Your Directors have great pleasure in presenting the 33rd Annual Reporttogether with the Audited Statement of Accounts for the financial year ended March 312018.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Company's Financial Results for the year under review areas follows:
| || ||(Rs. In lakhs) |
| ||Year Ended 31.03.18 ||Year Ended 31.03.17 |
|Sales and other Income (Net of Excise Duty and GST) ||160210.77 ||147724.69 |
|Profit before Interest Depreciation & Tax ||13379.62 ||11707.15 |
|Financial Cost ||14.93 ||5.40 |
|Depreciation ||2824.46 ||2906.20 |
|Profit before Tax ||10540.23 ||8795.55 |
|Tax Expenses || || |
|Current tax ||3110.23 ||3108.91 |
|Deferred tax ||(321.42) ||(384.69) |
|Total Tax Exp ||2788.81 ||2724.22 |
|Profit after Tax ||7751.42 ||6071.33 |
|Other comprehensive income net of taxes ||(130.52) ||(205.23) |
|Adjustment to deferred tax liability ||- ||(89.79) |
|Total Comprehensive Income ||7620.90 ||5776.31 |
|Net Profit brought forward ||24559.05 ||18782.74 |
|Profit available for appropriation ||32179.95 ||24559.05 |
|Dividend payment ||1599.80 ||- |
|Dividend Tax ||325.68 ||- |
|Transfer to General Reserve ||2000.00 ||- |
|Surplus Available ||28254.47 ||24559.05 |
OPERATIONS & STATE OF THE COMPANY'S AFFAIRS
The Company has achieved a sales turnover including other income (Net of Excise Duty)of Rs. 160210.77 lakhs vis--vis Rs. 147724.69 lakhs in the previous year. The profitbefore tax in the current year was at Rs. 10540.23 Lakhs as compared to Rs. 8795.55lakhs in the previous year. The State of affairs of the Company is detailed in the"Management Discussion & Analysis" section which 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:
| ||(In lakhs) |
|INR 6850 Long-Term Loans ||AA/Stable (Reaffirmed) |
|INR 3000 Cash Credit ||AA/Stable (Reaffirmed) |
|INR 4350 Letter of Credit ||CRISIL A1+ |
|INR 225 Bank Guarantee ||CRISIL A1+ |
|INR 600 Commercial Paper Programme ||CRISIL A1+ |
TRANSFER TO GENERAL RESERVE
The Board has transferred an amount of Rs. 2000/- lakhs to General Reserve beforerecommending the final dividend. The balance amount of Rs. 28254.47 lakhs (Previous yearRs. 24559.05 lakhs) will be retained as surplus in the statement of Profit and Loss.
Your directors are pleased to recommend a dividend of 225 per cent (i.e. Rs. 4.5/- perequity share of Rs. 2/- each fully paid up) for the financial year ended March 31 2018amounting to Rs. 1799.78 lakhs. Dividend will be tax free in the hands of shareholdersas the Company will bear the dividend distribution tax of Rs. 369.95 lakhs. The dividendif approved at the Annual General Meeting (hereinafter refer as "AGM") shall bepayable to the shareholders registered in the books of the Company and the beneficialowners whose names are furnished by the depositories determined with reference to thebook closure from Saturday September 15 2018 to Wednesday September 26 2018 (both daysinclusive).
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 Rs. 2 (RupeesTwo) each. The paid up Share Capital of the Company as on March 31 2018 was Rs.79992500 (Rupees Seven Crore Ninety Nine Lakhs Ninety Two Thousand Five Hundredonly). During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity. The Company has not accepted orrepaid any Debentures Preference Share Bond and Security during the financial year andnone of the Directors of the Company hold any shares or security of the Company. TheCompany does not have any Debentures Preferential Shares as on March 31 2018.
Cash and cash equivalent as at March 31 2018 was Rs. 1912 lakhs. The Company continuesto focus on judicious management of its working capital. Receivables inventories andother working capital parameters were kept under strict check through continuousmonitoring.
