Your Directors are pleased to present the 34th Board Report on the business andoperations of the Company together with the Audited Financial Statements for the financialyear ended March 312019.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Company's Financial Results for the year ended March312019 are as follows:
| || ||(Rs. In lakhs) |
| ||Year Ended 31.03.19 ||Year Ended 31.03.18 |
|Sales and other Income (Net of Excise Duty and GST) ||169269.32 ||160210.77 |
|Profit before Interest Depreciation & Tax ||11158.80 ||13379.62 |
|Financial Cost ||10.32 ||14.93 |
|Depreciation ||2594.18 ||2824.46 |
|Profit before Tax ||8554.30 ||10540.23 |
|Tax Expenses || || |
|Current tax ||2793.61 ||3110.23 |
|Deferred tax ||(498.81) ||(321.42) |
|Total Tax Expense ||2294.80 ||2788.81 |
|Profit after Tax ||6259.50 ||7751.42 |
|Other comprehensive income net of taxes ||10.77 ||(130.52) |
|Adjustment to deferred tax liability ||- ||- |
|Total Comprehensive Income ||6270.27 ||7620.90 |
|Net Profit brought forward ||28254.47 ||24559.05 |
|Profit available for appropriation ||34524.74 ||32179.95 |
|Dividend payment ||1799.78 ||1599.80 |
|Dividend Tax ||369.95 ||325.68 |
|Transfer to General Reserve ||2000.00 ||2000.00 |
|Surplus Available ||30355.01 ||28254.47 |
OPERATIONS & STATE OF THE COMPANY'S AFFAIRS
The Company has achieved a sales turnover including other income (Net of GST &Excise Duty) of Rs. 169269.32 lakhs vis-a-vis Rs. 160210.77 lakhs in the previous year.The profit before tax in the current year was at Rs. 8554.30 lakhs as compared to Rs.10540.23 lakhs 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:
|Long-Term Rating ||AA/Stable (reaffirmed) |
|Short-Term Rating ||CRISIL A1+ (reaffirmed) |
|Rs. (in crores) || |
|INR 68.5 Long-Term Loans ||AA/Stable |
|INR 30 Cash Credit ||AA/Stable |
|INR 43.5 Letter of Credit ||CRISIL A1 + |
|INR 2.25 Bank Guarantee ||CRISIL A1 + |
|INR 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 2019 before recommending the final dividend. The balanceamount of Rs. 30355.01 lakhs (Previous year Rs. 28254.47 lakhs) will be retained assurplus in the statement of Profit and Loss.
Your directors are pleased to recommend a dividend of 225% (i.e. Rs. 4.50 per equityshare of Rs. 2/- each fully paid up) for the financial year ended March 312019 amountingto Rs. 1799.78 lakhs. The Company will bear the dividend distribution tax of Rs. 369.95lakhs. The dividend if approved by the shareholders at the Annual General Meeting shallbe payable 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 August 17 2019 to Friday August 30 2019 (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 312019 was Rs.79992500 (Rupees Seven Crore Ninety Nine Lakhs Ninety Two Thousand Five Hundred only).
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 except Mr.Surinder Kumar Mehta who holds 2000 equity shares of the Company jointly with his wifeMrs. Santosh Mehta. The Company does not have any Debentures or Preferential Shares as onMarch 312019.
Cash and cash equivalent as at March 312019 was Rs. 4177.15 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 Company has made investments inMutual funds Alternative Investments Funds CP & Market linked debentures and hasgiven loans/advances to its vendors in the ordinary course of business. The details ofinvestments made and loans given are provided in Note no. 5A and 5B of the financialstatements for the year ended March 312019.
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 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Aseparate section on Corporate Governance and Management Discussion & Analysis Reportalong with a Certificate of the Auditors of your Company confirming the compliance isannexed as Annexure-A and forms an integral part of this Report.
In terms of Regulation 17(8) of SEBI (LODR) Regulations 2015 Certificate of CEO/CFOis also enclosed as a 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
During the Financial Year under review your Company has transferred unpaid/ unclaimeddividend amounting to Rs. 6.94 lakhs for financial Year 2010-11 to the Investor Educationand Protection Fund (IEPF) of the Central Government of India.
