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Sintercom India Ltd.

BSE: 535047 Sector: Auto
NSE: SINTERCOM ISIN Code: INE129Z01016
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Sintercom India Ltd. (SINTERCOM) - Director Report

Company director report

Dear Members

Your Board of Directors is pleased to present the Fourteenth Annual Report of SintercomIndia Limited ("Sintercom" or "Company") together with the auditedfinancial statements for financial year ended on 31st March 2021. Further incompliance with the Companies Act 2013 the Company has made all requisite disclosures inthe Board Report with the objective of accountability and transparency in its operationsand to make you aware about its performance and future perspective.

1. Financial Results:

The Financial performance of the Company during the financial year ended 31stMarch 2021 as compared to the previous financial year is summarized in the followingtable:

Particulars For the year ended on 31st March 2021 For the year ended on 31st March 2020
Net Revenue 471986697 535232499
Profit before Interest and depreciation 39035407 71541003
Finance Charges 38658586 37792195
Provision for Depreciation 62300253 68097746
Profit / (Loss) before Taxation (PBT) (61923431) (34348938)
Tax adjustments 14877534 5648665
Balance of (Loss)/Profit brought forward (47045896) (28700274)
Balance available for appropriation (46877121) (28502971)
Proposed Dividend on Equity Shares - -
Tax on proposed Dividend - -
Transfer to General Reserve - -
Amount carried to Balance Sheet (46877121) (28502971)

2. Operational Performance of the Company:

The outbreak of COVID-19 pandemic globally and in India has caused a significant socialand economic disruption. Your Company has diligently followed all the Government issuedguidelines including adoption of social distancing norms at workplace and necessaryprecautions for all employees on an ongoing basis.

The operations of your Company which were temporarily suspended from 23rdMarch 2020 due to stringent lockdown announced by the government of India resumed in aphased manner starting mid-May 2020 however with utilization at sub-optimal levels. Inthese difficult times your Company continued to fulfill customer's demands while alsoensuring the safety and well-being of its employees. Your Company is well positioned andcommitted to further strengthen financial performance in future.

Your Company's strategic initiatives have helped it to put in place strong andeffective mitigating actions in response to COVID-19's impact on the business. It hastaken effective measures to ensure that core support and strategic risks are effectivelymitigated.

The continued deceleration in the automotive sector and the standstill in the economybrought about by the lockdown during the first quarter of the year has adversely impactedyour Company's production and capacity utilization. In this difficult period your Companyfocused hard on cost optimization employees training across all functions including theshop floor and a heightened focus on customers and new product development.

In the financial year 2020-2021 your Company recorded net sales of Rs. 471.99 millionas against Rs. 535.23 million in the previous year and thereby recorded decrease of 10.93%in the net sale.

For the financial year 2020-2021 the Company incurred loss before tax of Rs. 61.92million as against loss of Rs. 34.35 million for previous financial year. This was mainlydue to the pandemic and effected supply chain during the start of the year. The loss wasoffset partially due to our immediate reductions in all variable costs related to lowerproduction volumes. These actions included reductions in the production's shifts plannedproduction shut down of certain lines etc. In addition we also took action to reduce ourfixed costs structure in the areas of management and employee costs.

During the financial year 2020-2021 your Company completed the raising of funds on apreferential private placement basis in the form of equity shares and compulsoryconvertible debentures (CCD's) from one of its promoters Miba Sinter Holding GmbH & COKG (Miba) for an aggregate amount of approximately INR 222 million after taking thenecessary approvals from the Board shareholders and other regulatory bodies. The proceedsof the Preferential Issue will be used to help facilitate the Company with additionalfunds necessary for working capital management acquisition of capital goods andmachinery operation and management of the Company.

3. Industry Update & Future Outlook:

It is expected that there will be a robust growth in domestic automotive industry. Theincrease in investment in infrastructure growth in working population & in income ofmiddleclass population will drive growth in the automotive market. With the Self-ReliantIndia mission the auto industry is looking to reduce by half its present Rs 1 trillion(USD 13.6 billion) worth of auto component imports over the next 4-5 years. This willprovide significant opportunities for existing and new auto components players to scaleup. Competitive advantage will facilitate the emergence of outsourcing hub followed by atechnological shift in product manufacturing and focus on R&D.

