Management Discussion and Analysis Report
Your Directors have pleasure in presenting the Twenty Fifth Annual Report together withthe Audited Statements of Accounts of the Company for the Financial Year ended March 312021. The Management Discussion and Analysis is also included in this Report.
The performance of your Company for the year under review is summarized below: (Rs. inLakhs)
|Particulars || |
| ||2020-2021 ||2019-2020 ||2020-2021 ||2019-2020 |
|Revenue from Operations ||0.82 ||14.88 ||2996.55 ||3082.93 |
|Other Income (Net of Excise Duty) ||491.77 ||269.11 ||475.37 ||281.99 |
|Total Income / Revenue ||492.60 ||283.99 ||3471.93 ||3364.92 |
|Profit/(Loss) before Interest Depreciation & Tax ||246.35 ||16.04 ||626.75 ||(157.67) |
|Less: Interest ||0.25 ||1.35 ||118.00 ||126.08 |
|Profit before Depreciation & Tax ||246.10 ||14.69 ||508.75 ||(283.75) |
|Less: Depreciation ||17.68 ||17.18 ||234.02 ||232.81 |
|Profit/ (Loss) before Taxation ||228.43 ||(2.49) ||274.73 ||(516.56) |
|Less: Provision for Current Tax / (MAT) ||- ||7.66 ||10.13 ||(7.66) |
|Deferred Tax and adjustments prior year ||- ||- ||(0.84) ||- |
|Less MAT Credit ||- ||- ||- ||- |
|Profit/ (Loss) after tax for the year ||228.43 ||(10.15) ||265.44 ||(524.22) |
|Total other comprehensive income (net of tax) ||144.87 ||(239.14) ||135.31 ||(226.83) |
|Total comprehensive income for the year ||373.29 ||(249.29) ||400.75 ||(751.06) |
Dividend and Reserves
In order to conserve capital for future investment plan the Board did not recommendany dividend for the year ended March 31 2021. During the year under review no amountwas required to be transferred to General Reserve.
During the year the Company has not issued shares with differential voting rights norhas granted any stock options or sweat equity. There was no provision made of the money bythe Company for purchase of its own shares by employee or by trustee. As on March 312021 none of the Directors of the Company hold instruments convertible into equity sharesof the Company.
During the year there was no change in the Share Capital of the Company.
As on March 31 2021 the issued subscribed and paid up share capital of your Companystood at Rs.130955070/- comprising 13095507 Equity shares of Rs.10/- each.
Directors and Key Managerial Personnel
The Company is well supported by the knowledge and experience of its Directors and KeyManagerial Personnel. Pursuant to provisions of the Companies Act 2013 Mr. GautamKhandelwal Director of the Company is liable to retire by rotation and being eligiblehas offered himself for re-appointment.
During the year the shareholders approved the appointment of Mr. Shyam BapuraoKanbargi as an Independent Director of the Company for term of 5 (five) consecutive yearswith effect from June 30 2020 and Mr. Ajit Ranchhoddas Kantelia as a Non- ExecutiveNon-Independent Director of the Company liable to retire by rotation.
All the Directors of the Company have confirmed that they are not disqualified frombeing appointed as Directors in terms of Section 164 of the Companies Act 2013 and notdebarred or disqualified by the SEBI / Ministry of Corporate Affairs or any such statutoryauthority from being appointed or continuing as Director of the Company or any otherCompany where such Director holds such position in terms of Regulation (10) (i) of Part Cof Schedule V of Listing Regulations.
The Company has following persons as Key Managerial personnel (KMP):
|Sr. No. Name of the person ||Designation ||Date of Appointment as KMP |
|1. Mr. Gautam Khandelwal ||Executive Chairman ||15.09.2014 |
|2. Mr. Santosh Khandelwal ||Chief Financial Officer ||30.09.2014 |
|3. Ms. Nidhi Salampuria ||Company Secretary ||30.09.2014 |
Details of Board meetings
During the year the Board of Directors met 7 times details of which are provided inthe Corporate Governance report.
