Your Directors are pleased to present the 36th Board Report on the businessand operations of the Company together with the Audited Financial Statements for thefinancial year ended March 31 2021.
FINANCIAL SUMMARY AND HIGHLIGHTS
The salient features of the Company's financial performance for the year ended March31 2021 are as follows:
(Rs. In lakhs)
| ||Year Ended 31.03.21 ||Year Ended 31.03.20 |
|Sales and other Income (Net of GST) ||110935.48 ||131277.29 |
|Profit before Interest Depreciation & Tax ||4785.77 ||7925.32 |
|Financial Cost ||14.77 ||42.53 |
|Depreciation ||1626.74 ||2037.66 |
|Profit before Tax ||3144.26 ||5845.13 |
|Tax Expenses || || |
|-Current tax ||500.80 ||1466.89 |
|-Deferred tax ||29.44 ||124.54 |
|Total Tax Expense ||530.24 ||1591.43 |
|Profit after Tax ||2614.02 ||4253.70 |
|Other comprehensive income net of taxes ||70.10 ||108.39 |
|Total Comprehensive Income ||2684.12 ||4362.09 |
|Surplus brought forward including items of other comprehensive income ||30547.37 ||30355.01 |
|Profit available for appropriation ||33231.49 ||34717.10 |
|Dividend payment ||1799.78 ||1799.78 |
|Dividend Tax ||- ||369.95 |
|Transfer to General Reserve ||2000.00 ||2000.00 |
|Surplus available including items of other comprehensive income ||29431.71 ||30547.37 |
OPERATIONS & STATE OF THE COMPANY'S AFFAIRS
The Company has achieved a sales turnover (Net of GST) including other income of Rs.110935.48 lakhs as compared to Rs. 131277.29 lakhs in the previous year. The profitbefore tax in the current year was at Rs. 3144.26 lakhs as compared to Rs. 5845.13 lakhsin the previous year.
The State of affairs of the Company is detailed in the "Management Discussion& Analysis Report" annexed as Annexure-A and forms part of this report.
The Company's financial discipline and prudence is reflected in the credit ratingsascribed by CRISIL rating agency as given below:
|Long-Term Rating ||AA/Negative |
|Short-Term Rating ||CRISIL A1 + |
|Rs(in crores) || |
|Rs. 99 Long-Term Loans ||AA/Negative |
|Rs. 15 Cash Credit ||AA/Negative |
|Rs. 28 Letter of Credit ||CRISIL A1 + |
|Rs. 2.25 Bank Guarantee ||CRISIL A1 + |
|Rs. 6 Commercial Paper ||CRISIL A1 + |
TRANSFER TO GENERAL RESERVE
The Board has transferred an amount of Rs. 2000/- lakhs to General Reserve for thefinancial year ended March 31 2021 before recommending the final dividend. The balanceamount of Rs. 29431.71 lakhs (Previous year Rs. 30547.37 lakhs) will be retained assurplus in the statement of Profit and Loss.
Your Directors are pleased to recommend a final dividend of 225% (i.e. Rs. 4.50 perequity share of Rs. 2.00/- each fully paid up) on the paid-up Equity Share Capital of theCompany for the financial year ended March 31 2021 amounting to Rs. 1799.78 lakhs.
As per Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") read with SEBI (Listing Obligationsand Disclosure Requirements) (Second Amendment) Regulations 2021 dated May 05 2021 theCompany has formulated the Dividend Distribution Policy of the Company and the Dividendrecommendation is in accordance with the Dividend Distribution Policy of the Company andsuch policy is available at the Company's website at www.munialshowa.net.
In view of the changes made under the Income-tax Act 1961 by the Linance Act 2020dividends paid or distributed by the Company shall be taxable in the hands of theShareholders. Your Company shall accordingly make the payment of the Dividend afterdeduction of tax at source. The final dividend if approved by the shareholders at the 36thAnnual General Meeting shall be payable to the eligible shareholders registered in thebooks of the Company and the beneficial owners whose names are furnished by thedepositories as on the Record Date i.e. August 13 2021.
SHARE CAPITAL & DEBENTURES
The authorized share capital of the Company is Rs. 150000000 (Rupees fifteen Croresonly) divided into 75000000 (Seven Crores Fifty Lakh) equity shares of face value ofRs.2 (Rupees Two) each. The paid-up Share Capital of the Company as on March 31 2021 was Rs.79990000 (Rupees Seven Crore Ninety-Nine Lakhs Ninety Thousand only) divided into39995000 equity shares of face value of Rs. 2 (RupeesTwo) each.
