Your Directors are pleased to present 35th Annual Report together with the auditedfinancial statements for the financial year ended March 31 2020.
FINANCIAL RESULTS - STANDALONE AND CONSOLIDATED
The Company's financial performance for the year ended March 31 2020 is summarizedbelow: -
| || || || ||(Rs. in lakhs) |
| ||Standalone ||Consolidated |
|Particulars ||Year ended March 31 2020 ||Year ended March 31 2019 ||Year ended March 31 2020 ||Year ended March 31 2019 |
|Total Income ||114821.49 ||115089.35 ||124098.58 ||121810.18 |
|Profit before Finance Cost & Depreciation ||3686.02 ||6538.99 ||5061.06 ||7323.40 |
|Depreciation ||(2157.00) ||(1874.95) ||(3149.97) ||(2026.58) |
|Finance Cost ||(843.95) ||(380.92) ||(1204.93) ||(427.99) |
|Profit before Taxation ||685.07 ||4283.12 ||673.60 ||4868.83 |
|Provision for Taxation (Deferred& Current) ||(191.47) ||(958.00) ||299.73 ||1138.72 |
|Profit after Taxation ||493.60 ||3325.12 ||373.87 ||3730.11 |
|Profit from Continuing operations ||493.60 ||3325.12 ||373.87 ||3730.11 |
|Other Comprehensive Income / Expenses ||(30.86) ||(26.93) ||(22.25) ||(26.54) |
|Total Comprehensive Income ||462.74 ||3298.19 ||351.62 ||3703.57 |
|Profit for the year attributable to: || || || || |
|- Owners of the Company ||493.60 ||3325.12 ||412.18 ||3596.66 |
|- Non-Controlling Interest ||- ||- ||(38.31) ||133.45 |
|Other Comprehensive Income for the year: || || || || |
|- Owners of the Company ||(30.86) ||(26.93) ||(25.01) ||(26.67) |
|- Non-Controlling Interest ||- ||- ||2.75 ||0.13 |
|Total Comprehensive Income for the year: || || || || |
|- Owners of the Company ||462.74 ||3298.19 ||387.18 ||3569.99 |
|- Non-Controlling Interest ||- ||- ||(35.56) ||133.58 |
|Surplus brought Forward ||28116.48 ||26264.96 ||27711.01 ||- |
|Surplus carried to Balance Sheet ||27373.66 ||28116.47 ||26892.63 ||27711.01 |
|Earning Per Share (EPS) ||0.49 ||3.33 ||0.37 ||3.73 |
During FY 2019-20 total income of the Company was Rs. 1148 Crores as compared to Rs.1151 Crores in FY 2018-19 registering a decrease of 0.26%.
Profit before tax and profit after tax were Rs. 6.85 Crores and Rs.4.93 Croresrespectively during the current year as against Rs. 42.83 Crores and Rs. 33.25 Croresrespectively in the previous year. Explanatory statement has been given in ManagementDiscussion analysis for decrease in profit.
PERFORMANCE OF SUBSIDIARY
Revenue from operations of Indutch Composites Private Limited (ICTPL) wasRs. 95.95Lakhs in 2019-20 as against Rs. 75.49 Lakhs in the previous year registering an increaseof 27.10%.
Profit before tax and Profit after tax of ICTPL were Rs. 0.11 Lakhs and Rs. (-) 108.16respectively during the current year as against Rs. 639.58 and Rs. 446.36 respectively inthe previous year.
In order to conserve the resources of the Company and considering the prevailingeconomic situation the need of resources for growth the Board of Directors of theCompany have decided not to recommend any dividend on the equity shares of the Company forthe Financial Year ended March 31 2020.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company are prepared in accordance withthe provisions of Section 129 of the Companies Act 2013 ("the Act") read withthe Companies (Accounts) Rules 2014 and Regulation 33 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") along with aseparate statement containing the salient features of the financial performance of itssubsidiary in the prescribed form. The audited consolidated financial statements togetherwith Auditors' Report form part of the Annual Report.
