of the Securities and Exchange Board of India("SEBI") (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations) the Dividend Distribution Policy was adopted to set outparameters and circumstances that will be taken into account by the Board whiledetermining the distribution of dividend to the shareholders. The Policy is available onthe website of the Company under the weblink https://mtar. in/ and same is annexed asAnnexure I to this Report.

7. MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no major material changes and commitments affecting the financial position ofthe Company after the end of the financial year and up to date of this report(i.e.02.06.2021)

8. BOARD MEETINGS

The Board of Directors duly met thirteen (13) times during the financial year fromApril 01 2020 to March 31 2021. The dates on which the meetings were held are 20.04.202020.06.2020 14.08.2020 08.09.2020 05.10.2020 19.10.2020 02.11.2020 05.12.202014.12.2020 09.02.202115.02.2021 22.02.2021 and 08.03.2021. All the meeting wereconducted through Audio Visual means during the FY 2020-21.

9. APPOINTMENT / RE-APPOINTMENT / RESIGNATION / RETIREMENT OF DIRECTORS /CEO/ CFO ANDKEY MANANGERIAL PERSONNEL a) Appointments:

Following appointments have taken place during the year:

S. No Name of the Director/KMP Designation Date
1. Mr. Sudipto Bhattacharya CFO 01.09.2020
2. Mr. Shubham Bagadia Company Secretary 20.10.2020
3. Mr. Subbu Venkata Rama Behara Independent Director 05.12.2020
4. Mr. Krishna Kumar Aravamudan Independent Director 05.12.2020
5. Mr. Gnana Sekaran Venkatasamy Independent Director 05.12.2020
6. Ms. Ameeta Chatterjee Independent Director 05.12.2020
7. Mr. Udaymitra Chandrakant Muktibodh Independent Director 05.12.2020
8. Mr. Vedachalam Nagarajan Independent Director 05.12.2020
9. *Mr. P. Srinivas Reddy Managing Director 01.09.2020 to 01.09.2023
10. Mr. A. Praveen Kumar Reddy Additional Director 14.12.2020

* Mr. P. Srinivas Reddy was appointed as the Managing Director of the company for aterm of three years from 01.09.2020 to 01.09.2023 in the board meeting held on 14.08.2020 b)Resignations:

Following Resignations have taken place during the year:

S. No Name of the Director/KMP Designation Date
1. Mr. P. Jayaprakash Reddy Director 10.04.2020
2. Mr. K. Satyanarayana Reddy Director 07.05.2020
3. Mrs. P. Kalpana Reddy Director 18.08.2020
4. Mr. C. Sukesh Reddy Director 25.08.2020
5. Mr. Anushman Reddy Promoter nominee Director 19.10.2020
6. Mr. Loka Rohith Reddy Promoter nominee Director 19.10.2020
7. Mr. P. Simhadri Reddy Investor Nominee Director 19.10.2020
8. Mr. Vamsidhar Reddy Kallem Director 14.12.2020
9. Mr. Abhaya Shankar CEO 10.05.2020

The Board places on record their appreciation for the invaluable contribution made bythe above directors and officer(s) during their tenure. c) As required under regulation 36(3) of the SEBI (LODR) Regulations 2015 brief particulars of the Directors seekingappointment/re-appointment i.e. Mr. G.V. Satish Kumar Reddy and Mr. A. Praveen KumarReddy are given as Annexure A and B to the notice of the AGM forming part of this AnnualReport. d) During the year Mr. Mathew Cyriac was re-designated from Non-ExecutiveDirector to Nominee Director w.e.f.

05.12.2020. e) During the year Mr. Devesh Dhar Dwivedi was designated as the ChiefOperating Officer of the Company w.e.f 01.09.2020 from the designation of Chief FinancialOfficer. f ) During the year under review the non-executive directors of the Company hadno pecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses if any.

10. REVISION OF FINANCIAL STATEMENTS

There was no revision of the financial statements for the year under review. Howeverthe company has undertaken the task of re-statement of the financials for the purpose ofIPO.

11. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received declarations from Mr. Krishna Kumar Aravamudan Mr. SubbuVenkata Rama Behara Mr. Gnana Sekaran Venkatasamy Ms. Ameeta Chatterjee Mr. UdaymitraChandrakant Muktibodh and Mr. Vedachalam Nagarajan Independent Directors of the Companyto the effect that they are meeting the criteria of independence as provided inSub-Section (6) of Section 149 of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The IndependentDirectors have also confirmed that they have complied with Schedule IV of the Act and theCompany's Code of Conduct.