Policy support will emerge as a key growth driver. Initiatives such as ‘Make inIndia' ‘Automotive Mission Plan 2026' and ‘National Electric Mobility MissionPlan 2020' (NEMMP 2020) will give a huge boost to the sector. In Union Budget 2021-22 thegovernment introduced the voluntary vehicle scrappage policy which when implemented islikely to boost demand for new vehicles after removing old unfit vehicles currently plyingon the Indian roads. To install electric vehicle supply equipment (EVSE) infrastructurefor EVs various public sector firms ministries and railways have come together to createinfrastructure and manufacturing of components.

The Automotive Mission Plan 2016-26 (AMP 2026) -

It targets a four-fold growth in the automobile sector in India which includemanufacturers of automobiles auto components & tractors over the next 10 years. Theplan is a mutual initiative by the Government of India and Indian Automotive Industry tolay down the roadmap for development of the industry as the Government aims to developIndia as a global manufacturing center.

Production-linked incentive (PLI) SCHEME -

On November 11 2020 the Union Cabinet approved production-linked incentive (PLI)scheme across 10 key sectors (including automobiles & auto components) to boostIndia's manufacturing capabilities exports and promote the ‘Atmanirbhar Bharat'initiative. The Union Cabinet has provided for an outlay of Rs 57042 crore (USD 7.81billion) for automobiles & auto components sector under the Department of HeavyIndustries.

Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) -

The Government approved FAME and plans to cover all vehicle segments and all forms ofhybrid & pure EVs. FAME-I scheme started in 2019 was supposed to end by 2022. In June2021 the scheme was extended until March 31 2024. In February 2019 the Government ofIndia approved FAME-II scheme with a fund requirement of Rs 10000 crore (USD 1.39billion) for FY20-22.

Other growth drivers -

Dept. of Heavy Industries & Public Enterprises created a USD 200 million fund tomodernize the auto components industry by providing interest subsidy on loans &investments in new plants & equipment. This also provided export benefits tointermediate suppliers of auto components against Duty-free Replenishment Certificate(DFRC).

India has significant cost advantages. Auto firms save 10-25% on operations vis-a-visEurope and Latin America. The industry has witnessed a cumulative FDI inflow of about USD25.40 billion in the automobile sector between April 2000 and December 2020. TheGovernment of India expects automobile sector to attract USD 8-10 billion in local andforeign investments by 2023. The vision of NEMMP 2020 is for faster adoption of EVs andtheir manufacturing in the country.

 

Source: IBEF report- Auto Components

4. Quality and Information Security:

The Company's focus on quality productivity and innovations has helped us deliverincreased value to our customers. The Company is certified for IATF 16949: 2016 & ISO14001: 2015 & ISO 45001: 2018 (Quality Management Systems)

5. Dividend:

In view of the losses for the current financial year your directors have decided notto recommend any dividend for the period under review.

6. Details of Subsidiaries Joint Ventures (JV) or Associate Companies (AC):

The Company has no subsidiary joint venture or associate companies.

7. Amounts proposed to be carried to any Reserves:

During the year under review the company does not propose to transfer any amount tothe reserves.

8. Listing Information

The Equity Shares in the Company have been migrated to main board of National StockExchange of India w.e.f. 07th October 2020. The Listing Fee has been paid tothe National Stock Exchange for the year 2021-22. The ISIN No. of the Company for equityshares is INE129Z01016 and for compulsary convertible debentures is INE129Z08011.

9. Change in nature of business if any Details of significant orders passed byRegulators and Material Changes if any between the end of the financial year 31stMarch 2021 of the Company and the date of the report:

There are no adverse material changes or commitments occurred after 31stMarch 2021 which may affect the financial position of the Company or may requiredisclosure.

10. Material events during the year under review:

Besides the outbreak of COVID-19 pandemic globally and in India the impact of which hasbeen noted in para 2 above during the year under review the Company issued and allottedthe following securities to Miba Sinter Holding GmbH & Co KG ("Miba")promoter of the Company by way of preferential allotment:

1350000 (One Million Three Hundred Fifty Thousand Only) equity shares ("EquityShares") having a face value of Rs. 10 (Rupees Ten only) issued at a price of Rs.67/- (Rupees Sixty-Seven only) per share amounting to Rs. 90450000 (Rupees Ninetymillion four hundred fifty thousand only) ; and

1975000 (One Million Nine Hundred Seventy-Five Thousand Only) 4% unsecuredcompulsorily convertible debentures ("CCDs") having a face value of Rs. 67(Rupees Sixty-Seven only) per CCD issued at a price of Rs. 67 (Rupees Sixty- Seven only)per CCD amounting to Rs. 132325000/- (One hundred thirty-two million three hundredtwenty-five thousand only)

The funds raised by the Company through preferential allotment will be used for workingcapital requirements and to help facilitate the Company with additional funds necessaryfor acquisition of capital goods and machinery operation and management of the Companyprovided that an amount equal to INR 90000000 (Indian Rupees Ninety Million only) fromthe proceeds to be allocated towards the acquisition of capital goods & machinery bythe Company". As on the date of the Board's report there has been no deviation inutilization of fund.