Further the Company has also transferred Rs. 2.90 lakhs on September 28 2018 forfinancial year 2017-18 being the dividend declared on shares already transferred to IEPF
Pursuant to Section 139 of the Companies Act 2013 (the Act') read with theCompanies (Audit and Auditors) Rules 2014 the Members of the Company in 32ndAnnual General Meeting approved the appointment of M/s Deloitte Haskins & Sells LLPChartered Accountants (ICAI Registration No. - 117366W/-100018) as the Statutory Auditorsof the Company for the period of 5 years who hold office up to the conclusion of the 37thAnnual General Meeting of the Company.
The Report given by the Statutory Auditors M/s Deloitte Haskins & Sells LLPChartered Accountants on the financial statement of the Company for the financial year2018-19 is part of the Annual Report. There has been no qualification reservationadverse remark observations comments or disclaimer in their Report.
Further no fraud has been reported by the Statutory Auditors in terms of Section143(12) of the Companies Act 2013 during the year.
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 hadappointed M/s Satyender Kumar & Associates a proprietorship firm of Company Secretaryto conduct the Secretarial Audit of the Company for the financial year 2018-19. The Reportgiven by the Secretarial Auditor is annexed as Annexure-Band forms an integral partof this report. The Board noted the following two observations made by the SecretarialAuditor in his report:
(a) The appointment of Company Secretary w.e.f 31.01.2019 was approved by the Board intheir meeting held on 04.02.2019 without the recommendation of Nomination and RemunerationCommittee.
(b) Two requests for dematerailisation of shares received by the RTA have beenconfirmed beyond the prescribed time.
In view of the point (a) above it is clarified that the Company has taken theunanimous approval of the Board of Directors for the appointment of Company Secretary inits Board meeting held on Monday i.e. 04.02.2019.
Further in view of the point (b) above it is clarified that the company has issued aletter to Registrar and Transfer Agent directing to ensure proper and timely complianceswith respect to requests received from shareholders of the Company so that there would beno such further delay in future.
The Board has re-appointed M/s Satyender Kumar & Associates Company Secretary (CPNo. 5189) as the Secretarial Auditors of the Company for the financial year 2019-20. YourCompany had received their written consent that the appointment will be in accordance withthe applicable provisions of the Companies Act 2013 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 Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 regarding Conservation of Energy TechnologyAbsorption and Foreign Exchange earnings & outgo is annexed as Annexure-C andforms an integral part of this report.
EXTRACT OF ANNUAL RETURN
In terms of provisions of Section 92 134(3)(a) of the Companies Act 2013 read withRule 12 of the Companies (Management and Administration) Rules 2014 the extracts ofannual return of the Company in Form MGT 9 may be accessed on the Company's website i.e.www.munjalshowa.net.
Further the information under rule 5(1) of Companies (Appointment & Remuneration)Rules 2014 is given in Annexure-D.
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 312019 is annexed as Annexure-Eand forms anintegral part of this report.
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://www.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 Health Water and Sanitation. These projects are largely in accordance withSchedule VII of the Companies Act 2013 and CSR Policy of the Company. The annual reporton CSR activities as required under the Companies (CSR Policy) Rules 2014 is set out as Annexure-Fandforms an integral part of this report.
Munjal Showa Limited considers corporate social responsibility as an integral part ofits business activities and endeavours to utilize the allocated CSR budget for the benefitof the society.
The Company has incurred the CSR expenditure of Rs. 242.26 lakhs during the currentfinancial year being about 132% of Rs. 184.10 lakhs to be spent during the year. The CSRactivities of the Company are approved by the Board and few new initiatives have beenproposed that may be considered in future. For the subsequent years the Companyendeavours to spend the budgeted CSR expenditure in accordance with the statutoryrequirements.
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 CII ACMA and international experts of our Japanese Collaborator. ByRegular training for workers and staff to prevent accident related to mechanicalelectrical chemical physiological and psychological safety the Company has made"Zero incidents" as acceptable standard. Hazard Identification and RiskAssessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Becauseof our dedicated and committed efforts in continual improvement of Safety Health andEnvironment area we had received two National Awards from Ministry of Labour andEmployment Government of India for safety. The Company is a regular member of HaryanaEnvironment 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 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 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. Through 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)and help us in reducing Cost of manufacturing. So far we are able to manufacture more than850 machines In-house with Lean TPM concept inclusive of many CNC Machines.
