To The Members
Your Directors are pleased to present the 29th Annual Report togetherwith Audited Financial Statements of your Company for the Financial Year ended March 312020.
(Rs. In Lacs)
|FINANCIAL RESULTS ||Year ended ||Year ended |
| ||31st March ||31st March |
| ||2020 ||2019 |
|Profit before Depreciation ||1091.80 ||2265.22 |
|Depreciation ||95.88 ||87.51 |
|Profit before Tax ||995.92 ||2177.71 |
|Provision for tax ||241.93 ||642.19 |
|Profit after Tax ||753.99 ||1535.52 |
|Balance brought forward from previous year ||8544.25 ||7008.73 |
|Balance carried forward to Balance Sheet ||9298.24 ||8544.25 |
During the year under review the Company has reported significantly lower grossrevenue from the operations of Rs. 5977.61 lacs as against Rs. 10993.96 lacs during F.Y.2018-19. Accordingly the Company has reported Profit Before Tax of Rs. 995.92 lacs andProfit After Tax of Rs. 753.99 lacs as against Rs. 2177.71 lacs and Rs. 1535.52 lacsrespectively for the previous financial year. As informed earlier this drop in grossrevenue is on account of discontinuation of Antifoam Product with effect from April 12019 as a consequence of global restructuring.
The gross revenue of Company's products such as Thermoplastic Elastomers SiliconMasterbatch Automotive dropped by 18% as compared to gross comparable revenues inprevious financial year. The decline in revenue has been primarily due to overall slowdownin the automotive market loss of volume in some product applications due to localcompetition and low tender roll outs in telecom in FY 2019-20.
Considering the current Covid-19 situation and its impact assessment on short term andlong term on business your Directors have thought it prudent to conserve the resources forthe future and not to declare any dividend on Equity
Shares for the year ended March 31 2020.
TRANSFER TO RESERVES
The Board of Directors have not recommended transfer of any amount of profit toreserves during the year under review. Hence the entire amount of profit for the yearunder review has been carried forward to the Statement of Profit and Loss.
REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:
The Company does not have any Subsidiaries Associates or Joint ventures.
REVISION OF FINANCIAL STATEMENT
There was no revision to the financial statements for any of the preceding financialyears.
BOARD OF DIRECTORS
Mr. Harish Motiwalla (DIN: 00029835) and Mr. Ashok Chhabra (DIN: 00059677) werere-appointed as Independent Directors of the Company for a period of five yearscommencing from 1st April 2019 upto 31st March 2024 by theShareholders of the Company by way of Postal Ballot.
Ms. Latha Gopinathan Nair (DIN: 08389056) and Mr. Krishan Phophalia Kumar (DIN:08395171) were appointed as Additional Directors with effect from 1st April2019 and Mr. John Francis Singer (DIN: 08416391) was appointed as an Additional Directorwith effect from 29th May 2019. The Shareholders at their Annual GeneralMeeting held on 26th September 2019 appointed them as Non-Executive & NonIndependent Directors of the Company.
Mr. Angad Singh Kalsi (DIN: 07597128) was appointed as an Additional Director witheffect from 1st April 2019. He subsequently resigned from the Company's Boardwith effect from 29th May 2019 due to his pre-occupancy with otherassignments.
Mr. Deepak Dhanak (DIN 03157491) was re-appointed as the Managing director of theCompany for a further period of three years with effect from 2nd March 2020.The resolution seeking shareholders' approval for his re-appointment are included in theNotice of 29th Annual General Meeting of the Company. Ms. Latha Nair (DIN08389056) resigned from the Company's Board with effect from 15th February2020 due to her pre-occupancy with other assignments. The Board places on recordits appreciation for the valuable services rendered by Ms. Latha Nair during her tenureas a Director of the Company.
Ms. Bharti Dhar (DIN: 00442471) was appointed as an Additional Director (Non-executiveand Independent) of the Company for a period of five years with effect from 15 thFebruary 2020 and shall hold office as an Additional Director upto the date of ensuingAnnual General Meeting of the Company. Based on the recommendation of the Nomination andRemuneration Committee it is proposed to recommend to the shareholder the appointment ofMs. Bharti Dhar as Director at the ensuing Annual General Meeting of the Company.
Mr. RT Paullin (DIN: 08759596) was appointed as an Additional Director (Non-executive)of the Company with effect from 25th June 2020 and shall hold office as anAdditional Director upto the date of ensuing Annual General Meeting of the Company. Basedon the recommendation of the Nomination and Remuneration Committee it is proposed torecommend to the shareholder the appointment of Mr. RT Paullin as Director at the ensuingAnnual General Meeting of the Company.
