The Board of Directors are pleased to present the Thirty Fifth AnnualReport of the Company and its audited financial statements (standalone and consolidated)for the Financial Year ended 31st March 2021. The summarised financial resultsfor the year ended 31st March 2021 are given below:
Rs. in lakhs
| ||Standalone ||Consolidated |
| ||Year Ended 31st March 2021 ||Year Ended 31st March 2020 ||Year Ended 31st March 2021 ||Year Ended 31st March 2020 |
|Profit before Exceptional Items Interest ||3606.46 ||2671.43 ||5171.97 ||4934.50 |
|Depreciation and Tax || || || || |
|Less: Exceptional Item ||- ||- ||- ||- |
|Profit before Interest Depreciation and Tax ||3606.46 ||2671.43 ||5171.97 ||4934.50 |
|Less: Interest ||170.63 ||339.13 ||286.58 ||459.29 |
|Profit before Depreciation and Tax ||3435.83 ||2332.30 ||4885.39 ||4475.21 |
|Less: Depreciation ||447.16 ||456.48 ||715.87 ||633.19 |
|Net Profit before Taxes ||2988.67 ||1875.82 ||4169.52 ||3842.02 |
|Less: Taxation (Including Deferred Tax) ||747.07 ||501.53 ||1129.32 ||805.70 |
|Net Profit After Tax before Transfer to ||2241.60 ||1374.29 ||3040.20 ||3036.32 |
|Minority Interest || || || || |
|Less: Transfer to Minority Interest ||- ||- ||299.22 ||522.66 |
|Net Profit After Tax and Transfer to Minority ||2241.60 ||1374.29 ||2740.98 ||2513.66 |
|Interest || || || || |
|Add: Brought forward from previous year ||7646.33 ||6479.68 ||7105.77 ||4845.23 |
|Balance Available for Appropriations ||9887.93 ||7853.97 ||9846.75 ||7358.89 |
|Appropriations: || || || || |
|Transfer to General Reserve ||- ||- ||- ||- |
|Dividend ||173.40* ||172.24 ||173.40 ||172.24 |
|Dividend Distribution Tax ||- ||35.40 ||- ||35.40 |
|Transfer to Statutory Reserve ||- ||- ||41.53 ||45.48 |
|Balance Carried over to Balance Sheet ||9714.53 ||7646.33 ||9631.82 ||7105.77 |
* Dividend pertains to the Financial Year 2019-20. No appropriation fordividend has been made in the Accounts for the dividend recommended for the Financial Year2020-21 pending approval by the Members at the ensuing Annual General Meeting in linewith Accounting Standard (AS) 4.
REVIEW OF FINANCIAL PERFORMANCE AND STATE OF COMPANY'S AFFAIRS
During the year under review in the wake of business impact caused byCOVID-19 your company focussed on profitable operations at site level in respect ofService and Operation and Maintenance division. The Company continued to focus onvalue-added products under manufacturing division. The Company also focussed closely oncost control and working capital management. This enabled the Company to increase itsturnover and profitability. The financial performance of the Company at standalone andconsolidated levels are given below:
Your Company recorded revenue (from operations) of Rs. 21372.36lakhs for the year ended 31st March 2021 as against Rs. 20169.16 lakhsin the previous year. It achieved an EBITDA of Rs. 3606.46 lakhs (previous year Rs.2671.43 lakhs) resulting in a net profit of Rs. 2241.60 lakhs as against Rs.1374.29 lakhs in 2019-20 registering a growth of 35% in terms of EBITDA and a growth of63% in terms of net profit.
The Consolidated Financial Statements of the Company have been preparedas per Accounting Standard 21 issued by the Institute of Chartered Accountants of India.The Company's consolidated revenue from operations in the year under reviewaggregated Rs. 32707.23 lakhs (previous year Rs. 30389.76 lakhs) on whichit made EBITDA of Rs. 5171.97 lakhs (previous year Rs. 4934. 50 lakhs) andnet profit (after transfer to Minority Interest) of Rs. 2740.98 lakhs as against Rs.2513.66 lakhs in 2019-20 registering a growth of 5% and 9% in terms of EBITDA and netprofit (after transfer to Minority Interest) respectively.