Committees of the Board
The details of the various committees of the board and their composition as on March31 2021 are as under:
|Name of Director(s) ||Audit Committee ||Stakeholder Relationship Committee ||Nomination & Remuneration Committee |
|Mr. Nimis Savailal Sheth ||Chairman ||Chairman ||Chairman |
|Mr. Gautam Khandelwal ||Member ||Member ||Member |
|Mr. Virat Mehta ||Member ||Member ||Member |
|Mr. Shyam Kanbargi w.e.f. February 02 2021 ||Member ||- ||- |
Declaration by Independent Directors (IDs)
Mr. Nimis Sheth Mr. Virat Mehta and Mr. Shyam Kanbargi are Independent Directors ofthe Company. The Company has received declaration from them confirming that they meet thecriteria of independence as prescribed under Section 149 (6) of the Companies Act 2013.
During the year the Independent Director Meeting was held on February 02 2021 asrequired by regulation 25 of SEBI (LODR) Regulations 2015.
Nomination and Remuneration Policy
The policy of the company on Directors Appointment and remuneration includingcriteria for determining qualifications positive attributes and independence of adirector and other matters provided under sub-section (3) of Section 178 of the CompaniesAct 2013 is adopted by the Board and may be accessed on the Companys website at thelink: http://www.nagpurpowerind.com/ investors/corporate-governance/. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was prepared asper the requirement of the act which included various aspects of Boards and Committeesfunctioning Composition of the Board and its Committees functioning of the IndividualDirectors. The aspects covered in the evaluation included the contribution to andmonitoring fulfillment of Directors corporate governance practices and theobligations and fiduciary responsibilities including but not limited to activeparticipation at the Board and Committee meetings.
Further the Independent Directors at their meeting reviewed the performance of BoardChairman of the Board and of Non - Executive Directors.
The Board expressed their satisfaction with the evaluation process.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals
There are no significant and material orders passed by the Regulators or Courts orTribunals which may impact the going concern status and Companys operations.
Internal Financial Controls
The details in respect of internal financial control and their advocacy are included inthe management discussion and analysis which forms part of this Annual Report.
During the year your Company has not accepted any deposits under the provisions ofChapter V of the Companies Act 2013 and the rules made there under.
Subsidiary/Joint Ventures/Associate Companies
The Company does not have any Joint Ventures/Associate Companies. The Company has OneSubsidiary Company "The Motwane Manufacturing Company Private Limited".
Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under Section 186 of the CompaniesAct 2013 form part of the notes to the financial statements provided in this AnnualReport.
Management Discussion and Analysis
a) Economy review:
The long-term growth perspective of the Indian economy is changing due to continuedinvestments in infra in Transmission and Distribution railways and metros lightingand digital initiatives Stable policies and good initiatives like smart cities. YourCompany (through its Subsidiary) is in the business of manufacturing electrical test andmeasurement equipments a power sector which has continued to be affected by the political& economic significant situation. We were hoping to see a gradual recovery but thefirst quarter of 2021 saw an unprecedented outbreak of second wave of COVID-19 pandemicwhich again caused disruption of economies around the world and dampened the already bleakeconomic prospects. It has proved to be one of the most damaging events of human historyand believed to have deep and cascading impact across the entire economic chain.
b) Business and Industrial review and future outlook:
The Company mainly operated on Metal Recovery Plant and produces Low Ferro Manganese(Slag) through its slag recovery process. However the re-useable waste of fine particlesremaining in the manganese slag which places at the factory site is depleting and it isuncertain how much slag is left. The technical consultants are also of the same view.
The management of the Company has foreseen this & thus entered another segment ofbusiness couple of years earlier via a majority stake in "The Motwane ManufacturingCompany Private Limited" (MMCPL) now a subsidiary company and is looking to developits business in electrical sector. The company is also looking at other businessopportunities including monetizing its assets and redeployment of the same in betterbusiness opportunities.
During the year MMCPL has entered into share purchase agreement dated 10th March 2021with the promoters of Telemetrics Equipments Private Limited to acquire 100% Stake by wayof purchase of shares of all the shareholders of the said company. In terms of theagreement 50% shares have been acquired on 12th March and balance shares will be acquiredwithin 11 months from the date of the agreement. Telemetrics Equipments Private Limited isinto manufacturing of underground cable fault equipments.
c) Risks Concerns & Threats and Impact of Covid 19 on business:
Our Registered Office at Mumbai and Factory at Nagpur were closed intermittently duringthe year as the national restrictions in the country. The outbreak of COVID -19 pandemicand the consequent announcement of series of lockdowns and other restrictions by thegovernment have affected the financial performance of the Company due to which the totalrevenue of the
Company will have an impact.
