Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
ET Markets
12,119.00-129.25
Stock Analysis, IPO, Mutual Funds, Bonds & More
Add to your PortfolioFollow MMP Industries Ltd. on etspeed

MMP Industries Ltd.

NSE:MMPEQ  |  58888:  |  IND:Aluminium  |  ISIN code:INE511Y01018  |  SECT:Metals - Non Ferrous

PREMARKET

BSE LIVE

Change:

Volume:

Open:

Prv. Close:

Today:

MMP Industries Ltd.

52-Wk:

MMP Industries Ltd.

Bid:

()

Offer:

()

NSE LIVE

Change:

Volume:

Open:

Prv. Close:

Today:

MMP Industries Ltd.

52-Wk:

MMP Industries Ltd.

Bid:

()

Offer:

()

You can view full text of the Director's Report for MMP Industries Ltd.
Director Report
Mar 2018

The Board of Directors of the Company hereby present the Forty-Fifth (45th) Annual Report together with the Audited Financial Statements (Standalone and Consolidated) of the Company for the year 2017-2018 ended 31st March 2018.

1. INITIAL PUBLIC OFFER (IPO)

The Company, pursuant to the provisions of Section 26 and 32 of the Companies Act, 2013 read with rules made there under, including the SEBI (ICDR) Regulations, 2009 (as amended), and in terms of Prospectus Dated 5th April 2018, offered 45,00,000 (Forty-five lakh) equity shares of face value of Rs.10/- each, at a premium of Rs.178/- per equity share, in the capital of the Company, through Book Building process, in the Initial Public Offer (IPO).

The IPO Bid / Issue opened on Wednesday, the 28th March 2018 and closed on Wednesday, the 4th April 2018, except for Anchor Investors, the Bidding date was Tuesday, the 27th March 2018.

The issue and allotment of equity shares in the capital of the Company was made on Tuesday, the 10th April 2018. The designated Stock Exchange - National Stock Exchange of India Limited, has approved, the listing and trading of equity shares in the capital of the Company, on its SME Platform namely NSE EMERGE, effective Thursday, the 12th April 2018.

2. OVERALL AFFAIRS / PERFORMANCE / FINANCIAL RESULTS

During the financial year 2017-2018 under review, the Company has recorded the higher standalone gross revenue of Rs. 24924.39 lakh, up by 10.01% over the revenue of Rs. 22655.71 lakh of FY 2016-2017. There is an excellent growth in operating profit (41.97%) and profit before tax and exceptional item (56.43%) as compared to growth in revenue (10.01%) over the corresponding figures pertaining to previous FY 2016-2017. However, there is nominal growth of 6.06% in net profits from 1449.32 lakh to 1537.17 lakh, mainly due to an exceptional item of Rs. 464.54 lakh (surplus on account of transfer (assignment) of leasehold rights in respect of Plot No. K-61, Butibori MIDC Area, Nagpur) pertaining to FY 2016-2017.

During the financial year 2017-2018 under review, the share of profits from Associate Companies of Rs. 366.44 lakh of FY 2017-2018 as compared to Rs. 271.87 lakh pertaining to FY 2016-2017 has been added, to make a consolidated net profits of 1903.61 lakh FY 2017-2018 as compared to Rs.1721.20 lakh pertaining to FY 2016-2017, of the Company.

The summarized financial results (standalone and consolidated) of the Company are as follows :-

Particulars

Standalone

Consolidated

FY 2017-2018 | FY 2016-2017

FY 2017-2018 | FY 2016-2017

(Rupees in Lakh, Except for EPS)

Revenue from Operations (Gross)

24924.39

22655.71

24924.39

22655.71

(Less) Excise Duty

650.82

2333.75

650.82

2333.75

Revenue from Operations (Net)

24273.57

20321.96

24273.57

20321.96

(Add) Other Income

69.79

51.23

69.79

51.23

Total Revenue (Income)

24343.36

20373.19

24343.36

20373.19

(Less) Total Expenditure (Excluding Interest and Depreciation)

21319.46

18243.25

21319.46

18243.25

Profit before Interest, Tax and Depreciation

3023.90

2129.94

3023.90

2129.94

(Less) Interest (Finance Cost)

384.79

390.12

384.79

390.12

(Less) Depreciation

201.75

181.73

201.75

181.73

Profit before Tax, Exceptional and Extra-ordinary Item/s

2437.36

1558.09

2437.36

1558.09

(Add) Exceptional and Extra-ordinary Item/s

0.00

464.54

0.00

464.54

Particulars

Standalone

Consolidated

FY 2017-2018 | FY 2016-2017

FY 2017-2018 | FY 2016-2017

(Rupees in Lakh, Except for EPS)

Profit Before Tax (PBT)

2437.36

2022.63

2437.36

2022.63

Current Tax

820.45

500.00

820.45

500.00

Deferred Tax

39.60

54.44

39.60

54.44

Income Tax related to earlier years

40.14

18.86

40.14

18.86

Profit After Tax (PAT)

1537.17

1449.33

1537.17

1449.33

Share of Profit from Associate Company

-

-

366.44

271.87

Basic & Diluted Earnings Per Share (Rupees)

12.36

11.66

15.31

13.84

3. SHARE CAPITAL

During the financial year 2017-2018 ended 31st March 2018 under review:-

- the nominal (authorised) share capital of the Company was increased from Rs. 8,50,00,000 to Rs. 20,00,00,000, vide special resolution passed at the Extra-ordinary general meeting held on 18th August 2017;

- the Company has issued 41,45,025 equity shares as bonus shares to the existing shareholders, in the ratio of 1 (one) equity share for every 2 (two) equity shares held as on record date i. e. 13th September 2017, by capitalizing Rs. 4,14,50,250 out of the General Reserves of the Company, vide Shareholders'' special resolution passed at the Extraordinary general meeting dated 18th August 2017 and Board resolution dated 13th September 2017;

- the issued, subscribed and paid-up share capital of the Company was increased from Rs. 8,29,00,500 to Rs. 12,43,50,750 by issuing bonus shares in proportion of 1 (one) Bonus equity share for every 2 (two) existing fully paid-up equity shares of the Company;

- the changes in the issued, subscribed and paid-up share capital, reserves and surplus, accounting of IPO proceeds and utilisation thereof, due to IPO, shall reflect in the financial statements pertaining to the financial year 2018-2019 ending 31st March 2019.