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 ISO14001:2015 and OHSAS 18001: 2007 (Occupational Health & Safety AssessmentSeries) certifications from reputed leading Indian and International CertificationInstitutions. These certifications help in continuous improvements besides emphasis beinglaid on prevention of defects reduction of wastes prevention of near misses and toensure maximized customer delight.
The shares of your Company are listed on the National Stock Exchange of India Limited(NSE) and Bombay Stock Exchange Limited (BSE) and pursuant to clause C (9) (d) ofSchedule V of SEBI (LODR) Regulations 2015 the Annual Listing fees for the year 2019-20has been paid to them well before the due date i.e. April 30 2019. Annual Custody/ Issuerfee for the year 2019-20 has been paid by the Company to the depositories viz. NSDL andCDSL.
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 3097 at the end of the year as compared to 3302 of theprevious year. The Company encourages long-term 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
The Company has a Risk Management Policy to identify evaluate business risks andopportunities. This framework seeks to create transparency minimize adverse impact on thebusiness objectives and enhance the Company's competitive advantage. The business riskframework defines the risk management approach across the enterprise at various levelsincluding 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 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:
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 2018-19.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Teruyoshi Sato ceased to be a director of the Company w.e.f. May 30 2018.
Mr. Pankaj Munjal has resigned as Director of the Company w.e.f September 29 2018. TheBoard placed its appreciation for the valuable services rendered by Mr. Pankaj Munjalduring his tenure as Director of the Company.
Mrs. Geeta Anand has been appointed as an additional director of the Company w.e.fNovember 03 2018. The Board after considering the recommendations of Nomination andRemuneration Committee recommends her appointment as a Non-Executive Independent Directorof the Company not liable to retire by rotation u/s 152 of the Companies Act 2013 atthe 34th Annual General Meeting of the Company.
Mr. Saurabh Agrawal resigned from the post of Company Secretary & ComplianceOfficer of the Company w.e.f. January 05 2019. Consequent upon his resignation Ms.Geetanjali Sharma was appointed as Company Secretary & Compliance Officer of theCompany w.e.f. January 312019.
During the period 2018-19 Mrs. Charu Munjal and Mr. Yogesh Chander Munjal Directorswere liable to retire by rotation and being eligible had offered themselves forre-appointment before the shareholders at 33rd Annual General Meeting of theCompany. The shareholder confirmed their appointment at the 33rd Annual GeneralMeeting of the Company.
At the 33rd Annual General Meeting of the Company the members confirmed theappointment of Mr. Yasuhiro Yamamoto as Non Executive Director of the Company.
Mr. Shigeki Kobayashi and Mr. Ashok Kumar Munjal are liable to retire by rotation atthe 34th Annual General Meeting and being eligible they have offered themselvesfor re-appointment.
At the 33rd Annual General Meeting of the Company the members approved thevariation in the terms of appointment of Mr. Yogesh Chander Munjal Managing Director andMr. Shigeki Kobayashi Joint Managing Director of the Company w.e.f. September 12018.
At the 33rd Annual General Meeting of the Company the members approved there-appointment of Mr. Devi Singh Mr. Vinod Kumar Agrawal Mr. Nand Lal Dhameja and Mr.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 012019 to March 312024.
Further in terms of the SEBI (LODR) (Amendment) Regulations 2018 consent of theMembers by way of Special Resolution have also been obtained for continuation of aNon-Executive Director beyond the age of seventy five years. Mr. Vinod Kumar Agrawal Mr.Surinder Kumar Mehta and Mr. Nand Lal Dhameja have attained the age of more than 75 yearsand the shareholders have approved their re-appointment through Special Resolution in the33rd Annual General Meeting for continuation as Independent Directors of theCompany.
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 Annual General Meeting have been provided in the Notice of 33rd AnnualGeneral Meeting.