Further the lockdown has had an adverse impact on the business of our subsidiarycompany "The Motwane Manufacturing Company Private Limited". The factory of thecompany had to be kept closed for a substantial period of time. As present the factory isfunctioning in accordance with the local & national business operating rules.
Although the lockdown has been lifted to a certain extent but the Company continues toprovide the "Work from Home" facility to its employees so as to avoid the riskassociated with the said pandemic.
The Company has taken all necessary steps to adhere to the guideline for socialdistancing with various directives issued by the Central/State Government and has putsafety measures which include: Sanitization of Premises Enforcing wearing of masksand Hand sanitizer at entry point etc. Thus any employees who need to come to officethey have to follow all the rules and regulations. The company is providing transportfacilities and employees have to follow social distancing at all times.
Due to the unpredictable nature of the situation it is very early & difficult toassess the actual future impact of COVID-19 with reasonable certainty. With the opening ofdomestic markets post lockdown we expect business to improve gradually in the comingmonths.
Further depletion of slag dumps posed a major problem for the Company. In order tocounter this the Company entered into another business through its subsidiary company andis looking to develop it. The Management of the Company meets frequently to take the stockof all the impending and immediate threats to the business and takes necessary steps forpositioning of the Company to meet the same in time. Any major threats affecting theCompany in general and business environment indirectly affecting the functioning of theCompany are discussed with the Board from time to time.
d) Internal Control Systems:
The Company has adequate internal control systems in place with reference to thefinancial statements. The Audit Committee of the Board periodically reviews the internalcontrol systems with the management Internal Auditors and Statutory Auditors and theadequacy of internal audit function significant internal audit findings and follow-upsthereon.
e) Financial Performance / Overview of Operations:
During the year under review the revenue from operation of the Company during the yearwas Rs. 0.81 Lakhs as compared to Rs. 14.88 Lakhs in the previous year.
Subsidiary Company and Consolidated Statements
Your Company has one subsidiary i.e The Motwane Manufacturing Company PrivateLimited (MMCPL). During the financial year 2020-21 total standalone revenue ofMMCPL was Rs. 29.43 crores as compared to Rs. 31.12 crores in the previous financial yearand the Company made a profit of Rs. 0.10 crores as compared to a loss of 5.14 crores inthe previous financial year. MMCPL prepared the consolidation accounts for the first timethis year. The consolidated revenue of MMCPL was Rs. 30.20 crores and the consolidatedprofit was Rs. 0.37 crores.
The Consolidated Financial Statement of your Company for the financial year 2020-21 isprepared in compliance with applicable provisions of the Companies Act 2013 AccountingStandard and SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015. The Consolidated Financial Statements have been prepared on thebasis of audited financial statements of the Company its subsidiary as approved by theirrespective Board of Directors.
Pursuant to sub-section (3) of section 129 of the Act the statement containing thesalient features of the financial statement of Companys subsidiary is given asAOC-1. Brief particulars about the business of the Subsidiary are given hereunder.
MMCPL is an R & D based company and has developed various high technology test andmeasurement products which have applicability in the domestic and international markets.The companys products are sold primarily to the power sector and energy intensiveindustries. The company expects gradual pick up in its order book due to growth and reformin the distribution sector in which the company operates. Alternatively it is exploringits potential in the IOT space in adjacent areas like smart lighting and other IOT relatedsmart & connected industrial solutions.
f) Material developments in human resources / industrial relations including number ofpeople employed:
The human resource plays a vital role in the growth and success of an organization. TheCompany has maintained cordial and harmonious relations with employees.
During the year under review various training and development workshops were conductedto improve the competency level of employee with an objective to improve the operationalperformance of individuals. The Company has built a competent team to handle challengingassignments and projects.
The Company has 11 permanent employees as on March 31 2021.
g) Details of Significant Changes:
|Ratios ||2021 ||2020 |
|Debtors turnover ratio ||- ||- |
|Interest coverage ratio ||910.74 ||(0.84) |
|Current ratio ||32.73 ||146.80 |
|Debt equity ratio ||0.006 ||0.000 |
|Operating margin ratio ||278.71 ||(0.08) |
|Net profit margin % ||27901.1% ||(68)% |
|Return on Net worth % ||3.12% ||(0.15)% |
|EPS ||1.74 ||(0.08) |
|PE Ratio ||20.46 ||(423.13) |
Reason for significant change:
The interest coverage ratio has gone up to 910.74 from (0.84) last year and its due toprofit from mutual funds.