During the year under review there was no change in the authorised subscribed andpaid-up share capital of the Company from the last financial year.
During the year under review the Company has not issued any shares with differentialvoting rights nor granted any stock options or sweat equity shares. The Company has notissued or repaid any Debentures Preference Shares Bonds and Security during thefinancial year. None of the Directors of the Company hold any shares or security of theCompany except Mr. Surinder Kumar Mehta who holds 2000 equity shares of the Companyjointly with his wife Mrs. Santosh Mehta. The Company does not have any Debentures orPreferential Shares as on March 31 2021.
Cash and cash equivalent as at March 31 2021 was Rs. 1018.45 lakhs. The Companycontinues to focus on judicious management of its working capital. Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has neither given any guarantee nor provided any security covered under theprovision of Section 186 of the Companies Act 2013 ("the Act"). The Company hasmade investments in Mutual funds Alternative Investments Funds CP & Market linkeddebentures and has given loans/ advances to its vendors in the ordinary course ofbusiness. The details of investments made and loans given are provided in Note no. 5A and5B of the financial statements for the year ended March 31 2021.
Your Company has been practicing the principles of good Corporate Governance over theyears. The Company has complied with the Corporate Governance requirements as stipulatedunder the Listing Regulations. A separate section on Corporate Governance along with aCertificate of the Auditors of your Company confirming the compliance of CorporateGovernance is annexed as Annexure-B and forms an integral part of this Report.
In terms of Regulation 17(8) of Listing Regulations a Certificate signed by ChiefExecutive Officer and Chief Financial Officer is annexed as Annexure-C and forms anintegral part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed by all theDirectors and members of Senior Management of your Company. The Board of Directorssupports the broad principles of Corporate Governance. In addition to the basic governanceissues the Board also lays strong emphasis on transparency accountability and integrity.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 of the Act read with Investor Education andProtection Fund Authority
(Accounting Audit Transfer and Refund) Rules 2016 ("IEPF Rules") andsubsequent amendment thereof the amount of dividends which remained unpaid or unclaimedfor a period of seven years from the date of transfer to Unpaid Dividend Account of theCompany and underlying equity shares on which dividend has not been paid or claimed bythe members for seven consecutive years are required to be transferred to the InvestorEducation & Protection Fund (IEPF) Authority established by the Central Government.
During the Financial Year under review your Company has accordingly transferredunpaid/ unclaimed dividend amounting to Rs. 7.25 lakhs pertaining to financial Year2012-13 to the IEPF Account.
Further the Company has also transferred Rs. 3.87 lakhs on September 14 2020 forfinancial year 2019-20 being the dividend declared on shares already transferred to IEPF.
The Company has transferred 8152 Equity Shares of ^ 2.00 each on which the dividendremained unpaid or unclaimed for seven consecutive years during the financial year 2020-21 to the IEPF Account after following the prescribed procedure.
Further amount of unclaimed dividend due in respect of financial year 2013-14 andshares where dividend had remained unpaid for last consecutive seven years will betransferred to the IEPF within the stipulated time period.
Pursuant to Section 139 of the Act read with the Companies (Audit and Auditors) Rules2014 the Members of the Company in 32nd Annual General Meeting("AGM") approved the appointment of M/s Deloitte Plaskins & Sells LLPChartered Accountants (ICAI Registration No. 117366W/W- 100018) as the Statutory Auditorsof the Company for the period of 5 years who shall hold office from the conclusion ofthis 32nd AGM up to the conclusion of the 37th AGM of the Companysubject to the ratification by members at every AGM.
The requirement of annual ratification for appointment of Statutory Auditor has beenomitted vide Companies (Amendment) Act 2017. Therefore the Statutory Auditors are nomore required to be ratified at every Annual General Meeting of the Company.
There are no qualifications reservation adverse remark observations comments ordisclaimer given by the Auditors in their Report. The Report given by the StatutoryAuditors M/s Deloitte Plaskins & Sells LLP Chartered Accountants on the financialstatements of the Company for the financial year 2020-21 is part of the Annual Report andself- explanatory and do not call for any further comments.