In terms of Regulations 25(8) of the Listing Regulations the Independent Directorshave confirmed that they are not aware of any circumstance or situation which exists ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgement and without any external influence.

12. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

Independent Directors are familiarized about the Company's operations and businesses.Interaction with the Business heads and key executives of the Company is also facilitated.Detailed presentations on important policies of the Company is also made to the directors.Direct meetings with the Chairman are further facilitated to familiarize the incumbentDirector about the Company/its businesses and the group practices.

13. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The assessment and appointment of Members to the Board is based on a combination ofcriterion that includes ethics personal and professional stature domain expertisegender diversity and specific qualification required for the position. The potential BoardMember is also assessed on the basis of independence criteria defined in Section 149(6) ofthe Companies Act 2013 and Regulation 27 of SEBI (LODR) Regulations 2015.

In accordance with Section 178(3) of the Companies Act 2013 and Regulation 19(4) ofSEBI (LODR) Regulations 2015 on the recommendations of the Nomination and RemunerationCommittee the Board adopted a remuneration policy for Directors Key Management Personnel(KMPs) and Senior Management. The Policy is attached a part of Corporate GovernanceReport. We affirm that the remuneration paid to the Directors is as per the terms laiddown in the Nomination and Remuneration Policy of the Company.

14. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act 2013and on the basis of explanation given by the executives of the Company and subject todisclosures in the Annual Accounts of the Company from time to time we state as under:

1. That in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied themconsistently and made judgment and estimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company at the end of the financialyear and of the profit or loss of the Company for that period;

3. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors have prepared the annual accounts on a going concern basis:

5. That the Directors have lain down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

6. That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

15. INVESTOR EDUCTION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124 of the Act Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 ("IEPFRules") read with the relevant circulars and amendments thereto the amount ofdividend remaining unpaid or unclaimed for a period of seven years from the due date isrequired to be transferred to the Investor Education and Protection Fund("IEPF") constituted by the Central Government.

During the Year no amount of dividend was unpaid or unclaimed for a period of sevenyears and therefore no amount is required to be transferred to Investor Education andProvident Fund under the Section 125(1) and Section 125(2)of the Act.

16. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES/ JOINT VENTURES

Magnatar Aero Systems Private Limited is the wholly owned subsidiary company of Companyincorporated on 04.11.2019 and till date there are no operations in the Company.

17. ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an annual return is disclosed onthe website www.mtar.in.

18. BUSINESS RESPONSIBILITY REPORT

As stipulated under Regulation 34 of the Listing Regulations the BusinessResponsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective forms part of this Annual Report and isannexed as Annexure II

19. AUDITORS a. Statutory Auditors

The members of the Company in accordance with Section 139 of the Companies Act 2013have passed a resolution for appointment of M/s. S.R. Batliboi & Associates. (FirmRegistration No. 101049W/E300004) as Statutory Auditors of the Company for a period of 5years in the AGM held on 30.09.2020 to hold office up to the conclusion of 26th AnnualGeneral Meeting of the Company to be held in the year 2025-2026.

Statutory Auditors Report

The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2021 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges and growth in the comingyears.

b. Secretarial Auditor

Pursuant to the provisions of Section 134(3) (f ) &Section 204 of the CompaniesAct 2013 the Board has appointed M/s. S.S Reddy & Associates Practicing CompanySecretaries has undertaken Secretarial Audit of the Company for financial year ending31.03.2021. The report of the Secretarial Auditor is enclosed herewith vide Annexure-IIIof this Report.

Secretarial Audit Report

The Board has duly reviewed the Secretarial Audit Report for the year ended March 312021 on the Compliances according to the provisions of Section 204 of the Companies Act2013.

Annual Secretarial Compliance Report

The Company has filed the Annual Secretarial Compliance Report for the year 2020-2021with the BSE Ltd and National Stock Exchange of India Limited The report was receivedfrom a Practicing Company Secretary and filed within the stipulated time as specifiedunder Regulation 24A of the SEBI (LODR) Regulations.

c. Cost Auditor

Your Company is required to make and maintain cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Act.