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- Joint Managing Director
c. Mr. Pankaj Gupta- Chief Financial Officer
d. Ms. Geetanjali Sharma- Company Secretary
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 March312019 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 2018-19 no Company became or ceased to be a Subsidiary/JointVenture/Associate of the 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 Board.The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.
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 objective of the Policy is to formulate the criteria for determiningqualifications competencies positive attributes and independence for appointment of adirector (executive/non-executive/independent director) of the Company
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 on recommendation of the Committee shall carry out evaluation ofperformance of every Director KMP and Senior Management at regular interval (yearly or asdeemed fit).
During the Financial Year 2018-19 no changes or amendments were made in such policybut certain modifications were made and approved by the Board of Directors in theirmeeting held on May 30 2019 pursuant to amendments in SEBI (LODR) Regulations 2015. Therevised Nomination and Remuneration Policy is available on our website at:
The details of remuneration under Section 197 of the Companies Act 2013 paid todirectors are given in point no. IV 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 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 at:
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year five Board Meetings were convened and held on May 30 2018 July 30 2018November 03 2018 February 04 2019 and March 12 2019. The details are given in theCorporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and SEBI (LODR) Regulations 2015. (Pleaserefer point no. I & II of Corporate Governance Report)
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(3)(c) & (5) ofthe Companies Act 2013 which is to the best of their knowledge and belief and accordingto the information and explanations obtained by them:
a. In the preparation of the annual accounts for the Financial Year ended March312019 the applicable accounting standards and no material departures were made from thesame;
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 and fair viewof the state of affairs of the Company for the financial year ended March 31 2019 and ofthe profits of your Company for the financial year ended March 312019;
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 for the Financial Year ended March 31 2019 have been preparedon a going concern basis;
e. They have laid down Internal Financial Controls which were followed by the Companyand that 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 Companies Act2013 and SEBI (LODR) Regulations 2015 during the financial year 2018-19 were in theordinary course of business and on an arm's length pricing basis and do not attract theprovisions of Section 188 of the Companies Act 2013. Hence requirement of Form AOC-2 asrequired under section 188(1) of the Companies Act 2013 is not applicable to the Companyfor all the transactions.
The Company generally provided interest free loan to all its permanent employees andworkers. As per the same the Company has provided interest free loan of Rs. 40000 to Mr.Saurabh Agrawal Key Managerial Personnel of the Company in financial year 2017-18. Theform AOC-2 in respect of such transaction has been provided as Annexure-G. The saidloan amount of Rs. 40000/- was repaid by Mr. Saurabh Agrawal partly in the year 2017-18and balance in the year 2018-19.
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 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:
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.
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.
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 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 effectiveness and efficiency of operations the reliability offinancial 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 2018-19.
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 issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.
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 no cases were filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Various workshops and awareness programme w.r.t. sexual harassment has been carried outduring the FY 2018-19. POLICIES
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (LODR) Regulations 2015mandated the formulation of certain policies for all listed companies. All our corporategovernance policies are available on our website 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/2019/05/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/2019/03/Whistle- Blower-Policy.pdf |
|Nomination and Remuneration Policy ||http://www.munjalshowa.net/wp-content/uploads/2019/06/Nomination- and-Remuneration-Policy.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 ||http://www.munjalshowa.net/wp-content/uploads/2019/06/Related- Party-Transactions-Policy.pdf |
|Code of Conduct for Regulating Monitoring and Reporting of Trading by Designated Persons ||http://www.munjalshowa.net/wp-content/uploads/2019/03/Code-of- Conduct-and-Fair-Disclosure-Under-SEBI--Insider-Trading-Regulation- -2015.pdf |
|Code of Conduct for Directors and Senior Management Personnel ||http://www.munjalshowa.net/wp-content/uploads/2016/02/Code-of- conduct.pdf |
|Sexual Harassment Policy ||http://www.munjalshowa.net/wp-content/uploads/2019/06/Sexual- Harassment-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 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 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: May 30 2019 ||(Chairman & Managing Director) ||(Director) |
| ||(DIN 00003491) ||(DIN 00004463) |
| ||B-175 Greater Kailash Part I ||A-224 Ist Floor Defence Colony |
| ||New Delhi 110048 ||New Delhi110024 |