The Board of Directors are pleased to recommend payment of dividend of60% i.e. Rs. 6/- per equity share of Rs. 10/- each for the Financial Yearended 31st March 2021 (previous year: 50%). Based on the equity sharesoutstanding as on 31st March 2021 the dividend would absorb an amount of Rs.210.99 lakhs (previous year - Rs. 173.40 lakhs). Dividend Distribution Tax has nowbeen abolished. Pursuant to the Finance Act 2020 the dividend income will be taxable inthe hands of the shareholders with effect from 1st April 2020 and the Companyis required to deduct tax at source ("TDS") from dividend payable to the Membersat the rates prescribed in the Income-tax Act 1961. The dividend payment is subject tothe approval of the Members at the ensuing Annual General Meeting.
EMPLOYEES STOCK OPTION SCHEME
The Members of the Company at their 29th Annual GeneralMeeting held on 26th August 2015 had approved the Thejo Employee Stock OptionPlan 2015 ("ESOP 2015") with a view to attracting and retaining the best talentand promoting increased participation by the employees in the growth of the Company.
The Compensation / Nomination and Remuneration Committee of the Board interalia administers and monitors the Employees' Stock Option Scheme 2015 of theCompany.
During the year under review there were no material changes in theEmployee Stock Option Scheme 2015 of the Company and the Scheme is in compliance with theSEBI Regulations on ESOPs. Information in respect of options granted under the ThejoEmployee Stock Option Plan 2015 is given in Note 24.10 forming part of the FinancialStatements. As per Regulation 14 of SEBI (Share Based Employee Benefits) Regulations 2014read with SEBI circular dated 16th June 2015 the details of the ESOPs areuploaded on the Company's website https://www.thejo-engg.com/sites/ESOPs2021.pdf Thetotal shareholding of the Company changed due to the allotments made under ESOP 2015. Thedetails of movement in shareholding are as follows:
|Date ||Details ||No. of equity shares Allotted ||No. of equity shares (Cumulative) |
|1st April 2020 ||Opening Balance || ||3460352 |
|10th July 2020 ||Allotment under ESOP ||7600 ||3467952 |
|3rd September 2020 ||Allotment under ESOP ||12900 ||3480852 |
|20th October 2020 ||Allotment under ESOP ||15048 ||3495900 |
|11th November 2020 ||Allotment under ESOP ||1600 ||3497500 |
|10th December 2020 ||Allotment under ESOP ||2628 ||3500128 |
|21st January 2021 ||Allotment under ESOP ||7700 ||3507828 |
|9th March 2021 ||Allotment under ESOP ||8599 ||3516427 |
A Certificate from the Auditors of the Company as required underRegulation 13 of Securities & Exchange Board of India (Share Based Employee Benefits)Regulations 2014 is attached to the Board's Report.
During the Financial Year 2020-21 CRISIL has upgraded the long-termcredit rating on the bank facilities of the Company from CRISIL BBB+/Positive to CRISILA-/Stable and short term-rating from CRISIL A2 to CRISIL A2+.
REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS ENVIRONMENT
During the current Financial Year (FY 2020-21) the outbreak ofCOVID-19 had severely impacted the economies and affected the business environment aroundthe globe. The output of eight core sector industries shrank by 23.4 per cent in May 2020due to the coronavirus-induced lockdown. However after the lockdown was relaxedimprovement was witnessed in several sectors of the economy. Cumulative growth of coreindustries during April 2020 to January 2021 stood at (-) 8.8%. Steel sector one of themajor sectors catered by the Company which suffered during the initial part of thefinancial year made a strong comeback towards the end of the financial year aided by steeprise in the prices globally.
Revenue for the Mining division in Australia has increased stronglyover the past five years due to generally higher output and stronger commodity prices.High global demand prompted several major Australian mining companies to commit to newmining projects and expansions early over the period. This helped our subsidiary inAustralia to strongly establish its business and continue its profitable operations. Theeconomy of Saudi Arabia was badly hit due to Covid pandemic impacting its primary sectorsviz. petroleum. However with established business and clientele Thejo Hatcon IndustrialServices Company ended the year with a marginal dip in its profitability. Brazilhad a rough ride in 2020 with the pandemic deeply impacting public health and economicactivity. The economy contracted by 4.1% in 2020 affecting the modest recovery that hadstarted to take shape in 2017. The operations of our subsidiary in Brazil remained steadyduring the year with marginal loss. Though the GDP of Chile contracted by 6% during 2020its mining exports registered a growth of about 4% during the year. On the back of steadyestablishment of our products and our brand in the market the operations of oursubsidiary in Chile remained steady and continued to be profitable during the year.Subject to the economic shock generated by COVID-19 the subsidiaries are expected to growin the medium term.
