Mar 31, 2022
1. financial results for the year ended 31st MARCH 2022 ( C in lakhs) |
||||||
Particulars |
2021-22 |
2020-21 |
||||
1.1 |
Forging sales |
1,08,798.03 |
71,146.74 |
|||
1.2 |
Profit before exceptional items/ extraordinary items and Tax |
13,289.40 |
5,493.05 |
|||
1.3 |
Exceptional/Extraordinary Items |
0.13 |
0.03 |
|||
1.4 |
Profit Before Tax |
13,289.53 |
5,493.08 |
|||
1.5 |
Tax |
|||||
For current year |
2,599.52 |
725.00 |
||||
Relating to previous years |
84.55 |
0.00 |
||||
Deferred Tax / MAT Credit |
1,429.48 |
4,113.55 |
107.36 |
832.36 |
||
Profit after Tax |
9,175.99 |
4,660.72 |
||||
2. dividend and financial results ( C in lakhs) |
||||||
2.1 |
Profit after Tax |
9,175.99 |
4,660.72 |
|||
2.2 |
Balance in P & L Account |
121.17 |
115.54 |
|||
2.3 |
Profit available for appropriation |
9,297.16 |
4,776.28 |
|||
2.4 |
Transfer to General Reserve |
7,725.00 |
3,200.00 |
|||
2.5 |
Proposed Dividend |
1,448.45 |
1,455.09 |
|||
2.6 |
Balance carried forward |
123.71 |
121.17 |
The Directors declared 60% dividend ( C 6/- per share ) of face value of C 10/- each, in their meeting held on 25th May 2022.
The Directors do not recommend any final dividend for the year 2021-22.
There was no change in the share capital during the year.
4. HIGHLIGHTS OF THE Companyâs OPERATIONAL PERFORMANCE
4.1 The Company has overall Revenue, of above C1100 crores.
4.2 The Companyâs PBT is C 132.89 crores.
4.3 The Companyâs PAT stands at C 91.76 crores.
4.4 The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were C 476.66 crores.
4.5 The Company has retained its ISO 9001 and TS 16949 Certification for its Quality Management.
4.6 Export sales is C 541 crores and the domestic sales stands at C 547 crores.
4.7 The Company has declared an interim dividend of 60 % dividend for the year.
5. INDIAN ACCOUNTING STANDARD ( IND AS) IFRS CONVERGED STANDARDS
Pursuant to the notification of the Companies (Indian Accounting Standard) Rules, 2015 by the Ministry of Corporate Affairs (MCA) on 16 February 2015, the Company has adopted Indian Accounting standards (IND AS).
6. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER
Raw Material - C 522.81 Crores (46.55 %)
Personnel - C 112.73 Crores (10.04 %)
7. MANAGEMENT DISCUSSION AND ANALYSIS Economic Overview - Global
The onset and subsequent drawn out war in eastern Europe has thrown commodity prices high, further dampening prospects of global economic recovery.
War-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7% in advanced economies and 8.7% in emerging market and developing economies -1.8% and 2.8% points higher than projected last January. Multilateral efforts to respond to the humanitarian crisis, preventing further economic fragmentation, maintaining global liquidity, manageing debt distress, tackleing climate change, and an end to the pandemic are essential.
2021 |
2022 |
2023* |
|
World output |
6.1 |
3.6 |
3.3 |
Advanced Economies |
5.2 |
3.3 |
2.4 |
Emerging Markets |
6.8 |
3.8 |
4.4 |
India |
8.9 |
8.2 |
6.9 |
* Projection || Source: World Economic Outlook || IMF
Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January. Beyond 2023, global growth is forecasted to decline to about 3.3 percent over the medium term.
It has been two years since COVID-19 was declared as a global pandemic with terrible loss of lives and livelihoods. Adaptation to life with pandemic induced restriction has enabled the global economy to perform reasonably well despite overall subdued mobility, leading to a stronger-than-anticipated rebound, on average, across regions.
After the near-term, widespread availability of vaccines and near-normalization of economic activity, together with continued policy support, should help fuel the manufacturing recovery. Further normalization of global capital expenditure will be an important source of demand for manufacturing.
MANAGEMENT DISCUSSION AND ANALYSIS Economic Overview - India
With Covid-19 largely behind, the Indian economy faces strong inherent growth momentum which is likely to be tempered by inflation, the consequent rise in interest rates and the risk of demand dampening.
Notwithstanding headwinds, globally, the Indian economy is projected to have the strongest growth in GDP in 2022 and also in 2023!
The phased unlocking of the economy with government intervention eased manufacturing and supply chains. Many sectors of the economy re-bounded in FY22. The third wave of the pandemic which lasted between Dec21 through Feb22 did not dent the momentum. The recovery cycle picked up from the second half of FY22 and is expected to grow further in FY23 and FY24. It may moderate from FY25 onwards. The IMF has upwardly revised the growth forecast to 8.2% for FY22 and 6.9% for FY23. This is the highest GDP growth rate in the world!
Indiaâs GDP, which shrank from $2.87 trillion in FY20 to $2.66 trillion in the FY21, is expected to rise to about $5 trillion in FY27 or FY28. The latest forecast hints that the target of $5 trillion may fructify with a minimum delay of four years.
FY22 saw an unprecedented rally in domestic steel prices which seemed unstoppable even in the current fiscal FY23. Steel prices have increased by almost 30% year on year. Further increases are expected in FY23. There is also anticipation that the government would take structural measures to cool down the steel market in India.
Market segments outlook: Key segment analysis: Commercial Vehicles (CV)
The CV segment plays a significant role of MMF with sales of 82%. Passenger car segment constitutes 11% and others 7%.
CV segment is poised to witness a robust turnaround domestically. It is also expected to do well in North America and Europe. US class 8 truck sales recorded significant numbers in Apr 2021 (440,000) and in Apr 2022 (390,000).
The European market has witnessed consistent demand through the years in excess of 300,000 HCV for the last 3 calendar years. However the prospects of continued war in eastern Europe is expected to dampen these economies. Real GDP growth rate is 5.9% for 2021 and 1.6% in 2022 and is expected to be 1.9% in 2023 and 2.2% in 2024.
In India, MHCV production which peaked in FY19 at 444,000 vehicles has tapered to 234,000 vehicles in FY20,161,000 in FY21 and 241,000 in FY22. In FY23 MHCV production is expected to grow significantly to 400,000 units.
Currency movement: [USD vs INR]
The INR which is near record lows at C 77.56 per USD is expected to be under continued pressure.
M M FORGINGS - Achievements in FY22
The following were achieved during FY22, despite the second and third wave of pandemic:
Domestic sales |
C 547 crore |
Export sales |
C 541 crore |
Total sales |
C 1088 crore |
Overall sales around |
C 1123 crore |
Production tonnage |
61,200 Tons |
Changes in steel prices which are in line with international markets are generally being passed on to customers as is the industry practice.
We are focusing on launching new products to take advantage of the forging capacities created in the last 4 years. We are also de-bottlenecking to take advantage of the growth in established products
Debtors Turnover |
118 days |
Inventory Turnover |
5.46 |
Interest Coverage Ratio |
7.39 |
Current Ratio |
1.90 |
Debt Equity Ratio |
0.75 |
Operating Profit Margin (%) |
11.76 % |
Net Profit Margin (%) |
8.17 % |
As highlighted in the Directorsâ Report, Return on Net Worth (on PAT) is 17.31% and Return on Capital Employed is 16.21%. Total Outside Liabilities to Net Worth stands at 1.41.
Human Resources and Industrial Relations
1. Our Company continues to focus on the development of its human resources to improve its performance. As on 31st Mar 2022, the Company currently has approximately 3703 employees. It is their invaluable contribution that has primarily resulted in our Companyâs position of strength in the industry.
2. Focus on a safe working atmosphere, constantly evolving systems for recognition and reward, consistent communication and imparting skills and training - all these focused on meeting customer needs, characterize the HR development of Hunan Resourses of the Company.
Every year, each plant of the Company celebrates Founderâs Day in a family atmosphere with all employees and their households. This practice has been hampered on account of COVID-19. We expect to restart this in the coming months.
3. Health, Safety and Environment
The Company follows a policy of zero tolerance towards accidents. Wherever possible, visible controls and fail-safe systems are provided to ensure prevention of accidents. Regular communication, periodic reviews of practices and training, play a vital role in maintaining safety standards.
The Company ensures compliance with all pollution control regulations. Adequate pollution control equipment have been installed to treat effluents and to control air pollution.
Risk Management
1. The Company is a leading manufacturer of automotive components. Automotive industry is subjected to cyclical variations in performance and is very sensitive to policy changes. The market is very competitive. Prices of raw materials change based on supply and demand. Margins remain under constant pressure. Any steep reduction in off-take exposes the Company to high fixed costs.
2. A considerable portion of the customers of the Company are situated outside of India. Hence, demand for the Companyâs product is subject to the health of the global economy.
3. The war in eastern Europe poses significant risk in global geopolitical stability
4. Further, the consequent inflation in commodity prices, hike in interest rates and prospect of significant demand reduction are risks to be considered in the coming months.
5. The Company has spread its risks by increasing the geographic spread of its customer base The Company proposes to improve capacity utilization in its existing facilities. Working capital management will receive high priority.
6. Risk Management Committee (RMC) has been formed w.e.f 21 Jun 21.
7. RMC shall meet twice a year.
8. The responsibilities of RMC includes formulating risk management policy, implementation of the policy, monitor, evaluate risks, device appropriate methodology, processes and systems.
M M FORGINGS - forging ahead with Manufacturing Excellence
Our goals in the coming months:
1. Focus on improving sales in keeping with market conditions.
2. Utilizing the production capacity of 1,00,000 Tons.
3. Focus on cost reduction continuously - particularly on reducing energy consumption and improving productivity.
4. Enhance IT systems with the continued development of the ERP system in place.
5. Continue the evolution into green sources of energy in the coming months.
6. Reduce the impact on the environment.
Sources:
⢠IMF World Economic Output
⢠The Economist
⢠SIAM data
8. TRANSFER TO RESERVE
A sum of C 77.25 Crores has been transfered to General Reserve.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The Company has made advance to the tune of C 83.52 Crores to its Subsidiary Company, DVS Industries Private Limited, repayable at prevailing rates. The details of the investments made by the Company are given in the notes to the financial statements.
10. DIRECTORS
Smt. Sumita Vidyashankar was appointed in the Board on 13 August 2021 as an Additional Director. Her appointment was regularised in the Annual General Meeting held on 13 September 2021.
11. RETIRE BY ROTATION
Shri. K. Venkatramanan (DIN 00823317) will retire by rotation and being eligible has offered himself for re-appointment.
12. DETAILS OF DIRECTORS OR KMP RESIGNED DURING THE YEAR - NIL
13. BOARD AND COMMITTEE MEETING DATES
Details are provided in Annexure III of this Report.
14. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS - None
15. RISK MANAGEMENT
Your Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Policy provides for identification of risks and mitigation measures. The Audit Committee is informed on the risk assessment and minimizations mechanism adopted by the Company.
The Company has formed Risk Management Committee, which consist of majority of Board Members.
16. RELATED PARTY TRANSACTION
The Company has formulated a policy on related party transactions and the same is uploaded on the Companyâs website:
https: //www.mmforgings.com/uploads/policies/Policy_on_Related_Party_Transactions.pdf
Related Party transactions during the financial year 2021-22 is shown in Annexure III to the Directorsâ Report, under the head âDisclosuresâ.
There are no âMaterialâ contracts or arrangement or transactions at armâs length basis.