4. DIVIDEND

The objects of the IPO is setting up of a new facility for manufacturing of Atomised Aluminium Powder, Pyro and Flake Aluminium Powder and Aluminium Foils at Umred MIDC Area. For implementation of all these projects, the Company is required to infuse its internal accruals in addition to IPO proceeds. As such, the Board of Directors does not recommend any dividend on the equity shares for the financial year 2017-2018 ended 31st March 2018.

5. TRANSFER TO RESERVES (BALANCE SHEET)

The sum/s transferred to reserves and surplus (balance sheet) account/s viz., Capital Reserve (Special Capital Incentives), Revaluation Reserve, General Reserve, Profit & Loss, and closing balance/s thereof as at 31st March 2018 (FY 2017 2018) [Previous Year ended 31st March 2017 (FY 2016-2017)] is as follows :-

Sr.

No.

Particulars

FY 2017-2018

FY 2016-2017

Amount in Rupees (Lakhs)

1.

Capital Reserve

a. Opening Balance

58.21

40.32

b. (Add) Additions during the year

0.00

17.89

c. (Less) Transferred during the year

17.89

0.00

Closing Balance

40.32

58.21

Sr.

No.

Particulars

FY 2017-2018

FY 2016-2017

Amount in Rupees (Lakhs)

2.

Revaluation Reserve

a. Opening Balance

6.08

6.08

b. (Add) Transfer from Statement of Profit & Loss

0.00

0.00

Closing Balance

6.08

6.08

3.

General Reserve

a. Opening Balance

407.13

407.13

b. (Add) Transfer from Statement of Profit & Loss

0.00

0.00

c. (Less) Amount utilised for issuance of Bonus Shares

407.13

0.00

Closing Balance

0.00

407.13

4.

Profit & Loss Account

a. Opening Balance

3346.82

1897.49

b. (Add) Net Profit for the year

1537.17

1449.33

c. (Less) Amount utilised for issuance of Bonus Shares

7.37

0.00

d. (Less) Adjustments in respect of provisions of Gratuity & Leave Encashment [Net of Taxes]

188.13

0.00

Closing Balance

4688.48

3346.82

Total Reserve and Surplus

4734.87

3818.23

6. NATURE OF BUSINESS ACTIVITIES AND CHANGES THEREOF

During the financial year 2017-2018 under review, the Board of Directors, though exploring addition to existing business and commercial activities, had neither been explored any change in nature of business and commercial activities for the Company nor there is a change in nature of business and commercial activities of the Company. As such, no specific details regarding change in nature of business activities are required to be given or provided.

7. STATE OF COMPANY''S AFFAIRS

Your Company has registered a consistent and strong revenue growth both in terms revenue and earnings in the financial year 2017-2018 ended 31st March 2018 under review. The consolidated net revenue from operations of Rs. 24273.57 Lakh in FY 2017-2018 is up by 19.45% as compared to Rs. 20321.96 Lakh in FY 2016-2017. The operating profit (EBIDTA) at Rs. 3023.90 Lakh in FY 2017-2018 is 41.97% higher than Rs. 2129.94 Lakh in FY 2016-2017. The Net profit after tax for the FY 2017-2018 has increased from Rs. 1449.32 Lakh (Including exceptional item of Rs. 464.53 Lakh) to Rs. 1537.16 Lakh. The overall performance of the respective division/s of the Company during the financial year 2017-2018 ended 31st March 2018 are provided hereunder :-

ALUMINIUM POWDER AND PASTE DIVISION

The total revenue of this division is Rs. 17680.09 Lakh, up by 26.43% as compared to the revenue of Rs. 13984.35 Lakh of FY 2016-2017. The segment result is at Rs. 2655.44 Lakh which is higher by 59.17% compared to Rs. 1668.26 Lakh of FY 2016-2017.

ALUMINIUM CONDUCTORS DIVISION

The total revenue of this division at Rs. 5762.73 Lakh, up by 1.98% as compared to the revenue of Rs. 5651.02 Lakh of FY 2016-2017 The segment result is at Rs. 545.62 Lakh which is up by 5% compared to Rs. 519.62 Lakh of FY 2016 2017.

FUTURE PROSPECTS

NEW MANUFACTURING FACILITIES AT UMRED - MIDC AREA, NAGPUR

The implementation/s of setting up of a new facility for manufacturing of Atomised Aluminium Powder, Pyro and Flake Aluminium Powder and Aluminium Foils at Umred MIDC Area, are as per schedule and plan/s as provided in the Objects of the Offer Document (Prospectus) of the Company.

After completion of allotment of industrial land at Umred MIDC Area, close to Nagpur city in the State of Maharashtra, the land development work (cutting, filling, and compaction) is in full swing. The electricity (temporary) connection from MSEDCL required for construction activities has been charged and temporary office and allied facilities for site management have been set up. The contract for site development, civil work, roads and water drains has been released.

The orders for major machineries (2 nos. furnaces for atomized powders and 6 nos. of ball mills for pyro and flake powders) have been released by the Company.