Share Capital

Details of changes in Authorized share capital during the year under review as under: -

At the beginning of the year i.e. as on 01st April 2020 250000000
Increase in Capital 26000000
At the end of the year i.e. as on 31st March 2021 276000000

*Increase in authorized capital on account of issue of Equity shares and Compulsoryconvertible debentures

Details of changes in paid-up share capital during the year under review as under: -

At the beginning of the year i.e. as on 01st April 2020 242028220
Preferential Issue of Equity Shares 13500000
At the end of the year i.e. as on 31st March 2021 255528220

The EOGM was conducted on 24th February 2021 and the special resolution wasduly approved by requisite majority. In furtherance of the said special resolution on 03rdMarch 2021 on the basis of approval granted by the members of the Company in relation tothe aforesaid the company issued preferential allotment of 1350000 (one million threehundred and fifty thousand) equity shares having face value of Rs. 10 (Rupees Ten only)each ("Equity Shares") for a per share price of Rs. 67 (Rupees Sixty-Seven only)and a preferential allotment of 1975000 4% unsecured compulsorily convertible debenturesof Rs. 67/- (Rupees Sixty-Seven) ("CCDs") at a price of Rs. 67/- (RupeesSixty-Seven only) to one of its promoters Miba Sinter Holding GmbH & Co KG("Miba"). The CCDs would stand converted into 1975000 Equity Shares at theprice of 67/- (Rupees Sixty-Seven only) equity shares having face value of Rs. 10 (RupeesTen only) each in accordance with the CCD terms and conditions.

11. Directors and Key Managerial Personnel:

The Board of the Company comprises an optimum combination of executive andnon-executive independent directors.

As on the date of this report Board of Directors of the Company comprises of total sixdirectors. The Composition of the Board of Directors is as under:

Name of Director Category and Designation
Mr. Hari Nair Chairman Non-Executive Non-Independent Director
Mr. Jignesh Raval Managing Director
Mr. Bernd Badurek* Non-Executive Non-Independent Director
Mr. Madan Godse Non- Executive Independent Director
Mr. Dara Kalyaniwala* Non- Executive Independent Director
Ms. Madhavi Pandrangi* Non- Executive Independent Director

Further this is to inform that Ms. Preeti Ramdasi resigned from the position ofIndependent Director on 26th June 2020 and Mr. Harald Neubert resigned from theposition of Non-Executive Director on 27th May 2021 due to personal reason.

*Mr. Dara Kalyaniwala and Ms. Madhavi Pandrangi were each appointed as IndependentDirector w.e.f. 02nd September 2020. Mr. Bernd Badurek was appointed asNon-Executive Non-Independent Director w.e.f. 27th May 2021

Pursuant to Section 149 152 and other applicable provisions of the Companies Act 20131/3rd of the Directors are liable to retire by rotation and if eligible offerthemselves for re-appointment. In the ensuing Annual General Meeting Mr. Hari NairDirector of the Company is liable to retire by rotation and being eligible offers himselffor re-appointment.

In pursuant to provisions of Section 203 of the Companies Act 2013 read with theapplicable rules and other applicable provisions of the Companies Act 2013 thedesignated Key Managerial Personnel (KMP) of the Company as on 31st March 2021are as follows:

Name of KMP Category and Designation
Mr. Jignesh Raval Managing Director
Mr. Pankaj Bhatawadekar Chief Financial Officer
Ms. Anuja Joshi Company Secretary and Compliance Officer

12. Board Meetings & Committee Meetings:

The Board meets at regular intervals to discuss and decide on Company/business policyand strategy apart from other items of business. The Board exhibits strong operationaloversight with regular presentations by business heads to the Board. The Board andcommittee meetings are prescheduled and a tentative annual calendar of Board andcommittee meetings is circulated to the directors well in advance to help them plan theirschedule and to ensure meaningful participation at the meetings.