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 Company has made investments inMutual funds and given loan/advance to its vendors during ordinary course of business.Please refer note numbers 5A and 5B to the financial statements. As per policy of loans toemployees of the Company during the year the Company provided an interest free loanamounting to Rs. 40000/- to Mr. Saurabh Agrawal-Company Secretary & Key ManagerialPerson of the Company.
Report on Corporate Governance and Management Discussion & Analysis Report alongwith Certificate of the Auditors of your Company pursuant to SEBI (LODR) Regulations2015 have been included in this Report as Annexure-A. Your Company has beenpracticing the principles of good Corporate Governance over the years. In terms ofregulation 17(8) of SEBI (LODR) Regulations 2015 Certificate of CEO/CFO is also enclosedas a part of the Report. The Board of Directors has laid down a Code of Conduct tobe followed by all the Directors and members of Senior Management of your Company.The Board of Directors supports the broad principles of Corporate Governance. Inaddition to the basic governance issues the Board also lays strong emphasis ontransparency accountability and integrity.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the Financial Year under review your Company has transferred unpaid/ unclaimeddividend amounting to Rs. 4.89 Lakhs for FY 2009-10 to the Investor Education andProtection Fund (IEPF) of the Central Government of India.
At 32nd AGM of the Company the members of the Company appointed M/sDeloitte Haskins & Sells LLP as a statutory auditor of the Company for the period of 5years who hold office up to the conclusion of the 37th AGM of the Company. Incompliance with the applicable provisions of the Companies Act 2013 and the rules madethereunder read with the statutory modification(s) or re-enactment(s) thereof for thetime being force the Board recommends for ratification of the appointment of M/s DeloitteHaskins & Sells LLP as the Statutory Auditors of the Company. The Statutory Auditorshave consented for the said ratification of appointment and confirmed their eligibilityunder Sections 139 and 141 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014.
The Report given by the Auditors M/s Deloitte Haskins & Sells LLP CharteredAccountants Gurugram on the financial statements of the Company for the financial year2017-18 is part of the Annual Report. There are no qualifications reservation adverseremark observations comments or disclaimer given by the Auditors in their Report.
Further with regard to section 134(3)(ca) of the Companies Act 2013 no frauds havebeen reported by the auditors under section 143(12) of the said Act.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Satyender Kumar & Associates a proprietorship firm of CompanySecretaries to undertake the Secretarial Audit of the Company. The Report of theSecretarial Audit Report is annexed herewith as Annexure B. There are noqualifications reservation adverse remark observations comments or disclaimer given bythe Auditors in their Report except two e-forms were filled with additional fees due toadministrative reason with Ministry of Corporate Affair.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 134(3)(m) of the Companies Act 2013 and the rulesmade thereunder regarding Conservation of Energy Technology Absorption and ForeignExchange earnings & outgo are given in Annexure-C which forms part of Board'sReport.
EXTRACT OF ANNUAL RETURN
The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12of the Companies (Management and Administration) Rules 2014 is appended as an Annexure-Dto this Report.
PARTICULARS OF EMPLOYEES
The statement of particulars of employees as per Section 197 of the Companies Act 2013read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 for the year ended March 31 2018 is annexed hereto and forms part of thisReport. Annexure-E
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
In terms of provisions of Section 135 of the Companies Act 2013 and the Companies(Corporate Social Responsibility Policy) Rules 2014 the Corporate Social Responsibility(hereinafter referred as CSR') Committee has formulated a CSR Policy indicating theactivities to be undertaken by the Company. The constitution of CSR Committee is disclosedin Corporate Governance Report.
The CSR policy may be accessed on the Company's website i.e. http://w ww.munjalshowa.net/wp-content/ uploads/2015/05/Corporate-Social-Responsibility-Policy1.pdf.
As part of its initiatives under CSR the Company has undertaken projects in the areasof Education Livelihood Health Water and Sanitation. These projects are largely inaccordance with Schedule VII of the Companies Act 2013 and CSR Policy of the Company. Theannual report on CSR activities as required under the Companies (CSR Policy) Rules 2014is set out as Annexure-F to Board's Report.