Further no fraud has been reported by the Statutory Auditors and the SecretarialAuditor to the Audit Committee in terms of Section 143(12) of the Act during the financialyear.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s SatyenderKumar & Associates a proprietorship firm of Company Secretary as the SecretarialAuditor to conduct the Secretarial Audit of the Company for the financial year 2020-21.The Secretarial Audit Report is self-explanatory and do not call for any further comments.There are no qualifications reservation adverse remark observations comments ordisclaimer given by the Auditors in their Report except one remark that:
"During the period under review the Company has complied with the provisions ofthe Act Rules Regulations Guidelines Standards etc. mentioned above. We have observedthat the Company has submitted unpaid dividend details for the Financial Year 1998-99onwards (Form 1A alongwith excel template) under Rule 4 of Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016. TheCompany despite of its best efforts is unable to trace the data of unpaid dividend for theFinancial Year 1988-89 to 1997-98. The Company vide its letter dated July 8 2020 hassought necessary guidance/clarification from IEPF Authority in this regard".
The Report given by the Secretarial Auditor for the financial year ended on March 312021 is annexed as Annexure D and forms an integral part of this report.
The Board has re-appointed M/s Satyender Kumar & Associates Company Secretary (COPNo. 5189) as the Secretarial Auditors of the Company for the financial year 2021-22. YourCompany had received their written consent that the appointment will be in accordance withthe applicable provisions of the Act and rules framed thereunder.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The details pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies(Accounts) Rules 2014 regarding Conservation of Energy Technology Absorption and ForeignExchange earnings & outgo is annexed as Annexure-E and forms an integral part of thisreport.
In terms of provisions of Section 92(3) 134(3)(a) of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 the copy of annual return of theCompany for the Financial Year ended March 31 2021 has been placed on the website of thecompany. Same can be accessed by the any person through below given the web-link may beaccessed on the Company's website i.e. www.munialshowa.net.
PARTICULARS OF EMPLOYEES
The statement of pa rticulars of employees as per Section 197 of the Act read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forthe year ended March 31 2021 is annexed as Annexure-F and forms an integral part of thisreport.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
In terms of provisions of Section 135 of the Act and the Companies (Corporate SocialResponsibility Policy) Rules 2014 the Corporate Social Responsibility (hereinafterreferred as 'CSR') Committee has formulated a CSR Policy indicating the activities to beundertaken by the Company. The constitution of CSR Committee is disclosed in CorporateGovernance Report which forms an integral part of Annual Report.
The CSR policy may be accessed on the Company's website i.e.https://www.munialshowa.net/wp-content/uploads/2021/02/Corporate-Social-Responsibilitv-Policy. pdf
As part of its initiatives under CSR the Company has undertaken projects in the areasof Education Health Water and Sanitation. These projects are largely in accordance withSchedule VII of the Act and CSR Policy of the Company. The annual report on CSR activitiesas required under the Companies (CSR Policy) Rules 2014 is set out as Annexure-G andforms an integral part of this report.
Munjal Showa Limited considers corporate social responsibility as an integral part ofits business activities and endeavors to utilize the allocated CSR budget for the benefitof the society.
The Company has incurred the CSR expenditure ofRs. 167.76 lakhs during the financialyear 2020-21 being about 104% ofRs. 161.42 lakhs to be spent during the financial year.The CSR activities of the Company are approved by the Board and few new initiatives havebeen proposed that may be considered in future. For the subsequentyears the Companyendeavors to spend the budgeted CSR expenditure in accordance with the statutoryrequirements.
BUSINESS RESPONSIBILITY REPORT
As stipulated under Regulation 34 of the Listing Regulations the BusinessResponsibility Report ('BRR') for the Financial Year 2020-21 has been prepared and formspart of the annual report as Annexure H. The report provides detailed overview ofinitiatives taken by your Company from environmental social and governance perspective.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of theCompany that have occurred between the end of financial year and the date of the report.
We believe that"waste is a precious resource kept in a wrong place". Wefurther believe that "there is no waste as per the law of the nature". Hencefrom the solid waste like Iron & Steel from old scrap machines we are collecting theraw material and we are manufacturing "Lean and Low cost" machines with aphilosophy of Easy to run Easy to maintain Easy to clean and Zero accident by meetingall the quality and productivity standard. Everything is done in-house starting fromdesign up to finishing of the machine. This concept of reuse of metallic waste is highlyappreciated by CM ACMA and international experts of our Japanese Collaborator. By Regulartraining for workers and staff to prevent accident related to mechanical electricalchemical physiological and psychological safety the Company has made "Zeroincidents" as acceptable standard. Hazard Identification and Risk Assessment (HIRA)is our primary focus to mitigate and prevent the abnormalities. Because of our dedicatedand committed efforts in continual improvement of Safety Health and Environment area wehad received two National Awards from Ministry of Labour and Employment Government ofIndia for safety. The Company is a regular member of Haryana Environment ManagementSociety.
