fluidomat ltd share price share price Management discussions

To

The Members of,

Fluidomat Limited

Indore (M.P.)

Your Directors have pleasure in presenting 46th Annual Report on the business and operations of the Company along with the Standalone & Consolidated Audited Financial Statements for the financial year ended March 31st 2022.

FINANCIAL RESULTS:

Financial performance of the Company is summarized in the table below:- (Rs. In Lakhs)

Particulars	Standalone	Consolidated
	Year ended on	Year ended on
	31.03.2022	31.03.2021	31.03.2022	31.03.2021
Revenue from Operations	3406.89	2827.34	3406.89	2827.34
Other Income	158.46	135.04	158.25	136.33
Total Income	3565.35	2962.38	3565.14	2963.67
Total Expenditure except Interest and Depreciation	2788.88	2356.76	2789.86	2357.76
Pro t before Interest, Depreciation & Tax (EBIDTA)	776.47	605.62	775.28	605.91
Less: Interest	0.31	2.26	0.31	2.26
Less: Depreciation	66.87	64.11	66.87	64.11
Pro t before Exceptional Items and Tax	709.29	539.25	708.10	539.54
Add: Exceptional items (Income tax refund and interest thereon)	33.35	0.00	33.35	0.00
Pro t before Tax	742.64	539.25	741.45	539.54
Less: (a) Current Tax	187.58	136.38	187.58	136.38
(b) Deferred Tax	6.18	4.53	6.18	4.53
Net Pro t for the year	548.88	398.34	547.69	398.63
Other Comprehensive Income/(Loss)	26.42	41.40	26.42	41.40
Total Comprehensive Income for the year Reserves & Surplus	575.30 3641.08	439.74 3225.90	574.11 3638.97	440.03 3224.99
EPS (Equity Shares of Rs. 10/- each) Basic & Diluted (in Rs.)	11.68	8.93	11.65	8.93
Paid up Equity Share Capital	492.70	492.70	492.70	492.70

REVIEW OF OPERATIONS /STATE OF AFFAIRS:

Standalone:

During the financial year 2021-22, the Company has generated a total revenue from operations of 3565.35 lakhs as against Rs. 2962.38 lakhs in the previous financial year 2020-21 representing increase total revenue of 20.35 %.

Company has booked the orders of Rs. 4125.00 lacs during the current financial year as against the booking of Rs.3856.63 lacs in the previous financial year, which is higher by 6.95%.

During the year ended on March 31, 2022 the Earnings before Interest, Depreciation and Tax (EBIDTA) been increased to Rs. 776.47 lakhs as against the EBIDTA of Rs. 605.62 lakhs in the corresponding financial year.

The Net Profit of the Company for the financial year 2021-22 has been increased to Rs. 575.30 lakhs compared to Rs. 439.74 lakhs during the previous financial year. Earning per share (EPS) for the year increased to Rs. 11.68 as compared to EPS of Rs. 8.93 in previous financial year.

Consolidated:

Your company has a wholly owned foreign subsidiary in the name of Fluidomat UK Private Limited (WOS) in UK incorporated on 26th June, 2019. During the year under review total expenses was Rs. 0.98 lakhs and the said subsidiary is yet to commence commercial operations, therefore there is no operating income during the year. However, WOS having foreign currency fluctuation loss in the financial statement Rs. 0.21 lakhs due to conversion of foreign currency into functional currency, net loss of Rs. 1.19 lakhs during the year has been reported.

IMPACT OF COVID-19 PANDEMIC:

The COVID-19 pandemic continued to be a global challenge creating disruption across the world. While the global economy showed early signs of recovery in the beginning of 2021, the repeated waves of COVID infection overwhelmed the Country?s health infrastructure. The partial lockdown situation in the Country in the starting part of the financial year under review led to rise in inflation impacting recovery especially across emerging economies and dented the pace of economic activity. The pandemic hit all segments of the economy quite hard with the manufacturing, construction and services segments reporting large contractions during the fiscal.

However, there is no material impact on Company?s manufacturing and distribution operations and based on the preliminary estimates the Company does not anticipate any major challenge in meeting the financial obligations on the long-term basis. However, the dispatch of goods has some impact due to inspection requirement. Further the company does not carry any risk in the recover ability and carrying values of its assets including property, plant and equipment, trade receivables, inventories, investments etc. Company during the year 2021-22.