CAPACITY UTILIZATION & PLANT OPERATIONS
All four units of the Company located at Waghodia in Gujarat Bawal as well asDharuhera in Haryana and Haridwar in Uttarakhand are running well and continue to operateat a satisfactory level of efficiency except for lockdown period.
CHANGES IN CAPITAL STRUCTURE
The paid-up equity capital as on March 31 2020 stood at Rs. 20 Crore consisting of 10Crore Equity Shares of Rs.2/- each with no change as compared to previous financial year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of Section 152 and other applicable provisions if any of Companies Act2013 Mr. Anuj Munjal retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.
Your Board recommends re-appointment of Mr. Anuj Munjal retiring at the forthcomingAGM of Company in terms Section 152 of the Act who in opinion of the Board fulfills theconditions for reappointment specified in the Act and rules made thereunder.
In accordance with section 149(1)(b) & (6) Rule 3 of Companies (Appointment andQualifications of Directors) Rules 2014 Regulation 17 (1) (A) of Listing Regulations andany other applicable provision for the time being in force Ms. Avi Sabavala was appointedas a Non-executive Additional Independent Woman Director on the Board of the Companyw.e.f. April 1 2020 by way of Circular Resolution dated 25.03.2020 subject toconfirmation of members at the ensuing Annual General Meeting.
- Key Managerial Personnel
Mr. Sudhir Kumar Munjal Managing Director Mrs. Anju Munjal and Mr. Anuj Munjal WholeTime Directors Mr. S.K. Sharma Chief Financial Officer and Mr. Rakesh Johari CompanySecretary and Compliance Officer are the Key Managerial
Personnel of your Company in accordance with the provisions of Section 2(51) and 203 ofthe Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
- Declaration from Independent Directors
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed u/s 149(6) of the Act and theListing Regulations. In the opinion of the Board Independent Directors fulfil theconditions specified in the Act Rules made thereunder and Listing Regulations and areindependent of the Management.
ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD ITS COMMITTEES AND OF INDIVIDUALDIRECTORS
Annual evaluation of the performance of the Board its Committees and of IndividualDirectors forms part of Corporate Governance Report.
Your Company is focusing on quality right from new product development stage such asdesign of processes manufacturing of tools fixtures & dies to ensure qualityoutput. This is the attribute of your Company which has enabled it to sustain as aconsistent quality producer over the years.
Your Company continued to focus on operational improvement. Continuing focus onmanaging optimal levels of inventory sound business performance operating efficienciesin various segments of business and cost saving drive across the organization have helpedit generating smooth cash flow from operations.
Your Company was able to raise the short-term/long term funds needed for its workingcapital related requirements & term loans for new capital expenditure at competitiverates. Your Company continues to enjoy excellent credit ratings for both long and shorttenure borrowings and maintains impeccable debt-servicing track record which helps itretain excellent rapport with all of its bankers.
The Company is committed to maintain the highest standards of corporate governance andadheres to the corporate governance requirements set out by SEBI. The Company has beenpracticing the principles of good corporate governance over the years and lays strongemphasis on transparency accountability and integrity. The report on Corporate Governanceas stipulated under the Listing Regulations forms an integral part of Annual Report.
Certificate of Corporate Governance and Non-Disqualification of Directors issued bySecretarial Auditor of the Company is attached to the Corporate Governance Report as AnnexureII and Annexure III respectively.
TRANSFER TO GENERAL RESERVE
During the Financial Year under review no amount has been transferred to GeneralReserve of the Company.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year under review your Company has transferred unpaid/ unclaimed dividendamounting to Rs. 12.44 Lakhs for FY 2011-12 and 42959 shares to the Investor Educationand Protection Fund (IEPF) Authority of the Central Government of India. Further dividenddeclared by the Company for FY 2018-19 amounting to Rs. 757570 was also transferred toIEPF account during FY 2019-20.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee (CSR Committee') has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy')indicating the activities to be undertaken by the Company which has been approved by theBoard.
The amount required to be spent on CSR activities during the year under review inaccordance with the provisions of Section 135 of the Act was Rs. 90.51 Lakhs and theCompany has spent ` 68.50 Lakhs during the financial year.