INDUSTRY STRUCTURE AND DEVELOPMENTS
Crude steel production in India fell by 10.60% during CY2020 due tomore stringent lockdown in the country. The domestic steel industry has witnessedsignificant improvement in the production levels in the last quarters of the financialyear.
The Government has announced several stimulus packages to tackle theeconomic impact of COVID-19 and several reform measures to give impetus to the economicgrowth. The policy decision to open up mining to the private sector is one such reform.The implementation of these reforms in right earnest will be crucial for the medium termeconomic growth.
The Company continued to focus on value-added products and onincreasing services business with focus on working capital management. This has resultedin increase in the turnover and profitability despite the pandemic. The Company continuesto develop its overseas markets and focus on exports as the domestic growth is expected tobe average with cyclical pressures.
COMPANY PERFORMANCE AND KEY DEVELOPMENTS
As the Members are aware the Company is engaged in manufacturingrubber and polyurethane-based engineered products marketing and servicing activities allunder one roof. The services business caters to installation operation and maintenance ofconveyor belts and allied services such as belt splicing pulley lagging beltreconditioning and rubber lining. The products business centres around designdevelopment manufacture and supply of Rubber and Polyurethane-based engineered productsfor belt cleaning spillage control flow enhancement impact and abrasion protection andscreening applications.
The outbreak of COVID-19 pandemic has affected the business/economicactivities globally. In India the Central and State Governments imposedlockdown/restrictions from the last week of March 2020 to tackle the pandemic. As aresult the manufacturing activities of the Company were temporarily closed for a shortperiod of time from the last week of March 2020. As many of the customers of the servicesand operation and maintenance divisions of the Company fell under essentialproducts/services/continuous operation plants the Company continued to serve them in linewith their requirement and operation levels. The restrictions were slowly relaxed and bythe second half of the financial year the business momentum was regained. The Companystarted to regain the business momentum from the second quarter of the financial year andgathered momentum in the second half of the fi financial year. The Company is currentlycarrying its operations following all statutory guidelines and complying with necessarysafety and sanitary norms. A brief outlook on the expected impact of COVID-19 is givenunder "Future Outlook" section of this Report. Members may also refer to Note24.13.6 forming part of the Financial Statements.
RESEARCH AND DEVELOPMENT
The R&D Centre is focussing on developing new and innovativeproducts as well as bringing about continuous improvement of existing products so as tomeet the needs of the customers and to tap new markets. The sustained efforts of theResearch and Development Team have helped the Company to develop diverse product rangescapable of withstanding some of the hardest working conditions in core sector industries.During the financial year the in-house R&D Centre of the Company won the CIIIndustrial Innovation Awards 2020 under "Manufacturing Medium Enterprise"Category and was also selected as one of the Top 25 Innovative Companies.
During the year under review the Company had applied for patent inrespect of several products/inventions. As at the end of the financial year the Companyhad applied for 26 patents of which eight patents have been awarded and the balance arein process.
As part of its policy of giving utmost importance to safety the SafetyDepartment of your Company is continuously evaluating every process at its manufacturingas well as work sites and taking necessary steps for the safety of personnel as well as ofproperties. The Company conducts safety review on regular basis and takes appropriatesteps based on the findings.
OPPORTUNITIES AND THREATS OPPORTUNITIES
The products as well as services offerings of the Company are primarilyintended for the core sector industries. The opportunities for the industry in which theCompany operates are intertwined with the opportunities for core sector industries.
Recently the Central Government have taken various initiatives underthe Atmanirbhar Abhiyan to enhance the domestic production of steel such as inclusion ofSpeciality Steel' incorporating four different product categories forincentives under the Production Linked Incentive (PLI) scheme measures to providepreference to domestically produced iron and steel in government procurement protectingthe industry from unfair trade through appropriate remedial measures including impositionof anti-dumping duty and countervailing duty etc. Further various measures announced inthe union budget for infrastructure-led economic revival disinvestment along withincreased Capex spending and increase in number of projects under National InfrastructurePipeline are expected to boost sectors that the Company caters to. These measures are apositive sign towards growth in Core Industries and provides the Company with thepossibility of new business opportunities. The Company has a balanced portfolio ofproducts and services which helps to moderate the impact of cyclicality experienced byits customers. It also helps the Company to tap the business opportunity during expansionas well as during operations.