DIVIDEND:

Your Board of Directors are pleased to recommend a dividend of Rs. 3.50 (35%) subject to TDS on Equity Share of Rs.10/- each for the year ended March 31, 2022. (Previous year Rs. 3.25 (32.50%) per Equity Share of Rs.10/- each). The above dividend would be paid subject to approval by the Members in the ensuing Annual General Meeting. The proposed dividend will absorb Rs.172.45 Lakhs (previous year Rs. 160.13 Lakhs)

TRANSFER TO RESERVES:

During the year, your company has voluntarily transferred Rs 100.00 Lakhs (Previous year Rs. 100.00 Lakhs) to the General Reserves. Except this, the company has not transferred any funds to any kind of Reserves during the year (Previous Year: Nil)

SHARE CAPITAL:

The paid up Equity Share Capital of the Company as at 31st March, 2022 was Rs. 492.70 Lakhs divided into 49.27 Lakhs equity shares of Rs. 10/- each. There is no change in share Capital of the Company during the year. Your company does not hold any instruments convertible into the equity shares.

CHANGE IN CONTROL AND NATURE OF BUSINESS

There is no change in control and nature of business activities during the period under review.

BUSINESS TRANSFER

There is no transfer of business during the period under review.

DIRECTORS & KEY MANAGERIAL PERSONNELS:

Executive Directors and KMPs:

The Company is having adequate Key Managerial Personnel?s as per requirements of section 203 of the Companies Act, 2013 as well as the SEBI (LODR) Regulations, 2015. There is no change in the key managerial personnel?s during the year under review.

Declaration for Independency of Independent Directors:

The Company have received necessary declaration from all the independent directors as required under section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of Independence as per the SEBI (LODR) Regulation, 2015 and the Companies Act,2013.In the Opinion of the Board, all the independent directors fulfills the criteria of the independency as required under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. All the Independent Directors have also registered themselves with Independent Directors? Databank.

The members of the Company in their 42nd Annual General Meeting held on 26thSeptember, 2018 has reappointed all Independent Directors of the Company for a second term of five consecutive years w.e.f. 1st April, 2019 and their office is not liable to retire by rotation.

Directors liable to retire by rotation and seeking re-appointment:

Mrs. Radhica Sharma (DIN: 06811597) the Deputy Managing Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. Your directors recommend to pass necessary resolution as proposed in the Item No. 3 of the Notice.

Executive Director seeking re-appointment:

The tenure of Shri Kunal Jain (DIN: 01475424) Whole-time Director designated as the Executive Director will be completed on 30th April,2023 therefore, the Board upon the recommendation of the Nomination and Remuneration Committee proposes his re-appointmentfor a further period of Three (3) years w.e.f. 1st May, 2023. Your Board of directors recommends passing special resolution as per the Companies Act, 2013 & SEBI (LODR) Regulation, 2015 as set out in the Item No. 5 notice of the Annual General Meeting.

Non-Executive Director (Independent Director) seeking ratification of appointment on attaining the age of 75 years during the term of his original appointment:

As per Regulation 17(1A) of SEBI (LODR) Regulation, 2015 in case of listed entities, the Company should not appoint or continue the appointment of any person as a Non-executive Director (NED) who has attained the age of 75 years unless Special Resolution is passed to that effect.

Shri Praful Ratilal Turakhia (DIN 00366398) Non-Executive Independent Director shall attain the age of 75 on 21st April, 2023 during his second term opto 31st March, 2024, in view thereof the Board and Nomination and Remuneration Committee has considered and recommended to ratify his appointment for remaining period of his second term, to be eligible to continue as the Non Executive Director upon attaining age of 75 years. Therefore, your Board of Directors recommends passing of necessary special resolution to that effect as set out in the Item No. 6 notice of the Annual General Meeting.

BOARD MEETING AND THE BOARD:

A. Number of meetings of the Board:

Total Five(5) meetings of the Board were held during the year. The intervening gap between any two meetings was not exceeding 120 days as prescribed by the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. For further details of the meetings, please refer the Corporate Governance Report which forms part of this report.