In terms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules2014 the Audit Committee recommended and the Board of Directors appointed M/s Sagar &Associates. Cost Accountants New Delhi (Registration No. 000118) being eligible as CostAuditors of the Company to carry out the cost audit of products included under CTA CODES7204 7228 7326 7503 7602 8108 8401 8482 8483 8487 8803 and 9306 in relation tothe financial year ending March 31 2022. The Company has received their written consentthat the appointment is in accordance with the applicable provisions of the Act and rulesframed thereunder. The Cost Auditors have confirmed that they are not disqualified to beappointed as the Cost Auditors of the Company for the year ending March 31 2021.

The remuneration of Cost Auditors has been approved by the Board of Directors on therecommendation of Audit Committee and in terms of the Companies Act 2013 and Rulesthereunder requisite resolution for ratification of remuneration of the Cost Auditors bythe members has been set out in the Notice of the 22nd Annual General Meeting of yourCompany d. Internal Auditor

The Company has appointed M/s. Seshachalam & Co. Chartered Accountants as InternalAuditors of the Company for the Financial Year 2020-2021.

20. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There have been no frauds reported by the auditor's u/s 143(12).

21. INTERNAL AUDIT AND FINANCIAL CONTROLS

The Company has adequate internal controls consistent with the nature of business andsize of the operations to effectively provide for safety of its assets reliability offinancial transactions with adequate checks and balances adherence to applicable statuesaccounting policies approval procedures and to ensure optimum use of available resources.These systems are reviewed and improved on a regular basis. It has a comprehensivebudgetary control system to monitor revenue and expenditure against approved budget on anongoing basis.

22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given loans Guarantees or made any investments (except for parkingexcess funds in FDs with Scheduled banks as and when required) during the year underreview.

23. RELATED PARTY TRANSACTIONS

Our Company has formulated a policy on related party transactions which is alsoavailable on Company's website at https://mtar.in/. This policy deals with the review andapproval of related party transactions.

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There were no materialsignificant related party transactions made by the Company with the Promoters DirectorsKey Managerial Personnel or the Senior Management which may have a potential conflict withthe interest of the Company at large.

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as Annexure IVwhich forms part of this Report.

All related party transactions were placed before the Audit Committee/Board forapproval. Prior approval of the Audit Committee was obtained for the transactions whichare foreseen and are in repetitive in nature. Members may refer to note no. 35 to thefinancial statement which sets out related party disclosures pursuant to IND AS-24.

24. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of your Company for the year ended March 31 2021have been prepared in accordance with the provisions of Section 129(3) of the CompaniesAct and applicable Accounting Standards and form part of this report. Pursuant to SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 read with firstproviso of Section 129(3) of the Companies Act read with Rule 5 of the Companies(Accounts) Rules 2014 a separate statement containing salient features of the FinancialStatements of Subsidiary Company in Form AOC-1 is appended to this report which formspart of the Financial Statements. The separate Audited Financial Statements in respect ofthe Subsidiary are also available on the website of the Company at www.mtar.in.

25. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the year under review no Company has become or ceased to become itssubsidiaries joint ventures or associate Company.

26. DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3) (m) of the Companies Act 2013 isprovided hereunder:

A. Conservation of Energy:

During the Financial Year 2020-21 your Company strived to imbibe energy conservationprinciples and initiatives across all its facilities.

The other key initiatives across multiple areas are highlighted below – HVAC– Your Company has undertaken initiatives such as Installation of VFD with solenoidvalves for Compressor cooling water system AC optimum utilization through installation oftimer control units etc.

Lighting – Similar to last year your Company has continued the initiative toreplace old lighting fittings with new-age energy efficient LED fittings within andoutside some of our facilities. The installation of motion sensors at various locationshas helped us to reduce the energy consumption at various sites.

Awareness Generation – This included improving awareness amongst employees toswitch off major energy consuming equipment or units when idle as well as employing anenergy review tool and energy balance tool to identify projects.

Apart from the above initiates the company also has a specific conservation of energypolicy with SOPs to be followed. It is assured that the same are in place and adequatemeasures are taken to follow the SOPs.

B. Research & Development and Technology Absorption:

1. Research and Development (R&D): NIL

2. Technology absorption adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings: 1248.87 Rs. Mn Foreign Exchange Outgo: 596.03 Rs. Mn

27. COMMITTEES

(I). AUDIT COMMITTEE

During the year the Audit Committee was constituted by a resolution of our Board datedDecember 05 2020 and is in line with the provisions of Regulation 18(1) of SEBI (LODR)Regulations with the Stock Exchanges read with Section 177 of the Companies Act 2013 areincluded in the Corporate Governance report which forms part of this report. During theyear all recommendations of Audit Committee were approved by the Board of Directors.