The Company considers Operation and Maintenance (O&M) as one of themain areas for the future. O&M is still viewed as a commodity with consequent pricepressures bordering on manpower contract. The Company intends to focus only on suchO&M contracts that would add value to the Company in the long run. We expect goodpotential in O&M in the long term as the market matures.
The Company has managed to maintain its exports despite the pandemicand the resultant impact on logistics posing challenge to international trade. With thedomestic growth expected to be tepid the Company considers exports as the area ofopportunity. The Company is taking various measures to establish its products in theoverseas markets. The Company believes that there will be good growth and returns fromexports in the medium to long term.
The economic impact of COVID-19 has been a major threat and almost allcountries faced a slowdown in economic growth amidst rising trade tensions and policyuncertainties. Containing the second and subsequent waves of COVID-19 poses serious globalchallenge. This had a bearing on various industries and sectors. Although themanufacturing sector is expected to stage a relatively quick recovery supply chaindisruptions are likely to continue. Though steel sector made handsome recovery in the lastquarter of FY2020-21 the ability to sustain the same will depend on the ability of keysteel-consuming sectors bouncing back. The private sector demand in infrastructureconstruction and real estate sectors were subdued due to the lockdown. Further thedemand from automobile white goods and capital goods sectors may reduce with consumersdeferring discretionary spends in the near term. Effective government stimulus and returnof consumer confidence is likely to be the key driver for a gradual recovery over theFY2021-22.
The domestic product business is prone to cyclicality in the economyespecially the core sector. The competition from the unorganized sector is a challenge forthe services business of the Company. In Operation & Maintenance there is intensecompetition with manpower-based contracts being bagged by competition at lower pricesespecially during times of economic downturn.
Policy changes in respect of core sector industries will have a directimpact on the business of the Company as it primarily caters to core sector industries inthe domestic market.
International commodity prices and fortunes of the global miningindustries will have an impact on the export prospects of the Company.
The prices of most of the raw materials used by the Company arevolatile. The impact of COVID-19 also plays a role in the price of raw materials. TheCompany is doing its best to address this risk by framing appropriate procurement andpricing policies.
The business and economic impact of COVID-19 along with the effects ofthe second wave of COVID is expected to be felt during FY21-22. The Central Governmenthave announced a slew of policy liquidity and fiscal measures as part of the "AtmaNirbhar Bharat" Scheme and as part of Union Budget 2021. Implementation of thesepolicies and schemes would play a crucial role in the economic growth in the medium term.While FY22 may witness overall growth on the back of fall in the GDP during FY21 the paceand extent of recovery shall depend on the implementation of various policy measures.Under these circumstances the future outlook remains one of guarded optimism.
The financial performance of the Company in the year under review hasshown reasonable growth. The turnover from Manufacturing Division has increased marginallywith reasonable increase in profitability. The Services Division saw a better performancewith increase in turnover and profitability. Exports have shown a dip of about 11%compared to the previous year. Your Company is expanding its business in the overseasmarkets through its subsidiaries and branch which is expected to improve the exportturnover in future. The production of moulded and extruded rubber products was 1162tonnes during 2020-21 registering a growth of 13% over the previous year (1029 tonnes).The production of adhesives during the year under review was 323 tonnes showing a dip of4% over the previous year (338 tonnes).
SEGMENT WISE PERFORMANCE
Your Company has 3 segments of revenue Manufacturing UnitsService Units and Others. Audited financial results of these segments are furnished inNote 24.4 forming part of the Financial Statements.
RISKS AND CONCERNS
The Company has put in place Risk Management Policy and Procedures foridentification assessment management monitoring and minimization of risks. It hasidentified potential risks under various categories like Business Dynamics OperationsLiquidity Market/Industry Human Resources Systems and Disaster Management. The Companyis periodically reviewing the risks and their identification assessment monitoring andmitigation procedures. It does not perceive any major technological operationalfinancial or environmental risks in the near future.