B. Policy on Directors? appointment and remuneration:

The Board has, on the recommendation of the nomination and remuneration committee framed a nomination, remuneration and evaluation policy which lays down the criteria for identifying the persons who are qualified to be appointed as directors and/or senior management personnel of the company, along with the criteria for determination of remuneration of directors, KMP?s and other employees and their evaluation and includes other matters, as prescribed under the provisions of section 178 of Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations 2015. Policy of the Company has been given at the website of the Company at Link:-http://www.fluidomat.com.The details of the same are also covered in Corporate Governance Report forming part of this annual report.

C. Board Evaluation:

The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter se board members, effective participation, domain knowledge, compliance with code of conduct, vision and strategy.

The Nomination & Remuneration Committee and the Board carried out an annual performance evaluation of the Board, Committees, Individual Directors and the Chairman. The Chairman of the respective Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees.

The formal evaluation of performance of individual directors was made by independent directors in their meeting and report on performance evaluation was placed before the Board of Directors for consideration.

The report on performance evaluation of the Individual Directors was reviewed by the Chairman of the Board and Nomination & Remuneration Committee and feedback was given to Directors.

COMMITTEES OF THE BOARD:

In accordance with the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 and other purposes the Board has the following Four (4) committees as on 31.03.2022:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholders? Relationship Committee

d) Corporate Compliance Committee

Apart from the aforesaid committees under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 the Company has also constituted Internal Complaints Committee (ICC) under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.A detailed note on the Board and its committees is provided under the Corporate Governance Report section in this report.

DIRECTORS? RESPONSIBILITY STATEMENT:

In terms of Section 134(3)(c) of the Companies Act, 2013, your directors, to the best of their knowledge and belief and according to the information and explanations obtained by them in the normal course of their work, state that, in all material respects;

a) In the preparation of the annual financial statements for the year ended March 31, 2022, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) Appropriate accounting policies have been selected, applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2022 and of the profit of the company for the year ended on that date;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The annual financial statements have been prepared on a going concern basis;

e) Proper internal financial controls were in place and the financial controls were adequate and operating effectively; and

f) Proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

AUDITORS AND THEIR REPORT:

A. Statutory Auditors:

In terms of the provisions of section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. C.P. Rawka & Co., Chartered Accountants, (F. R. No. 000518C)was appointed as the statutory auditors of the Company to hold office for one term of 5 years commencing from conclusion of the 41st Annual General Meeting upto the conclusion of the Annual General Meeting of the Company to be held in the calendar year 2022. Therefore their tenure being the Statutory Auditors shall be completed at the conclusion of the ensuing annual general meeting.

M/s J.P. Saraf & Co., Chartered Accountants (F.R. No. 006430C),are recommended by the Board and Audit committee for appointment as the Statutory Auditor for a First term of 5 consecutive years i.e. commencing from the conclusion of this 46th Annual General Meeting until the conclusion of 51st Annual General Meeting to be held in the year 2027 in place of the existing retiring auditor M/s C.P. Rawka & Co. Chartered Accountants, whose tenure shall expire on the conclusion of this Annual General Meeting,

The Standalone and Consolidated Auditors Report and the Notes on financial statement for the year 2021-22 referred to in the Auditors Report are self-explanatory and does not contain any qualification, reservation or adverse remark, therefore, do not call for any further comments.

B. Cost Auditors and Records:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, amended time to time, the provision regarding Cost Audit and maintenance of Cost Records is not applicable to Company during the year 2021-22.

C. Secretarial Auditors:

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has re-appointed M/s D.K. Jain & Co., Company Secretaries to undertake the Secretarial Audit of the Company for the year 2021-22. The Secretarial Auditors has made certain observations which has been replied by the Management of the company. The Report of the Secretarial Audit for the year 2021-22 in the Form MR-3 is annexed herewith as

"Annexure-1".

Observations of the Secretarial Auditors:

a) There are 2 (Two) Charges for Charge ID No. 90205616 and 90204976 reflecting in the Index of Charges at the portal of MCA. However, the loan amount was repaid and satisfied long back but no evidence for the filing of Forms for satisfaction were produced before us.

Managements Reply:

a) The company is trying to get the charge satisfied, however the company could not find whereabouts of the charge holders, therefore we could not file the Form CHG-4 with the digital signature of the charge holder. However, the management is trying to find a suitable way to file the same and comply with the requirement of law.