There are no materially significant Related Party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.
For related party transactions as per Accounting Standards, refer Notes on Accounts.
17. CORPORATE SOCIAL RESPONSIBILITY
A Board Level Committee of CSR has been constituted and the Board has adopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy are Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business Projects.
Amount to be spent under CSR for F22 - C 147.26 lakhs
Amount spent in F22 - C 173.94 lakhs
Excess spent for F22 - C 26.68 lakhs
Annual report on CSR has been provided in Annexure III of this Report.
18. POLICY ON DIRECTORSâAPPOINTMENT AND REMUNERATION
In terms of provision of section 178 of the Companies Act, 2013 read with Rules prescribed, a policy for the Directors, KMP and other employees has been adopted by the Board of Directors of the Company, which analyzes the criteria for determining qualifications, positive attributes and independence of a Director.
The said policy is provided in Companyâs website as below:
https://www.mmfbrgings.com/uploads/policies/Nomination_and_Remuneration_Policy_f_
amended).pdf
19. PARTICULARS OF EMPLOYEES
The information required under the rules prescribed, has been given in the annexure appended hereto and forms part of this report.
20. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES:
20.1 The ratio of remuneration of each Director to the median remuneration of the employees:
Name |
Ratio |
|
Shri Srinivasan N |
0.00 |
1 |
Shri Vaidyanathan V |
1.65 |
1 |
Shri Gopalakrishnan A |
1.65 |
1 |
Smt Kavitha Vijay |
1.65 |
1 |
Smt Sumita Vidyashankar |
1.65 |
1 |
Shri Vidyashankar Krishnan |
287 |
1 |
Shri K. Venkatramanan |
287 |
1 |
For this purpose, sitting fees paid to the Directors have not been considered as remuneration.
20.2 Percentage increase in remuneration of each Director, KMP, in the financial year:
Name |
Increase % |
Shri Srinivasan N |
125.00% |
Shri Vaidyanathan V |
4.69% |
Shri Gopalakrishnan A |
50.00% |
Smt Kavitha Vijay |
24.82% |
Smt Sumita Vidyashankar |
100.00% |
Shri Vidyashankar Krishnan |
132.84% |
Shri K. Venkatramanan |
133.26% |
Smt J. Sumathi |
14.24% |
Shri R. Venkatakrishnan |
11.14% |
20.3 Percentage increase in median remuneration of employees is 45.30% in the financial year 2021-22.
20.4 The number of permanent employees on the rolls of Company: 2159.
20.5 Explanation of relationship between average increase in remuneration and Company performance: PAT - (last year) C 4,660.72 Lakhs; PAT - (this year) - C 9,175.99 Lakhs. Increase 98.45% against which, the average increase in remuneration is 45.30%
20.6 Comparison of remuneration of each KMP against performance of Company
Name |
Designation |
CTC in D |
% of Increase |
PAT D in Lakhs |
% in PAT |
Vidyashankar Krishnan |
CEO |
6,95,29,262 |
132.84 |
||
J.Sumathi |
Company Secretary |
11,32,900 |
14.24 |
9175.99 |
98.45 |
R.Venkatakrishnan |
CFO |
17,14,036 |
11.14 |
20.7 Variation in market cap/net worth of Company:
Date |
Paid up Capital (Shares) |
Closing market Price per share in C |
EPS |
PE Ratio |
Market Capitalisation C in Crores |
31.03.2021 |
24140800 |
495.00 |
19.31 |
25.63 |
1,194.97 |
31.03.2022 |
24140800 |
846.75 |
38.01 |
22.28 |
2,044.12 |
20.8 Justification of increase in managerial remuneration with that of increase in remuneration of other employees.Average Increase in Remuneration for employees other than Directors and KMP is 36.90%.
Average Increase in Remuneration for KMP and Senior Management is 127.10%.
20.9 Key parameters for any variable remuneration of Directors:
Directors are paid Commission. However, the overall managerial remuneration payable is subject to the provisions of the Companies Act, 2013.
20.10 Ratio of remuneration of highest paid Director to other employees who get remuneration more than highest paid Director - NOT APPLICABLE.
20.11 Is remuneration as per remuneration policy of the Company: YES.
21 SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND
CompanyâS OPERATIONS IN FUTURE:
Not applicable.
22 MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE
FINANCIAL POSITION OF THE Company WHICH HAS OCCURRED SINCE
31.03.2022 TILL THE DATE OF THE REPORT:
NIL
23 DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation of the accompanying
financial statements by taking all reasonable steps to ensure that:
23.1 In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures;
23.2 The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2022 and of the profit or loss of the Company for that period ended on that date;
23.3 The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
23.4 The Directors had prepared the annual accounts on a going concern basis.
23.5 The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
23.6 The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
24 ESTABLISHMENT OF VIGIL MECHANISM
The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue. The Whistle Blower Policy covering all employees and Directors is hosted on the Companyâs website at https: //www.mmforgings.com/uploads/policies/Whistle_Blower_ Policy2.pdf.
A high level Committee has been constituted to look into the complaints. The Committee reports to the Audit Committee and the Board.
25 ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company had laid down Internal Financial Controls and such internal financial controls are adequate with reference to the Financial Statements and were operating effectively.
It also ensures the orderly efficient conduct of its business, including adherence to Companyâs policies, the safe guarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information during the year, such controls were tested and no material weakness in the operations were observed.
26 CORPORATE GOVERNANCE REPORT
The guidelines evolved by SEBI were applicable to the Company. The Company is committed to ethical management and excellence in performance. Details are provided in Annexure III.
27 ANNUAL RETURN
In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at https: //www.mmforgings.com/uploads/general_share/AnnualReturn.pdf
28 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS;
28.1 Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feed back forms for evaluation of the Board, Independent Directors and Chairman.
28.2 Independent Directors at a meeting without anyone from the non-independent Directors and management, considered/evaluated the Boardâs performance, performance of the Chairman and other non-independent Directors. Their meeting was held on 17 November 2021.
28.3 The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant Director).
28.4.1. Observations of Board evaluation carried out for the year: The main inputs received from the Directors, covering various aspects of the Boards functioning was with regard to adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non Independent Directors and Top Managerial Personnel were carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.
28.4.2 Previous yearâs observations and actions taken - NIL
28.4.3 Proposed actions based on current year observations - NIL
29 FAMILIARISATION OF PROGRAMME ARRANGED FOR INDEPENDENTDIRECTORS
⢠M M Forgings Limited has put in place a system to familiarise independent Directors about the Company, its products, business and the on-going events relating to the Company.
⢠Independent Directors of the Company are made aware of their role, responsibilities and liabilities at the time of their appointment / re-appointment, through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.
⢠They are also made aware of Companyâs Board and Board Committee framework, policies and procedures.
⢠As part of Board Discussions, presentations on business of the Company are made to the Directors from time to time.
⢠Important announcements and press releases for various news related to the Company are forwarded to the Directors from time to time.
⢠Each member of the Board, including the independent Directors, have been given complete access to any information relating to the Company.
⢠You may also view the Company website: https://www.mmforgings.com/uploads/ Familiarisation_programme/Familiarization_programme1.pdf
30 AUDITORS:
M/s G R N K & Co., Chartered Accountants (FRN 016847S) will be retiring in the ensuing
Annual General Meeting. M/s Ramesh Kumar & Co., Chartered Accountants, will be appointed
as Auditors for a period of 5 years from this forthcoming Annual General Meeting.
There is no audit qualification, reservation or adverse remark for the year under review.
Brief profile of M/s . Ramesh Kumar & Co.:
Partners: G.Ramesh Kumar FCA and S.Sridhar FCA
1. Statutory / Internal Audit of more than 50 Limited Companies, MSME,Trust, including Trust running Educational Institutions, branches of public sector banks.
2. services for acquisition, mergers/ demergers.
3. Preparation ofProject Feasibility Reports for Term Loan from All India Financial Institutions - IDBI/ IFCI/TFCI/ State Financial Institutions/ banks. Income Tax representations and Appeal of more than 600 families.
Pursuant to Section 204 of the Companies Act, 2013 and Rules thereunder, the Company has appointed V.Shankar, Practicing Company Secretary (C.P. No. 12974) as the Secretarial Auditor for the financial year 2022-23.
Pursuant to the provisions contained in Rule 14 of the Companies ( Audit and Auditors) Rules, 2014, Shri. S. Hariharan ( CP No. 20864) has been appointed as Cost Auditor for the financial year 2022-23.
33. SUBSIDIARY COMPANIES33.1 DVS INDUSTRIES PRIVATE LIMITED
DVS Industries achieved a turnover of C 66.01 Crores in FY22 located in Pantnagar, Uttarakhand. DVS Industries is well equipped with precision equipment, in-house tool room inspection facilities, well trained personnel, etc.
33.2 CAFOMA AUTOPARTS PRIVATE LIMITED
The Company acquired Cafoma Autoparts Pvt. Ltd. for C33 Crores, including subordinated debt of C5 Crore on 15th October 2021. It is now a wholly owned subsidiary of MM Forgings Ltd. and is engaged in machining. Cafoma achieved a turnover of C 9.12 Crores (in FY22) of crankshafts.
33.3 SUVARCHAS VIDYUT PRIVATE LIMITED
SUVARCHAS VIDYUT PRIVATE LIMITED was incorporated as a wholly owned subsidiary of the Company on 31st March 2022. There were no activities in this year. Authorised Share Capital : C 5,00,00,000/- (Rupees Five Crores Only)
Paid-Up Share Capital : C 1,00,00,000 (Rupees One Crore Only)
Turnover : New Company / not yet started operations.
Object : It is a start-up Company to produce electrical and
electronic components and subassemblies for industrial, consumer, and automotive applications.
34 EXPLANATION TO AUDITORâS REMARK
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.
35. SAFETY
Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training at all levels have been provided by the Company.
36. DEPOSITS:
The Company does not have any deposits nor accepts any fresh deposits.
37. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 134 (3) of the Companies Act, 2013, read with the Companies (Accounts)) Rules, 2014 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure
38. DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All the Independent Directors have given the necessary declarations to the Company as required under sub section (6) of Section 149 of the Companies Act, 2013.
39. PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE
During the year under review, pursuant to the new legislation, âPrevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013â introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at workplace. There were no cases reported during the year under review under the said Policy.
Disclosures in relation to the Sexual Harassment of Women in work place:
No. of complaints filed during the year - 0
No of complaints disposed of during the year - 0
No of complaints pending as on the end of the financial year - 0
40. COVID 19
The Company is following Covid-19 guidelines, rules and regulations issued by Central and State governments. During the second wave (Delta Variant) in May to July of 2021, your company contributed a total of C 132.78 Lakhs towards the Covid effort, largely by building, bolstering and augmenting the availablity of oxygen to hospitals - both private and public.
41. BUSINESS RESPONSIBILITY REPORT
The Report is attached to this Report. (Annexure 5)
42. INDEPENDENT DIRECTOR SELF ASSESSMENT TEST
⢠Shri. N. Srinivasan and Shri. V. Vaidyanathan are exempted from undergoing selfassessment test.
⢠Shri A. Gopalakrishnan and Smt. Kavitha Vijay have passed the self-assessment test conducted by the Ministry of Corporate Affairs.
43. ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the cooperation and continued assistance received from DBS Bank, State Bank of India, HDFC Bank, Federal Bank, ICICI Bank and Standard Chartered Bank.
Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the Company. The results achieved would not have been possible but for their outstanding effort and divine grace.
Above all the Directors thank the shareholders for their continued confidence in the management.