The requisite details (in a matrix form) on CSR activities pursuant to Section 135 ofthe Act read with Companies (CSR Policy) Rules 2014 are annexed as Annexure A tothis Report.
POLICY RELATING TO PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has placed a policy to treat women employees with dignity and nodiscrimination against them plus zero tolerance towards any sexual abuse to abide byletter and spirit requirements of the Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013 and rules framed there under andredressal of complaints of sexual harassment at work place. All employees (permanentcontractual temporary and trainees) are supposed to adhere to and conduct themselves asprescribed in this policy. During the year under review no complaint was reported to theBoard and accordingly the Company has no information to report on filing and disposal ofthe cases pursuant to Section 22 of the said Act.
Your Company has neither accepted nor renewed any deposits within the meaning ofSection 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014 for theyear ended March 31 2020
PARTICULARS OF LOANS GUARANTEES SECURITIES AND INVESTMENTS
The Company has not given any guarantees or securities within the meaning of theprovisions of Section 186 of the Act.
However the aggregate of loans and advances granted as also investments made if anyare within the limits of Section 186 of the Act.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the Directors would like tostate that:
a) In the preparation of the annual accounts financial year ended March 31 2020 theapplicable accounting standards have been followed along with proper explanation relatingto material departures; if any
b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2020 and of the profitand loss of the Company for the financial year ended March 31 2020 under review;
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
d) The Directors have prepared the annual accounts for the financial year ended March31 2020 on a going concern basis;
e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) The Directors have devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED IN SECTION 188OF THE COMPANIES ACT 2013
There were no material related party transactions entered into during the financialyear within the meaning of Section 188 of Companies Act 2013 read with the Companies(Meetings of Board and its Powers) Rules 2014.
Details of all related party transactions are enclosed as part of notes to the accountsfor the year ended March 31 2020.
Thakurdevi Investments Private Limited continues to be holding company of the Companyholding 74.81% Equity Share Capital of the Company. The Company will make relevantdisclosure during the year in case of change in the current status if any.
Indutch Composites Technology Pvt. Ltd. (ICTPL) continues to be subsidiary company.Munjal Auto Industries Limited is holding 68% Equity Share Capital for the year endedMarch 31 2020.
AUDIT COMMITTEE RECOMMENDATIONS
During the year The Board has accepted all recommendations of Audit Committee andaccordingly no disclosure is required to be made in respect of non-acceptance of anyrecommendation of the Audit Committee by the Board.
INTERNAL FINANCIAL CONTROL
The Corporate Governance Policy guides the conduct of the affairs of your Company andclearly delineates the roles responsibilities at each level of its key functionariesinvolved in governance. Your Company has in place adequate internal financial controlswith reference to the Financial Statements. During the year under review no reportablematerial weakness in the operation was observed. Regular audit and review processes ensurethat such systems are reinforced on an ongoing basis.
Your Company's assets are adequately insured against multiple risks from fire riotearthquake terrorism and other risks which are considered necessary by the Management.
As an additional coverage a Public Liability Insurance Policy is also in place tocover public liability if any arising out of any industrial accidents. The Company hasalso covered the Directors' and Officers' liability under the Act to meet with anyeventuality.
(i) Statutory Auditors
The Company at its 33 rd AGM held on 25 th August 2018 appointed M/s. K C Mehta &Co. Chartered Accountants Vadodara having Firm Registration No. 106237W as StatutoryAuditors of the Company to hold office for their remaining tenure of 4 consecutive yearstill the conclusion of 37 th Annual General Meeting. The Company has obtained necessarycertificate under Section 141 of the Act conveying their eligibility for being theStatutory Auditors of the Company for the year 2020-21.
(ii) Internal Auditors
M/s Mukund & Rohit Chartered Accountants Vadodara have been appointed asInternal Auditors of the Company in terms of Section 138 of the Act and rules andregulations made thereunder for the Financial Year 2020-21 by the Board of Directorsupon recommendation of the Audit Committee.
(iii) Secretarial Auditors
As required under Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company is required to appoint aSecretarial Auditor for auditing secretarial and related records of the Company.