D. Disclosure of frauds against the Company:

The auditors have not found any fraud as required to be reported by them under section 143(12) to the Central Government during the year 2021-22. Further that, there were no instances of fraud, other than those which are reportable to the Central Government covered under section 134(3)(ca) of the Companies Act, 2013.

TRANSACTIONS WITH RELATED PARTIES:

The Company has not entered into any material contracts, with the related parties during the year 2021-22 and other contracts or arrangements wherein the ordinary course of business on arms length basis, which were approved by the Audit Committee and the Board from time to time. Therefore, there is no particulars of contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013 which needs to disclose in the prescribed form AOC-2 and may be treated as not applicable. However, the related party transactions as covered under Indian Accounting Standards (Ind AS 24) have been disclosed in the Note of the financial statements for the year under review.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators/Courts of law which would have impact on the going concern status of the Company and its future operations.

CONSOLIDATED FINANCIAL STATEMENTS:

Company is having one Wholly Owned Subsidiary in corporated in UK. Therefore, company is presenting Consolidated Financial Statement for the year 2021-22.Pursuant to section 136 of the Companies Act, 2013 the Standalone financial statements and consolidated financial statements along with relevant documents and separate unaudited accounts of Fluidomat UK Private Limited are available on the website (www.fluidomat.com) of the company.

PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINT VENTURES:

Your company has one Wholly Owned Subsidiary (WOS) Fluidomat UK Private Limited incorporated on 26th June, 2019. However, there is no associate company or/and joint venture within the meaning of Section 2(6) of the Companies Act, 2013.The WOS is yet to commence the commercial activities. However, pursuant to Section 129(3) of the Companies Act, 2013 a statement containing salient features of the financial statements of the Companys subsidiaries in Form AOC-1 is annexed herewith as "Annexure-2". There was no change in the status of Subsidiary, Associate or Joint Venture during the financial year 2021-22.

PUBLIC DEPOSITS:

DEPOSITS

Your Company has not accepted deposit from the public falling within the ambit of section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and there were no remaining unpaid or unclaimed deposits as on 31st March, 2022. Further, the Company has not accepted any deposit or loans in contravention of the provisions of the Chapter V of the Companies Act, 2013 and the Rules made there under.

S. No. Particulars	Amt in Rs.
1 Details of Deposits accepted during the year	Nil
2 Deposits remaining unpaid or unclaimed at the end of the year	Nil
3 Default in repayment of deposits	N.A.
At the beginning of the year
Maximum during the year
At the end of the year
4 Deposits not in compliance with law	N.A.
5 NCLT/ NCLAT orders w.r.t. depositors for extension of time and penalty imposed	N.A.

There are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013 and the rules made thereunder.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL RESULTS:

The Board of Directors has devised systems, policies and procedures / frameworks, which are currently operational within the Company for ensuring the orderly and efficient conduct of its business, which includes adherence to Company?s policies, safeguarding assets of the Company, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. In line with best practices, the Audit Committee reviews these internal control systems to ensure they remain effective and are achieving their intended purpose. Where weaknesses, if any, are identified as a result of the reviews, new procedures are put in place to strengthen controls. These controls are reviewed at regular intervals.

Nothing has come to the attention of the Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year under review. There have been no significant changes in the Company?s internal financial controls during the year that have materially affected or are reasonably likely to materially affect its internal financial controls. There are inherent limitations to the effectiveness of any system of disclosure, controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There is no material changes and commitments affecting the financial position of the Company occurred during the Financial Year to which these financial statements relate and the date of report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not provided any loans and/or guarantees pursuant to section 186 of the Companies Act, 2013. However, The Company has made investments in Mutual funds and in the WOS and has also given advance against salary or otherwise to the employees of the Company as per the Company?s policy. Details of the existing investment is provided in the Financial Statement and hence, not reproduced here.