For and On behalf of the Board Vidyashankar Krishnan
Place: Chennai Chairman of the Meeting
Date: 25 May 2022 (DIN 00081441)
Mar 31, 2018
1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2018
(Rs. in Lakhs)
2017-18 |
2016-17 |
||||
1.1. |
Forging Sales |
60091.09 |
46042.66 |
||
1.2. |
Profit before exceptional items/ extraordinary items and Tax |
8191.36 |
5514.16 |
||
1.3 |
Exceptional/Extraordinary Items |
17.21 |
0.25 |
||
1.4 |
Profit Before Tax |
8208.57 |
5514.41 |
||
1.5 |
Tax |
||||
For current year |
1500.00 |
1176.86 |
|||
Relating to previous years |
- |
80.91 |
|||
Deferred Tax |
(323.35) |
293.21 |
|||
MAT credit entitlement |
181.19 |
1357.84 |
(378.81) |
1172.19 |
|
Profit After Tax |
6850.73 |
4342.22 |
The Directors commend the employees for their commitment and contribution.
2. DIVIDEND AND FINANCIAL RESULTS: (Rs. in Lakhs)
2017-18 |
2016-17 |
||
2.1. |
Profit After Tax |
6850.73 |
4342.22 |
2.2. |
Balance in P & L Account |
244.71 |
244.20 |
2.3. |
Profit available for appropriation |
7095.44 |
4586.42 |
2.4. |
Transfer to General Reserve |
5400.00 |
3500.00 |
2.5. |
Interim Dividend paid |
701.43 |
841.71 |
2.6 |
Proposed Dividend |
701.43 |
- |
2.7. |
Balance carried forward |
292.58 |
244.71 |
The Directors had declared a second Interim Dividend of 50% - Rs.5/- per share of face value of Rs.10/- each on 28 May 2018. The Directors earlier declared first Interim Dividend of Rs.5/- per share and the same was paid on 11 December 2017. With this, the total Dividend for the year ended 31, March 2018, will aggregate to Rs.10/- per share. The Directors do not recommend any final dividend for the year 2017-18.
3. HIGHLIGHTS OF THE COMPANYâS OPERATIONAL PERFORMANCE
3.1 The company continues to be one of the largest exporter of forgings from South India and has received 26 consecutive Annual Awards from The engineering Exports Promotion Council since 1989.
3.2 The company has crossed the Rs.200 Crore mark for the first time in domestic sales, Rs.350 Crore mark in export sales and Rs.600 Crore mark in overall sales.
3.3 The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs.277.30 crores.
3.4 The Company has retained its ISO 9001 and TS 16949 Certification for its Quality Management.
3.5 The capital expenditure during the year was Rs.100.90 Crores. Forgings and Machining capacity has been substantially increased in line with customer demand. The company also produces Green energy in its Solar and in Wind farms.
3.6 DVS Industries (P) Ltd : Your Company has acquired DVS Industries (P) Ltd.
4. INDIAN ACCOUNTING STANDARD ( IND AS) IFRS CONVERGED STANDARDS
Pursuant to the notification of the Companies (Indian Accounting Standard) Rules, 2015 by the Ministry of Corporate Affairs ( MCA) on 16 February 2015, the company has adopted Indian Accounting standards (IND AS)
5. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER
Raw Material - Rs.285.57 crores (45.12%)
Personnel - Rs.65.28 crores (10.31%)
7. TRANSFER TO RESERVE
Transfer to General Reserve - Rs.54 Crores
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The Company has made advance to the tune of Rs.46.28 Crores to its Subsidiary Company, DVS Industries Private Limited, repayable at prevaling rates.
The details of the investments made by the company are given in the notes to the financial statements.
9. DIRECTORS
Both Shri Vidyashankar Krishnan, Vice Chairman and Managing Director and Shri K Venkatramanan, Jt Managing Director are being re-appointed for a period of five years with effect from 1 September 2018. The profile of Directors form part of the notice.
10. DETAILS OF DIRECTORS OR KMP RESIGNED DURING THE YEAR - NIL
11. BOARD AND COMMITTEE MEETING DATES
Details are provided in Annexure III of this Report.
12. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS - None
13. RISK MANAGEMENT
Your Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Policy provides for identification of risks and mitigation measures. The Audit Committee is informed on the risk assessment and minimizations mechanism adopted by the Company.
14. RELATED PARTY TRANSACTION
The Company has formulated a policy on related party transactions and the same is uploaded on the Companyâs website.
All Related Party transactions that were entered into by the Company during the financial year 2017-18, were in compliance of Section 188 of the 2013 Act and the Rules framed thereunder. There are no âMaterialâ contracts or arrangement or transactions at armâs length basis.
All Related Party transactions were placed before the Audit Committee for their prior approval in accordance with the requirements of the SEBI LODR. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee for its review.
There are no materially significant Related Party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.
For related party transactions, refer Annexure 3, under the head âDisclosuresâ
15. CORPORATE SOCIAL RESPONSIBILITY
A Board Level Committee of CSR has been constituted and the Board has adopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy are Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business Projects.
Your Company has fulfilled its obligation towards CSR, by spending a sum of Rs.131.36 Lakhs during the year.Annual report on CSR has been provided in Annexure III of this Report.
16. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
In terms of provision of section 178 of the Companies Act, 2013 read with Rules prescribed, a policy for the Directors, KMP and other employees has been adopted by the Board of Directors of the Company analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said Policy is given in Annexure 3 under Nomination & Remuneration Committee.
17. PARTICULARS OF EMPLOYEES
The information required under the rules prescribed, has been given in the annexure appended hereto and forms part of this Report.
18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES :
18.1 The ratio of remuneration of each Director to the median remuneration of the employees:
Name |
Ratio |
Shri. N. Srinivasan |
4.15 : 1 |
Shri V. Vaidyanathan |
2.21 : 1 |
Shri A. Gopalakrishnan |
1.66 : 1 |
Ms. Kavitha Vijay |
1.66 : 1 |
Shri Vidyashankar Krishnan |
243.52 : 1 |
Vice Chairman & Managing Director (Chief Executive Officer) Shri. K. Venkatramanan, Joint Managing Director |
236.31 : 1 |
For this purpose, sitting fees paid to the Directors have not been considered as remuneration 18.2 Percentage increase in remuneration of each Director, KMP, in the financial year:
Name |
% Increase |
Shri. N. Srinivasan |
- |
Shri V. Vaidyanathan |
- |
Shri A. Gopalakrishnan |
5.56 % |
Ms. Kavitha Vijay |
- |
Shri Vidyashankar Krishnan |
44.39 % |
Vice Chairman & Managing Director |
|
(Chief Executive Officer) |
|
Shri. K. Venkatramanan, Joint Managing Director |
45.32 % |
Smt.J.Sumathi, Company Secretary |
5.17 % |
Shri.R.Venkatakrishnan, CFO |
10.78 % |
18.3 Percentage increase in median remuneration of employees is 21.10 in the financial year 2017-18
18.4 The number of permanent employees on the rolls of Company: 1589
18.5 Explanation of relationship between average increase in remuneration and company performance :
PAT - ( last year) - Rs.4342.22 Lakhs PAT - ( this year) - \Rs.6850.75 Lakhs,
Increase - 57.77 against which, the average increase in remuneration is 24 %
18.6 Comparison of remuneration of each KMP against performance of company
Name |
Designation |
CTC in CTC |
% Increase |
PAT Rs. in Lakhs |
% in PAT |
Vidvashankar Krishnan |
CEO |
44045674 |
44.39% |
6850.75 |
57.77% |
J.Sumathi |
Company Secretary |
1051310 |
5.17 % |
||
R.Venkatakrishnan |
CFO |
1570122 |
10.78 % |
18.7 Variation in market cap/net worth of company:
Date |
Issued Capital (Shares) |
Closing market Price per share in Rs. |
EPS |
PE Ratio |
Market Capitalisation Rs. in Crores |
31.03.2017 |
12070400 |
542 |
35.97 |
15.07 |
654.21 |
31.03.2018 |
12070400 |
1038 |
56.76 |
18.29 |
1252.90 |
Increase/ (Decrease) |
NIL |
496 |
20.79 |
3.22 |
598.69 |
% of Increase/ (Decrease) |
NIL |
91.51 |
57.80 |
21.37 |
47.78 |
18.8 Justification of increase in managerial remuneration with that of increase in remuneration of other employees.
Average Increase in Remuneration for employees other than Directors and KMP is 2.1%
Average Increase in Remuneration for KMP and Senior Management is 42.3%
18.9 Key parameters for any variable remuneration of Directors:
Directors are paid Commission. However, the overall managerial remuneration payable is subject to the provisions of the Companies Act, 2013
18.10 Ratio of remuneration of highest paid Director to other employees who gets remuneration more than highest paid Director. - NOT APPLICABLE
18.11 Is remuneration is as per remuneration policy of the Company: YES
19 SIGNINFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE: Not applicable
20 MATERAIL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2018 TILL THE DATE OF THE REPORT: Not applicable
21 DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that -
21.1 In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures;
21.2 The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2018 and Profit or Loss of the Company for that period ended on that date.
21.3 The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
21.4 The Directors had prepared the annual accounts on a going concern basis.
21.5 The Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
21.6 The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
22 ESTABLISHMENT OF VIGIL MECHANISM
The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue. The Whistle Blower Policy covering all employees and Directors is hosted on the Companyâs website.
A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.
23 ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company had laid down Internal Financial Controls and such internal financial controls are adequate with reference to the Financial Statements and were operating effectively.
It also ensures the orderly efficient conduct of its business, including adherence to Companyâs policies, the safe guarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information during the year, such controls were tested and bi-material weakness in the operations were observed.
24 CORPORATE GOVERNANCE REPORT
The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3.
25 ANNUALRETURN
An extract of Annual Return as on 31 March 2018 pursuant to Section 92 ( 3) of the Companies Act, 2013 and forming part of the report is attached separately.
26 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS;
1. Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feed back forms for evaluation of the Board, Independent Directors and Chairman.
2. Independent Directors at a meeting without anyone from the non-independent Directors and management, considered/evaluated the Boardâs performance, performance of the Chairman and other non-independent Directors. Their meeting was held on 14 November 2017.
3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant Director)
4. i) Observations of board evaluation carried out for the year:
The main inputs received from the Directors, covering various aspects of the Boardâ functioning was with regard to adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non Independent Directors and Top Managerial Personnel were carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process
ii) Previous yearâs observations and actions taken- NIL
iii) Proposed actions based on current year observations . NIL
27 FAMILIARISATION OF PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS
- M M Forgings Limited has put in place a system to familiarise the independent Directors about the company, its products, business and the on-going events relating to the company.
- Independent Directors of the Company are made aware of their role, responsibilities and liabilities at the time of their appointment / re-appointment , through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.
- They are also made aware of Companyâs Board and Board Committee framework, policies and procedures.
- As part of Board discussions, presentations on business of the Company are made to the Directors from time to time.
- Important announcements and press releases for various news related to the company are forwarded to the Directors from the time to time.
- Each member of the Board, including the independent Directors, have been given complete access to any information relating to the Company.
- You may also view the company website www.mmforgings.com in this regard.
28 AUDITORS:
G R N K & Co., Chartered Accountant (FRN 016847S) have been appointed as the Statutory Auditors of the Company in the 71st Annual General Meeting held on 26 September 2017. They will hold office for a period of five years
29. SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act, 2013, the Company has appointed V.Shankar, Practicing Company Secretary (C.P. No. 12974 ) as the Secretarial Auditor for the financial year 2017-18 whose report of 28 May 2018 is attached separately to this report.