The debt has decreased as compared to last year and the company has acomfortable debt equity ratio.
The net profit margin has increased due to profit from sale of mutual funds.
The earnings per share was 1.74 as compared to (0.08) per share last year due to theprofit from mutual funds in the current year.
h) Details of any change in Return on Net Worth as compared to the immediately previousfinancial year:
Due to overall profit in the current year the return on shareholders equity was3.12% as compared to (0.15)% last year.
The Company is aware of the risks associated with the business. The Senior Managementsregularly analyses and takes corrective actions for managing / mitigating the same. Interms of the requirement of the Act the Company has authorized Senior Management tomanage monitor and report on the principal risks and uncertainties that can impact theability to achieve the Companys strategic objectives. The Senior Managementperiodically informs the board on various issues along with its recommendations andcomments for Boards review and necessary action.
Statutory Auditors their Report and Notes to Financial Statements
M/s. Parekh Sharma and Associates Chartered Accountants (Firm Registration No.129301W) were appointed as the Statutory Auditors of the Company as per the provisions ofSection 139 of the Companies Act 2013 to hold office from the conclusion of the 21stAnnual General Meeting (AGM) held on September 28 2017 until the conclusion of the Fifthconsecutive AGM of the Company to be held in the year 2022 (subject to ratification oftheir appointment by the Members at every AGM held after the AGM held on September 282017).
In accordance with the Companies Amendment Act 2017 enforced on May 07 2018 by theMinistry of Corporate Affair the appointment of Statutory Auditors is not required to beratified at every Annual General Meeting. Therefore it is not proposed to ratify theappointment of auditors at the ensuing Annual General Meeting.
The Notes on financial statement referred to in the Auditors Report areself-explanatory and do not call for any further comments. The Auditors Report doesnot contain any qualification reservation or adverse remark.
Details In Respect of Frauds Reported By Auditors
During the year under review the Statutory Auditors has not reported any instances offrauds committed against the Company by its Officer(s) or Employee(s) to the Board undersection 143(12) of the CompaniesAct 2013.
In terms of Section 204 of the Act and Rules made there under M/s. DSM &Associates Practicing Company Secretary (COP No. : 9394) have been appointed asSecretarial Auditors of the Company. The secretarial audit report does not contain anyadverse remarks or disclaimers and is enclosed as Annexure I to this report. The report isself-explanatory and do not call for any further comments.
The Company is in compliance with the applicable secretarial standards.
In terms of Section 138 of the Companies Act 2013 and the rules made there under M/sM. V. Ghelani & Co. Chartered Accountants (ICAI Registration No. 119077W) areInternal Auditors of the Company. The audit Committee of the Board of Directors inconsultation with the Internal Auditors formulate the scope functioning periodicity andmethodology for conducting the internal audit.
Related Party Transactions
There have been no materially significant related party transactions between theCompany and the Directors the management the key managerial personnel the subsidiariesor the relatives except for those disclosed in the financial statements. Accordinglyparticulars of contracts or arrangements with related parties referred to in Section188(1) along with the justification for entering into such contract or arrangement in FormAOC-2 does not form part of the report.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website and can be accessed at the Web link:http://www.nagpurpowerind.com/investors/corporate-governance/
Extract of the Annual Return
As required under Section 92(3) and 134(3) (a) of the Act and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 (as amended) Annual Return in FormMGT - 7 is available on Companys website on the link http://www.nagpurpowerind.com/investors/corporate-governance/
Disclosures pursuant to the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
A) Details of the ratio of the remuneration of each director to the medianemployees remuneration and other details as required pursuant to Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014:
|Sr. No. Name of Director/KMP and Designation ||Remuneration of Director/KMP for financial year 2020-21 (Rs. in Lacs) ||% increase in Remuneration in the financial year 2020-21 ||Ratio of remuneration of each Director/to median remuneration of employees ||Comparison of the Remuneration of the KMP against the performance of the Company |
|1. Mr. Nimis Sheth* Independent Director ||NIL ||N.A. ||N.A. ||N.A. |
|2. Mr. Virat Mehta* Independent Director ||NIL ||N.A. ||N.A. ||N.A. |
|3. Mr. Shyam Kanbargi* Independent Director ||NIL ||N.A. ||N.A. ||N.A. |
|4. Mr. Ajit Kantelia* Non-Executive Director ||NIL ||N.A. ||N.A. ||N.A. |
|5. Ms. Nidhi Salampuria* Non-Executive Director ||NIL ||N.A. ||N.A. ||N.A. |
|6. Mr. Gautam Khandelwal Executive Chairman ||12.00 ||NIL ||6.16:1 ||Company has made a Profit of |
|7. Mr. Santosh Khandelwal Chief Financial Officer ||14.40 ||1.41% ||N.A. ||Rs. 2.28 Crores for F.Y. 20-21 vs. Loss of 10.15 Lakhs |
|8. Ms. Nidhi Salampuria Company Secretary & Compliance Officer ||27.50 ||10% ||N.A. ||(Previous Year) |
* The Company has paid sitting fees of Rs. 25000 per board meeting and Rs.1000 percommittee meeting to the Non-Executive & Independent Directors during the year.