Total 6 (six) Board Meetings were held during the financial year 2020-21 as requiredu/s 173 (1) of the Companies Act 2013 and rules made thereunder. The intervening gapbetween two board meetings was within the period prescribed under the Companies Act 2013and as per Secretarial Standard-1. The details of meetings of the Board of Directors areprovided in the Report on Corporate Governance that forms part of this Annual Report.

Committees:

Presently the Board has four (4) Committees i.e. Audit Committee Nomination &Remuneration Committee Stakeholder Relationship Committee and Corporate SocialResponsibility Committee which have been established as a part of better corporategovernance practices and is in compliance with the requirements of the relevant provisionsof applicable laws and statutes. The details of meetings of committees are provided in theReport on Corporate Governance that forms part of this Annual Report.

Audit Committee:

The Audit Committee was constituted in compliance with the provision of Section 177 ofthe Companies Act 2013 and Regulation 18 of SEBI (Listing Obligations & DisclosureRequirements) Regulation 2015.

During the year under review 4 (Four) Audit Committee meetings were held.

The details of meetings of the Audit Committee are provided in the Report on CorporateGovernance that forms part of this Annual Report.

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee was constituted in compliance with theprovision of Section 178 of the Companies Act 2013 and Regulation 19 of SEBI (ListingObligations & Disclosure Requirements) Regulation 2015.

During the year under review 1 (One) meeting of Nomination and Remuneration Committeemeeting was held the details of which are provided in the Report on corporate Governancethat forms part of this Annual report.

The salient features of the policy of the Nomination & Remuneration Committee samehave been disclosed under Annexure VI.

The policy is available on https://www.sintercom.co.in/about-us/corporate-policies.html

Stakeholder Relationship Committee:

The Stakeholder Relationship Committee was constituted in compliance with the provisionof Section 178 of the Companies Act 2013 and Regulation 20 of SEBI (Listing Obligations& Disclosure Requirements) Regulation 2015.

During the year under review 1 (One) meeting of Stakeholder Relationship Committeemeeting was held the details of which are provided in the Report on corporate Governancethat forms part of this Annual report.

Corporate Social Responsibility Committee:

The Corporate Social Responsibility Committee was constituted in compliance with theprovision of Section 135 of the Companies Act 2013.

During the year under review there was no meeting of the Corporate SocialResponsibility Committee.

Meeting of Independent Directors:

Additionally during the financial year ended 31st March 2021 theIndependent Directors held a separate meeting on 19th February 2021 inCompliance with the requirement of Schedule IV of the Companies Act 2013 and Regulation25 (3) of the SEBI (Listing Obligations & Disclosure Requirements). The said meetingwas attended by all the Independent Directors.

13. Evaluation of Board of Directors Committees and Individual Director:

The Nomination & Remuneration Committee has set up a formal mechanism to evaluatethe performance of the Board of Directors as well as that of its Committee's andindividual Directors including Chairman of the Board Key Managerial Personnel/ SeniorManagement etc. The exercise was carried out through an evaluation process coveringaspects such as the composition of the Board experience competencies government issuesattendances specific duties etc.

The performance of each of the non-independent directors (including the chairman) wasalso evaluated by the independent directors at the separate meeting held of theIndependent Directors of the Company.

14. Familiarisation Programme:

The Company regularly provides orientation and business overview to its directors byway of detailed presentations by the various business and functional heads at Boardmeetings and through other interactive programs. Such meetings/programs include briefingson domestic and global business of the Company. Besides this the Directors are regularlyupdated about Company's new projects R&D initiatives changes in regulatoryenvironment and strategic direction.

The Board members are also provided relevant documents reports and internal policiesto facilitate familiarization with the Company's procedures and practices from time totime.

The details of programmes for familiarisation for Independent Directors are posted onthe website of the Company and can be accessed athttps://www.sintercom.co.in/images/pdf/corporate-policies/details-of-familiarisation-programme-for-independent-directors-of-sintercom.pdf

15. Disclosure by Directors:

The Board of Directors have submitted a notice of interest in Form MBP 1 under Section184(1) as well as intimation by directors in Form DIR 8 under Section 164(2) anddeclaration as to compliance with the Code of Conduct of the Company.