The Company has started Green Vendor Development Programme (GVDP) since 2009-10. Theaim of the project is to conserve water and energy minimize generation of wasteterminate hazardous chemicals with non-hazardous chemicals minimize carbon foot print andgenerate pollution prevention awareness throughout the plant and to achieve 100 percentlegal compliance. The Company is rigorously improving to create a better place for ournext generation.
TOTAL PRODUCTIVE MAINTENANCE
The Company has taken up the journey of Total Productive Maintenance (TPM) with thehelp of JIPM (Japan Institute of Plant Maintenance) Japan and Cll TPM Club India. Majorobjectives of TPM are to increase (PQCDSME) Productivity to improve Quality to reduceCosts to ensure in time Delivery to increase Safety to increase profitability to buildMorale and to protect environment by formation of small cross functional work groups andto improve overall Plant efficiency. The other objectives are to procure and installmaintenance free plant and machinery; and to achieve zero defects zero break down zerolosses and zero accidents. In nutshell TPM is to identify 21 types of Losses &converts them i nto Profit. We a re a ble to reduce Repair&Mainte nance Cost andworking very aggressively towards reduction in Inventory Loss.
We have achieved TPM Excellency Award "Category A" for Gurugram and ManesarPlants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance.We have been awarded by JIPM TPM Excellence Consistency Award for both Gurugram &Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plantalso & we had TPM Kick-Off Ceremony in November 2015.
LEAN TPM ACTIVITIES
We have clubbed TPM with lean manufacturing system. Through Lean we are able to focus& control 8 types of wastes. Now we are giving more focus on 3 M - Muda Mura &Muri. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Workshopthrough JMAC Japan. We have converted huge & complicated machines by using TPM &Lean Concepts. These machines consume very less Electricity occupy less space take veryless inputs like consumables manpower tools oils compressed air less set-up timeless cycle time etc.These machines are 10S Machines (Safe Simple Small Slim SpeedSmart Sturdy Superb Sushil & Sunder) and help us in reducing Cost ofmanufacturing."
Low Cost Automation is the need of hour. In this area we have achieved great success ina very short span of time by Converting 12 numbers 2W Rod CNC machines from manual toAutomatic mode. Besides this Automation has been achieved in most of Damper case &Bottom tube Welding process in all the 3 Plants. Many other machines in other lines.Resulting into Quality & Productivity improvements in many folds. Another 4 majorProjects are there in pipeline & very soon we will achieve them. We are also workingtowards Introduction & implementation of Material Flow Cost Accounting.
ISO/TS 16949/LATF16949 ACCREDITATION
Your Company's manufacturing facilities are located at Gurugram Haridwar and Manesarand we continue to maintain and uphold the prestigious ISO/TS 16949:2009 ISO 14001:2015and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certificationsfrom reputed leading Indian and International Certification Institutions.
Further your company is now an "ISO-45001" certified company. ThisCertificate for Safety Management System is approved by International StandardOrganization. This is an International Standard that specifies requirements for anoccupational health and safety (OH&S) management system.
These certifications help in continuous improvements besides emphasis being laid onprevention of defects reduction of wastes prevention of near misses and to ensuremaximized customer delight.
The shares of your Company are listed on the National Stock Exchange of India Limited(NSE) and BSE Limited (BSE) and pursuant to clause C (9) (d) of Schedule V of SEBIListing Regulations the annual Listing fees for the year 2021-22 has been paid to themwell before the due date i.e. April 30 2021. Annual Custody/lssuer fee for the year2021-22 has been paid by the Company to the depositories viz. NSDL and CDSL.
Promoting Human Resources management is the strength of our Company and over a periodof time we have changed our vision of employees from "Human ResourcesManagement" to "Human Capital Management".