30. COST AUDITOR
Pursuant to the provisions contained in Rule 14 of the Companies ( Audit and Auditors) Rules, 2014, Shri. S. Hariharan (CP No. 20864) has been appointed as Cost Auditor for the financial year 2018-19.
31 SUBSIDIARY COMPANY - DVS Industries Private Limited
Your company has acquired majority stake in DVS Industries Private Limited for cash consideration, who is a leading manufacturer of crank shafts, automobile crank shafts and diesel engines. This acquisition was decided in the Board Meeting held on 05 February 2018.
With this acquisition, your company will enhance synergies between itâs wide ranging capability in forgings and machining and DVS Industries long standing expertise will be an addition in machining of crankshafts.
Incorporated in 1992, DVS Industries (with the paid-up share capital currently being Rs.1,59,29,900/ and turn-over of Rs.13.17 Crores in FY 2017) is a north Indian based player with its manufacturing unit located in Pant Nagar, Uttarakhand. DVS Industries is well equipped with modern manufacturing facilities, such as sophisticated in-house tool room.
32 EXPLANATION TO AUDITORâS REMARK
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.
33 SAFETY
Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training at all levels have been provided by the Company.
34 DEPOSITS:
The Company does not have any deposits. Fresh deposits are not being accepted by the Company.
35 ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 134 (3) of the Companies Act, 2013, read with the Companies (Accounts)) Rules, 2014 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure
36 DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All the Independent Directors have given the necessary declarations to the Company as required under sub section (6) of Section 149 of the Companies Act, 2013.
37 PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE
During the year under review, pursuant to the new legislation, âPrevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013â introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There were no cases reported during the year under review under the said Policy.
38 ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, HDFC Bank Ltd and State Bank of India.
Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort.
Above all the Directors thank the shareholders for their continued confidence in the management.
Place : Chennai For and On behalf of the Board
Date : 28 May 2018 N. SRINIVASAN
Chairman
Mar 31, 2017
1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2017
(Rs. in Lakhs)
2016-17 |
2015-16 |
||||
1.1. |
Forging Sales |
46,042.66 |
48,905.80 |
||
1.2. |
Profit before exceptional items/ extraordinary items and Tax |
5514.16 |
6,928.91 |
||
1.3. |
Exceptional/Extraordinary Items |
0.25 |
0.55 |
||
1.4. |
Profit Before Tax |
5514.16 |
6,929.46 |
||
1.5. |
Tax |
||||
For current year |
1176.86 |
1,725.00 |
|||
Relating to previous years |
80.91 |
52.18 |
|||
Deferred Tax |
293.21 |
143.45 |
|||
Mat Credit Entitlement |
(378.81) |
1172.19 |
1,920.63 |
||
Profit After Tax |
4342.22 |
5,008.83 |
The Directors commend the employees for their commitment and contribution.
2. DIVIDENDAND FINANCIAL RESULTS:
(Rs. in Lakhs)
2016-17 |
2015-16 |
||
2.1. |
Profit After Tax |
4342.22 |
5,008.83 |
2.2. |
Balance in P & L Account |
244.20 |
177.07 |
2.3. |
Profit available for appropriation |
4586.42 |
5,185.91 |
2.4. |
Transfer to General Reserve |
3500.00 |
4,100.00 |
2.5. |
Interim Dividend paid |
701.43 |
841.72 |
2.6. |
Proposed Dividend |
140.28 |
- |
2.7. |
Balance carried forward |
244.71 |
244.20 |
The Directors had declared Two Interim Dividend of 50% - Rs.5/- per share of face value of Rs.10/- each on 11 August 2016 and 10% - Rs.1/- per share on 19 May 2017. With this, the total Dividend for the year ended 31st March 2017, will aggregate to 60% - Rs.6/- per share. The Directors do not recommend any final dividend for the year 2016-17
3. HIGHLIGHTS OF THE COMPANYâS OPERATIONAL PERFORMANCE
3.1. The Company continues to be one of the largest exporter of forgings from India and has received 25 consecutive Annual Awards from The Engineering Exports Promotion Council since 1989.
3.2. The Company has also crossed the Rs.150 Crore mark for the second time in domestic sales.
3.3. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs.235.56 Crores.
3.4. The Company has retained its ISO 9001 and TS 16949 Certification for its Quality Management.
3.5. The capital expenditure during the year was Rs.80.57 Crores. Forging and Machining capacity has been substantially increased in line with customer demand. The Company also produces Green Energy in its Solar and in Wind farms.
3.6. Directors retained the dividend payment to 60%.
4. Indian Accounting Standard (IND AS) IFRS Converged Standards
Pursant to the notification of the Companies (Indian Accounding Standard) Rules, 2015 by the Ministry of Corporate Affairs (MCA) on 16 February 2015, the Company has adopted Indian Accounting Standard (IND AS) with effect from 01 April 2016.
5. EXPENSES MADE MORE THAN 10% OF THE TURNOVER
Raw material - Rs.191.13 Crores (43%)
Personnel - Rs.52.86 Crores (12%)
6. TRANSFER TO RESERVE
Transfer to General Reserve - Rs.35 Crores.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 Not applicable
8. DIRECTORS
8.1 Shri. K. Venkatramanan, Director retires by rotation and being eligible, offers himself for reappointment.
Shri. K. Venkatramanan has a Bachelor of Engineering Degree. He has 25 years of experience in the Company. He joined the Board as an Additional Director in this Company. He has been responsible for the tremendous growth in the sales of the Company. His accomplishments include a 10 fold increase in the export sales.
9. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL RESIGNED DURING THE YEAR - Nil
10. BOARDAND COMMITTEE MEETING DATES
Details are provided in Annexure III of this Report
11. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS - None
12. RISK MANAGEMENT
Your Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Policy provides for idendification of risks and mitigation measures. The Audit Committee is informed on the risk assessment and minimizations mechanism adopted by the Company.
13. RELATED PARTY TRANSACTION
The Company has formulated a policy on related party transactions and the same is uploaded on the Companyâs website.
All Related Party transactions that were entered into by the Company during the financial year 2016-17, were in compliance of Section 188 of the 2013 Act and the Rules framed thereunder. There are no âMaterialâ contracts or arrangement or transactions at armâs length basis and hence disclosure in form AOC-2 is not required.
All Related Party transactions were placed before the Audit Committee for their prior approval in accordance with the requirements of the SEBI LODR. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee for its review.
There are no materially significant Related Party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.
14. CORPORATE SOCIAL RESPONSIBILITY
A Board Level Committee of CSR has been constituted and the Board has adopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy are Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business Projects. Your company has fulfilled its obligation towards CSR by spending a sum of Rs.117.12 lakhs during the year Annual Report on CSR has been provided in Annexure III of this Report.
15. POLICY ON DIRECTORSâAPPOINTMENT AND REMUNERATION
In terms of provision of Section 178 of the Companies Act, 2013 read with Rules prescribed, a policy for the Directors, KMP and other employees has been adopted by the Board of Directors of the Company analysing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is given in Annexure 3 under Nomination & Remuneration Committee.
16. PARTICULARS OF EMPLOYEES
The information required under the Rules prescribed, has been given as annexure appended hereto and forms part of this Report.
17. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES:
17.1 The ratio of remuneration of each Director to the median remuneration of the employees:
Name |
Ratio |
Shri. N. Srinivasan |
3.80:1 |
Shri. V. Vaidyanathan |
2.03:1 |
Shri. A. Gopalakrishnan |
1.52:1 |
Smt. Kavitha Vijay |
1.52:1 |
Shri. Vidyashankar Krishnan, Vice Chairman and Managing Director |
155:1 |
Shri. K. Venkatramanan, Joint Managing Director |
149:1 |
For this purpose, sitting fees paid to the Directors have not been |
|
considered as remuneration |
17.2 Percentage increase in remuneration of each Director, KMP, in the financial year:
Name |
% Increase |
Shri. N. Srinivasan |
0.81 % |
Shri. V. Vaidyanathan |
-5.75 % |
Shri. A. Gopalakrishnan |
-2.57 % |
Smt. Kavitha Vijay |
2.13 % |
Shri. Vidyashankar Krishnan, Vice Chairman and Managing Director |
-18.75 % |
Shri. K. Venkatramanan, Joint Managing Director |
-19.23 % |
Smt.J.Sumathi |
5.40 % |
Shri.R.Venkatakrishnan |
6.50 % |
17.3 Percentage increase in median remuneration of employees is 8.3% in the financial year 2016-17.
17.4 The number of permanent employees on the rolls of Company: 1357
17.5 Explanation of relationship between average increase in remuneration and company performance PAT - (last year) - Rs.5008.83 Lakhs PAT - (this year) - Rs.4342.22 Lakhs, Decrease - 13.31 % against which, the average decrease in remuneration is 4%.
17.6 Comparison of remuneration of each KMP against performance of company
Name |
Designation |
CTC in CTC |
% Increase |
PAT Rs. in Lakhs |
% in PAT |
Vidyashankar Krishnan |
CEO |
30503724 |
-18.75% |
||
J.Sumathi |
Company Secretary |
999650 |
5.40 % |
4342.22 |
-13.31% |
R.Venkatakrishnan |
CFO |
1417386 |
6.50 % |
17.7 Variation in market cap/net worth of company:
Date |
Issued Capital (Shares) |
Closing market Price per share in Rs. |
EPS |
PE Ratio |
Market Capitalisation Rs. in Crores |
31.03.2016 |
12070400 |
443 |
41.50 |
10.67 |
534.72 |
31.03.2017 |
12070400 |
542 |
35.97 |
15.07 |
654.21 |
Increase/(Decrease) |
NIL |
99 |
(5.53) |
4.40 |
19.49 |
% of Increase / (Decrease) |
NIL |
18.26 |
(13.32) |
29.20 |
18.26 |
17.8 Justification of increase in managerial remuneration with that of increase in remuneration of other employees.
Average decrease in Remuneration for employees other than Directors and KMP is 0.80%
Average decrease in Remuneration for KMP and Senior Management is 18.99 %
17.9 Key parameters for any variable remuneration of Directors:
Directors are paid Commission. However, the overall managerial remuneration payable is subject to the provisions of the Companies Act, 2013
17.10 Ratio of remuneration of highest paid Director to other employees who gets remuneration more than highest paid Director. - NOT APPLICABLE
17.11 Is remuneration as per remuneration policy of the Company: YES
18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUSAND COMPANYâS OPERATIONS IN FUTURE
Not applicable
19. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURED SINCE 31.03.2017 TILL THE DATE OF THIS REPORT:
Not applicable
20. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that -
20.1 In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures;
20.2 The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31 March 2017 and of the profit or loss of the company for that period ended on that date;
20.3 The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
20.4 The Directors had prepared the annual accounts on a going concern basis.
20.5 The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
20.6 The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;
21. ESTABLISHMENT OF VIGIL MECHANISM
The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue. The Whistle Blower Policy covering all employees and Directors is hosted on the Companyâs website.
22. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company had laid down Internal Financial Controls and such internal financial controls are adequate with reference to the Financial Statements and were operating effectively.
It also ensures the orderly efficient conduct of its business, including adherence to Companyâs policies, the safe guarding of its assets, the prevention and detention of frauds and errors, the accuracy and completements of the accounting records and the timely preparation of reliable financial informationâs during the year, such controls were tested and bi-material weakness in the design or operations were observed.
23. CORPORATE GOVERNANCE REPORT
The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are Provided in Annexure 3.