Mr. John Francis Singer (DIN: 08416391)resigned from the Company's Board with effectfrom 25th June 2020 due to his pre-occupancy with other assignments. The Boardplaces on record its appreciation for the valuable services rendered by Mr. John Singerduring his tenure as a Director of the Company.
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. KrishanPhophalia Kumar (DIN: 08395171) is liable to retire by rotation at the ensuing AnnualGeneral Meeting of the Company and being eligible has offered himself for re-appointment.A resolution seeking shareholders' approval for his re-appointment forms part of theNotice of the 29th Annual General Meeting of the Company. Your Board recommendsthe appointment of the above Directors at the ensuing Annual General Meeting of theCompany.
None of Directors are disqualified from being appointed / re-appointed as Directors ofthe Company as per the disclosure received from them pursuant to Section 164(2) of theCompanies Act 2013.
Further the Board on considering the recommendation of the Nomination and RemunerationCommittee approved the appointment of Mr. Pankaj Holani as the Chief Financial Officer(CFO) of the Company with effect from 1st May 2019. Apart from the above noother Director or KMP was/were appointed or had retired or resigned during FY 2019-20.Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel of theCompany as on 31st March 2020 are: Mr. Deepak Dhanak-Managing Director Mr.Pankaj Holani-
Chief Financial Officer and Ms. Sunaina Goraksh-Company
Brief particulars and expertise of Directors seeking appointment / re-appointmenttogether with their other directorships and committee memberships have been given in theannexure to the notice of the Annual General Meeting in accordance with the requirementsof the Listing Regulations and Secretarial Standards.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
During the financial year under review declarations were received from all theIndependent Directors of the Company that they satisfy the "criteria ofIndependence" as defined under Regulation 16(b) of SEBI Listing Regulations andSection 149(6) of the Companies Act 2013 read with the Schedules and Rules madethereunder. Further all the Independent Directors of the Company have complied with theCode for Independent Directors as prescribed in Schedule IV of the Companies Act 2013There has been no change in the circumstances or situation that could impair or impacttheir ability to discharge their duties.
CHANGE IN SHARE CAPITAL
The Company has not made any issue of shares during the year and its Share Capital forthe year ended 31 March 2020 remains unchanged.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence therequirement for furnishing of details of deposits which are not in compliance with theChapter V of the Act is not applicable
The Members had at the 26th Annual General Meeting of the Company held on 25thJuly 2017 appointed M/s BSR & Co. LLP Chartered Accountants (Firm Registrationno.101248W/W-100022) as the Statutory Auditors of the Company for a period of 5 years tohold office from the conclusion of the 26th Annual General Meeting until theconclusion of 31st Annual General meeting of the Company. In terms of Section139 of the Companies Amendment Act 2018 such appointment no longer requires theratification by the Members at each Annual General Meeting. Accordingly the term ofStatutory auditors M/s BSR & Co. LLP Chartered Accountants (Firm Registrationno.101248W/W-100022) as Statutory Auditors shall continue for a consecutive term of 5years. The report of the Statutory Auditors along with notes to Schedules is a part of theAnnual Report.
Pursuant to Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 your Company appointed M/s DhrumilM Shah & Co Practicing Company Secretary to conduct the Secretarial Audit of yourCompany. The Secretarial Audit Report is enclosed as Annexure I' to this report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
The Company has complied with all the applicable provisions of Secretarial Standard-1and Secretarial Standard-2 as issued by the Institute of Company Secretaries of India.
STATUTORY AUDITORS' REPORT
The Report of the Statutory Auditors on the Company's Accounts for the year ended March31 2020 is self-explanatory and does not contain any qualification adverse remark orobservation.
INDIAN ACCOUNTING STANDARDS:
The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazettedated February 16 2015 notified the Indian Accounting Standards (Ind AS) applicable tocertain classes of Companies. Ind AS has replaced the existing Indian GAAP as prescribedunder Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts)Rules 2014. For your Company Ind AS was applicable from April 1 2017.
Pursuant to provisions of Rule 5 (1) and Rule 3 (B) of the Companies (Cost records andAudit) Rules 2014 your Company was required to conduct Cost Audit for financial year2019-20.
Accordingly your Company appointed M/s. B. F. Modi & Associates Cost Accountantsas Cost Auditors for financial year 2019-20 As per the provisions of Section 148 of theCompanies Act 2013 the Company is required to appoint Cost Accountant to carry out thecost audit of cost records of the Company's manufacturing unit for the year 2020-21. TheCompany has appointed M/s B F Modi & Associates Cost Accountants (Firm RegistrationNo. 100604) as Cost Auditors of the Company for the financial year 2020-21. Theremuneration as fixed by the Board of Directors is required to be ratified by members atthe ensuing Annual General Meeting of the Company.
The Board of Directors recommends the ratification of the Cost Auditor's remunerationat the ensuing Annual General Meeting of the Company.