Your Company believes that employees form the fulcrum of growth and differentiation forthe organization. The Company recognizes that people are its principal assets and that itscontinued growth is dependent upon the Company's ability to attract and retain qualitypeople. The total headcounts were 2500 at the end of the year as compared to 2531 of theprevious year. The Company encourages longterm commitment to the Company by rewarding itspeople for the opportunities they create and the value generated for customers andshareholders. The Company conducts several employee engagement and training Programmes toupgrade the skills of the workforce and generate specialist in quality maintenance andmanufacturing. As desired by the Government of India we have started NEEM Scheme and NAPSScheme in order to enhance the technical skill level of our unemployed youths.
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement Programmes which have helped theorganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
BUSINESS RISK MANAGEMENT
SEBI vide notification dated May 05 2021 has amended Listing Regulations pursuant tothe said notification of SEBI Risk Management ("RM") Policy is applicable onthe top 1000 listed entities by market capitalization. Erstwhile it was applicable on top500 listed entities by market capitalization. However the Company has already formulatedthe RM policy on voluntary basis and after the said SEBI notification formulation of RMpolicy becomes statutory requirement of the Company.
Therefore the Company has a Risk Management Policy to identify evaluate businessrisks and opportunities. This framework seeks to create transparency minimize adverseimpact on the business objectives and enhance the competitive advantage of the company.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting.
The Company regularly conducts a study to develop a comprehensive 360 view on theopportunities risks and threats to the business. These include areas such as markettrends new competition changing customer preferences disruptions in supplies productdevelopment talent management etc.
The Board has identified following risks: -
Intensifying Competition Declining margins Imposition of strict environmental /safety / regulatory regulations Increase in raw material/component prices Dependence onCollaborators Over dependence on limited user segment base Economic downturn Risk ofnatural or manmade disasters Product liability / recall Single vendor dependence forcritical components Investment risks in expansion projects Sales Catering only toDomestic Market Over Dependence on few customers base Retention & development ofpersonnel and Inappropriate addressing of customer grievances. We through qualitativeproducts and brand image import only in case of cost advantage regular improvement inproductivity controls over overhead and Labour cost through a robust control ofapprovals internal audit of environmental safety and regulatory compliance localizationof components insurance TS 16949 certification TPM certification regular developmentof alternate vendors where only single source capturing customer complaints and responseto them have effective risk mitigating plans.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism for the Directors and Employees of theCompany by adopting the Whistle Blower Policy to report about the genuine concernsunethical behaviour fraud or violation of Company's Code of Conduct. Your Company herebyaffirms that no Director/ Employee of the Company have been denied access to the Chairmanof the Audit Committee. The details of the Whistle Blower Policy is explained in theCorporate Governance Report which form an integral part of this Report and is also postedon the website of the Company.
The website link is given below:
RECOMMENDATION OF THE AUDIT COMMITTEE
During the year all the recommendations made by the Audit Committee were accepted bythe Board.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company during the FinancialYear 2020-21.
DIRECTORS AND KEY MANAGERIAL PERSONNELS
During the financial year 2020-21 Mr. Yasuhiro Yamamoto (DIN: 08127304) Director wasliable to retire by rotation and being eligible had offered himself for re-appointmentbefore the shareholders at 35th Annual General Meeting ("AGM") of theCompany. The shareholders confirmed his re-appointment at the 35th AGM of theCompany.
At the 35th AGM of the Company the members approved the variation in theterms of appointment of Mr. Shigeki Kobayashi Joint Managing Director of the Company withretroactive effect from financial year ended March 312020.
Mr. Shigeki Kobayashi ceased to bea director of the Company w.e.f. April 10 2021. TheBoard placed its appreciation for the valuable services rendered by Mr. Shigeki Kobayashiduring his tenure as Director of the Company.
Mrs. Charu Munjal Non-Executive Director and Mr. Yogesh Chander Munjal ExecutiveDirector are liable to retire by rotation at the 36th AGM and being eligiblethey have offered themselves for re-appointment.
Mr. Kazuhiro Nishioka (DIN: 00602255) has been appointed as an Additional Director(Non-executive Non Independent Director) of the Company w.e.f June 23 2021. The Boardafter considering the recommendations of Nomination and Remuneration Committee recommendshis appointment as a Non-Executive Director of the Company liable to retire by rotationu/s 152 of the Companies Act 2013 at the 36th AGM of the Company.