24. ANNUAL RETURN
An extract of Annual Return as on 31 March 2017 pursuant to Section 92 (3) of the Companies Act, 2013 and forming part of the report is attached separately.
25. A STATEMENT INDICATING THE MANNER IN WHICH FORMALANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEE AND INDIVIDUAL DIRECTORS
1. Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feed back forms for evaluation of the Board, Independent Directors and Chairman.
2. Independent Directors at a meeting without anyone from the non-independent Directors and management, considered/evaluated the matters relating to the Boardâs performance, performance of the Chairman and other non-independent Directors Their meeting was held on 15 February 2017.
3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant Director)
26. FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS
M M Forgings Limited has put in place a system to familiarise the Independent Directors about the company, its products, business and the on-going events relating to the Company.
- Independent Directors of the Company are made aware of their role, responsibilities and liabilities at the time of their appointment / re-appointment , through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.
- They are also made aware of Companyâs Board and Board Committee framework, policies and procedures.
- As part of Board Discussions, presentations on business of the Company are made to the Directors from time to time.
- Important announcements and press releases for various news related to the company are forwarded to the Directors from time-to-time.
- Each member of the Board, including the independent Directors, have been given complete access to any information relating to the Company.
27. STATUTORY AUDITORS:
As per Section 139 (2 ) of the Companies Act 2013 and Rules prescribed thereunder, the term of the present Auditor G. Ramesh Kumar & Co. expires from the date of the ensuing Annual General Meeting. The Board of Directors place on record their appreciation for the service rendered by M/s. G. Ramesh Kumar & Co during their tenure as Statutory Auditors of the Company.
GRNK & CO ( FRN 016847S) is recommended by the Board to be appointed as Statutory Auditor of the Company, for the approval of members in the ensuing Annual General Meeting till the conclusion of the fifth consecutive Annual General Meeting in the year 2022 (subject to the ratification by members at every Annual General Meeting). Certificate from proposed Auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under section 139 of the Companies Act, 2013.
A short profile of G R. Naresh Kumar, the proposed Auditor:
Name : G. R. Naresh Kumar, FCA, CISA
Firm Name : GRNK & CO FRN : 016847S
Mem No: 215577
Address : 26/5, Akila Lands, Ganapathy Colony, South, Thiruvanaikoil Post, Trichy - 620005.
Mission Statement:
To be recognized by the stakeholders of the company as a valuable associate by independently and objectively providing information, analysis and counsel to assist management in fulfilling their responsibility and ensuring operations are managed ethically, effectively and efficiently.
Brief Profile:
Practicing Chartered Accountant with more than a decade experience in Statutory Audits, Internal Audits, Management Consulting, Business Process Reengineering, IT Consulting, Systems Audit, ERP Consulting, Income Tax practice and Internal financial controls audit.
28. SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act, 2013, the Company has appointed. V. Shankar, Practicing Company Secretaries ( C.P. No.12974 ) as the Secretarial Auditor for FY 2017 whose report of 19 May 2017 is attached separately to this report.
29. COSTAUDIT:
Pursuant to the provisions contained in Rule 14 of the Companies (Audit and Auditors) Rules, 2014 Shri. S. Hariharan (C.P. No. 20864) has been appointed as Cost Auditor for the financial year 2017-18.
30. EXPLANATION TO AUDITORâS REMARKS
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.
31. SAFETY
Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training at all levels have been provided by the Company.
32. DEPOSITS
The Company does not have any deposits. Fresh deposits are not being accepted by the Company.
33. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 134 (3 ) ( m) of Companies act 2013, read with the Companies (Accounts ) Rules 2014 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure.
34. DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All the Independent Directors have given the necessary declarations to the Company as required under sub section (6) of Section 149 of the Companies Act, 2013.
35. PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
During the year under review, pursuant to the new legislation, âPrevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013â introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There were no cases reported during the year under review under the said Policy.
36. ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, State Bank of India and State Bank of Travancore.
Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort.
Above all the Directors thank the shareholders for their continued confidence in the management.
For and On behalf of the Board
Place : Chennai Vidyashankar Krishnan
Date : 19 May 2017 Chairman of this meeting
(DIN 00081441)
Mar 31, 2015
Dear Members,
1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2015
(Rs. in Lakhs)
2014-15 2013-14
1.1. Forging Sales 48,950.32 40,073.91
1.2. Profit before exceptional items/
extraordinary items and Tax 6,865.02 3,680.49
1.3. Exceptional/Extraordinary Items 1.42 161.12
1.4. Profit Before Tax 6,866.44 3,841.61
1.5. Tax
For current year 1,690.00 916.30
Relating to previous years 36.92 9.87
MAT credit entitlement (90.48)
Deferred Tax 84.70 74.00
1,811.62 909.69
Profit After Tax 5,054.82 2,931.92
Sales of forgings grew substantially by 22%. Sales Turnover crossed Rs.
500 Crores for the first time in the Company's History. The performance
is quite above market conditions. The Directors commend the employees
for their commitment and contribution.
2. DIVIDEND AND FINANCIAL RESULTS: (Rs. in Lakhs)
2014-15 2013 -14
2.1. Profit After Tax 5,054.82 2,931.92
2.2. Balance in P & L Account 463.97 493.19
2.3. Profit available for appropriation 5,518.76 3,425.11
2.4. Transfer to General Reserve 4,500.00 2,400.00
2.5. Interim Dividend paid 420.86 280.57
2.6. Interim Dividend inclusive of taxes 420.86 280.57
2.7. Balance carried forward 177.07 463.97
The Directors had declared a second Interim Dividend of 30% - Rs. 3/-
per share of face value of Rs. 10/- each on 18th May 2015. The
Directors earlier declared first Interim Dividend of Rs. 3/- per share
and the same was paid on 11 November 2014. With this, the total
Dividend for the year ended 31st March 2015, will aggregate to Rs. 6/-
per share. The Directors do not recommend any final dividend for the
year 2014 - 2015.
3. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE
3.1. Sales Turnover of the Company crossed Rs. 500 Crores for the first
time in the Company's History.
3.2. Exports at Rs. 350.59 Crores accounting for 72% of Company's
Sales. The Company has crossed the Rs. 350 Crore mark for the first
time in export sales. The Company continues to be one of the largest
exporter of forgings from India and has received 25 consecutive Annual
Awards from The Engineering Exports Promotion Council since 1989.
3.3. The Company has also crossed the Rs. 100 Crore mark for the first
time in domestic sales.
3.4. The Company continues to be a net foreign exchange earner. The net
foreign exchange earnings during the current year were Rs. 308.91
Crores.
3.5. The Company has retained its ISO 9001 and TS 16949 Certification
for its Quality Management.
3.6. The capital expenditure during the year was Rs. 61.15 Crores.
Machining capacity has been substantially increased in line with
customer demand. The Company also produces Green Energy in its Solar
and in Wind farms.
3.7. The Directors increased the Dividend by 20% over previous year and
declared 60%.
4. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER
Raw Material - 211.84 crores (42%)
6. TRANSFER TO RESERVE
Transfer to General Reserve - Rs. 4500 lakhs
7. PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS UNDER SECTION 186
Not applicable
8. DIRECTORS
8.1 Shri. K. Venkatramanan, Director retires by rotation and being
eligible, offers himself for reappointment.
8.2 DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL APPOINTED DURING
THE YEAR
In compliance with the provisions of the Companies Act, 2013 and Clause
49 of the Listing Agreement, a Woman Director has to be inducted in the
Board of Directors of the Company, with effect from 01 April 2015.
Hence, the Board appointed Smt. Kavitha Vijay ( DIN 01047261), an
advocate, as an Additional, Non - Executive, Independent Director on
the Board of Directors with effect from 01 April 2015, by way of
Circular Resolution. The term of additional directorship terminates as
on the date of this Annual General Meeting. The Board recommends the
appointment of Smt Kavitha Vijay, as an Independent Director for a
period of 5 years.
9. DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL RESIGNED DURING
THE YEAR - NIL
10. BOARD AND COMMITTEE MEETING DATES
Details are provided in Annexure III of this Report.
11. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT
ACCEPTED BY THE BOARD ALONG WITH REASONS - None
12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions with related parties are in the ordinary course of
business and on arm's length basis; and there are no material contracts
or arrangement or transactions at arm's length basis. Such
transactions done in the ordinary course of business has been specified
in the Notes on accounts
13. POLICY ON RELATED PARTY TRANSACTION
The Company has a policy on Related Party Transaction and the same has
been displayed on the Company's website
14. NOMINATION AND REMUNERATION POLICY
A Board level Committee of Nomination and Remuneration Committee has
been constituted and the Board had adopted Nomination and Remuneration
Policy. Human Resources Policy of the Company considers Human Resources
as its valuable asset.
15. CORPORATE SOCIAL RESPONSIBILITY
A Board Level Committee of CSR has been constituted and the Board has
adopted a CSR Policy as recommended by the Committee. The thrust areas
of CSR Policy are Eradicating Hunger and Poverty, Education, Combating
Diseases and Social Business Projects.
Annual Report on CSR has been provided in Annexure III of this Report.
16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING
CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES,
INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER
EMPLOYEES
* The Board shall have minimum 3 and maximum 15 directors, unless
otherwise approved.
* No person of age less than 21 years shall be appointed as a director
on the Board.
* The Company shall have such person on the Board who complies with the
requirements of the Companies Act, 2013, Provisions of the Listing
Agreement, Memorandum of Association and Articles of Association of the
Bank and all other statutory provisions and guidelines as may be
applicable from time to time.
* Composition of the Board shall be in compliance with the requirements
of Clause 49 of the Listing Agreement of the Stock Exchanges.
* Majority of the Directors shall have specialised knowledge/experience
in the areas like Agriculture, Banking, SSI, Legal, Risk Management,
Accountancy, Finance, Windmill, manufacturing of forgings etc.
* Except for the Vice Chairman and Managing Director and the Joint
Managing Director, no other directors are paid remuneration, but are
paid only sitting fees and Commission subject to the ceiling provided
in the Companies Act, 2013.
* Vice Chairman and Managing Director / CEO, Company Secretary and
Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of
the Company.
* All persons who are Directors / KMPs, members of Senior Management
and all other employees shall abide by the Code of Conduct.
Directors/KMPs shall not acquire any disqualification and shall be
persons of sound integrity and honesty, apart from knowledge,
experience, etc. in their respective fields.
17. PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act,
2013 and the rules made there under, as amended, has been given in the
annexure appended hereto and forms part of this report.
18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES :
18.1 The ratio of remuneration of each director to the median
remuneration of the employees:
Name Ratio
Shri. N. Srinivasan 2.84 : 1
Shri V. Vaidyanathan 1.51 : 1
Shri A. Gopalakrishnan 1.14 : 1
Shri Vidyashankar Krishnan 126.47 : 1
Vice Chairman and Managing Director
(Chief Executive Officer)
Shri. K. Venkatramanan, Joint Managing Director 123.22 : 1
For this purpose, sitting fees paid to the Directors have not been
considered as remuneration
18.2 Percentage increase in remuneration of each Director, KMP, in the
financial year:
Name % Increase
Shri. N. Srinivasan 7.1%
Shri V. Vaidyanathan 14.3%
Shri A. Gopalakrishnan 20.0%
Shri Vidyashankar Krishnan 90.0%
Vice Chairman and Managing Director
(Chief Executive Officer)
Shri. K. Venkatramanan, Joint Managing Director 92.0%
Smt.J.Sumathi 11.4%
Shri.R.Venkatakrishnan 11.2%
18.3 Percentage increase in median
remuneration of employees : 18.0%
18.3 The number of permanent
employees on the rolls of Company: 1353
18.5 Explanation of relationship between average increase in
remuneration and company performance
PAT - ( last year) - Rs. 2931.92 Lakhs PAT - ( this year) - Rs. 5054.82
Lakhs, Increase - 72.4% against which, the average increase in
remuneration is 24.90 %.