The application for consent to establish has been made to the Maharashtra Pollution Control Board (MPCB). The civil and structural designs of various factory buildings have been finalized and the Request for Quotation (RFQ''s) for the Pre-engineered Buildings have been released.

ALUMINIUM POWDERS

The growth of low cost and urban housing is expected to be above the GDP growth with the Government''s objective of housing for all by 2022. As such, the Aluminium powder usage in AAC blocks is likely to be strong and grow at 12 to 15% with more and more factories starting production and stabilizing operations. Your Company is making efforts to export this product in South East and it is expected that after the initial customer resistance, a breakthrough is possible in this vast market potential. With this in view, an additional capacity is planned to be added in the next 12 to 15 months for Aluminium powders for AAC at the new manufacturing facilities at Umred - MIDC Area.

In line with the mining growth of 10 to 12%, the usage of Aluminium powders for the slurry explosives will continue to grow and your Company''s strong market share will be further consolidated. Aluminium powders usage in other user segments like pesticides, defence applications and exothermic applications are continuing to grow well.

The sale of Atomized powder to the Associate Company (TMI) will be ramped up specifically with your Company setting up an additional capacity for Atomized Powders at the new manufacturing facilities in Umred - MIDC Area.

FUTURE PLANS FOR ALUMINIUM POWDERS

Recently, your Company has been listed on the NSE Emerge and a significant part of the IPO proceeds will be utilized in enhancing the capacity of Atomized powders as well as Pyro & Flake powders. For that purpose, your Company has allotted MIDC land at Umred (60 KM from Nagpur) and plant design, building and civil infrastructure at this greenfield site is now under process. Subject to receipt of approval/s from the Government as per our estimates, we expect partial capacities to be operational for trials during the Fourth Quarter (Q-4) of the FY 2018-2019.

ALUMINUM PASTE

With the transfer of production capacity to TMI for Aluminium pastes, your Company will largely focus on promotion of leafing powders for the ink and plastic industries. This has a decent export potential and a growing domestic market. The Aluminium paste capacity will also act as an additional capacity support to TMI in times of heavy demand.

ALUMINIUM CONDUCTORS

Your Company has plans to meet the requirements of Power Grid Corporation of India in the FY 2018-2019 and open up a new potential for its Aluminium conductors. The present local demand with private contractors is satisfactory but growth is hindered because of delay in payments by the electrical distribution companies to the private contractors. However, the Government rates and payment terms with private contractors are expected to be resolved and the second half of the FY 2018-2019 will see demand uptick. It is expected that Aluminium conductor revenue will rise by 20 to 25% over the FY 2017-2018.

8. HOLDING, SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANY

During the financial year 2017-2018 ended 31st March 2018 under review, the Company is neither a Holding Company nor a Subsidiary, Associates or Joint Venture Company of any other Company or Companies pursuant to the provisions of the Companies Act, 2013 read with relevant rules made thereof.

However, Star Circlips & Engineering Limited [CIN - U24110MH1974PLC017301] and Toyal MMP India Private Limited [CIN - U36990MH2016FTC281521] were continued to be the Associate Companies of the Company during the financial year 2017-2018 ended 31st March 2018.

STAR CIRCLIPS AND ENGINEERING LIMITED (''Star Circlips'')

Star Circlips is the engineering and specialized fastener manufacturing Company. The Company''s products are extensively used in the automobile sector comprising of 2 and 3 wheelers, passenger cars, commercial vehicles and tractors. The Company''s growth is fueled directly by the ever increasing demand in India, Europe and USA in the auto sector. As the automobile assemblies in transmission boxes, clutches, steering columns and brakes are continuously upgraded by international auto companies, Star Circlips is required to continuously develop and produce new specialized parts.

With ongoing investments in new equipment/s to enhance productivity and reduce input costs, Star Circlips is expected to maintain a healthy growth in the coming years. Our cost effective pricing, strong customer confidence and continuous technical exchange with our partner Seeger-Orbis, Germany has been instrumental in Star Circlips being recognized as a reliable brand in the fastener industry.

During the financial year 2017-2018 ended 31st March 2018 under review, the total revenue of Star Circlips at Rs. 10725.38 lakh is up by 24.51% compared to Rs. 8614.09 lakh of the FY 2016-2017. The EBIDTA at Rs. 3110.15 lakh is up by 44.64% as compared to Rs. 2150.34 lakh and PAT at Rs. 1551.69 lakh is up by 49.85% compared to Rs. 1035.52 lakh of the FY 2016-2017. The Company continued to hold 26.06% shareholding in Star Circlips during the FY 20172018 ended 31st March 2018 and by virtue of shareholding, the share of profit of Rs. 378.73 lakh is considered in the consolidated financial statements of the Company.

TOYAL MMP INDIA PRIVATE LIMITED (TMI)

TMI is the Aluminium Paste making Company, of which the commercial production commenced in February 2018. The trading business of high value paste from Toyo Group Companies in Japan, USA and France completed its first full year of operations and has been of advantage to major paint companies like Kansai, Asian PPG and KCC. The approvals for manufactured grades with domestic paint companies after validation in Japan is a time consuming activity and TMI expects to introduce its non-leafing grades in the market during the second half of the FY 2018-2019, whereas, the transfer of leafing grades from MMPIL is continuing. TMI also has plans to produce some medium grade pastes (currently imported from China) and have these validated with domestic paint companies during the FY 2018-2019.

During the financial year 2017-2018 ended 31st March 2018 under review, the total revenue of TMI at Rs. 1965.25 lakh is up by 1266.28% compared to Rs. 143.84 lakh of the FY 2016-2017. The EBIDTA at Rs. 35.76 lakh is up by 195.78% as compared to Rs. 12.09 lakh and PAT at (Rs. 47.24 lakh) decreased by 709.09% compared to Rs. 7.76 lakh of the FY 2016-2017. The Company continued to hold 26.00% shareholding in TMI during the FY 2017-2018 ended 31st March 2018 and by virtue of shareholding, the share of loss of Rs. 12.28 lakh is considered in the consolidated financial statements of the Company.