However impact of COVID-19 and its second/subsequent waves volatilityin commodity prices fluctuations in forex and constraints in infrastructure are causesfor concern in the near/medium future.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company has adequate internal control systems combined withDelegation of Powers and periodical review of the process. The control system is alsosupported by internal audits and management reviews of documented policies and procedures.
DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
The Company continues to look at identify create and executeinitiatives that enhance productivity and efficiency. To enthuse the employee base andincrease the linear relationship between performance and reward increments/incentives andESOP are being provided based on performance.
During the year the spread of COVID-19 and associated moral andpsychological stress of the employees especially those serving in remote locations werecombatted through the support extended to them and their families.
The Company will invest as hitherto in people through variousinitiatives which enable the workforce to meet the production and service expectations andchallenges related thereto and to infuse positive enthusiasm towards the organisation.
SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
During the Financial Year 2020-21 the Company focussed on profitablebusiness receivable and working capital management. With the support of employees acrossdivisions and aided by the rebound witnessed during the second half of the financial yearthe Company could successfully increase its turnover profitability receivable positionand consequently reduce working capital utilization and interest outfl ow. The Companyregistered a profitability of Rs. 2241.60 lakhs against Rs. 1374.29 lakhsin the previous year with a reasonable growth in sales.
As a result of the above factors the company could considerablyimprove the key financial ratios as given below:
|Particulars ||Financial Year 2020-21 ||Financial Year 2019-20 |
|Operating Profit Margin ||14.83% ||11.05% |
|Net Profit Margin ||10.52% ||6.86% |
|Return on Net Worth ||19.13% ||13.75% |
|Debt Equity Ratio (Times) ||0.45 ||0.62 |
|Interest Coverage Ratio (Times) ||18.52 ||6.53 |
There were no significant changes in the other key financial ratios.
Certain statements in the Management Discussion and Analysisdescribing the Company's views about the Industry objectives and expectations etc.may be considered as forward looking statements.' The Company has tried toidentify such statements by using words such as expect'anticipate' hope' likely' plan'projected' believe' etc. While making these statements theManagement has made certain assumptions which it believes are prudent. There is noguarantee that the assumptions would prove to be accurate. Actual results may differsubstantially or materially from those expressed or implied in the statements. The Companyundertakes no obligation to update any of the statements whether as a result of anyfuture events change in assumptions or for any other reason whatsoever. These statementsare purely intended to put certain things in perspective based on the assumptions andestimates of the Management and in no way solicit investment or guarantee any performanceor returns. Members and others are requested to make their own judgment before taking anydecision to invest in the shares of the Company.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has in place adequate internal financial controlscommensurate with its size. During the year such controls were tested and no reportablematerial weaknesses were observed.
As on the date of this Report the Company has four subsidiariesnamely Thejo Hatcon Industrial Services Company Kingdom of Saudi Arabia (Thejo Hatcon)with 51% shareholding Thejo Australia Pty Ltd. Australia (Thejo Australia) with 74%shareholding Thejo Brasil Comercio E Services Ltda Brazil (Thejo Brasil) with 99.99%shareholding and Thejo Engineering LatinoAmerica SpA Chile (Thejo Chile) with 99.86%shareholding.
PERFORMANCE OF SUBSIDIARY COMPANIES
Thejo Hatcon Industrial Services Company (Thejo Hatcon) is engagedprimarily in rubber lining and related industrial services activities. During the period1st April 2020 to 31st March 2021 Thejo Hatcon achieved aturnover of SAR 8.20 million (Rs. 1626.18 lakhs) on which it made net profit ofSAR 1.67 million (Rs. 322.87 lakhs). Thejo Australia Pty Ltd (Thejo Australia) is aservicing Company primarily engaged in belt splicing belt jointing maintenance andrelated activities. During the period 1st April 2020 to 31stMarch 2021 Thejo Australia achieved a turnover of AUD 19.39 million (Rs. 9856.05lakhs) with a profit of AUD 0.95 million (Rs. 542.35 lakhs).
Thejo Brasil Comercio E Servicos Ltda (Thejo Brasil) is mainly engagedin selling materials used in core sector industries for bulk material handling mineralprocessing and corrosion protection. During the period 1st April 2020 to 31stMarch 2021 Thejo Brasil achieved a turnover of BRL 0.78 million (Rs. 105.85lakhs) and incurred a loss of BRL 0.22 million (Rs. 30.32 lakhs).