18.6 Comparison of remuneration of each KMP against performance of
company
Name Designation CTC %increase
in CTC
Vidyashankar CEO 36888975 82.0%
Krishnan
J.Sumathi Company Secretary 866400 11.4%
R.Venkatakrishnan CFO 1220148 11.2%
Name PAT % in PAT
Rs. Lakhs
Vidyashankar 5054.82 72.4%
Krishnan
J.Sumathi 5054.82 72.4%
R.Venkatakrishnan 5054.82 72.4%
18.7 Variation in market cap/net worth of company:
Date Issued Capital Closing EPS
(Shares) Market
Price per
share in Rs.
31.03.2014 12070400 119 24.29
31.03.2015 12070400 678 41.88
Increase/ NIL 559 17.59
(Decrease)
% of Increase/ NIL 470% 72%
(Decrease)
Date PE Ratio Market
Capitali-
sation
Rs. in crores
31.03.2014 4.90 143.64
31.03.2015 16.19 818.37
Increase/ 11.29 674.73
(Decrease)
% of Increase/ 43.39% 470%
(Decrease)
18.8 Justification of increase in managerial remuneration with that of
increase in remuneration of other employees.
Average Increase in Remuneration for employees other than Directors and
KMP is 18%
Average Increase in Remuneration for KMP and Senior Management is
11.39%
18.9 Key parameters for any variable remuneration of directors:
Directors are paid Commission. However, the overall managerial
remuneration payable is subject to the provisions of the Companies Act,
2013
18.10 Ratio of remuneration of highest paid director to other employees
who gets remuneration more than highest paid director. - NOT APPLICABLE
18.11 Is remuneration is as per remuneration policy of the Company: YES
19 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS
OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S
OPERATIONS IN FUTURE
Not applicable
20 MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAS OCCURED SINCE 31.03.2015 TILL THE
DATE OF THIS REPORT:
Not applicable
21 DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation
of the accompanying financial statements by taking all reasonable steps
to ensure that -
21.1 In the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper explanation
relating to material departures;
21.2 The directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit or
loss of the company for that period;
21.3 The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
company and for preventing and detecting fraud and other
irregularities;
21.4 The directors had prepared the annual accounts on a going concern
basis.
21.5 The Directors, had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively.
21.6 The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
22 ESTABLISHMENT OF VIGIL MECHANISM
The Company has in place a vigil mechanism pursuant to which a Whistle
Blower Policy has been in vogue . The Whistle Blower Policy covering
all employees and directors is hosted on the Company's website.
23 ADEQUACY OF INTERNAL FINANCIAL CONTROL
Company has a process to continuously monitor the existing controls and
identify gaps, if any. It implements new / improved controls wherever
the effect of such gaps would have a material effect on the Company's
operation.
24 CORPORATE GOVERNANCE REPORT
The guidelines evolved by SEBI were applicable to the company. The
company is committed to ethical management and excellence in
performance. Details are provided in Annexure 3.
25 ANNUAL RETURN
An extract of Annual Return as on 31 March 2015 pursuant to Section 92
( 3) of the Companies Act, 2013 and forming part of the report is
attached separately.
26 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION
HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS
COMMITTEES AND INDIVIDUAL DIRECTORS;
1. Nomination and Remuneration Committee of the Board had prepared and
sent through its Chairman draft parameterized feed back forms for
evaluation of the Board, Independent Directors and Chairman.
2. Independent Directors at a meeting without anyone from the
non-independent directors and management, considered/evaluated. Their
meeting was held on 20 October 2014 the Board's performance,
performance of the Chairman and other non-independent Directors.
3. The Board subsequently evaluated performance of the Board, the
Committees and Independent Directors (without participation of the
relevant director)
27 FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS
* M M Forgings Limited has put in place a system to familiarise the
independent directors about the company, its products, business and the
on-going events relating to the company, its products, business and the
on-going events relating to the Company.
* Independent Directors of the Company are made aware of their role,
responsibilities and liabilities at the time of their appointment /
re-appointment , through a formal letter of appointment, which also
stipulates various terms and conditions of their engagement.
* They are also made aware of Company's Board and Board Committee
framework, policies and procedures.
* As part of Board Discussions, presentations on business of the
Company are made to the directors from time to time.
* Important announcements and press releases for various news related
to the company are forwarded to the directors from the time - to time.
* Each member of the Board, including the independent directors, have
been given complete access to any information relating to the Company.
28 AUDITORS:
The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered
Accountants, Tiruchirapalli being eligible, offer themselves for
reappointment.
29 SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act, 2013, the Company
has appointed M/s S. Dhanapal & Associates, Practicing Company
Secretaries ( C.P. No. 7028 ) as the Secretarial Auditor for FY 2015
whose report of 18 May 2015 is attached separately to this report.
30 COST AUDITOR
Pursuant to the provisions contained in Rule 14 of the Companies (Audit
and Auditors) Rules, 2014 Shri. S. Hariharan (C.P. No. 20864) has been
appointed as Cost Auditor for the financial year 2015-16.
31 EXPLANATION TO AUDITOR'S REMARKS
Not applicable
32 SEEL- Subsidiary Company
Srivatsa Electric and Electronic Limited - The final Order for
dissolution of the Company has been received from the High Court,
Chennai.
33 DEPOSITS:
The Company does not have any deposits. Fresh deposits are not being
accepted by the Company.
34 ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:
Disclosures as per requirements of Section 217 (1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of particulars in report
of the Board of Directors) Rules, 1988 with respect to Energy
Conservation, Technology Absorption, Research & Development and Foreign
Exchange Earnings / Outgo are given in Annexure
35 DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All the Independent Directors have given the necessary declarations to
the Company as required under sub section (6) of Section 149 of the
Companies Act, 2013.
36 PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT WORK
PLACE
During the year under review, pursuant to the new legislation,
'Prevention, Prohibition and Redressal of Sexual Harassment of Women at
Workplace Act, 2013' introduced by the Government of India, which came
into effect from 09 December 2013, the Company has framed a Policy on
Prevention of Sexual Harassment at Workplace. There were no cases
reported during the year under review under the said Policy.
37 ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the
cooperation and continued assistance received from Citibank N.A., DBS
bank, State Bank of India and State Bank of Travancore.
Your Directors wish to record their appreciation for the exemplary
services rendered by the employees of the company. The results achieved
would not have been possible but for their outstanding effort.
Above all the Directors thank the shareholders for their continued
confidence in the management.
For and On behalf of the Board
Place : Kodaikanal N. SRINIVASAN
Date : 18-May-2015 Chairman
Mar 31, 2014
1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2013
(in Lakhs)
2013-14 2012 -13
1.1. Forging Sales 40,073.91 35,023.65
1.2. Profit before exceptional items/
extraordinary items and Tax 3,680.48 3,002.01
1.3. Exceptional/Extraordinary Items 161.11 -
1.4. Profit Before Tax 3,841.59 3,002.01
1.5. Tax
For current year 916.30 600.00
Relating to previous years 9.87 45.76
MAT credit entitlement (90.48) (153.68)
Deferred Tax 74.00 65.00
909.69 557.08
Profit After Tax 2,931.90 2,444.93
Sales of forgings grew substantially by 14.4%. The performance has been
highly satisfactory. The Directors commend the employees for their
commitment and contribution.
2. DIVIDEND AND FINANCIAL RESULTS: (in Lakhs)
2013 -14 2012 -13
2.1. Profit After Tax 2,931.90 2,444.93
2.2. Balance in P & L Account 493.18 669.10
2.3. Profit available for appropriation 3,425.08 3,114.03
2.4. Transfer to General Reserve 2,400.00 2,200.00
2.5. Interim Dividend paid 280.57 -
2.6. Interim Dividend inclusive of taxes 280.57 420.85
2.7. Balance carried forward 463.94 493.18
The Directors had declared a second Interim Dividend of 20% - Rs. 2.00
per share of face value of Rs. 10.00 each on 14th May 2014. The Directors
earlier declared first Interim Dividend of Rs. 2.00 per share and the
same was paid on 24th February 2014. With this, the total Dividend for
the year ended 31st March 2014 is Rs. 4.00 per share as against Rs. 3.00
paid for the previous year ended 31st March 2013. The Directors do not
recommend any final dividend for the year 2013 Â 2014.
3. HIGHLIGHTS OF THE COMPANY''S OPERATIONAL PERFORMANCE
3.1. Sales Turnover of the Company crossed Rs. 400 Crores for the first
time in the Company''s History.
3.2. Exports at Rs. 291.12 Crores accounting for 72.65% of Company''s
Sales is at an all time high and has crossed the Rs. 250 Crore mark for
the second time. The Company continues to be one of the largest
exporter of forgings from India and has received 24 consecutive Annual
Awards from The Engineering Exports Promotion Council since 1989.
3.3. The Company continues to be a net foreign exchange earner. The
net foreign exchange earnings during the current year were Rs. 238.15
Crores.
3.4. The Company has retained its ISO 9001 TS 16949 Certification for
its Quality Management.
3.5. The capital expenditure during the year was Rs. 53.10 Crores.
Machining capacity has been substantially increased in line with
customer demand.
3.6. The Directors increased the Dividend by 10% over previous year
and paid 40%.
4. MANAGEMENT DISCUSSION AND ANALYSIS :
GLOBAL SCENE
4.1. The last fiscal 2013-14 saw a further firming up of equity
markets from the increases of previous year. Globally, the
availability of "cheap money" was a significant contributing factor for
this.
4.2. USA - The US economy has shown resilience and has shown strong
performance compared to its peers amongst G7 economies.
4.3. Europe  The Euro has weathered the pressures on account of the
floundering economies of Portugal, Ireland, Greece and Spain (PIGS
countries).
4.4. Germany along with a few countries bordering the North Sea have
emerged as pillars of the European economy. Their relative prosperity
forms the back bone of the efforts to keep the EU and ECU integrated.
The moribund labour markets in France is a considerable risk to the
very EU itself.
4.5. The rigid labour markets of Europe, absence of political union,
unwillingness of the German public to bear a higher burden, significant
welfare commitments, large share of government spending in the economy,
etc., are some of the significant structural issues. Countries like
Spain, Ireland, etc., have embarked on a journey of significant and
painful structural reforms which are starting to bear fruit.
4.6. The significant challenge for European leadership is the
management of structural reforms and containment of public spending
without causing social turbulence.
4.7. China  the Chinese economy has maintained its growth rate of
around 7.7% for 2013. A further slow- down is expected upto 2017.
4.8. Japan  Japan has benefitted from Abenomics, the radical monetary
expansion, fiscal stimulus and structural reforms, promulgated by
Mr.Shinzo Abe, the Prime Minister of Japan. In 2013, a real GDP growth
of 1.5% has been achieved as against 1.4% in 2012.
4.9. Commodities  The Dow Jones  UBS Commodity Index has risen
considerably in the last one year, signifying the impact of "cheap
money".
4.10. Overall, Global output is expected to have grown around 3.3% per
various economic think tanks. Across mature economies, the 2014 growth
outlook has improved significantly to 2.0 percent growth in 2014,
compared to 1.3 percent in 2013.