All the requisite information (details) have been provided in the prescribed Form No. AOC-1 attached as an Annex - A, which forms part and parcel of the Board''s Report.

9. PUBLIC DEPOSITS

During the financial year 2017-2018 ended 31st March 2018 under review, the Company has neither invited nor accepted any public deposits within the meaning of Section 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (as amended).

As such, no specific details prescribed in Rule 8(1) of the Companies (Accounts) Rules, 2014 (as amended) are required to be given or provided.

10. DIRECTORS AND KEY MANAGERAIL PERSONNEL

The changes amongst the Director/s including Executive Director/s and Key Managerial Personnel during the period are as follows :-

I. CHANGES AMONGST THE PROMOTER DIRECTOR/S

Mr. Arun Raghuveer Raj Bhandari, (DIN - 00008901), was re-appointed as the Managing Director (Category -Promoter & Executive), designated Key Managerial Personnel, of the Company, for a further period of Five (5) years effective 1st February 2018.

II CHANGES AMONGST THE EXECUTIVE DIRECTOR/S

(a) Mr. Bhinvkaran Dhularam Jangid, (DIN - 08021867), was appointed as an Additional Director [Category -Non-Promoter, Non-Independent & Executive], of the Company, effective 14th December 2017 and also, the Whole-time Director, designated Key Managerial Personnel, of the Company for a period of Five (5) years effective 14th December 2017.

(b) Mr. Madanmohan Chandulal Agrawal, (DIN - 02281318), Whole-time Director [Category - Non-Promoter, Non-Independent & Executive] ceased to be a Director and also, the Whole-time Director, of the Company, due to resignation effective 14th December 2017. The Board places on records its appreciation for his wide contributions in the overall performance of the Company.

III. CHANGES AMONGST KEY MANAGERIAL PERSONNEL (KMP)

Apart from change/s referred to in (I) and (II) above, there is no other change/s, in the Key Managerial Personnel (KMP), of the Company, and accordingly, Mr. Arun Raghuvir Raj Bhandari, (DIN - 00008901), Managing Director, [Category - Promoter & Executive], Mr. Lalit Ranjeet Raj Bhandari, (DIN - 00010934), Whole-time Director, [Category - Promoter & Executive], Mr. Bhinvkaran Dhularam Jangid, (DIN - 08021867), Whole-time Director, [Category - Non-Promoter & Executive], CA Sharad Mohanlal Khandelwal, [ICAI Membership No. FCA -047999, IT PAN - ADCPK2636D], Chief Financial Officer and CS Chandrakant Shivshankar Nimje [ICSI Membership No. ACS - 48717, IT PAN - ATWPN0626J], Company Secretary and Compliance Officer, of the Company, continued to act as the Key Managerial Personnel (KMP) of the Company, pursuant to the provisions of Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended).

IV. CHANGES AMONSGT THE INDEPENDENT DIRECTOR/S

Mr. Vijay Singh Bapna, (DIN - 02599024), and Mr. Sunil Khanna, (DIN - 00907147), were appointed as an Additional Director [Category - Non-executive, Independent], of the Company, by the Board of Directors effective 7th May 2018, in terms of provisions of Section 161 of the Companies Act, 2013 read with the rules made there under, and who holds such office up to the conclusion of this Forty-fifth (45th) Annual General Meeting of the Company.

V. DIRECTOR RETIREMENT BY ROTATION

Pursuant to Section 152 of Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended), Mr. Bhinvkaran Dhularam Jangid, (DIN - 08021867), [Category - NonPromoter & Executive], of the Company, retires by rotation and being eligible, offers himself for re-appointment.

The Board recommends his re-appointment as a Director [Category - Non-Promoter & Executive] of the Company, in the interest of the Company.

VI. PROPOSED CHANGES AMONGST DIRECTOR/S PLACED BEFORE THE MEMBERS FOR THEIR APPROVAL

(a) The Board of Directors at its meeting held on 1st February 2018, based on the recommendations vide resolution passed by the Nomination and Remuneration Committee at its meeting held on 1st February 2018, has re-appointed Mr. Arun Raghuveer Raj Bhandari, (DIN - 00008901), as the Managing Director, [Category - Promoter & Executive], designated Key Managerial Personnel, of the Company, for a further period of Five (5) years, effective 1st February 2018, subject to approval of the Shareholders (Members) of the Company at the ensuing Forty-fifth (45th) Annual General Meeting of the Company. The Board recommends his appointment as the Managing Director, [Category - Promoter & Executive], designated Key Managerial Personnel, of the Company, for a further period of Five (5) years, effective 1st February 2018, in the interest of the Company.

(b) The term of Mr. Bhinvkaran Dhularam Jangid, (DIN- 08021867), as an Additional Director, [Category - Non Promoter & Executive], of the Company, expiring at the conclusion of the ensuing Forty-fifth (45th) Annual General Meeting of the Company. The Board recommends his appointment as a Director, [Category - Non Promoter & Executive], liable to retire by rotation, of the Company, in the interest of the Company.

(c) The Board of Directors at its meeting held on 14th December 2017, based on the recommendations vide resolution passed by the Nomination and Remuneration Committee at its meeting held on 13th December 2017, has appointed Mr. Bhinvkaran Dhularam Jangid, (DIN - 08021867), as the Whole-time Director, [Category - Non-Promoter, Non-Independent & Executive], designated Key Managerial Personnel, of the Company, for a period of five (5) years, effective 14th December 2017, subject to approval of the Shareholders (Members) of the Company at the ensuing Forty-fifth (45th) Annual General Meeting of the Company. The Board recommends his appointment as the Whole-time Director, [Category - Non-Promoter, Non-Independent & Executive], designated Key Managerial Personnel, of the Company for a period of Five (5) years, effective 14th December 2017, in the interest of the Company.