The Secretarial Audit Report for the year 2019-20 given by M/s. Devesh Pathak &Associates Practicing Company Secretaries Vadodara is attached as Annexure C tothis Report.
The Board at its meeting held on 30th June 2020 has re-appointed M/s. Devesh Pathak& Associates Practicing Company Secretaries Vadodara having CP No. 2306 allotted bythe Institute of Company Secretaries of India as Secretarial Auditors for the financialyear 2020-21.
EXPLANATIONS/COMMENTS ON STATUTORY AUDITORS' REPORT & SECRETARIAL AUDITORS' REPORT
Neither the Statutory Auditors nor the Secretarial Auditors of the Company in theirrespective reports have made any qualifications reservations adverse remarks ordisclaimers. Accordingly no explanations/ comments thereon are required to be furnished.
The composition of the Audit Committee is in line with the provisions of Section 177 oftheAct read with Regulation 18 of Listing Regulations. The Chairman of the Audit Committeeis an Independent Director. The Audit Committee of the Board provides reassurance to theBoard on the existence of an effective internal control environment that ensures theefficiency and effectiveness of the operations of the Company and safeguarding of assetsand adequacy of provisions for all liabilities. The details of meetings and theirattendance are included in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE
The composition of the Nomination and Remuneration Committee (NRC) is in line with theSection 178 of the Act read with Regulation 19 of Listing Regulations. The Committeedetermines overall Company's Policy on remuneration packages and other terms andconditions of the appointment of the Executive Directors and Senior Management of theCompany as well as sitting fees to the Non-Executive Directors of the Company and also toapprove payment of remuneration to Managing Director and Whole Time Directors as decidedby the members of the Company and recommends to the Board of Directors for theirconsideration and approval. The details of meetings and their attendance are included inthe Corporate Governance Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The composition of the Stakeholders' Relationship Committee (SRC) is in line with theSection 178 of the Act and Regulation 20 of Listing Regulation. The Committee looks afterthe stakeholders' grievances and redressal of investor's complaints related to transfer ofshares non-receipt of balance sheet non-receipt of dividend etc. The details of meetingsand their attendance are included in Corporate Governance Report.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and rules framed thereunder either to the Company or to the CentralGovernment.
EXTRACT OF ANNUAL RETURN
In terms of Sections 92(3) and 134(3)(a) of the Act and rules made thereunder extractof the Annual Return in Form No. MGT-9 is annexed to this report as Annexure B andis also available on the website of the Company.
CODE OF CONDUCT
The Code of Conduct which is applicable to the members of the Board and all designatedemployees in the course of day to day business operations of the Company. The code laiddown by the Board is known as "Code of Conduct and Fair Disclosure of UnpublishedPrice Sensitive Information" which forms an Appendix to the Code of Conduct of theCompany which is in line with SEBI (Prohibition of Insider Trading) Regulation 2018 asamended from time to time.
The Company has received affirmations from Board members as well as senior managementconfirming their compliance with the said Code for FY 2019-20.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices anddealing with stakeholders. All the Board members and the senior management personnel haveconfirmed their compliance with the Code. All management personnel are being providedappropriate training in this regard.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has a vigil mechanism/whistle blower policy to deal with instance of fraudand mismanagement if any. In staying true to our values of strength performance andpassion and in line with our vision of being one of the most respected companies in Indiathe Company is committed to the high standards of Corporate Governance and stakeholder'sresponsibility.
PREVENTION OF INSIDER TRADING
The Code requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window' is closed. The Board is responsible forimplementation of the code. All Directors and the designated employees have confirmedcompliance with the code.
Four meetings of the Board of Directors were held during the financial year 2019-20.Details of the composition of the Board and its committees and of the meeting heldattendance of the Directors of such meeting and other relevant details are provided in theCorporate Governance Report.
RISK MANAGEMENT POLICY
The composition of the Risk Management Committee is not applicable to your Company.However the Company has adopted a Risk Management policy in accordance with theprovisions of the Act and Regulation 17 (9) of Listing Regulation. It establishes variouslevels of accountability and overview within the Company while vesting identifiedmanagers with responsibility for each significant risk.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS IMPACTING THE GOING CONCERN STATUS/COMPANY'S OPERATIONS IN FUTURE
No significant material orders have been passed by the regulators or courts ortribunals impacting the going concern status of the Company or Company's operations infuture.