Mr. Yasuhiro Ashiki (DIN 09132637) has been appointed as an additional director in theCompany w.e.f. June 23 2021. The Board after considering the recommendations ofNomination and Remuneration Committee recommends her appointment as an Executive Director(Joint Managing Director) of the Company liable to retire by rotation u/s 152 of theCompanies Act 2013 at the 36th AGM of the Company for a period of five yearswith effect from June 23 2021 to June 222026.
The Board proposed the re-appointment of Mr. Yogesh Chander Munjal (DIN 00003491) asManaging Director of the Company at the 36th AGM of the Company for a furtherperiod of five years with effect from September 01 2021 to August 31 2026.
During the year under review apart from the above stated facts there is no change inthe composition of Board of Directors and Key Managerial Personnel of the company.
Pursuant to the provisions of the SEBI Listing Regulations and the Act the profiles ofall the Directors seeking appointment/re-appointment at the ensuing AGM have beenprovided in the Notice of 36th AGM of the Company.
All Independent Directors havegiven individual declarations that they meet the criteriaof independence as laid down under Section 149(6) of the Act and Listing Regulations. Allthe Independent Directors have registered themselves under data bank of IndependentDirectors created and maintained by Indian Institute of Corporate Affairs.
All Directors of the Company have also given declarations that they are not debarredfrom holding the office of Director by virtue of any SEBI order or any other suchstatutory authority as required under the Circular dated 20th June 2018 issuedby BSE Limited and National Stock Exchange of India Limited.
The Company appreciates the dedicated and valuable guidance given by all the Directorsof the Company.
COMMITTEES OF THE BOARD
The Company has several Committees which have been established in compliance with therequirement of the relevant provisions of applicable laws and statutes. As on March 312021 the Board has five committees: The Audit Committee Nomination and RemunerationCommittee Corporate Social Responsibility Committee Share Transfer/StakeholdersRelationship Committee and Risk Management Committee. A detailed note on the compositionof the Board and its committees is provided in the Corporate Governance Report whichforms integral part of the Board Report.
SUBSIDIARY COMPANIES JOINT VENTURES OR ASSOCIATE COMPANIES
During the financial year 2020-21 no Company became or ceased to be a Subsidiary/JointVenture/Associate of the Company.
However Showa Corporation technical collaborator of the Company has entered into anabsorption type merger with Hitachi Automotive Systems Limited and formed Hitachi AstemoLtd. with effect from January 01 2021.
Pursuanttothe provisionsoftheActand Listing Regulations the Board has carried out anannual performance evaluation of its own the Directors individually as well as itsvarious committees on the criteria as recommended by the Nomination and RemunerationCommittee of the Company. The manner in which theformal annual evaluation has been carriedout has been explained in the Corporate Governance Report which forms an integral part ofthis report. The performance evaluation was found satisfactory.
NOMINATION AND REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS
The Board on the recommendation of the Nomination & Remuneration Committee hasframed a policy for selection and appointment of Directors Senior Management Personnelincluding Key Management Personnel and affixing their remuneration. The salient featuresof the Nomination and Remuneration Policy are mentioned below:
The Nomination and Remuneration Policy of the Company is designed to attractmotivate improve productivity and retain manpower by creating a congenial workenvironment encouraging initiatives personal growth team work and inculcating a senseof belongingness and involvement besides offering appropriate remuneration packages andsuperannuation benefits.
The Committee shall comprise at least three (3) Directors all of whom shall benon-executive Directors and at least half shall be Independent.
The Nomination and Remuneration Committee shall meet at least once in a year.
Quorum of the meeting shall be either two members or one-third of the members ofthe committee whichever is greater including at least one independent director inattendance.
The Role of the Committee includes: Periodically reviewing the size andcomposition of the Board to have an appropriate mix of executive and independent Directorsto maintain its independence and separate its functions of governance and management andto ensure that it is structured to make appropriate decisions with a variety ofperspectives and skills in the best interests of the Company.
Formulate the criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board relating to the remuneration forthe Director key managerial personnel and other employees.
Establishing and reviewing Board KMP and Senior Management succession plans inorder to ensure and maintain an appropriate balance of skills experience and expertise onthe Board and Senior Management.
The Board as per the criteria approved by the Nomination and RemunerationCommittee shall carry out evaluation of performance of its own its committees andindividual Directors.