(d) The term of Mr. Vijay Singh Bapna, (DIN - 02599024), as an Additional Director [Category - Non-executive, Independent], of the Company, expiring at the conclusion of the ensuing Forty-fifth (45th) Annual General Meeting of the Company. The Board recommends his appointment as a Director, [Category - Non-executive, Independent]. to hold the office for a fixed first term of three (3) consecutive years, i.e. from the conclusion of Forty-fifth (45th) Annual General Meeting to be held for the financial year 2017-2018 ended 31st March 2018, up to the conclusion of Forty-eighth (48th) Annual General Meeting of the Company to be held for the financial year 2020-2021, of the Company, in the interest of the Company.

(e) The term of Mr. Sunil Khanna, (DIN - 00907147), as an Additional Director [Category - Non executive, Independent], of the Company, expiring at the conclusion of the ensuing Forty-fifth (45th) Annual General Meeting of the Company. The Board recommends his appointment as a Director, [Category - Non executive, Independent]. to hold the office for a fixed first term of three (3) consecutive years, i.e. from the conclusion of Forty-fifth (45th) Annual General Meeting to be held for the financial year 2017-2018 ended 31st March 2018, up to the conclusion of Forty-eighth (48th) Annual General Meeting of the Company to be held for the financial year 2020-2021, of the Company, in the interest of the Company.

The Company has received a Notice in writing under Section 160 of the Companies Ac, 2013 from a member proposing the candidature/s of Mr. Bhinvkaran Dhularam Jangid, Mr. Vijay Singh Bapna, and Mr. Sunil Khanna, for the office of the Director/s of the Company. Moreover, Mr. Vijay Singh Bapna and Mr. Sunil Khanna Independent Director/s, have submitted a declaration that they meets the criteria of independence as provided under the Act.

Except the above, there is no change in the composition of the Board of Directors during the period under review and accordingly, the other Director/s namely, Mr. Ajay Sadashiv Gokhale, (DIN - 00550452), Mr. Karan Yudhishtir Varna (DIN - 06923525), and Mrs. Sudha Sukesh Gandhi, (DIN - 06611145), are continued as the Director/s [Category -Non-executive, Independent] of the Company. [The information (details) of Director/s of seeking appointment / reappointment at the Forty-fifth (45th) Annual General Meeting of the Company, pursuant to Regulation 26(4) and 36(6) of the Listing Regulations and Secretarial Standards on General Meetings (SS-2) is annexed to the Notice convening the Forty-fifth (45th) Annual General Meeting of the Company].

11. DECLARATION BY INDEPENDENT DIRECTOR/S

The Company has duly complied with the definition of ‘Independence’ according to the provisions of Section 149(6) of, read with Schedule IV - Code of Independent Directors to, the Companies Act, 2013. All the Independent Director/s, have submitted a declaration that he/she meets the criteria of independence and submits the declaration regarding the status of holding other directorship and membership as provided under law.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors confirms:-

(i) That in the preparation of the Annual Accounts (Financial Statements), the applicable Accounting Standards had been followed along with proper explanation, relating to material departures;

(ii) That the Directors had 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 profits of the Company for that financial year;

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) That the Directors had prepared the Annual Accounts (Financial Statements), on going concern basis;

(v) That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively; and

(vi) That the Directors had devised proper system to ensure compliance with the provisions of all applicable laws and regulations and that such systems were adequate and operating effectively.

13. NUMBER OF MEETINGS OF THE BOARD

Nine (9) meeting/s of the Board of Directors of the Company were held during the financial year 2017-2018 ended 31st March 2018 under review, on (1) 11.04.2017 (2) 15.05.2017 (3) 05.08.2017 (4) 18.08.2017 (5) 13.09.2017 (6) 16.10.2017 (7) 03.11.2017 (8) 14.12.2017 and (9) 01.02.2018

14. COMMITTEE(S) OF THE BOARD

The Company has constituted all the requisite Committee(s) of the Board, namely Audit Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, Corporate Social Responsibility (CSR) Committee, Share Transfer Committee, Risk Management Committee and Project Monitoring Committee, pursuant to the provisions of the Companies Act, 2013 read with the rules made there under and Listing Regulations. The details of its constitution, objective or terms of reference and other related information has been provided under the Corporate Governance Report, which forms part and parcel of the Board''s Report.

15. AUDITORS

I. STATUTORY AUDITORS AND THEIR REPORT

The Shareholders (Members) of the Company, based on the approval and recommendations of the Board of Directors, based on the approval and recommendations of the Audit Committee of the Company, at their Forty-fourth (44th) Annual General Meeting held on 30th September 2017, has approved the appointment of Messers Manish N. Jain & Co., Chartered Accountants, Nagpur [ICAI Firm Registration No. 138430W, Peer Review Certificate No. 010231], as the Statutory Auditors of the Company to hold office from the conclusion of Forty-fourth (44th) Annual General Meeting held for the financial year 2016-2017 ended 31st March 2017 till the conclusion of Forty-ninth (49th) Annual General Meeting of the Company to be held for the financial year 2021-2022 ending 31st March 2022, subject to ratification by Shareholders (Members) at every subsequent Annual General Meeting of the Company. However, the Company is not required to place the matter relating to appointment including re-appointment of the Statutory Auditors of the Company, for ratification by the Shareholders (Members) at every subsequent Annual General Meeting of the Company, in terms of deletion of First Proviso to Section 139(1) of Companies Act, 2013 vide the Companies (Amendment) Act, 2017 effective 7th May 2018.