(II). NOMINATION AND REMUNERATION COMMITTEE

During the year the Nomination and Remuneration Committee of the Company wasconstituted by a resolution of our Board dated December 05 2020 and is in line with theprovisions of Regulation 19(1) of SEBI (LODR) Regulations with the Stock Exchanges readwith Section 178 of the Companies Act 2013 are included in the Corporate Governancereport which forms part of this report.

(III). STAKEHOLDERS RELATIONSHIP COMMITTEE

During the year the Stakeholders Relationship Committee of the Company was constitutedby a resolution of our Board dated December 05 2020 and is in line with the provisions ofRegulation 20 of SEBI (LODR) Regulations with the Stock Exchanges read with Section 178 ofthe Companies Act 2013 are included in the Corporate Governance report which forms partof this report.

(IV). RISK MANAGEMENT COMMITTEE

The Company had been undertaking the activity of identifying key business andsustainability risks and taking actions to mitigate such risks from time to time. Thematters related to risks and their management has been shared with the Board of Directorsfrom time to time. However a structured process is now felt necessary in the light ofglobal sustainability risks faced by all businesses in the light of the challenges thathave unfolded over the last 15 months. The Company has put in place a Risk managementPolicy and has constituted a Risk Management Committee of the Board. The details ofconstitution of the Committee and its terms of reference are set out in the Report onCorporate Governance. The Company has formulated a Risk Management Policy under whichvarious risks associated with the business operations is identified and risk mitigationplans have been put in place.

(V) IPO COMMITTEE

The Company has constituted an IPO Committee. The details of constitution of theCommittee are as follows:

Name Designation
P. Srinivas Reddy Executive Director
G.V Satish Kumar Reddy Non-Executive & Non- Independent Director
Mathew Cyriac Non-Executive & Nominee Director
A. Praveen Kumar Reddy Non-Executive & Non- Independent Director

(VI) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The brief outline of the corporate social responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure V of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. For other details regarding the CSR Committeeplease refer to the Corporate Governance Report which is a part of this report. ThisPolicy is available on the Company's website www.mtar.in. During the year the Company hasreconstituted a Corporate Social Responsibility Committee pursuant to a resolution passedin a Board meeting held on 05.12.2020. The composition of Committee is as follows:

Name Designation
G.V Satish Kumar Reddy Non-Executive & Non Independent Director
V.G. Sekaran Non-Executive & Independent Director
U.C Muktibodh Non-Executive & Independent Director

(VII) SHARE ALLOTMENT COMMITTEE

The Company has constituted a Share Allotment Committee. The details of composition ofcommittee is as follows:

Name Designation
P. Srinivas Reddy Executive Director
G.V Satish Kumar Reddy Non-Executive & Non- Independent Director
Mathew Cyriac Non-Executive & Nominee Director
A. Praveen Kumar Reddy Non-Executive & Non- Independent Director
K. Krishna Aravamudan Non-Executive & Non- Independent Director

28. VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013read with Regulation 22 of SEBI (LODR) Regulations 2015 a vigil Mechanism for Directorsand employees to report genuine concerns has been established. It also provides fornecessary safeguards for protection against victimization for whistle blowing in goodfaith.

Vigil Mechanism Policy has been established by the Company for directors and employeesto report genuine concerns pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013. The same has been placed on the website of the Company.

29. CORPORATE SOCIAL RESPONSIBILITY (CSR COMPOSITION OF CSR COMMITTEE AND CONTENTS OFCSR POLICY)

The company has attracted the provisions of Corporate Social Responsibility u/s 135 ofCompanies Act 2013 based on the net profit of the company being more than Rs. 5.00 Cr infinancial year 2019-2020. The company has formed the CSR committee to foresee the CSRactivities adopted the CSR policy and also created a separate bank account exclusivelyfor CSR. The Corporate Social Responsibility Report is enclosed as Annexure V.

In terms of Section 135 of the Companies Act 2013 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 as amended ("CSR Rules") and inaccordance with the CSR Policy during the financial year 2020-2021 your Company hasspent Rs. 6863155/- (representing 2 % of the average net profit for the past thethree financial years being FY 2018 FY 2019 and FY 2020). Areas of Activities taken bythe Company are Education Child Care Centres Blood Donations and collections.

The excess amount of approximately Rs. 2.00 Lacs spent during the FY 2020-2021 will beset off against the CSR amount to be spent in the subsequent Financial Years.