Your Directors have in compliance with the provisions of Section 177 of the CompaniesAct 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 constituted the Audit Committee of the Board. Mr. Krishan Phophalia wasappointed as the member of the Audit Committee with effect from 1st April2019. As on date the members of the Audit Committee are Mr. Harish Narendra Motiwalla(Chairman) Mr. Ashok Chhabra and Mr. Krishan Phophalia.
The scope and terms of reference of the Audit Committee is in accordance with the Actand it reviews the information as required under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
During the year under review there were no instances of recommendation by the AuditCommittee not being accepted by the Board of Directors of the Company. The CompanySecretary acts as Secretary of the Committee.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Your Board of Directors has formulated the Corporate Social Responsibility (CSR) Policypursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 based on therecommendations of the CSR Committee. The CSR Policy is available on the website of theCompany http://www.multibaseindia.com/policies.php As on date the members of the CSRCommittee are Mr. Harish Narendra Motiwalla (Chairman) Mr. Ashok Chhabra (Member) and Mr.Deepak Dhanak (Member). The company has spent an amount of Rs.28.83 lacs under Social& Economic development Education and Prime Minister relief fund for CSR activity ofthe Company.
A brief outline of the CSR Policy of the Company and the Annual Report on CSRactivities as required by the Companies (Corporate Social Responsibility Policy)Rules2014 are set out in Annexure II' to this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2020 theBoard of Directors hereby confirms that: a. in the preparation of the annual accounts theapplicable accounting standards had been followed along with proper explanation relatingto material departures; b. the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period; c. the directorshad taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities; d. the directors had preparedthe annual accounts on a going concern basis; e. the directors had laid down internalfinancial controls to be followed by the company and that such internal financial controlsare adequate and were operating effectively; and f. the directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.
MANAGEMENT DISCUSSION & ANALYSIS
A separate report on Management Discussion & Analysis is appended to this AnnualReport and forms part of this Directors' Report.
In compliance with Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a detailed Report on CorporateGovernance is enclosed as a part of this Annual Report. A certificate from a PracticingCompany Secretary regarding compliance of the conditions of Corporate Governance asstipulated under Schedule V (E) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is appended to this Annual Report and forms part of thisDirectors' Report.
The Company recognizes risk management as an integral component of good corporategovernance and fundamental in achieving its strategic and operational objectives. Itimproves decision-making defines opportunities and mitigates material events that mayimpact shareholder value. The Board has also adopted a Risk Management Policy. The Companyhas adopted an enterprise wide framework that incorporates a system of risk oversightrisk management and internal control designed to identify assess monitor and managerisks consistent with the size of the business.
Multibase applies risk management in a well-defined integrated framework that promotesawareness of risks and understanding of the company's risk tolerances. The Risk ManagementFramework enables a systematic approach to risk identification leverage of anyopportunities and provides treatment strategies to manage transfer and avoid risks.
INTERNAL CONTROL AND INTERNAL AUDIT
The Company has an adequate Internal Control System commensurate with the size andnature of its business. The Company continues to engage M/s. Mukund & Rohit CharteredAccountants as its Internal Auditor. During the year the Company continued to implementtheir suggestions and recommendations to improve the control environment. Their scope ofwork includes review of processes for safeguarding the assets of the Company review ofoperational efficiency effectiveness of systems and processes and assessing the internalcontrol strengths in all areas. Internal Auditors findings are discussed with the processowners and suitable corrective actions taken as per the directions of Audit Committee onan ongoing basis to improve efficiency in operations.
CRITERIA FOR APPOINTMENT OF DIRECTORS AND RELATED MATTERS
The criteria for appointment of directors related matters and the remuneration policyis provided in Annexure III' to this Report. The remuneration policy of the Companyis designed to attract motivate and retain employees in a competitive market. TheNomination and Remuneration Policy can be accessed on the website of the Company atwww.multibaseindia.com.
ANNUAL EVALUATION OF THE DIRECTORS AND THE BOARD
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance and the directorsindividually. The evaluation of the Chairman non-independent directors and the Board wasconducted at the Independent Directors meeting February 132020. The criteria forevaluation are provided in Annexure III' of this report.
DETAILS WITH RESPECT TO THE PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS:
The Independent Directors of the Company are informed about their roles rightsresponsibilities in the company nature of the industry in which the company operates andrelated matters. Periodic presentations are made at the Board and Committees meetingsrelating to the Company performance.
The details of the familiarization programme is uploaded on the website of the Companywww.multibaseindia.com. In the Opinion of the Board of the Directors of the Company theIndependent Directors of the Company fulfillthe conditions specified in ListingRegulations and are independent of the management of the Company.