The Statutory Auditors have furnished a Certificate of their consent, qualification and eligibility for ratification as well as appointment including re-appointment under Section 139 and 141 of the Companies Act, 2013 read with the rules and regulations made thereunder.

The Shareholders (Members) of the Company are requested to consider, ratify and approve, the appointment including re-appointment of Messers Manish N. Jain & Co., Chartered Accountants, Nagpur, [ICAI Firm Registration No. 138430W, Peer Review Certificate No. 010231], as the Statutory Auditors of the Company, to hold office from the conclusion of Forty-fifth (45th) Annual General Meeting held for the financial year 2017-2018 ended 31st March 2018 till the conclusion of the Forty-ninth (49th) Annual General Meeting of the Company to be held for the financial year 2021-2022 ending 31st March 2022 at such remuneration as fixed by the Board of Directors and/or Audit Committee of the Company from time to time.

The Auditors'' Report submitted by Messers Manish N. Jain & Co., Chartered Accountants, Nagpur, [ICAI Firm Registration No. 138430W, Peer Review Certificate No. 010231], the Statutory Auditors of the Company to the Shareholders (Members) for the financial year 2017-2018 ended 31st March 2018 do not contain any qualification. The observations made by the Statutory Auditors in their report are self-explanatory and have also been further amplified in the Notes to the financial statements and as such, do not call for any explanations.

During the financial year 2017-2018 ended 31st March 2018 under review:-

(a) there is no fraud occurred, noticed and/or reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (as amended);

(b) the observations made by the Statutory Auditors on the financial statements including the affairs of the Company are self-explanatory and do not contain any qualification, reservation, adverse remarks or disclaimer thereof.

As such, no specific information, details or explanations required to be given or provided by the Board of Directors of the Company.

II. COST AUDITORS AND THEIR REPORT

Pursuant to Section 148 of the Companies Act 2013, the Board of Directors, on the recommendations of the Audit Committee, of the Company, has appointed Messers Khanuja Patra & Associates, Cost Accountants, Nagpur, [Firm Registration No. 00214], as the Cost Auditors of the Company, for the financial year 2018-2019 ending 31st March 2019 and has also recommended their remuneration to the Shareholders (Members) for their ratification at the ensuing Forty-fifth (45th) Annual General Meeting of the Company.

The said Cost Auditors have furnished a Certificate of their eligibility for appointment pursuant to Section 141(3)(g) and 148(5) of the Companies Act, 2013 read with the rules made there under, Certificate for independence and arms'' length relationship with the Company and have confirmed about their not being disqualified for such appointment including re-appointment within the meaning of Section 141(3) of the Companies Act, 2013.

III. SECRETARIAL AUDITORS AND THEIR REPORT

The Board of Directors, on the recommendations of the Audit Committee, of the Company, has appointed Messers Mukesh Parakh & Associates, Company Secretaries, Nagpur, [ICSI Membership No. FCS-4343 & Certificate of Practice No. 13693], as the Secretarial Auditors of the Company for the financial year 2017-2018 ended 31st March 2018.

The Secretarial Audit Report in Form No. MR-3 submitted by the said Secretarial Auditors, do not contain any adverse remarks and qualifications, is self-explanatory and do not call for any further explanation/s by the Company. The Secretarial Audit Report in Form No. MR-3 submitted by the said Secretarial Auditors, for the financial year 2017-2018 ended 31st March 2018, is attached herewith as an Annex - B and forms part and parcel of the Board''s Report.

IV. INTERNAL AUDITORS

Pursuant to Section 138 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 (as amended), the Board of Directors, on the recommendations of the Audit Committee, of the Company, has appointed (through re-designation) CA Priyesh Rajesh Jobanputra [ICAI Membership No. ACA - 164429], presently designated as the Assistant Manager (Finance) of the Company, as the Internal Auditors of the Company, for the financial year 20172018 ended 31st March 2018 and also, for the financial year 2018-2019 ending 31st March 2019.

The Internal Audit Finding/s and Report/s submitted by the said Internal Auditors, from time to time, during the financial year 2017-2018 ended 31st March 2018, to the Audit Committee and Board of Directors of the Company, do not contain any adverse remarks and qualifications, is self-explanatory and do not call for any further explanation/s by the Company.

16. PERSONNEL / PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(a) The ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company for the financial year :

Executive Directors

Ratio to Median remuneration

Mr. Arun Raghuveer Raj Bhandari - Managing Director Mr. Lalit Ranjeet Raj Bhandari - Whole-time Director

22.73 : 1 6.25 : 1

(b) The percentage increase in remuneration of each Director/s, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year 2017-2018 ended 31st March 2018 :

Director/s, Chief Executive Officer, Chief Financial Officer and Company Secretary

% increase in remuneration in the financial year

Mr. Arun Raghuveer Raj Bhandari - Managing Director Mr. Lalit Ranjeet Raj Bhandari - Whole-time Director Mr. Bhinvkaran Dhularam Jangid - Whole-time Director CA Sharad Mohanlal Khandelwal - Chief Financial Officer CS Chandrakant Shivshankar Nimje - Company Secretary

66.67% 22.22% Not Applicable Not Applicable Not Applicable

(c) The percentage increase in the median remuneration of employees in the financial year : 13.30%

(d) The number of permanent employees on the rolls of Company as on 31st March 2018 : 347

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

- The average annual increase was about 10%. During the financial year, the total increase is approximately 13.30% after accounting for promotions and other event based compensation revisions.

- Increase in the managerial remuneration for the financial year was around 59.70%, other than commission based on net profit as per the terms of their appointment.