30. PUBLIC DEPOSITS

Your Company has not accepted any deposits falling within the meaning of Sec.73 74& 76 of the Companies Act 2013 read with the Rule 8(v) of Companies (Accounts) Rules2014 during the financial year under review.

31. SIGNIFICANT & MATERIAL ORDERS PASSED BY COURTS / REGULATORS / TRIBUNALS

There are no significant and material orders passed by the regulators /courts thatwould impact the going concern status of the Company and its future operations. Howeverthe company has filed two compounding Applications under sections 203 and 68 of theCompanies Act 2013 and the orders from the Hon'ble Regional Director/ Registrar ofCompanies Ministry of Corporate Affairs are awaited.

32. DISCLOSURE OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. The Company maintains appropriate system ofinternal control including monitoring procedures to ensure that all assets aresafeguarded against loss from unauthorized use or disposition. Company policiesguidelines and procedures provide for adequate checks and balances and are meant toensure that all transactions are authorized recorded and reported correctly. During theperiod under review there is no material or serious observations have been noticed forinefficiency or inadequacy of such controls.

Further details of internal financial control and its adequacy are included in theManagement Discussion and Analysis Report that forms part of this Report.

33. INSURANCE

The properties and assets of your Company are adequately insured.

34. CREDIT & GUARANTEE FACILITIES

The Company has availed Working Capital facilities and Term Loan from HDFC Bank andState Bank of India.

35. RISK MANAGEMENT POLICY

Business Risk Evaluation and Management is an ongoing process within the Organization.The Company has a robust risk management framework to identify monitor and minimize risksand also to identify business opportunities. As a process the risks associated with thebusiness are identified and prioritized based on severity likelihood and effectiveness ofcurrent detection. Such risks are reviewed by the senior management on a quarterly basis.

Risk Management Committee of the Board of Directors of your Company assists the Boardin (a) overseeing and approving the Company's enterprise wide risk management framework;and (b) overseeing that all the risks that the organization faces such as strategicfinancial credit market liquidity security property IT legal regulatoryreputational other risks have been identified and assessed and there is an adequate riskmanagement infrastructure in place capable of addressing those risks. The development andimplementation of risk management policy has been covered in the Management Discussion andAnalysis which forms part of this Report.

36. SHARE CAPITAL

The authorized share capital of the Company stands at Rs. 660000000/- dividedinto 66000000 equity shares of Rs. 10/- each.

The paid up share capital of the Company stands at Rs. 307595910/- dividedinto 30759591 equity shares of Rs. 10/- each.

37. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

The Company has implemented all of its major stipulations as applicable to the Company.As stipulated under Regulation 34 read with schedule V of SEBI (LODR) Regulations 2015 areport on Corporate Governance duly audited is appended as Annexure VII for information ofthe Members. A requisite certificate from the Secretarial Auditors of the Companyconfirming compliance with the conditions of Corporate Governance is attached to theReport on Corporate Governance.

38. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

The Management Discussion and Analysis Report pursuant to the SEBI (LODR) Regulationprovides an overview of the affairs of the Company its legal status and autonomybusiness environment mission & objectives sectoral and segment-wise operationalperformance strengths opportunities constraints strategy and risks and concerns aswell as human resource and internal control systems forms a part of this report forinformation of the members.

39. POLICIES:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies. All the policies areavailable on our website https://mtar.in/investor-relations/corporate-governance/policies-related-documents/.

40. ENVIRONMENTS AND HUMAN RESOURCE DEVELOPMENT:

Your Company always believes in keeping the environment pollution free and is fullycommitted to its social responsibility. The Company has been taking upmost care incomplying with all pollution control measures from time to time strictly as per thedirections of the Government.

We would like to place on record our appreciation for the efforts made by themanagement and the keen interest shown by the Employees of your Company in this regard.

41. STATUTORY COMPLIANCE:

The Company has complied with the required provisions relating to statutory compliancewith regard to the affairs of the Company in all respects.

42. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaint Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment.

Constitution of Committee:

Name Designation

K. Aruna Kumari Presiding Officer Pusparaj Satpathy Member J. Srilekha Member DasariPalla Joji External Member

All employees are covered under this policy. During the year 2020-2021 there were nocomplaints received by the Committee.