Thejo Engineering LatinoAmerica SpA (Thejo Chile) is primarily engagedin selling materials used in core sector industries for bulk material handling mineralprocessing and corrosion protection. During the period 1st April 2020 to 31stMarch 2021 Thejo Chile achieved a turnover of USD 1.21 million (Rs. 897.88 lakhs)with a profit of USD 0.02 million (Rs. 1.69 lakhs).
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGYABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars relating to conservation of energy technology absorptionforeign exchange earnings and outgo as prescribed under Sub-section 3(m) of Section 134of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 are given inAnnexure 1 forming part of the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Your Directors have constituted a Corporate Social ResponsibilityCommittee (CSR Committee) with Mr. V.K. Srivastava as Chairman and Mr. K.J. Joseph Mr.Thomas John and Mr. V.A. George as Members. The Committee has been entrusted with theresponsibility of formulating and recommending to the Board a Corporate SocialResponsibility Policy (CSR Policy) and a CSR Annual Action Plan indicating the activitiesto be undertaken by the Company monitoring the implementation of the framework of the CSRPolicy and recommending the amount to be spent on CSR activities. The CSR Policy isprovided in the Corporate Governance Report.
During the year 2020-21 the Company was required to incur CSRexpenditure of Rs. 33.70 lakhs being 2% of the average net profits for theimmediately preceding three Financial Years. In compliance with this requirement theCompany spent Rs. 34 lakhs on eligible projects approved by the Board on therecommendation of the CSR Committee thus fully meeting the CSR target for the year underreview. Annual Report on CSR Activities for the Financial Year 2020-21 is given inAnnexure 2 forming part of the Board's Report. Brief particulars of the CSR projectsundertaken forms part of the same.
DIVIDEND DISTRIBUTION POLICY
The Company has formulated a Dividend Distribution Policy in compliancewith Regulation 43A of SEBI (Listing Obligations and Disclosure Requirement) Regulations2015. The same is uploaded on the Company's website athttps://www.thejo-engg.com/thejo-admin/upload/allstatutory/DivDisbPolicy.pdf
Pursuant to Section 92(3) read with Section 134(3)(a) of the CompaniesAct 2013 the Annual Return of the Company is available on the Company's website athttps://www.thejo-engg.com/investors/AnnRet
NUMBER OF MEETINGS OF BOARD
Four meetings of the Board of Directors were held during year.Particulars of the meetings held and the Directors present are given in the CorporateGovernance Report which forms part of the Board's Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
a) in the preparation of the annual accounts for the year ended 31stMarch 2021 the applicable accounting standards have been followed and there are nomaterial departures from the same;
b) the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31stMarch 2021 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the Directors have prepared the annual accounts on a goingconcern' basis;
e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and
f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy of the Company on Directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of a Director and other matters provided under sub-section 3 of Section 178of the Companies Act 2013 adopted by the Board of Directors is given in the CorporateGovernance Report forming part of the Board's Report.
The Auditors' Report for the year ended 31st March2021 does not contain any qualification. During the year under review the Auditors havenot reported any matter under Section 143 (12) of the Companies Act 2013.
M/s. Brahmayya & Co. Chartered Accountants were appointed asAuditors at the 31st Annual General Meeting of the Company held on 16thAugust 2017 to hold offi ce up to the conclusion of the 36th Annual GeneralMeeting of the Company.
The Board appointed Mrs. Sindhuja Porselvam Practising CompanySecretary to conduct Secretarial Audit for the Financial Year 2020-21 to fi ll the casualvacancy caused by the demise of the earlier Secretarial Auditor Mr. G. PorselvamPractising Company Secretary who passed away on 23rd May 2021. TheSecretarial Audit Report of Mrs. Sindhuja Porselvam for the Financial Year is attached asAnnexure 3 to the Board's Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
The Company complies with all applicable Secretarial Standards issuedby the Institute of Company Secretaries of India.
The Company is required to maintain cost records as specifi ed by theCentral Government under sub-section 1 of Section 148 of the Companies Act 2013. TheCompany is accordingly making and maintaining such accounts and records.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Particulars of Loans given Investments made and Guarantees given whichare required to be disclosed under Section 186 (4) of the Companies Act 2013 are given inAnnexure 4 forming part of the Board's Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties requiredto be given under Section 188 (2) of the Companies Act 2013 in Form No. AOC-2 are setout in Annexure 5 forming part of the Board's Report.