(f) Affirmation: Remuneration paid to Director/s, Key Managerial Personnel and Employees of the Company is as per the remuneration policy of the Company.

(g) Information as per Section 197 of the Companies Act, 2013 (“the Act”) and Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 (as amended), forms part of this report. However, in terms of Section 136(1) of the Act, the Report and Financial Statements are being sent to all the shareholders and others entitled to receive the same, excluding the statement of particulars of employees. The statement is available for inspection by the Shareholders (Members) at the Registered Office of the Company during business hours on any working day up to the date of the ensuing Forty-fifth (45th) Annual General Meeting. If any Shareholder (Member) is interested in obtaining a copy thereof, such Shareholder (Member) may write to the Company Secretary, whereupon a copy would be sent to the concerned Shareholder (Member) of the Company.

17. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, for the financial year 2017-2018 ended 31st March 2018 as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in the Annex - C to this report.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the financial year 2017-2018 ended 31st March 2018 under review, the Company has neither granted loan/s (secured or unsecured), provided guarantees or securities in connection with any loan/s availed by others nor made any investments pursuant to the provisions of Section 185 and 186 the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended). As such, no specific details are required to be given or provided.

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS OR TRANSACTIONS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013

The details of contracts or arrangements or transactions not at arm''s length basis and/or the details of contracts or arrangements or transactions at arm''s length basis in Form No. AOC - 2 pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 (as amended) are given in the Annex - D, which forms part and parcel of the Board''s Report.

20. LISTING OF SHARES AND PAYMENT OF FEES

The designated Stock Exchange - National Stock Exchange of India Limited, has approved, the listing and trading of equity shares in the capital of the Company, on its SME Platform namely NSE EMERGE, effective Thursday, the 12th April 2018 and continued to be actively listed and traded as on date. The Company, has paid in advance, the requisite Initial and Annual Listing Fees for the financial year 2018-2019 ending 31st March 2019, to the National Stock Exchange of India Limited.

21. DEMATERIALISATION OF SHARES

As on 31st March 2018, all 12435075 equity shares dematerialised through depositories viz. National Securities Depository Limited and Central Depository Services (India) Limited, which represents whole 100% of the total issued, subscribed and paid-up capital of the Company as on that date.

As on 23rd July 2018, all 16935075 equity shares dematerialised through depositories viz. National Securities Depository Limited and Central Depository Services (India) Limited, which represents whole 100% of the total issued, subscribed and paid-up capital of the Company as on that date.

22. EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return as on 31st March 2018 pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 (as amended) is furnished in the Annex-E attached to this report, which forms an integral part of this report.

23. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

During the financial year 2017-2018 ended 31stMarch 2018 under review, there were no amount/s which is required to be transferred to the Investor Education and Protection Fund by the Company. As such, no specific details are required to be given or provided.

24. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by the SEBI through the Listing Regulations executed with the Stock Exchange. The Company has also implemented several best corporate governance practices as prevalent globally, on voluntary basis.

Your Directors are pleased to report that almost all the provisions of the Companies Act, 2013 read with the rules made there under and the SEBI Regulation/s, including but not limited to, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) [''Listing Regulation''], is made applicable to the Company, effective the date of listing and commencement of trading i. e. 12thApril 2018.

Your Directors are pleased to report that your Company has complied with the SEBI Guidelines on Corporate Governance as of 31st March 2018 relating to the Listing Regulations, on voluntary basis. A Certificate from Messers Mukesh Parakh & Associates, Company Secretaries, Nagpur [ICSI Membership No. FCS-4343, Certificate of Practice No. 13693) confirming voluntary compliance with conditions as stipulated under Listing Regulations is annexed to the Corporate Governance Report of the Company.

25. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company believes in the Corporate Social Responsibility as an integral part of its business. Education specifically Education for Girls, Women, Poor, Under-privileged or Disabled (Divyang), Skill Development and Training, Environment, Health, Drinking Water, Rural Development, are some of the most critical problems that our country has been facing for years. One of the most effective direct and indirect solutions to solve these is an education, but a great number of peoples cannot afford to get them self-educated.

Keeping this in mind, the Board of Directors through its CSR Committee has implemented certain CSR projects either directly or through implementing agency nominated by the CSR Committee of the Company. All the activities and programme/s covered under CSR are being monitored and implemented by the CSR Committee of the Company. The Company do confirms that the Company is in due compliance of the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR project/s of the Company are in accordance with the provisions of Section 135 of, Schedule VII to, the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Company''s CSR Policy. The Annual Report on the CSR Activities for the financial year 2017-2018 ended 31st March 2018 is given in the Annex - F, which forms part and parcel of the Board''s Report.

26. CODES OF CONDUCT OF BUSINESS PRINCIPLES & ETHICS AND PREVENTION OF INSIDER TRADING AND OTHER CODES/ POLICIES

Your Directors are pleased to report that your Company has complied with the:-

(i) Code of Conduct of Business Principles and Conduct;

(ii) Code of Prevention of Insider Trading in MMP securities by the designated persons (insider) (as amended from time to time);

(iii) Code for Vigil Mechanism - Whistle Blower Policy;

(iv) Code for Independent Directors;

(v) Corporate Social Responsibility (CSR) Policy;

(vi) Risk Management Policy;

(vii) Policy on Document Preservations (Regulation 9 of the SEBI (LODR) Regulations, 2015);

(viii) Policy for determining of ''material'' Subsidiary (Regulation 16 of the SEBI (LODR) Regulations, 2015);

(ix) Policy on materiality of related party transaction/s and on dealing with related party transactions (Regulation 23 of the SEBI (LODR) Regulations, 2015); and

(x) Policy for determination of materiality, based on specified criteria and accordingly, grant authorisation for determination of materiality of events (Regulation 30 of the SEBI (LODR) Regulations, 2015).