Munjal Showa Limited considers social responsibility as an integral part of itsbusiness activities and endeavours to utilize the allocated CSR budget for the benefit ofthe society.
The Company has incurred the CSR expenditure of Rs. 112.67 lakhs during the currentfinancial year being about 61.04 % of Rs. 184.59 Lakh to be spent during the year.The shortfall of Rs. 71.92 Lakh being 38.96% of the required expenditure on CSRwas due to non-identification of appropriate projects / activities / programmes inline with the CSR policy of the Company. The CSR activities of the Company are approved bythe Board and few new initiatives have been proposed that may be considered infuture. For the subsequent years the Company endeavours to spend the budgeted CSRexpenditure in accordance with the statutory requirements.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments af fecting the financial position of theCompany which have occurred between the end of the financial year of the company towhich the financial statements relate 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".Hence from the solid waste like Iron & Steel from old scrap machines we arecollecting the raw material and we are manufacturing "Lean and Low cost"machines with a philosophy of Easy to run Easy to maintain Easy to clean and Zeroaccident by meeting all the quality and productivity standard. Everything is donein-house starting from design up to finishing of the machine. This concept of reuse ofmetallic waste is highly appreciated by CII ACMA and international experts of ourJapanese Collaborator. By Regular training for workers and staf f to preventaccident related to mechanical electrical chemical physiological and psychologicalsafety the Company has made "Zero incidents" as acceptable standard. HazardIdentification and Risk Assessment (HIRA) is our primary focus to mitigate andprevent the abnormalities. Because of our dedicated and committed efforts incontinual improvement of Safety Health and Environment area we had received two NationalAwards from Ministry of Labour and Employment Government of India for safety. The Companyis a regular member of Haryana Environment Management Society.
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 percent legal compliance. The Company is rigorously improving to create a better place forour next 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 CII 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 into Profit. We are able to reduce Repair & Maintenance Cost.
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. Thru Lean we are able to focus& control 7 types of wastes. Our Company has conducted Lean Manufacturing System(Value Stream Mapping) Work Shop through JMAC Japan. We have converted huge &complicated machines by using TPM & Lean Concepts. These machines consume very lessElectricity occupy less space take very less inputs like consumables manpower toolsoils compressed air less set-up time less cycle time etc. These machines are 10SMachines (Safe Simple Small Slim Speed Smart Sturdy Superb Sushil & Sunder andhelp us in reducing Cost of manufacturing. So far we are able to manufacture more than 750machines In-House with Lean TPM Concept inclusive of many CNC Machines.
ISO/TS 16949 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 ISO14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series)certifications from reputed leading Indian and International Certification Institutions.These certifications help in continuous improvements besides emphasis being laid onprevention of defects reduction of wastes prevention of rear misses and to ensuremaximized customer delight.
The shares of your Company are listed at The National Stock Exchange of India Limitedand BSE Limited and pursuant to clause C (9) (d) of Schedule V of SEBI (LODR)Regulations 2015 the Annual Listing fees for the year 2018-19 has been paid to them wellbefore the due date i.e. April 30 2018. Annual Custody/Issuer fee for the year 2018-19has also been paid by the Company to 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 andthat its continued growth is dependent upon the Company's ability to attract andretain quality people. The total headcounts were 3302 at the end of the year as comparedto 3058 of the previous year. The Company encourages long-term commitment to the Companyby rewarding its people for the opportunities they create and the value generatedfor customers and shareholders. The Company conducts several employee engagementand training programmes to upgrade the skills of the workforce and generatespecialist in quality maintenance and manufacturing. As desired by the Govt. of India wehave started NEEM Scheme and NAPS Scheme in order to enhance the technical skill levelof our unemployed youths. Many initiatives have been taken to support business throughorganizational efficiency process change support and various employee engagementprogrammes which have helped the organization achieve higher productivity levels. Asignificant ef fort has also been undertaken to develop leadership as well as technical/functional capabilities in order to meet future talent requirement.