RELATED PARTY TRANSACTIONS
All Related Party Transactions entered by the Company during the financial year were inthe ordinary course of business and at arm's length basis. The details of material relatedparty transactions i.e. transactions exceeding 10% of the annual consolidated turnover asper the last audited financial statements are furnished in Annexure IV' and formspart of this Report. All transactions with related parties are placed before the AuditCommittee for approval. An omnibus approval of the Audit Committee is obtained for theRelated Party Transactions which are repetitive in nature.
As per the requirement of Regulation 23 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Regulations") approval of the AuditCommittee was received for all the Related Party Transactions. In compliance withRegulation 23 of the SEBI Listing Regulations the Company has adopted a policy to dealwith related party transactions and for determining material subsidiary. The Policy is onthe website of the Company http://www.multibaseindia.com/policies.php
PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES
The Company has not given any guarantees or made any investments in securities undersection 186 of the Act during the financial year under review.
VIGIL MECHANISM POLICY:
In compliance with the provisions of Section 177(9) of the Companies Act 2013 readwith Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 the Companyhas an established Vigil Mechanism Policy-Whistle Blower Policy for Directors andemployees to report concerns about unethical behavior actual or suspected fraud orviolation of the Company's Code of Conduct or ethics policy.
The employees of the Company have the right to report their concern or grievance to theChairman of the Audit Committee. The Whistle Blower Policy is available on the website ofthe Company http://www.multibaseindia.com/policies.php During the year under review theCompany did not receive any whistle blower complaint.
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year six Board Meetings and five Audit Committee Meetings were convened and held
The details of which are given in the Corporate Governance Report. The intervening gapbetween the Meetings was within the period prescribed under Regulation 17 and Regulation18 of the SEBI (Listing Obligation and Disclosures Requirements) Regulations 2015.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant/material orders passed by the regulators or courts ortribunals impacting the going concern status of your Company and its operations in future.
DISCLOSURES UNDER SECTION 134(3)(L) OF THE COMPANIES ACT 2013:
Except as disclosed elsewhere in this report no material changes and commitments haveoccurred which could affect the Company's financial position between the end of thefinancial year of the Company and date of this report.
During the year the properties assets and inventories of your Company are safeguardedproperly.
The Company considers human resources as its most critical asset and is putting inplace various practices to ensure healthy work environment. Industrial relations continuedto be cordial and harmonious throughout the year.
DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014
Details of employee's remuneration as required under the provisions of Section 197 ofthe Act and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are available at the Registered Office of the Companyduring working hours and shall be made available to any shareholder on request. Theinformation required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are furnished inAnnexure V which form parts of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure VI' which form parts of this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are enclosed as Annexure VII' to thisreport. The same is also available on the website of the Company at www.multibaseindia.com
During the year under review there were no material or serious instances of fraudfalling within the purview of Section 143 (12) of the Companies Act 2013 and rules madethere under by officers or employees reported by the Statutory Auditors of the Companyduring the course of the audit conducted.
SEXUAL HARASSMENT AT WORKPLACE:
The Company has formulated a Policy on prevention of Sexual Harassment in accordancewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules made thereunder which is aimed atproviding every woman at the workplace a safe secure and dignified work environment.
The Company has complied with the applicable provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules madethereunder including constitution of the Sexual Harassment Committee.
|No. of complaints filed during Financial Year 2019-20 ||NIL |
|No. of complaints disposed off during Financial Year 2019-20 ||NIL |
|No. of complaints pending as on 31st March 2020 ||NIL |
Electronic copies of Annual Report 2019-20 are sent to all members whose emailaddresses are registered with the Company/depository participant(s). Pursuant to theapplicable provisions of the Companies Act 2013 Rules made there under and GeneralCircular No. 20/2020 dated 5th May 2020 issued by Ministry of CorporateAffairs Notice of 29th Annual General Meeting along with the Annual Report isbeing sent only through electronic mode to those Members whose email addresses areregistered with the Company/ Depositories no physical copies of Notice of Annual GeneralMeeting and Annual Report will be sent to any Member.
Your Directors state that no disclosures or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:a) Issue of equity shares with differential rights as to dividend voting or otherwise andunder Employees Stock Option Scheme as per provisions of Section 62(1) (b) of the Act readwith Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014. b) Issue ofshares (including sweat equity shares) to employees of the Company under any scheme. c)Exercising of voting rights in respect of shares purchased directly by employees under ascheme pursuant to Section 67(3) of the Companies Act 2013.
Your Directors place on record their appreciation for the contributions made by theemployees at all levels enabling the Company to achieve the performance during the yearunder review.
Your Directors thank the Central Government Government of Diu & Daman UnionTerritory as also the Government agencies bankers local bodies Registrar of Companiesstock exchanges depositories shareholders customers vendors associates of the Companyand other related organizations for their continuous co-operation and support in progressof the Company and also look forward to their continued confidence and trust in theCompany.