The aforesaid code(s) and policy(ies) are available on the Company''s website www.mmpil.com.

27. MATERIAL DEVELOPMENT IN HUMAN RESOURCES

During the financial year under review, industrial relations remained cordial. Employees'' competencies and skills were enhanced by exposing them to several internal and external training programme/s. Various measures were taken to improve motivation level of employees. Additional efforts are continued to be implemented with a view to obtain commitment and loyalty towards the organisation.

28. INDUSTRIAL RELATIONS, HEALTH AND SAFETY

Departmental safety coordinators are identified for monitoring & training on safety related matter at shop-floor. Safety Committee and Apex Committee are available for periodical review on safety, health & environment of all departments. Regular Training on Safety is being organised for New Joinee, regular employees & contract labour. Mock-drills are conducted for practical exposure to meet emergency need on quarterly basis. Hand book on safety awareness are distributed to all employees.

29. SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

MMP Industries Limited (“the Company”) has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees etc.) are covered under this Policy. The Certificate by the Managing Director and Whole-time Director of the Company, to that effect is enclosed herewith as an Annex - G and forms part of this report.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems and procedures commensurate with the size and nature of business. These procedures are designed to ensure:-

(a) that all assets and resources are used efficiently and are adequately protected;

(b) that all the internal policies and statutory guidelines are complied with; and

(c) the accuracy and timing of financial reports and management information is maintained.

31. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

As mentioned under the head “Initial Public Offer (IPO)” at Sr. No. 1, the Company has issued and allotted 45,00,000 (Forty-five lakh) equity shares of face value of Rs.10/- each, at a premium of Rs.178/- per equity share, in the capital of the Company, through Book Building process, in the Initial Public Offer (IPO). The issue and allotment of equity shares in the capital of the Company was made on Tuesday, the 10th April 2018. The designated Stock Exchange - National Stock Exchange of India Limited, has approved, the listing and trading of equity shares in the capital of the Company, on its SME Platform namely NSE EMERGE, effective Thursday, the 12th April 2018.

Accordingly, a sum of Rs. 30,01,60,800 received against Bidding by Anchor Investors was shown as Share Application Money Pending Allotment as on 31st March 2018. Whereas, the changes in the Issued, Subscribed and Paid-up Share Capital, Reserves and Surplus, Accounting of IPO Proceeds and Utilisation thereof, due to IPO, shall reflect in the financial statements pertaining to the financial year 2018-2019 ending 31st March 2019.

Except the aforesaid, during the financial year 2017-2018 ended 31st March 2018 under review, there are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relates and the date of this report. As such, no specific details are required to be given or provided.

32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

During the financial year 2017-2018 ended 31st March 2018 under review, no significant and material order is passed by any of the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future. As such, no specific details are required to be given or provided.

33. OTHER DISCLOSURES

The details regarding Board and its Committee meetings, Evaluation of Board performance, Declaration by Independent Director/s, Remuneration policy for Director/s and KMP''s, Induction, training and familiarisation programmes for Director/s including Independent Director/s and such other related information has been provided under the Corporate Governance Report, which forms part and parcel of the Board''s Report.

34. COMPLIANCE OF THE SECRETARIAL STANDARDS [SS-1 AND SS-2]

The Board of Directors confirms that the Company, has duly complied and is in compliance, with the applicable Secretarial Standard/s, namely Secretarial Standard-1 (''SS-1'') on Meetings of the Board of Directors and Secretarial Standard -2 (''SS-2'') on General Meetings, during the financial year 2017-2018 ended 31st March 2018.

35. ENCLOSURES

(a) Annex - A: Form No. AOC-1 - Information (Details) about the Associate Companies of the Company;

(b) Annex - B: Secretarial Audit Report in Form No. MR-3;

(c) Annex - C: Report on Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo;

(d) Annex - D: Form No. AOC-2 - Information (Details) of contracts or arrangements or transactions not at arm''s length basis and/or the details of contracts or arrangements or transactions at arm''s length basis;

(e) Annex - E: Extract of Annual Return as of 31st March 2018 in the prescribed Form No. MGT-9;

(f) Annex - F: Annual Report on Corporate Social Responsibility (CSR) activities together with expenditure details; and

(g) Annex - G: Certificate on Sexual Harassment of Women at the Workplace and its Prevention, Prohibition & Redressal.

36. ACKNOWLEDGEMENT

The Board of Directors acknowledges with gratitude for the co-operation and assistance received from National Stock Exchange of India Limited (NSE), Securities Exchange Board of India (SEBI), Merchant Banker, Lead Manager, Underwriter and Market Maker, Auditors, Advisors & Consultants, other Intermediary service provider/s, Anchor and other Investor/s for successful accomplishment of the Company''s maiden IPO.

The Board of Directors also take this opportunity to extend its sincere thanks for co-operation and assistance received by the Company from the Central - State - Local Government and other regulatory authorities, Bankers, Members, Customers, Suppliers,

The Directors also record their appreciation of the dedication of all the employees at all levels for their support and commitment to ensure that the Company continues to grow.

For and on behalf of the Board

Arun Raghuveer Raj Bhandari Lalit Ranjeet Raj Bhandari

P|ace : Nagpur Managing Director Whole Time Director

Date : July 23, 2018 DIN - 00008901 DIN - 00010934

Date Sources:Live BSE and NSE Quotes Service: TickerPlant | Corporate Data, F&O Data & Historical price volume data: Dion Global Solutions Ltd.
BSE Quotes and Sensex are real-time and licensed from the Bombay Stock Exchange. NSE Quotes and Nifty are also real time and licenced from National Stock Exchange. All times stamps are reflecting IST (Indian Standard Time).
By using this site, you agree to the Terms of Service and Privacy Policy.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service