16. Declaration from Independent Directors:

During the year under review all Independent Directors have given declaration thatthey meet the criteria of independence as laid down under Section 149 of the CompaniesAct 2013 that the Independent Directors have complied with the Code for IndependentDirectors prescribed in Schedule IV to the Act and Regulation 16 & 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

Further the Company has received confirmation from Mr. Madan Godse Mr. DaraKalyaniwala and Ms. Madhavi Pandrangi Independent Director that they have registeredtheir name in the Independent Director's Database. Ms. Preeti Ramdasi IndependentDirector has not registered under the Independent Director's Database and she has resignedfrom the position of Independent Director w.e.f. 26th June 2020 due to personalreasons.

None of the Independent Directors serve as an Independent Director in more than themaximum permissible limit on the number of directorships as an Independent Director andalso has not crossed the maximum tenure of Independent Director. The Board confirms thatall the Independent directors are proficient and performing their duties with integrity.

17. Code of Conduct for Prohibition of Insider Trading:

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations2015 as amended from time to time the code of conduct for prevention of insider tradingand the code for corporate disclosures ("Code") as approved by the Board fromtime to time are in force at the Company. The objective of this Code is to protect theinterest of shareholders at large to prevent misuse of any price-sensitive informationand to prevent any insider trading activity by dealing in shares of the Company by itsDirectors designated employees connected persons and other employees. The Company alsoadopts the concept of Trading Window Closure to prevent its Directors Officersdesignated employees connected persons and other employees from trading in the shares ofthe company at the time when there is unpublished price sensitive information.

The Policy is available on the website of the Companyhttps://www.sintercom.co.in/about-us/ corporate-policies.html

18. Corporate Governance:

The Company is committed to maintaining the highest standards of Corporate Governanceand adheres to the Corporate Governance requirements set out by the Securities andExchange Board of India ("SEBI"). The Company has also implemented several bestgovernance practices. The report on Corporate Governance as stipulated under the ListingRegulations forms part of the Annual Report. Certificate from the Auditors of the Companyconfirming compliance with the conditions of Corporate Governance is attached to thereport on Corporate Governance. For sake of brevity the items covered in Board's Reportare not repeated in the Corporate Governance Report and vice versa.

The Corporate Governance Report is annexed as Annexure II.

19. Management Discussion and Analysis Report:

Management Discussion & Analysis report for the year under review as stipulatedunder Regulation 34(2) (e) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed as Annexure Ihereto and forms part of this Report. For sake of brevity the items covered in Board'sReport are not repeated in the Management Discussion and Analysis Report and vice versa.

20. Code of Conduct:

The Board has also laid down a Code of Conduct for Independent Directors pursuant toSection 149(8) and Schedule IV to the Companies Act 2013 via terms and conditions forappointment of Independent Directors which is a guide to professional conduct forIndependent Directors and has been uploaded on the website of the Company at following weblink: http://www.sintercom.co.in/investor-financial/corporate-governance.html

21. Particulars of Employee and Remuneration

Disclosures of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time are provided as "Annexure V".

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided upon request. In terms of Section 136 of theAct the Report and financial statements are being sent to Members and others entitledthereto excluding the information on employees' particulars which will be available forinspection in electronic mode up to the date of AGM. Members can inspect the same bysending an email to investor@sintercom.co.in.

During the financial year 2020-2021 no employee whether employed for whole or part ofthe year was drawing remuneration exceeding the limits mentioned under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

22. Risk Management:

The Company is a supplier of various automobile parts and is therefore exposed to risksassociated with the automotive industry in particulars. The Company has in place amechanism to identify assess monitor and mitigate various risks to key business set forthe Company. As a part of Risk Management policy the relevant parameters for theprotection of the environment the safety of operations and the health of people at workare monitored regularly.

The successful management of opportunities and risks is part of operating a businessand is the primary task of all management personnel. During the regular managementmeetings at all management levels opportunities risks and optimization measures arereviewed in detail. Any exceptional situations having potential risks are identified andtreated at the early stage to minimize their impact on financial and income positions.

23. Deposits:

The Company has not accepted any deposits under the provisions of Section 73 of theCompanies Act 2013 read with Companies (Acceptance of Deposit) Rules 2014 as amendedfrom time to time during the year under review and therefore details mentioned in Rule8(5) (v) & (vi) of Companies (Accounts) Rules 2014 relating to deposits coveredunder Chapter V of the Act is not required to be given.

As on March 31 2021 the Company has an outstanding unsecured loan including interestthereon of Rs. 15.38 million from Mr. Jignesh Raval Managing Director and he has givendeclaration that the amount is not being given out of funds acquired by him by borrowingor accepting loans or deposits from others. This borrowing is exempted deposit as per Rule2 (c) (viii) Companies (Acceptance of Deposits) Rules 2014.

24. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:

Information required under section 134(3) (m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is given herein below:

A. Conservation of Energy

There is constant focus at all level in the organization to conserve energy and use itefficiently. This is also key to financial success as energy is one of the important costelement of conversion cost. Your Company has been implementing short- and long-termactions to improve the energy efficiency as its commitment towards minimizing the effectsof factors of climate change. It has grounded mechanism to excel in this area. Regularreview is conducted for evaluating the progress and effectiveness of various ongoinginitiatives to reduce the energy consumption.

Energizing Low Carbon Sustainable Operations

Sintercom has tied up with M/s RMK Infrastructure and has successfully commissionedcaptive solar power projects in Village Mangrul Tal Maval Pune with plant capacity of 1MW power generation. This project is generating around 2 million kWh of electricity peryear helping to emission per year.

 reduce Sintercom's carbon footprint by approx. 1900 tonnes of CO2

B. Technology Absorption

The Company has entered into Joint Venture agreement with M/s MIBA Sinter Holding Gmbh& Co KG Austria. The Company has also entered into technology agreements with MIBAAustria. Under these agreements MIBA has transferred technology for development of highstrength sinter hardened Synchro hub Cam to Cam gears and Cam to Cam Backlash Gears. Theplant has been designed to suit the said technology. The products using these technologieshave demand in the Indian market. The Company continuously runs inhouse programs forproduct improvement cost reduction product development or import substitutions. TheCompany also takes help of external consultants whenever required on these aspects. Duringthe year under review the Company incurred an amount of Rs. 918444 on research anddevelopment.

C. Foreign Exchange Earnings & Outgo

Foreign exchange earned in terms of actual inflows during the year and the foreignexchange outgo during the year in terms of actual outflows.

Particulars 2020-2021 2019-20
Foreign Exchange Earnings in terms of actual inflows - 77850
Foreign Exchange Outgo in terms of actual outflows - 1433397
CIF Value of Imports 313729 1669639

 

Note: The above amount does not include the foreign exchange received from Miba SinterHolding GmbH & CO KG against allotment of equity shares and compulsory convertibledebenture as it is mentioned in the report earlier.

25. Corporate Social Responsibility (CSR):

The report as per Section 135 of the Companies Act 2013 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 is attached as Annexure VII.

Policy is available on company's website:https://www.sintercom.co.in/pdf/corporate-policies/csr-policy.pdf

26. Auditors:

Statutory Auditor:

The Company at its Annual General Meeting held in the year 2017-18 appointed M/s.Kirtane & Pandit LLP Chartered Accountants (Firm Registration Number 105215W) asStatutory Auditors of the Company for five years.

The Notes on financial statements referred to in the Auditors Report areself-explanatory and do not call for any further comments. The Auditors Report does notcontain any qualification reservation or adverse remark.

There is no incident of fraud requiring reporting by the Auditors under Section 143(12)of the Companies Act 2013.

Secretarial Auditor:

Pursuant to Section 204 of Companies Act 2013 read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. Kanj& Co LLP Practicing Company Secretary Pune to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report in Form MR-3 issued by Secretarial Auditor for thefinancial year ended on 31st March 2021 is enclosed to this Report as "AnnexureIII".

The Secretarial Audit Report contains qualification and the Company has given itscomments on Auditors qualified opinion the details are mentioned hereunder.

Qualified Opinion (1)

Due to the unprecedented pandemic of COVID-19 which resulted in persistent lockdownsyour Company was unable conduct the meeting for the approval of the projects as plannedthe Company has identified projects under the CSR. The said projects were recommended andapproved by the CSR committee in the meeting held on 01st May 2021.

Qualified Opinion (2)

The Explanatory Statement forming part of the EGM Notice contained an illustration ofthe shareholding pattern of the Company after issuance of the 1350000 Equity Shares andthe 1975000 CCDs such Explanatory Statement did not specifically contain a separateillustration for the shareholding pattern of the Company highlighting only theshareholding pattern post conversion of the 1975000 CCDs. It is clarified that theExplanatory Statement forming part of the EGM Notice already contained an illustration ofthe shareholding pattern of the Company after issuance of the 1350000 Equity Shares andthe 1975000 CCDs. However as a matter of good governance and abundant caution theCompany issued a Corrigendum to the Notice of 01st Extra Ordinary GeneralMeeting of the Financial year 2020-2021 held on 24th February 2021("Corrigendum') expressly highlighting only the shareholding pattern of the Companypost conversion of the 1975000 CCDs. As the Corrigendum was issued after the holding ofthe Extra Ordinary General Meeting on 24th February 2021 and as a matter ofgood practice and governance the Company has decided to place the Corrigendum and specialresolutions already approved at the 1st Extra-Ordinary General Meeting on 24thFebruary 2021 before the members of the Company for them to note and take on record theCorrigendum and the special resolution approved by the members at the EGM.