4.11. The issue of high levels of sovereign debt which most countries
have run up over the last two decades, continues to be of serious
concern. The next few years appear to be a consolidation phase for the
global economy with growth stuck in a range of 1-2%. Getting out of
high levels of sovereign debt without derailing economies into
recession will be a significant conundrum.
INDIA
4.12. The Indian economy is expected to have grown by approximately
4.6% in F14 as compared to about 5% in F13.
4.13. During F14 the automotive industry posted negative growth rates
of approximately 5% in the car segment and 21% in the CV segment.
4.14. Steel prices have dropped by about 6% compared to the highs of
the previous year.
4.15. The INR ended the year lower by approximately 6.5%, ending the
year at a level of Rs. 60.96 per USD. Please refer graph below. Further
weakening of the INR is anticipated. However, if FDI inflows are
strong, the pressure on the INR will be relieved.
M M FORGINGS Â capitalising on favourable winds
4.16. The following were important developments witnessed during the
year :
- Adding to the volume of existing parts, were the new parts which were
developed in the last 2 years.
- Despite the fall in the automotive and commercial vehicle segments in
India, the company has posted a growth of 14% in domestic sales by the
development of new parts. Riding on the back of strong global demand,
export sales grew by 15%.
- Changes in steel prices which are in line with international markets
are being passed on to customers as is the industry practice.
- We are focusing on capacity utilisation, to take advantage of the
production capacities created in the last 3 years.
4.17. Overall sales increased by 14.43%. As highlighted in the
Directors'' Report, Return On Net Worth is 14.51% and Return On Capital
Employed is 22.45%. Current Ratio is 1.41. The total outside
liabilities to net worth stands at 0.87. Debt Equity Ratio is 0.25.
Human Resources and Industrial Relations
4.19. Your company continues to focus on the development of its human
resources to improve its performance. The company currently has
approximately 1100 employees. It is their invaluable contribution that
has primarily resulted in your company''s position of strength in the
industry.
4.20. Focus on a safe working atmosphere, constantly evolving systems
for recognition and reward, consistent communication and imparting
skills and training  all these focused on meeting customer needs,
characterise the HR development of the Company.
4.21. Every year, each plant of the Company celebrates ''Founder''s Day''
in a family atmosphere with all employees and their household members.
Health, Safety and Environment
4.22. The Company follows a policy of zero tolerance towards
accidents. Wherever possible, visible controls and fail-safe systems
are provided to ensure prevention of accidents. Regular communication,
training and periodic reviews of practices play a vital role in
maintaining safety standards.
4.23. The Company ensures compliance with all pollution control
regulations. Adequate pollution control equipments have been installed
to treat effluents and to control air pollution.
Risk Management
4.24. The Company is a leading manufacturer of automotive components.
Automotive industry is subjected to cyclical variations in performance
and is very sensitive to policy changes. The market is very
competitive. Prices of raw materials change based on supply and demand.
Margins remain under constant pressure. Any steep reduction in off-take
exposes the Company to high fixed costs.
4.25. A considerable portion of the customers of the Company are
situated outside of India. Hence, demand for the Company''s product is
subject to the health of the global economy.
4.26. The Company has spread its risks by increasing the geographic
spread of its customer base. The Company proposes to improve capacity
utilization in its existing facilities. Working capital management will
receive high priority.
M M FORGINGS forging ahead
4.27. Our goals in the coming months:
- Focus on improving sales in keeping with market conditions.
- Utilise the production capacity which has been created in the last 3
years.
- Focus on cost reduction continuously and particularly on reducing
energy consumption.
- Enhance IT systems with the continued development of the ERP system
in place.
- Continue the evolution into green sources of energy in the coming
months.
- Reduce the impact on the environment.
5. DIRECTORS
5.1 As per the provisions of the New Companies Act, 2013, the
Independent Directors of the Company viz., Shri N. Srinivasan, Shri. V.
Vaidyanathan and Shri. A.Gopalakrishnan are being appointed for a
period of 5 years term.
5.2 Shri. Vidyashankar Krishnan, Director retires by rotation and being
eligible, offers himself for reappointment.
6. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation
of the accompanying financial statements by taking all reasonable steps
to ensure that -
6.1. In the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper explanation
relating to material departures;
6.2. The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit or
loss of the company for that period;
6.3. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
company and for preventing and detecting fraud and other
irregularities;
6.4. The Directors have prepared the annual accounts on a going
concern basis.
7. CORPORATE GOVERNANCE:
The guidelines evolved by SEBI were applicable to the company. The
company is committed to ethical management and excellence in
performance. Details are provided in Annexure 3.
8. AUDITORS:
The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered
Accountants, Tiruchirapalli being eligible, offer themselves for
reappointment.
9. PERSONNEL:
Information required to be furnished u / s 217 ( 2A) of the Companies
Act, 1956, read with the Company''s (Particulars of Employees) Rules,
1975, as amended, has been annexed to this Report.
10. SUBSIDIARY COMPANY:
Srivatsa Electric & Electronic Limited - The final order pertaining to
amalgamation petition is pending in High Court of Chennai.
11. DEPOSITS:
The Company does not have any deposits. Fresh deposits are not being
accepted by the Company.
12. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 217 (1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of particulars in report
of the Board of Directors) Rules, 1988 with respect to Energy
Conservation, Technology Absorption, Research & Development and Foreign
Exchange Earnings / Outgo are given in Annexure
13. ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the
cooperation and continued assistance received from Citibank N.A., DBS
bank, State Bank of India and State Bank of Travancore.
Your Directors wish to record their appreciation for the exemplary
services rendered by the employees of the company. The results achieved
would not have been possible but for their outstanding effort.
Above all the Directors thank the shareholders for their continued
confidence in the management.
For and On behalf of the Board
Place : Kodaikanal N. SRINIVASAN
Date :14 May 2014 Chairman
Mar 31, 2013
1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2013
(Rs. in Lakhs)
2012-13 2011-12
1.1. Forging Sales 35,023.65 34,381.96
1.2. Profit before exceptional
items/ extraordinary items
and Tax 3,002.01 3,133.05
1.3. Exceptional/Extraordinary Items 724.62
1.4. Profit Before Tax 3,002.01 3,857.67
1.5. Tax
For current year 600.00 775.00
Relating to previous years 45.76 214.60
MAT credit carried forward (153.68)
Deferred Tax 65.00 192.65
Total Tax 557.08 1,182.25
1.6. Profit After Tax 2,444.93 2,675.42
Despite the slower growth in the world economy and in India, sales of
forgings grew marginally by 1.9%.
Given the adverse environment and market conditions, the performance
has been highly satisfactory. The Directors commend the employees for
their commitment and contribution.
2. DIVIDEND AND FINANCIAL RESULTS:
(Rs.in Lakhs)
2012-13 2011-12
2.1. Profit After Tax 2,444.93 2,675.42
2.2. Balance in P & L Account 669.10 614.54
2.3. Profit available
for appropriation 3,114.03 3,289.66
2.4. Transfer to General Reserve 2,200.00 2,200.00
2.5. Interim Dividend inclusive of taxes 420.85 420.85
2.6. Balance carried forward 493.18 669.15
The Directors have declared an Interim Dividend of 30% - Rs. 3/- per
share of face value of Rs. 10/- each. The cost of the Interim Dividend
inclusive of all taxes is Rs. 420.85 Lakhs. The Interim Dividend is
already in line with the Payout Policy of the Company. The Directors,
therefore, do not recommend a final Dividend.
3. HIGHLIGHTS OF THE COMPANY''S OPERATIONAL PERFORMANCE
3.1. Sales Turnover of the Company crossed Rs. 350 Crores for the first
time in the history of the Company.
3.2. Exports at Rs. 253.96 Crores accounting for 72.5% of the Sales of
the Company and has crossed the Rs. 250 crore mark for the first time.
The Company continues to be one of the largest exporter of forgings
from India and has received 23 consecutive Annual Awards from The
Engineering Exports Promotion Council since 1989.
3.3. The Company continues to be a net foreign exchange earner. The
net foreign exchange earnings during the current year were Rs. 209.11
Crores.
3.4. The Company has retained its ISO 9001 TS 16949 Certification for
its Quality Management.
3.5. The capital expenditure during the year was Rs. 29.02 crores.
Machining capacity has been substantially increased in line with
customer demand.
3.6. Despite an adverse environment and difficult market conditions,
the Directors have maintained the Dividend at 30%
4. DIRECTORS
5.1. Shri. V.Vaidyanathan, Director retires by rotation and being
eligible, offers, himself for reappointment.
5.2. Shri. K.Venkatramanan, Director retires by rotation and being
eligible, offers, himself for reappointment
5.3. Shri. N. Srinivasan , has been appointed as Chairman of the Board
w.e.f. 24 October 2012.
5.4. Shri. Vidyashankar Krishnan, Managing Director has been appointed
as Vice Chairman of the Board and will be designated as Vice Chairman
and Managing Director w.e.f. 24 October 2012.
5.5. Shri V. Narayanan, Director, had resigned from directorship of
the Company and Shri. A.Gopalakrishnan was appointed in his place as a
Director appointed by way of casual vacancy with effect from 24 October
2012. The Directors record their appreciation for the valuable services
rendered by Shri. V. Narayanan as a Chairman and Director, during his
20 years tenure in your Company.
6. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation
of the accompanying financial statements by taking all reasonable steps
to ensure that -
6.1. In the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper explanation
relating to material departures;
6.2. The directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit or
loss of the company for that period;
6.3. The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities;
6.4. The directors had prepared the annual accounts on a going concern
basis.
7. CORPORATE GOVERNANCE:
The guidelines evolved by SEBI were applicable to the company. The
company is committed to ethical management and excellence in
performance. Details are provided in Annexure 3.
8. AUDITORS:
The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered
Accountants, Tirchirapalli being eligible, offer themselves for
reappointment.
9. PERSONNEL:
Information required to be furnished u / s 217 ( 2A) of the Companies
Act, 1956, read with the Company''s (Particulars of Employees) Rules,
1975,as amended, has been annexed to this Report.
10. SUBSIDIARY COMPANY:
Srivatsa Electric & Electronic Limited - The final order pertaining to
amalgamation petition is pending in High Court of Chennai.
11. DEPOSITS:
The Company does not have any deposits. Fresh deposits are not being
accepted by the Company.
12. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 217 (1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of particulars in report
of the Board of Directors) Rules, 1988 with respect to Energy
Conservation, Technology Absorption, Research & Development and Foreign
Exchange Earnings / Outgo are given in Annexure
13. ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the
cooperation and continued assistance received from Citibank N.A., DBS
bank, State Bank of India and State Bank of Travancore.
Your Directors wish to record their appreciation for the exemplary
services rendered by the employees of the company. The results achieved
would not have been possible but for their outstanding effort.
Above all the Directors thank the shareholders for their continued
confidence in the management.
For and On behalf of the Board
Place : Kodaikanal N. SRINIVASAN
Date :21 May 2013 Chairman
Mar 31, 2012
1. RESULTS FOR THE YEAR ENDED 31 MARCH 2012
Sales has increased by 29.31% over the previous year. Profit Before Tax
(before extraordinary item) for the current year has increased by 11%.