PARTICULARS OF EMPLOYEES
The Statement of disclosure of remuneration under Section 197 of the Act and Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(Rules') is annexed to this report as Annexure D. There was no employee ofthe Company except Executive Directors employed throughout the year who was in receiptof the remuneration exceeding 1.02 Crore per annum.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34(2)(e) of Listing Regulation is enclosed as Annexure E and forms partof this report.
Industrial relations have remained cordial throughout the year in the Company at all ofits units.
ENVIRONMENT HEALTH SAFETY AND SOCIAL RESPONSIBILITY
Your Company is committed in maintaining the highest standards of environmentcompliances and therefore adopted a systematic approach towards environment management byembedding a vision of being an 'Injury Free' and Zero Environment Incident'organisation. Over the past many years your Company has been progressing well in terms ofreducing injury frequency rates and has improved the safety records.
Your Company is environment-conscious and committed to making a positive contributionto the communities where it operates. The Company has been proactively pursuing measuresand reaching out to the communities surrounding the areas of its operations by extendingsupport and lending a helping hand to some very credible social institutions that arecommitted to address social causes.
Your Company has been re-certified for Occupation Health and Safety (OHSAS) 1800:2007from Bureau Verit as during FY 2018-19 which is valid for up to March 11 2021.
CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION AS WELL AS FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information required under Section 134(3)(m) of the Act read with Rules madethereunder is annexed to this report as Annexure F.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the Listing Regulations the Business Responsibility Report(BRR') has been prepared and forms part of the annual report as Annexure G.The report provides detailed overview of initiatives taken by your Company fromenvironmental social and governance perspective.
Pursuant to provisions of the Act the Nomination and Remuneration Committee (NRC) ofyour Board has formulated a Remuneration Policy for the appointment and determination ofremuneration of the Directors Key Managerial Personnel Senior Management and otheremployees. The NRC has developed criteria for determining the qualification positiveattributes and independence of Directors and for making payments to Executive and Non-Executive Directors. The remuneration policy of the Company can also be seen at thewebsite of the Company i.e. www.munjalauto.com.
MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF COMPANY IF ANYDURING THE PERIOD FROM MARCH 31 2020 TO DATE OF REPORT
World Health Organization (WHO) declared outbreak of Coronavirus Disease (COVID-19) aglobal pandemic on March 11 2020. Consequent to this Government of India declaredlockdown on March 23 2020 and the Company temporarily suspended the operations in all theunits of the Company in compliance with the lockdown instructions issued by the Centraland State Governments. COVID-19 has impacted the normal business operations of the Companyby way of interruption in production supply chain disruption unavailability ofpersonnel closure/lockdown of production facilities etc. during the lockdown period whichhas been extended till May 17 2020. However production and supply of goods has resumedduring the month of May 2020 on graded basis on various dates at all the manufacturinglocations of the Company after obtaining permissions from the appropriate governmentauthorities. The impact of the same is partially reflected in the financial statements ofthe Company for the year and materially will reflect in Q-1 of next year.
COMPLIANCES WITH APPLICABLE SECRETARIAL STANDARDS
The Company is fully compliant with the applicable Secretarial Standards (SS) viz. SS-1& SS-2 on Meeting of Board of Directors and General Meetings respectively.
The Board of Directors express their sincere thanks to all of its Stakeholdersincluding inter alia Suppliers Vendors Investors and Bankers and appreciation to allits customers for their consistent abiding support throughout the year.
Your Company also records its appreciation of the contributions made by employees atall levels. Their commitment cooperation and support are indeed the backbone of allendeavors of the Company.
The Company would like to acknowledge Government of India Goods and Services Tax (GST)Department Income Tax Department Industrial & Labour Departments Government ofGujarat Government of Haryana Government of Uttarakhand and other government agenciesfor the support; the Company has been receiving over the years and is looking forward totheir continued support/ guidance in times to come.