Internal Auditor:

In accordance with the provision of Section 138 of the Companies Act 2013 and Rulesmade thereunder your Company has appointed Ms. Anuja Joshi as the Internal Auditor of theCompany for Financial Year 2020-21 and takes her suggestions and recommendation to improveand strengthen the internal control system.

27. Compliance with Secretarial Standard:

The Company has generally complied with all the applicable Secretarial Standards in theFinancial Year 2020-21.

28. Directors Responsibility Statement:

Pursuant to the requirement of section 134(5) of the Companies Act 2013 the Directorsstate that: 1. in the preparation of the Annual Accounts for the year 31stMarch 2021 the applicable Accounting Standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;

2. 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 year and of the profitof the Company for the year ended on that date;

3. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

4. the annual financial statements have been prepared on a going concern basis.

5. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively and.

6. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively.

29. Finance and Accounts:

Financial Statement has been prepared in accordance with accounting standards as issuedby the Institute of Chartered Accountants of India and as specified in Section 133 of theCompanies act 2013 and the relevant rules thereof and in accordance with Regulation 33 ofSEBI (Listing Obligations and Disclosure Requirements) Regulation 2015. IND AS isapplicable to the Company. The estimates and judgments relating to the FinancialStatements are made on a prudent basis so as to reflect in a true and fair manner theform and substance of transactions and reasonably present the Company's financialposition.

30. Fraud Reporting:

There have been no frauds reported by the Auditors of the Company to the AuditCommittee or the Board of Directors under sub-Section (12) of Section 143 of the CompaniesAct 2013 during the financial year.

31. Extract of Annual Return:

In accordance with Sections 92(3) read with 134(3)(a) of the Act the Annual Return ofthe Company as on March 31 2021 is available on the website of the Company athttps://www.sintercom.co.in/ investor-financial/overview.html

32. Particulars of Loans Guarantees and Investments:

The Company has not given any loan or guarantee or security or made investment underSection 186 of the Companies Act 2013 during the financial year.

33. Particulars of Related Party Transactions:

During the year under review contract or arrangements entered into with related partyas defined under Section 2(76) of the Companies Act 2013 were in ordinary course ofbusiness on arm's length basis. Details pursuant to the transactions to compliance ofsection 134(3) (h) of the Companies Act 2013 and Rule 8 (2) of the Companies (Accounts)Rues 2014 are annexed herewith as per prescribed Form AOC-2 -Annexure IV.

The Company has formulated a policy on materiality of Related Party Transactions anddealing with Related Party Transactions which has been uploaded on the Company's websitehttps://www. sintercom.co.in/pdf/corporate-policies/materiality-policy.pdf

34. Internal Financial Control System:

The Company has a proper and adequate system of internal controls. This ensures thatall transactions are authorized recorded and reported correctly and assets aresafeguarded and protected against loss from unauthorized use or disposition. In additionthere are operational controls and fraud risk controls covering the entire spectrum ofinternal financial controls. An extensive program of internal audits and managementreviews supplements the process of internal financial control framework. Properlydocumented policies guidelines and procedures are laid down for this purpose. Theinternal financial control framework has been designed to ensure that the financial andother records are reliable for preparing financial and other statements and formaintaining accountability of assets. In addition the Company has identified anddocumented the risks and controls for each process that has a relationship to thefinancial operations and reporting.

The Company also has an Audit Committee to interact with the Statutory AuditorsInternal Auditors and Management in dealing with manner within its terms of reference.This Committee mainly deals with accounting matters financial reporting and internalcontrols.