BUSINESS RISK MANAGEMENT
The Company has a Risk Management Policy to identify evaluate business risks andopportunities. This framework seeks to create transparency minimize adverse impacton the business objectives and enhance the Company's competitive advantage. The businessrisk 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 on Collaborators Over dependence on limited user segment baseEconomic downturn Risk of natural or manmade disasters Product liability / recallSingle vendor dependence for critical components Investment risks in expansionprojects Sales Catering only to Domestic Market Over Dependence on few customersbase Retention & development of personnel and Inappropriate addressing ofcustomer grievances. We through qualitative products and brand image import only in caseof cost advantage regular improvement in productivity controls over overhead andlabour cost through a robust control of approvals internal audit of environmentalsafety and regulatory compliance localization of components insurance TS 16949certification TPM certification regular development of alternate vendors where onlysingle source capturing customer complaints and response to them have effective riskmitigating plans.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism policy to deal with instance of fraud andmismanagement if any. The details of the Policy is explained in the Corporate GovernanceReport and also posted on the website of the Company.
The website link is given below:http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil-Mechanism-Whistle-Blower-Policy2.pdf
RECOMMENDATION OF THE AUDIT COMMITTEE
During the year all the recommendations of the Audit Committee were accepted by theBoard.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company during the FinancialYear 2017-18.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Masanao Matsui ceased to be a director of the Company w.e.f. May 19 2017.
During the period 2017-18 Mr. Ashok Kumar Munjal was the director liable to retire byrotation and being eligible he had offered himself for re-appointment before theshareholder at 32nd AGM of the Company. The shareholder confirmed hisappointment at the 32nd AGM of the Company.
At the 32nd Annual General Meeting of the Company the members confirmed theappointment of Mr. Kobayashi as Joint Managing Director of the Company. Mr. Teruyoshi Satowas appointed as an additional director of the Company w.e.f. May 19 2017. Further hewas appointed as a Non-Executive Director of the Company liable to retire by rotation u/s152 of the Companies Act 2013 at the 32nd AGM of the Company. At the 32ndAGM of the Company the members approved the variation in the terms of appointment of Mr.Yogesh Chander Munjal and Mr. Shigeki Kobayashi w.e.f. September 01 2017.
The Board of Directors in its meeting held on May 30 2018 after considering therecommendation of Nomination and Remuneration Committee recommended to the shareholdersto approve the variation in the terms of appointment of Mr. Yogesh Chander MunjalManaging Director and Mr. Shigeki Kobayashi Joint Managing Director of the Company w.e.f.September 1 2018.
Mr. Yogesh Chander Munjal and Mrs. Charu Munjal are liable to retire by rotation at theensuing AGM. And being eligible they offered themselves for re-appointment.
The Board of Directors in its meeting held on May 30 2018 after considering therecommendation of Nomination and Remuneration Committee recommended to the shareholdersthe re-appointment of Mr. Devi Singh Mr. Vinod Kumar Agrawal Mr. Nand Lal Dhameja andMr. Surinder Kumar Mehta as Independent Directors of the Company for a second term of 5(five) consecutive years on the Board of the Company w.e.f. April 01 2019 to March 312024 as special resolution at the ensuing AGM.
Further Mr. Yasuhiro Yamamoto has been appointed as an additional director of theCompany w.e.f May 30 2018. The Board after considering the recommendations of Nominationand Remuneration Committee recommends his appointment as a Non-Executive Director of theCompany liable to retire by rotation u/s 152 of the Companies Act 2013 before theshareholder at the 33rd AGM of the Company.
Pursuant to the provisions of the SEBI (LODR) Regulations 2015 and the Companies Act2013 the profiles of all the directors seeking appointment or reappointment at theensuing AGM have been provided in the Notice of 33rd AGM. Mr. Teruyoshi Satohas resigned as Director of the Company w.e.f May 30 2018. The Board placed itsappreciation for the valuable services rendered by Mr. Teruyoshi Sato during his tenure asDirector of the Company.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and SEBI (LODR)Regulations 2015.