During the Financial Year 2020-21 certain modifications in the policy were made andapproved by the Board of Directors in their meeting held on May 30 2019 pursuant toamendments in SEBI Listing Regulations. The revised Nomination and Remuneration Policy isavailable on the website of the Company at:
https://www.munialshowa.net/wp-content/ uploads/2020/07/NRC-Policv Updated24.07.2020.pdf
The details of remuneration under Section 197 of the Companies Act 2013 paid toDirectors are given in point no. VIII of Corporate Governance Report which forms integralpart of this Report.
BOARD DIVERSITY POLICY
The Company recognizes and embraces the importance of a diverse board in its success.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity race and gender which will help us retain our competitiveadvantage. TheBoard has adopted the Board Diversity Policy which sets out the approach to diversity ofthe Board of Directors.
The Board Diversity Policy is available on our website at:
http://www.munialshowa.net/wi3-content/ uploads/2016/02/Boards-Di versitv-Policv.pdf
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe financial year four (4) Board Meetings were convened and held on June 30 2020 July31 2020 November 05 2020 and February 04 2021. The details of Board and CommitteeMeetings and Board members and Committee members who have attended the meetings are givenin the Corporate Governance Report forming part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(3)(c) & (5) ofthe Act which is to the best of their knowledge and belief and according to theinformation and explanations obtained by them:
a. In the preparation of the annual accounts for the Financial Year ended March 312021 the applicable accounting standards had been followed and no material departureswere made from the same;
b. Appropriate accounting policies have been selected and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give a true andfair viewof the stateof affairs of theCompany at the end financial year ended March 31 2021 and ofthe profits of your Company for that period;
c. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of yourCompany and for preventing and detecting fraud and other irregularities;
d. The annual accounts have been prepared on a going concern basis;
e. They have laid down Internal Financial Controls to be followed by the Company andthat such Internal Financial Controls are adequate and were operating effectively; and
f. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under the Act and ListingRegulations during the financial year 2020-21 were in the ordinary course of business andon an arm's length pricing basis and do not attract the provisions of Section 188 of theAct. Hence requirement of Form AOC-2 as required under Section 188(1) of the Act is notapplicable to the Company.
All transactions with related parties were placed before Audit Committee and committeehas also given omnibus approval for repetitive and foreseen transactions. The Board alsonoted these related party transactions on quarterly basis. The details of related partytransactions are given in note number 32 of Audited Financial Statements.
The Company has developed a policy on Related Party Transactions. The policy on RelatedParty Transactions as approved by the Board is uploaded on the Company's website and thelink of such policy is given below:
MAINTAINANCE OF COST RECORDS
The provisions of Section 148 of the Companies Act 2013 is not applicable to theCompany so the Company is not required to maintain cost records under the aforesaidsection.
INTERNAL CONTROL SYSTEM ANDTHEIR ADEQUACY
The Company has a comprehensive system of internal control to safeguard the Company'sassets against any loss from unauthorized use and ensure proper authorization of financialtransactions.
The Company has internal control systems commensurate with the size and nature of thebusiness and has experienced personnel positioned adequately in the organization to ensureinternal control processes and compliances. The Company takes abundant care in designingreviewing and monitoring regularly the working of internal control systems and theircompliances for all important financial internal control processes. The Audit findings arereported on quarterly basis to the Audit Committee of the Board headed by a Non-ExecutiveIndependent Director.
The Company has robust ERP systems based on SAP platform. This ensures high degree ofsystems-based checks and controls.
The Company maintains a system of internal controls designed to provide a high degreeof assurance regarding the effectiveness and efficiency of operations the reliability offinancial controls and compliance with laws and regulations.
The Act has introduced under Section 143(3)(i) stating that the statutory auditors ofthe Company shall include in his audit report whether the Company has adequate internalfinancial controls system in place and the operating effectiveness of such controls inaddition to the reporting by Board of Directors in director's responsibility statement.The concept of reporting on internal financial controls is still new in India.This newreporting requirement has thrown up many challenges. The Company has developed theinternal financial control processes and that was vetted by the internal auditors duringthe year. The same has also been verified by the statutory auditors and who have reportedthat all the material Internal financial controls exist during the financial year 2020-21.
COMPLIANCE OF THE SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards on Board and General meetings issued by the Instituteof Company Secretaries of India and that such systems are adequate and operatingeffectively.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act - The Company didnot invite/accept any deposit within the meaning of Chapter V of the Act and the rulesmade thereunder.
2. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT2013
The Company has in place a Policy on prevention of Sexual Elarassment at workplace inline with the requirements of The Sexual Elarassment 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) are covered under this policy.
Your Directors further state that during the year under review no complaints werereceived or pending pursuant to the Sexual Elarassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Various workshops and awareness Programmes w.r.t. prevention of sexual harassment hasbeen carried out during the F.Y. 2020-21.
PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016
The Company has not made any application or any proceeding pending under the Insolvencyand Bankruptcy Code 2016 (31 of 2016) ("IBC Code") during the year. Further atthe end of the year Company does not have any proceedings related to IBC Code.
THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIMESETTLEMENT ANDTHE VALUATION DONE WHILETAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONSALONG WITH THE REASONS THEREOF
During the year under review the Company has not made one-time settlement thereforethe same is not applicable. POLICIES
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI Listing Regulations mandatedthe formulation of certain policies for all listed companies. All our corporate governancepolicies are available on website of the company i.e. www.munialshowa.net
|Policy ||Web-link |
|Policy for Determination of Materiality of Information or Events ||http://www.munjalshowa.net/wp-content/uploads/2019/05/Policy- for-Determination-of-Materiality-of-lnformation-or-Events.pdf |
|Boards Diversity Policy ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards- Diversity-Policy.pdf |
|Corporate Social Responsibility Policy ||https://www.munjalshowa.net/wp-content/uploads/2021/02/ Corporate-Social-Responsibility-Policy.pdf |
|Vigil Mechanism / Whistle Blower Policy ||https://www.munjalshowa.net/wp-content/uploads/2019/06/Vigil- Mechanism-or-Whistle-Blower-Policy.pdf |
|Nomination and Remuneration Policy ||https://www.munjalshowa.net/wp-content/uploads/2020/07/NRC- Policy_llpdated_24.07.2020.pdf |
|Records and Archives Management Policy ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Records- and-Archives-Management-Policy.pdf |
|Related Party Transaction Policy ||https://www.munjalshowa.net/wp-content/uploads/2020/06/ Related-Party-Transaction-Policy.pdf |
|Code of Conduct for Regulating Monitoring and Reporting of Trading by Designated Persons ||https://www.munjalshowa.net/wp-content/uploads/2020/09/ Prohibition_of_lnsider_Trading-Code_of_Conduct.pdf |
|Code of Conduct for Directors and Senior Management Personnel ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Code-of- conduct.pdf |
|Policy on prevention of Sexual Harassment at workplace ||https://www.munjalshowa.net/wp-content/ uploads/2020/07/20200724121738.pdf |
|Quality Policy ||https://www.munjalshowa.net/wp-content/uploads/2021/02/Quality- Policy.pdf |
|Occupational Health and Safety Policy ||https://www.munjalshowa.net/wp-content/uploads/2021/02/ Occupational-Health-and-Safety-Policy.pdf |
|Environment Policy ||https://www.munjalshowa.net/wp-content/uploads/2021/02/ Environment-Policy.pdf |
|Risk Management Policy ||https://www.munjalshowa.net/wp-content/uploads/2021/06/Risk- Management-Policy.pdf |
|Dividend Distribution Policy ||https://www.munjalshowa.net/wp-content/uploads/2021/06/ Dividend-Distribution-Policy.pdf |
Your Directors place on record their appreciation of the co-operation and supportextended to the Company by Government of India State Governments of Haryana andUttarakhand other local authorities bankers suppliers customers and other stakeholderswhose continued support has been a source of strength to the Company. The continueddedication and sense of commitment shown by the employees at all levels during the yeardeserve special mention.
The Directors also place on record their appreciation for the valuable assistance andguidance extended to the Company by Showa Corporation and Hitachi Astemo Ltd. Japan andfor the encouragement and assurance which our collaborator has provided from time to timefor the growth and development of the Company.
The Directors also take this opportunity to express their deep gratitude for thecontinued co-operation and support received from its valued shareholders.
| || ||For and on behalf of the Board |
|Place: Gurugram ||Yogesh Chander Munjal ||Vinod Kumar Agrawal |
|Date: June 232021 ||(Chairman & Managing Director) ||(Director) |
| ||(DIN 00003491) ||(DIN 00004463) |
| ||B-175 Greater Kailash Part 1 ||A-2241st Floor Defence Colony |
| ||New Delhi 110048 ||New Delhi 110024 |