35. Disclosure under the Sexual Harassment of Women at Workplace (preventionprohibition and Redressal) Act 2013:

As per the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 a committee called Internal Complaints Committee hasbeen established to provide a mechanism to redress grievances pertaining to sexualharassment at workplace and Gender Equality of working women. During the year Company hasnot received any complaint pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

36. Vigil Mechanism / Whistle Blower:

The Company has adopted a Vigil Mechanism Policy through a Whistle Blower Policy toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct or ethics policy. The Policy provides for adequate safeguards againstvictimization of employees who avail of the mechanism and also provides for direct accessto the Chairman of the Audit Committee. It is affirmed that no personnel of the Companyhave been denied access to the Audit Committee.

The Whistle Blower Policy is disclosed on website of the Companyhttps://www.sintercom.co.in/pdf/ corporate-policies/whistleblower-policy.pdf

37. Non-Disqualification of Directors:

All the directors of the Company are non- disqualified and certificate for the samefrom the Practicing Company Secretary in annexed as Annexure VIII.

38. Policy of preservation of Documents:

Pursuant to Regulation 9 of SEBI (LODR) 2015 the Company has maintained the policy ofpreservation of documents as per Regulation 9 (a) & 9 (b) of SEBI (LODR) 2015 and thesame has been uploaded on the website of the Company onhttps://www.sintercom.co.in/images/pdf/corporate-policies/SILpreservation-and-archival-policy.pdf

39. Details of significant and material order passed by the regulators or courts ortribunals:

There were no significant and material orders issued against the Company by anyregulating authority or court or tribunal that could affect the going concern status andCompany's operations in future.

40. Order of SEBI & NSE

There are no orders received by the Company from SEBI and NSE Limited which wouldimpact the listing of the Company's shares.

41. Cost Records:

The provisions of section 148(1) of the Companies Act 2013 and other applicable rulesand provisions do not apply to the company. Therefore no cost record has been maintainedby the Company.

42. Credit Rating:

As on the date of this report the credit rating is as below

Type Rating
Long Term Rating CRISIL BB+/Negative (Reaffirmed)
Short Term Rating CRISIL A4+ (Reaffirmed)

43. Investor Education and Protection Fund (IEPF):

During the year under review the provision of Section 125(2) of Companies Act 2013does not apply as the company was not required to transfer any amount to the InvestorEducation Protection Fund (IEPF) established by Central Government of India.

44. Unpaid and Unclaimed amount of Dividend and Share Application Money:

There is no unpaid Dividend is pending to be paid to the investors and shareholderstill 31st March 2021.

Further during the financial year 2020-2021 your Company has raised funds on apreferential private placement basis in the form of equity shares and compulsoryconvertible debentures (CCD's) from one of its promoters Miba Sinter Holding GmbH & COKG (Miba) for an aggregate amount of approximately INR 222 million. Of this Rs. 3.41million was pending towards excess application money as on 31st March 2021. Thesame was returned to the Miba Sinter Holding GmbH & CO KG on 3rd May 2021.

45. Insurance

Our Company generally maintains insurance covering our inventories/ stock at suchlevels that we believe to be appropriate. The insurance policy covers stock lying in thepremises stock in transit and the stock which is in our custody and specified person likewarehouse or vendors locations.

46. Business Responsibility Report:

Your Company does not fall under Top 1000 listed entities as per Market Capitalization.Hence the Business Responsibility Report for the financial year as stipulated underRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is not enclosed to this Annual Report.

47. Registrar and Share transfer Agent Information:

Link Intime India Pvt. Ltd
Block No. 202
2nd Floor Akshay Complex
Near Ganesh Temple
Off Dhole Patil Road
Pune – 411001
Tel: 020 - 2616 1629 / 2616 0084 Fax: 020 - 2616 3503
Email: pune@linkintime.co.in Website: https://www.linkintime.co.in

48. Event Based Disclosures:

Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview: • the Company has neither issued shares with differential voting rights as todividend or otherwise. nor has granted any stock options or sweat equity to the employeeof the Company. As on March 31 2021 none of the Directors of the company holdinstruments convertible into equity shares of the Company.

• The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustee for the benefit of employees.

49. Acknowledgements:

Your directors would like to place on record their appreciation and gratitude for thesupport to the Company received from the Employees Clients Customers and Shareholders ofthe Company for their trust and patronage as well as to the Bankers Securities andExchange Board of India National Stock Exchange Government of India and other RegulatoryAuthorities for their continued co-operation support and guidance.

FOR AND ON BEHALF OF THE BOARD
SINTERCOM INDIA LIMITED
Hari Nair
Chairman
DIN: 00471889
Place: Chicago USA
Date: 10th August 2021

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