43. STATEMENT SHOWING THE NAMES OF THE TOP TEN EMPLOYEES IN TERMS OF REMUNERATION DRAWNAND THE NAME OF EVERY EMPLOYEE AS PER RULE 5(2) & (3)OF

THE COMPANIES(APPOINTMENT & REMUNERATION) RULES 2014:

A table containing the particulars in accordance with the provisions of Section 197(12)of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended as Annexure VIII(a) to this Report.

A statement showing the names of the top ten employees in terms of remuneration drawnand the name of every employee is annexed to this Annual report as Annexure VIII(b).

During the year NONE of the employees is drawing a remuneration of Rs. 10200000/-and above per annum or Rs. 850000/- and above in aggregate per month the limitsspecified under the Section 197(12) of the Companies Act2013 read with Rules 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

44. RATIO OF REMUNERATION TO EACH DIRECTOR

Under section 197(12) of the Companies Act 2013 and Rule 5(1) (2) & (3) of theCompanies (Appointment & Remuneration) Rules 2014 read with Schedule V of theCompanies Act 2013 the ratio of remuneration of Managing Director (Mr. P Srinivas Reddy)Managing Director of the Company to the median remuneration of the employees is 1:0.06respectively.

45. CODE OF CONDUCT COMPLIANCE:

All Members of the Board and Senior Management have affirmed compliance to the Code ofConduct for the Financial Year 2020-21. A declaration signed by the Managing Directoraffirming compliance with the Company's Code of Conduct by the Board of Directors andSenior Management for the Financial Year 2020-21 as required under Regulation 26(3) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is included inthe Corporate Governance Report which is appended as Annexure ‘VIII' and forms partof this Report.

46. MECHANISM FOR EVALUATION OF THE BOARD

Evaluation of all Board members is performed on an annual basis. The evaluation isperformed by the Board Nomination and Remuneration Committee and Independent Directorswith specific focus on the performance and effective functioning of the Board andIndividual Directors.

In line with Securities and Exchange Board of India Circular No.SEBI/HO/CFD/CMD/CIR/P/2017/004 dated January 5 2017 and the Companies Amendment Act2017 the Company adopted the recommended criteria by Securities and Exchange Board ofIndia. The criteria for performance evaluation covers the areas relevant to thefunctioning of the Board and Board Committees such as its composition oversight andeffectiveness performance skills and structure etc.

At the Independent Directors meeting held on 27.03.2021 the Directors were of the viewthat a detailed evaluation of the performance of the Directors committees of the Boardand Board as whole will be conducted after expiry of six months of Financial Year2021-2022 as the Board of the Company was recently reconstituted for the purpose ofInitial Public Offer.

47. SECRETARIAL STANDARDS

The Company is in compliance with the applicable secretarial standards.

48. EVENT BASED DISCLOSURES

During the year under review the Company has not taken up any of the followingactivities except as mentioned:

1. Issue of sweat equity share: NA

2. Issue of shares with differential rights: NA

3. Issue of shares under employee's stock option scheme: NA

4. Disclosure on purchase by Company or giving of loans by it for purchase of itsshares: NA

5. Buy back shares: NA

6. Disclosure about revision: NA

7. Preferential Allotment of Shares: The Company has allotted 1851851 Equity Sharesto SBI Funds and Axis Mutual Funds.

49. CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016 (IBC):

There is no application filed for corporate insolvency resolution process by afinancial or operational creditor or by the company itself under the IBC before the NCLT.

50. CEO/ CFO CERTIFICATION:

The Managing Director cum CEO and CFO certification of the financial statements for theyear 2020-2021 is annexed in this Annual Report as Annexure IX.

51. CREDIT RATING:

The Company enjoys a credit rating of BBB+ (Stable) for long-term fundbased / cashcredit facilities long-term fund-based term loans and long-term unallocated facilitiesand a credit rating of BBB+ (Stable) / A2 for long-term / short term non-fund-basedfacilities from ICRA.

The Company enjoys a long-term credit rating of BBB+ / Stable and short-term creditrating of ‘A2' from CRISIL. The rated instrument reflects strong degree of safety andlowest credit risk

52. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made bythe employees at all levels to the continued growth and prosperity of your Company. YourDirectors also wish to place on record their appreciation of business constituents banksand other financial institutions and shareholders of the Company for their continuedsupport for the growth of the Company.

For and on behalf of the Board of
For MTAR Technologies Limited
Subbu Venkata Rama Behara Parvat Srinivas Reddy
Chairman Managing Director
(DIN: 00289721) (DIN: 00359139)

Place: Hyderabad

Date: 02.06.2021

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