(Rs in Lakhs)
2011-12 2010-11
1.1 Forging Sales 34,381.96 26,589.58
1.2 Profit before exceptional items/
extraordinary items and Tax 3,133.05 2,853.64
1.3 Exceptional/Extraordinary Items 724.62 952.08
1.4 Profit Before Tax 3,857.67 3,805.72
1.5 Tax
For current year 775.00 700.00
Relating to previous years 214.60 28.91
Deferred Tax 192.65 104.08
Total Tax 1,182.25 832.99
1.6 Profit After Tax 2,675.42 2,972.73
Despite the slowdown in the world economy and in India, sales of
forgings grew by 29%. However, because of higher input costs,
increased financial charges, enhanced provision for depreciation and
lower realisation from extraordinary items, Profit Before Tax was at
the same level as last year. As shown in the table above, provision for
tax was Rs 3.5 Crores more than the previous year resulting in a decline
in Profit After Tax.
Given the adverse environment and market conditions, the performance
has been highly satisfactory. The Directors commend the Management and
all other employees for their commitment and contribution.
2. DIVIDEND AND FINANCIAL RESULTS:
(Rs in Lakhs)
2011-12 2010-11
2.1 Profit after Tax 2,675.42 2,972.73
2.2 Balance in P & L Account 614.54 64.06
2.3 Profit available for appropriation 3,289.96 3,036.79
2.4 Transfer to General Reserve 2,200.00 2,000.00
2.5 Interim Dividend inclusive of taxes 420.85 422.25
2.6 Balance carried forward 669.11 614.54
The Directors have declared an Interim Dividend of 30% - Rs 31- per
share of face value of Rs 10/- each. The cost of the Interim Dividend
inclusive of all taxes is Rs 420.85 Lakhs. The Interim Dividend is
already in line with the Pay Out Policy of the Company. The Directors,
therefore, do not recommend a final Dividend.
3. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE
3.1 Sales Turnover of the Company crossed Rs 300 Crores for the first
time in the Company's History.
3.2 Exports were Rs 239.07 Crores accounting for 70% of the Company's
Sales. The Company continues to be one of the large exporter of
forgings from India and has received 22 consecutive Annual Awards from
Engineering Exports Promotion Council.
3.3 The Company continues to be a net foreign exchange earner. The net
foreign exchange earnings during the current year wereRs 216.97 Crores.
3.4 The Company has retained its ISO/TS 16949 : 2009 Certification for
its Quality Management.
3.5 The capital expenditure during the year was Rs66.17 crores.
Machining capacity has been substantially increased in line with the
changing customer demand.
3.6 Despite an adverse environmental difficult market conditions, the
Directors have maintained the Dividend at 30%
4. DIRECTORS:
Shri V. Narayanan, Director retires by rotation and being eligible,
offers, himself for reappointment. Shri.N.Srinivasan, Director retires
by rotation and being eligible, offers, himself for reappointment.
5. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation
of the accompanying financial statements by taking all reasonable steps
to ensure that -
5.1. In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
5.2. The directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit or
loss of the company for that period;
5.3. The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities;
5.4. The directors had prepared the annual accounts on a going concern
basis.
6. CORPORATE GOVERNANCE:
The guidelines evolved by SEBI were applicable to the company. The
company is committed to ethical management and excellence in
performance. Details are provided in Annexure 3.
7. AUDITORS:
The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered
Accountants, Tiruchirapalli being eligible, offer themselves for
reappointment.
8. PERSONNEL / SUBSIDIARY COMPANY
8.1 Personnel : Information required to be furnished u/s 217(2A) of the
Company's Act, 1956, read with the Company's (Particulars of
Employees) Rules, 1975, as amended, has been annexed to this Report.
8.2 Srivatsa Electric and Electronic Limited:
The Final Order pertaining to amalgamation petition is pending with the
High Court of Chennai.
9. DEPOSITS: Fresh Deposits are not being accepted by the Company.
10. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 217 (1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of particulars in report
of the Board of Directors) Rules, 1988 with respect to Energy
Conservation, Technology Absorption, Research & Development and Foreign
Exchange Earn- ings / Outgo are given in Annexure
11. ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the
cooperation and continued assistance received from Citibank N.A., DBS
bank, State Bank of India and State Bank of Travancore.
The Directors thank all other Stakeholders for their unstinted
co-operation and support.
Above all the Directors thank the shareholders for their continued
confidence in the management.
For and On behalf of the Board
Place : Kodaikanal V. NARAYANAN
Date : 19 May 2012 Chairman
Mar 31, 2011
Dear Members,
1. RESULTS FOR THE YEAR ENDED 31 MARCH 2011
Total sales has increased by 68% over the previous year. Profit After
Tax also increased by 195%.
(Rs. in Lakhs)
2010-11 2009-10 %
a. Forging Sales 26,589.18 15,843.96 68%
b. Profit after
tax 3,075.17 1,041.66 195%
2. DIVIDEND AND FINANCIAL RESULTS:
(Rs. in Lakhs)
2010-11 2009-10
a. Profit before Tax 3,775.17 1,162.00
b. Provision for taxa
tion 700.00 130.00
c. Profit After Tax 3,075.17 1,032.00
d. Deferred Tax Asset
/ (Liability) (104.08) 9.66
e. Balance in Profit &
Loss Account previous
year 64.06 234.22
f. Profit available
for appropriation 3,035.15 1,275.88
g. Transfer to General
Reserve 2,000.00 1,000.00
h. Interim Dividend
including Dividend Tax 422.25 211.83
i. Balance carried to
Balance Sheet 612.90 64.05
The Directors have decided to pay an interim dividend of Rs. 3 per
share of face value of Rs.10 each. The interim dividend will absorb an
amount of Rs. 422.25 lakhs. The directors do not recommend any final
dividend.
4. DIRECTORS:
Shri V. Vaidyanathan, Director retires by rotation and being eligible,
offers, himself for reappointment.
Shri. K.Venkatramanan, Joint Managing Director retires by rotation and
being eligible, offers, himself for reappointment.
5. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation
of the accompanying financial statements by taking all reasonable steps
to ensure that -
5.1. In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
5.2. The directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit or
loss of the company for that period;
5.3. The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities;
5.4. The directors had prepared the annual accounts on a going concern
basis.
6. CORPORATE GOVERNANCE:
The guidelines evolved by SEBI were applicable to the company from the
previous financial year. The company is committed to ethical management
and excellence in performance. Details are provided in Annexure 3.
7. AUDITORS:
The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered
Accountants, Tiruchirapalli are eligible for, and seek reappointment.
8. OPERATIONS:
A. Sales:
The company continues to be one of the largest exporters of steel
forgings in India and has received 21 consecutive annual awards from
the Engineering Export Promotion Council. Export sales of the Company
were Rs. 182.94 crores and account for 69% of total sales.
B. Foreign Exchange Earnings :
The company is a net foreign exchange earner. During the current year,
the company's net foreign exchange earnings were Rs.144.51 Crores.
C. Quality :
The company has retained its ISO TS 16949 certification for its quality
management system.
D. Personnel:
Information required to be furnished under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, has been annexed to this Report.
E. Investments:
1. Total Capital Expenditure during the year was Rs.15.43 crores.
2. Production capacity has increased from 38,000 MT to 40,000 MT
3. Machining capacity has been substantially increased in line with
changing customer demand.
9. SUBSIDIARY COMPANY:
Srivatsa Electric & Electronic Limited - The final order pertaining to
amalgamation petition is pending in High Court .
10. DEPOSITS : No unclaimed deposits were outstanding as at the end of
the year.
11. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 217 (1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of particulars in report
of the Board of Directors) Rules, 1988 with respect to Energy
Conservation, Technology Absorption, Research & Development and Foreign
Exchange Earnings / Outgo are given in Annexure
12. ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the
cooperation and continued assistance received from Citibank N.A., DBS
Bank, State Bank of India and State Bank of Travancore.
Your Directors wish to record their appreciation for the exemplary
services rendered by the employees of the company. The results achieved
would not have been possible but for their outstanding effort. Above
all the Directors thank the shareholders for their continued confidence
in the management.
For and On behalf of the Board
V. Narayanan
Chairman
Place : Chennai
Date : 22 April 2011
Mar 31, 2010
The Directors are pleased to present their Report for the Year ended
31st March 2010.
1. RESULTS:
Total sales has decreased by 23% over the previous year. However,
Profit After Tax has increased by 2%.
(Rs. in Lakhs
)
2009-10 2008-09
a. Gross Sales 15,843.96 20,680.96 -23%
b. Profit after tax 1,041.66 1,022.53 + 2%
2. DIVIDEND AND FINANCIAL RESULTS:
The Directors recommend a dividend payment of 15%. Taking the dividend
into account the financial results are as follows :
(Ks. in Lakhs)
2009-10 2008-09
a. Profit before Tax 1162.00 1,376.26
b. Provision for taxation 130.00 275.00
c. Fringe Benefit Tax - 5.00
d Deferred Tax Asset / (Liability) 9.66 73.73
e. Profit After Tax 1041.66 1,022.53
f. Balance in Profit & loss
Account previous year 234.22 223.50
g. Profit available for
appropriation 1275.88 1,246.03
h. Transfer toGeneral Reserve 1000.00 800.00
i. Proposed Dividend including
DividendTax 211.83 211.83
j. Balance carried to Balance Sheet 64.05 234.23
Although the operational margins have dropped for the year under
review, in view of the expectations of better market conditions in the
next year, the Directors recommend maintaining the dividend at 15%.
3. OPERATIONS:
A. Sales :
The company continues to be one of the largest exporters of steel
forgings in India and has received 20 consecutive annual awards from
the Engineering Export Promotion Council. Export sales of the Company
were Rs.104.18 crores and account for 66% of total sales.
B. Foreign Exchange Earnings :
The company is a net foreign exchange earner. During the current year,
the companys net foreign exchange earnings were Rs.82.37 crores after
taking repayment of Rs.17.93 crores of term loans in foreign exchange.
C. Quality :
The company has retained its ISO/TS 16949 : 2009 and ISO 9001 : 2008
certification for its Quality Management System.
D. Personnel :
Information required to be furnished under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, has been annexed to this Report.
E. Investments :
1. Total Capital Expenditure during the year was Rs. 25.83 crores.
2. Production capacity has increased from 35,500 MT to 38,000 MT.
3. Machining capacity has been substantially increased in line with
changing customer demand.
4. CORPORATE GOVERNANCE:
The company is committed to ethical management and excellence in
performance. Details are provided in Annexure 3.
5. SUBSIDIARY COMPANY:
As required under section 212 of the Companies Act, 1956 the Audited
statement of the Accounts along with the report of the Directors and
the Auditors Report of the wholly owned subsidiary company, Srivatsa
Electric & Electronic Limited for the year ended 31 March 2010 are
annexed. An application for merger of SEEL with M M Forgings has been
filed in the High Court. The case is pending.
6. DEPOSITS:
No unclaimed deposits were outstanding as at the end of the year.
7. DIRECTORS:
Shri V. Narayanan, Director retires by rotation and being eligible,
offers, himself for re- appointment.
Shri N.Srinivasan, Director retires by rotation and being eligible,
offers, himself for re- appointment.
8. AUDITORS:
The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered
Accountants, Tiruchirapalli are eligible for, and seek reappointment.
9. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 217 (1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of particulars in report
of the Board of Directors) Rules, 1988 with respect to Energy
Conservation, Technology Absorption, Research & Development and Foreign
Exchange Earnings / Outgo are given in Annexure I.
10. ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the
cooperation and continued assistance received from ABN Amro Bank,
Citibank N.A., State Bank of India and State Bank of Travancore.
Your Directors wish to record their appreciation for the exemplary
services rendered by the employees of the company. The results achieved
would not have been possible but for their outstanding effort.
Above all the Directors thank the shareholders for their continued
confidence in the management.
For and On behalf of the Board
V. NARAYANAN
Chairman
Place : Kodaikanal
Date : 23 May 2010