COMMITTEES OF THE BOARD
Currently the Company has five Committees of the Board of Directorsnamely the Audit Committee Compensation/Nomination and Remuneration Committee CorporateSocial Responsibility Committee Shareholders' and Investors' GrievanceCommittee and Allotment Committee. The terms of reference of the Committees are providedin the Corporate Governance Report forming part of the Boards' Report. Thecomposition of the Committees is as follows:
|Name of the Committee ||Composition of the Committee ||Status |
|Audit Committee ||Mr. M. P. Vijay Kumar ||Independent Director Chairman |
| ||Mr. N. Ganga Ram ||Independent Director Member |
| ||Mr. A. Satyaseelan ||Independent Director Member |
| ||Mrs. Sujatha Jayarajan ||Independent Director Member |
|Compensation/Nomination and ||Mr. N. Ganga Ram ||Independent Director Chairman |
|Remuneration Committee ||Mr. V. K. Srivastava ||Independent Director Member |
| ||Mr. M. P. Vijay Kumar ||Independent Director Member |
| ||Mrs. Sujatha Jayarajan ||Independent Director Member |
|Corporate Social Responsibility ||Mr. V. K. Srivastava ||Independent Director Chairman |
|Committee ||Mr. K. J. Joseph ||Non-Executive Director Member |
| ||Mr. Thomas John ||Non-Executive Director Member |
| ||Mr. V. A. George ||Managing Director Member |
|Shareholders' and Investors' ||Dr. C. N. Ramchand ||Independent Director Chairman |
|Grievance Committee ||Mr. V. K. Srivastava ||Independent Director Member |
| ||Mr. K. J. Joseph ||Non-Executive Director Member |
| ||Mr. Thomas John ||Non-Executive Director Member |
|Allotment Committee ||Mr. A. Satyaseelan ||Independent Director Chairman |
| ||Mr. K.J.Joseph ||Non-Executive Director Member |
| ||Mr. Thomas John ||Non-Executive Director Member |
| ||Mr. V. A. George ||Managing Director Member |
| ||Mr. Manoj Joseph ||Whole-time Director Member |
| ||Mr. Rajesh John ||Whole-time Director Member |
All the recommendations made by the Audit Committee during the yearwere accepted by the Board of Directors without any exception.
The Company has put in place Whistle Blower Policy and established therequisite Vigil Mechanism for employees and Directors for reporting concerns aboutunethical behaviour actual or suspected fraud or violation of law to a designatedCommittee. The Committee consists of Mr. M.D. Ravikanth Chief Financial Officer &Secretary Mr. S Premjit Vice President Services and Mr. Thomas K Abraham Vice President HR & Admin. This mechanism also provides for adequate safeguardsagainst victimisation of reporting employees. The Policy has been disseminated to all theemployees through display on Notice Board and the Company's website.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Thomas John (DIN 00435035) Director retires by rotation at theensuing Annual General Meeting and being eligible offers himself for reappointment.
Mr. V.A. George (DIN 01493737) Managing Director retires by rotationat the ensuing Annual General Meeting and being eligible offers himself forreappointment.
Mr. K.J. Joseph (DIN 00434410) Chairman resigned from the Board asDirector and Chairman with effect from the close of business hours on 22ndJune 2021. The Board while accepting his resignation placed on record its warmappreciation of the invaluable service rendered by him in building the Organisation sinceits inception and contributing to its growth and prosperity. In recognition of hisoutstanding service the Board was pleased to confer on Mr. Joseph the honorary title of"Chairman Emeritus" with effect from 23rd June 2021. Mr. V.A. George(DIN 01493737) was appointed as Managing Director up to 14th July 2021 at the32nd Annual General Meeting held on 20th August 2018. The Board ofDirectors on the recommendation of the Compensation / Nomination and RemunerationCommittee have appointed Mr. V.A. George as Whole-time Director designated as ExecutiveChairman with the general powers of management of the affairs of the Company for a periodof 5 years with effect from 15th July 2021 subject to the approval of theMembers. Mr. Manesh Joseph (DIN 07599476) was appointed as an Additional Director witheffect from 23rd June 2021 by the Board at its meeting held on 22ndJune 2021 based on the recommendation of the Compensation/ Nomination and RemunerationCommittee. He holds office as Additional Director up to the date of this Annual GeneralMeeting. On the recommendation of the Compensation/Nomination and Remuneration Committeethe Board of Directors have appointed Mr. Manesh Joseph as Whole-time Director of theCompany for a period of five years with effect from 23rd June 2021 subject tothe approval of the Members.