#Nidhi Salampuria is paid salary as Company Secretary & Compliance Officer of theCompany.
i) The Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2020-21: As per table given above.
ii) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2020-21: As per table given above.
iii) The percentage increase in the median remuneration of employees in the financialyear 2020-21: 44.78%
iv) There were 11 confirmed employees on the rolls of the Company as on March 31 2021.
v) Average percentage increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentageincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: As pertable given above.
vi) Affirmation that the remuneration is as per remuneration policy of the Company-Yes
B) Particulars of employees remuneration as required under section 197(12) ofthe Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016: During the year underconsideration none of the employees of the Company were in receipt of remuneration inexcess of limits prescribed section 197(12) of the Companies Act 2013 read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Amendment Rules 2016 hence particulars as required under section 197(12) of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Amendment Rules 2016 are not given.
Conservation of Energy Technology Absorption Foreign Exchange Earning and Outgo
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 are given below:
(A) Conservation of Energy:
Your Company continues to take appropriate measures to reduce its energy consumption ona regular basis.
(B) Technology Absorption: a. Research and Development (R & D):
The Company has not undertaken any R&D activity in the current year. b. TechnologyAbsorption Adaptation and Innovation: The Company has not imported any technology duringthe year.
(C) Foreign Exchange earnings and outgo:
During the year the foreign Exchange outgo was NIL (Previous year NIL). Theforeign exchange Earning was Nil (Previous year Nil).
Corporate Social Responsibility (CSR)
Since the CSR norms are not applicable to the Company hence the disclosures as perRule 9 of Companies (Corporate Social Responsibility Policy) Rules 2014 is not requiredto be made.
Maintenance of cost records as specified under Section 148(1) of theAct is notapplicable to your Company.
Vigil Mechanism and Whistle Blower Policy
The Company has adopted a Vigil Mechanism and Whistle Blower Policy to report genuineconcerns about any unethical behavior actual or suspected fraud or violations of theCompanys code of conduct. The provisions of this policy are in line with theprovisions of Section 177 (9) of the Act. The policy can be accessed on the Companyswebsite at following link http://www.nagpurpowerind. com/investors/corporate-governance/
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
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.
The following is a summary of Sexual Harassment Complaints received and disposed offduring the year 2020-2021.
|No. of Complaint received ||No. of Complaints disposed off ||No. of Complaints pending |
|Nil ||N.A. ||N.A. |
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthis report relates and the date of the report except as otherwise mentioned in thisdirector report if any.
There had been no changes in the nature of Companys business. To the best ofinformation and assessment there has been no material changes occurred during thefinancial year generally in the classes of business in which the Company has an interestexcept as otherwise mentioned in this director report if any.
Directors Responsibility Statement
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 (the Act) theBoard of Directors to the best of their knowledge and ability confirm that:
i) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed and that there are no material departures;
ii) they have selected such accounting policies and applied them 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 at the end of the financial and of the profit ofthe Company for that year;
iii) they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis;
v) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Company adheres to the requirements set out by the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Corporate Governance practices and haveimplemented all the stipulations prescribed. The Company has implemented several bestcorporate governance practices.
The Corporate Governance which form an integral part of this Report are set out asAnnexure II together with the Certificate from the Auditors of the Company regardingcompliance with the requirements of Corporate Governance as stipulated in SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Your Board of Directors wishes to place on record their appreciation for thewhole-hearted co-operation received by the Company from the Shareholders variousGovernment departments Business Associates Companys Bankers and all the employeesduring the year.
| ||For and on behalf of the Board |
|Place: Mumbai ||Gautam Khandelwal |
|Date: August 13 2021 ||Chairman |
| ||DIN 00270717 |