The following employees were designated as whole-time key managerial personnel of theCompany: a. Mr. Yogesh Chander Munjal- Managing Director b. Mr. Shigeki Kobayashi- JointManaging Director c. Mr. Pankaj Gupta- Chief Financial Officer. d. Mr. Saurabh Agrawal-Company Secretary
The information under rule 5(1) of Companies (Appointment & Remuneration) Rules2014 is given in
The Company appreciates the dedicated and valuable guidance given by all the Directorsof the Company.
COMMITTEES OF THE BOARD
Currently the Board has five committees: the Audit Committee the Nomination andRemuneration Committee the Corporate Social Responsibility Committee the Share Transfer/Stakeholders Relationship Committee and the Risk Management Committee (non-mandatorycommittee). A detailed note on the composition of the Board and its committees is providedin the corporate governance report which forms a part of the Board Report.
SUBSIDIARY COMPANIES JOINT VENTURES OR ASSOCIATE COMPANIES
During the financial year 2017-18 the Company neither has any subsidiary jointventure or associate company nor has any company become or ceased to be its subsidiaryjoint venture or associate company.
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board has carried out an annual performance evaluation of its own performancethe directors individually as well as the evaluation of the other committees of the Boardi.e. Audit Committee Nomination & Remuneration Committee and Share Transfer/Stakeholders Relationship Committee. The manner in which the evaluation has been carriedout has been explained in the Corporate Governance Report.
REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The silent feature of the Nomination and Remuneration Policy has beenprovided in this Report as Annexure-G. During the Financial Year 2017-18 nochanges or amendments were made in such policy. The Nomination and Remuneration Policy isavailable on our website athttp://www.munjalshowa.net/wp-content/uploads/2015/05/Nomination-And-Remuneration-Policy1.pdf.
The details of remuneration sitting fee etc. paid to directors are given in CorporateGovernance Report. (Please refer point no. IV of Corporate Governance Report) BOARDDIVERSITY 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 competitive advantage. 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 Web-link:http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-Diversity-Policy.pdf
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year four Board Meetings and four Audit Committee Meetings were convened and held. Thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013 and SEBI(LODR) Regulations 2015. (Please refer point no. I & II of Corporate GovernanceReport) 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. that in the preparation of the annualaccounts for the Financial Year ended March 31 2018 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures; b. that appropriate accounting policies have been selected and appliedconsistently and judgments and estimates that are reasonable and prudent have been made soas to give a true and fair view of the State of Affairs as at March 31 2018 and ofthe Profit of your Company for the Financial Year ended March 31 2018; c. that proper andsufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of yourCompany and for preventing and detecting fraud and other irregularities; d. thatthe annual accounts for the Financial Year ended March 31 2018 have been prepared on agoing concern basis; e. that the Directors have laid down Internal FinancialControls which were followed by the Company and that such Internal FinancialControls are adequate and were operating effectively; and f. that the Directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All transactions except the loan to Mr. Saurabh Agrawal entered into with RelatedParties as defined under the Companies Act 2013 and SEBI (LODR) Regulations 2015 duringthe financial year were in the ordinary course of business and on an arm's length pricingbasis and do not attract the provisions of Section 188 of the Companies Act 2013. Hencerequirement of Form AOC-2 as required under section 188(1) of the Companies Act 2013 isnot applicable to the Company for all the transactions except the loan provided to CompanySecretary. The Company generally provided interest free loan to all its permanentemployees and workers. As per the same the Company has provided interest free loan of Rs.40000 to Mr. Saurabh Agrawal KMP of the Company. The form AOC-2 in respect of suchtransaction has been provided as Annexure H.
All transactions with related parties were placed before Audit Committee and Auditcommittee has given omnibus approval for repetitive and foreseen transactions. The Boardalso noted these transactions on quarterly basis. The details of related partytransactions are given in note number 32 of Financial Statements. The Company hasdeveloped a policy on Related Party Transactions. The policy on Related Party Transactionsas approved by the Board is uploaded on the Company's website. And the link of such policyis given below:http://www.munjalshowa.net/wp-content/uploads/2016/02/Related-Party-Policy-of-MSL.pdf Noneof the Indepedent Directors has any pecuniary relationships with the Company.
EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION RESERVATION OR ADVERSE REMARKOR DISCLAIMER MADE
The observations of the Auditors in their report read with the notes to accounts areself-explanatory and do not require any specific comments. However as pointed out by theAuditors in annexure to their report at point number vii(a) the slight delay in paymentof undisputed statutory dues in few cases was on account of finalization of accountsbeyond the due date of statutory dues and the same were paid with interest.
There is no other qualification reservation or adverse remark comment observation ordisclaimer made by the auditor in his report and the company secretary in practice in hissecretarial audit report except two e-forms were filled with additional fee to ROC due toadministrative reason.
INTERNAL CONTROL SYSTEM AND THEIR 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 ef fectiveness and ef ficiency of operations the reliabilityof financial controls and compliance with laws and regulations.
The Companies Act 2013 has introduced under Section 143(3)(i) stating that thestatutory auditors of the Company shall include in his audit report whether the companyhas adequate internal financial controls system in place and the operating effectivenessof such controls in addition to the reporting by Board of Directors in director'sresponsibility statement. The concept of reporting on internal financial controls is stillnew in India. This new reporting requirement has thrown up many challenges. The Companyhas developed the internal financial control processes and that was vetted by the internalauditors during the year. The same has also been verified by the statutory auditors andwho have reported that all the material Internal financial controls exist during thefinancial year 2017-18.
The Company with the help of reputed professionals has developed a compliance tool forthe purpose of legal compliance of all the applicable Acts to the Company.
COMPLIANCE OF THE SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards 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.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
4. 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 POLICY
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Various workshops or awareness programme w.r.t. sexual harassment has been carried outduring the F.Y. 2017-18.
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 Japan and for the encouragement andassurance which our collaborator has provided from time to time for the growth anddevelopment of the Company. The Directors also take this opportunity to express their deepgratitude for the continued co-operation and support received from its valuedshareholders.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. All our corporate governance policies are available on ourwebsite i.e. http://www.munjalshowa.net/
|Policy ||Web-link |
|Policy for Determination of Materiality of Information or Events ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Policy- for-Determination-of-Materiality-of-Information-or-Events.pdf |
|Boards Diversity Policy ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards- Diversity-Policy.pdf |
|Corporate Social Responsibility Policy ||http://www.munjalshowa.net/wp-content/uploads/2015/05/ Corporate-Social-Responsibility-Policy1.pdf |
|Vigil Mechanism / Whistle Blower Policy ||http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil- |
| ||Mechanism-Whistle-Blower-Policy2.pdf |
|Nomination And Remuneration Policy ||http://www.munjalshowa.net/wp-content/uploads/2015/05/ Nomination-And-Remuneration-Policy1.pdf |
|Records and Archives Management Policy ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Records- and-Archives-Management-Policy.pdf |
|Related Party Policy ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Related- Party-Policy-of-MSL.pdf |
|CODE OF INTERNAL PROCEDURES ||http://www.munjalshowa.net/wp-content/uploads/2015/05/CODE- |
|AND CONDUCT FOR REGULATING ||OF-INTERNAL-PROCEDURES-AND-CONDUCT-FOR-REGULATING- |
|MONITORING AND REPORTING OF ||MONITORING-AND-REPORTING-OF-TRADING-BY-INSIDERS.pdf |
|TRADING BY INSIDERS || |
|CODE OF CONDUCTFORDIRECTORS ANDSENIORMANAGEMENT PERSONNEL ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Code-of- conduct.pdf |
| || ||For and on behalf of the Board |
|Place: Gurugram ||Yogesh Chander Munjal ||Vinod Kumar Agrawal |
|Date: May 30 2018 ||(Chairman & Managing Director) ||(Director) |
| ||(DIN 00003491) ||(DIN 00004463) |
| ||B-175 Greater Kailash Part I ||A-224 Ist Floor Defence Colony |
| ||New Delhi 110048 ||New Delhi 110024 |