Mr. Manoj Joseph (DIN 00434579) was appointed as Whole-time Director ofthe Company designated as Deputy Managing Director and Chief Operating Officer for aperiod of 3 years with effect from 20th June 2020 at the 34thAnnual General Meeting held on 29th August 2020. On the recommendation of theCompensation / Nomination and Remuneration Committee the Board of Directors haveappointed Mr. Manoj Joseph as Managing Director of the Company for a period of 5 yearswith effect from 15th July 2021 subject to the approval of the Members.
Mr. Rajesh John (DIN 05161087) was appointed as Whole-time Director ofthe Company for a period of 5 years up to 15th January 2022 at the 30thAnnual General Meeting held on 3rd August 2016. On the recommendation of theCompensation/Nomination and Remuneration Committee the Board of Directors havere-appointed Mr. Rajesh John as Whole-time Director of the Company for a period of 5 yearswith effect from 16th January 2022 subject to the approval of the Members.
A brief resume of these Directors together with related information isgiven in the Notice convening the ensuing Annual General Meeting. The Board recommendstheir appointment / re-appointment as Directors of the Company.
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed under Section 149(6) of the Companies Act 2013. None of the IndependentDirectors will retire by rotation at the ensuing Annual General Meeting.
A formal annual evaluation is required to be made by the Board of itsown performance and that of its Committees and individual Directors. Section 178(2) of theCompanies Act 2013 requires the Compensation/ Nomination and Remuneration Committee tocarry out evaluation of every Director's performance. Schedule IV of the CompaniesAct 2013 states that the performance evaluation of the Independent Directors is to bedone by the entire Board of Directors excluding the Director being evaluated.
Accordingly the Board of Directors carried out annual performanceevaluation of the Board Board Committees Individual Directors and Chairperson during theyear under review. The Compensation/ Nomination and Remuneration Committee duly carriedout evaluation of every Director's performance. Similarly the performance of theNon-Independent Directors and of the Board as a whole was evaluated by the IndependentDirectors at a separate Meeting held by them. The evaluation of all the Directors made wason the basis of the criteria and framework adopted by the Compensation/Nomination andRemuneration Committee.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures relating to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as Annexure 6 to theBoard's Report.
In terms of provisions of Section 197(12) of the Companies Act 2013and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 a statement showing names of the employees drawing remuneration and otherparticulars as prescribed in the said Rules forms part of this report. However in termsof proviso to Section 136(1) of the Act and Rule 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Annual Report excluding theaforesaid information is being sent to the Members of the Company. The said information isavailable for inspection at the Registered Office of the Company during working hours andany member who is interested in obtaining these particulars may write to the CompanySecretary of the Company. During the Financial Year no employee received remuneration inexcess of the limits prescribed under Section 197(12) of the Companies Act 2013 read withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
Your Company is committed to the well-being of the Environment Societyand upholding high standards of Governance. The Company has voluntarily complied with therequirements of Corporate Governance to a large extent. A report on Corporate Governanceis attached as Annexure 7 to the Board's Report.
Your Directors state that there were no transactions in respect of thefollowing items during the year under review requiring disclosure or reporting:
1. Deposits covered under Chapter V of the Companies Act 2013.
2. Issue of equity shares with differential rights as to dividendvoting or otherwise.
3. Receipt of remuneration or commission by the Managing Director orthe Whole-time Directors of the Company from any of its subsidiaries.
4. Significant or material orders passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that the Company has constituted anInternal Complaints Committee and during the year under review there was no case fi ledpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The Directors wish to thank the Company's Bankers for theircontinued support. The Directors also wish to thank the Company's customers andstakeholders for their patronage.
Your Directors place on record their appreciation of the good work doneby the employees of the Company at all levels.
| || || |
For and on behalf of the Board
| ||K. J. JOSEPH ||THOMAS JOHN ||V.A. GEORGE |
|Chennai ||Chairman ||Vice Chairman ||Managing Director |
|22nd June 2021 ||DIN 00434410 ||DIN 00435035 ||DIN 01493737 |