ANNUAL RETURN:

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014,the draft Annual Return in form MGT-7 for the year ended 31st March, 2022 is hosted on www.fluidomat.com. The same shall be filed to Registrar of Companies after Annual General Meeting to be held on 26th September, 2022

CORPORATE SOCIAL RESPONSIBILITY (CSR):

In view of the profit of Fluidomat during immediately preceding three financial years, the company is required to undertake Corporate Social Responsibility (CSR) activities during the year 2021-22 as per provisions of the section 135 of the Companies Act, 2013 and the rules made there under. As part of its initiatives under CSR, Fluidomat has undertaken activities in the areas of Education and animal welfare. The company has also contributed a part of its CSR obligation to the Prime Minister National Relief Fund (PMNRF) as covered in the Schedule VII of the Companies Act, 2013.

The Company is required to spend Rs.8.66 lakhs of the average qualifying net profits of the last three financial years on CSR activities on projects in FY 2021-22. During the year under review, the Company has spent Rs. 8.66 lakhs on CSR activities.

The Company has met its obligation of spending Rs.8.66 lakhs for FY2021-22. The Annual Report on CSR containing the composition of the CSR & Sustainability Committee, salient features of the CSR Policy, details of activities, and other information as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided in "Annexure -3" attached to this Report. The CSR Policy may be accessed on the Companys website at the link www.fluidomat.com.

The Company is not required to have CSR Committee as such, hence the existing CSR Committee was dissolved w.e.f. 12th February,2021 and the Board is responsible to implements of the CSR activities.

CORPORATE GOVERNANCE:

Your Company firmly believes and adopts the highest standard of practice under Corporate Governance. A separate section on Corporate Governance and a certificate obtained from Auditors of the Company and Practicing Company Secretary related Dis-qualification of Directors form part of Corporate Governance Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure-4".

INTERNAL COMMITTEE ON PREVENTION OF SEXUAL HARASSMENT:

The Company has framed ‘Anti Sexual Harassment Policy? at workplace and has constituted Internal Complaints Committee (ICC) as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. No complaints with allegations of sexual harassment were reported during the year under review.

RISK MANAGEMENT:

The Company has a well-defined process to ensure the risks are identified and mitigation steps are put in place. The Companys Risk Management process focuses on ensuring that these risks are identified on a timely basis and reasonably addressed. The Audit Committee oversees financial risks and controls. Major risks are identified by the businesses and functions and these are systematically addressed through mitigating actions on continuing basis.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Your company has a Vigil Mechanism in place which also includes a whistle blower policy in terms of the SEBI (LODR) Regulation, 2015 for Directors and employees of the Company to provide a mechanism which ensures adequate safe guards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc. The Vigil Mechanism/Whistle Blower Policy of the Company can be accessed on the Company?s website at the link:(http://www.fluidomat.com) and the same is being attached with this Report as

"Annexure-5".

All the employees have the right/option to report their concern/grievance to the Chairman of the Audit Committee. During the year under review no protected disclosure from any Whistle Blower was received by the designated officer under the Vigil Mechanism.

PARTICULARS OF EMPLOYEES:

The information required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment & remuneration of Management Personnel) Rules, 2014 as amended are given below:

A. Ratio of the remuneration of each director to the median employee?s remuneration and the percentage increase in remuneration of each Director& Key Managerial Personnel:

S. No. Name	Designation	Remuneration for the year 2020-22 (Rs.)	Remuneration for the year 2020-21 (Rs.)	Increase In Remuneration (Rs.)	Percentage of Increase I in Remuner- ation	Ratio Between Director?s Remuneration and Median Employee Remuneration
1 Shri Ashok Jain	CMD	59,98,955	44,48,828	15,50,127	34.85%	22.19
2 Shri Kunal Jain	WTD	48,00,700	42,76,203	5,24,497	12.27%	18.18
3 Mrs.Radhica Sharma	WTD	45,28,500	37,24,393	8,04,107	21.60%	17.37
4 *Shri Khushal Chandra Jain	Independent Director	Nil	Nil	-	-	-
5 *CA Mahendra Kumar Shah	Independent Director	Nil	Nil	-	-	-
6 *Shri Praful R Turakhia	Independent Director	Nil	Nil	-	-	-
7 Mrs. Monica Jain	CFO	14,29,318	12,97,008	1,32,310	10.20%	5.42
8 CS Devendra Kumar Sahu	CS	8,17,676	7,18,206	99,470	13.85%	3.17

*Shri Khushal Chandra Jain, CA Mahendra Kumar Shah and Shri Praful R. Turakhia Independent Directors were paid sitting fees for attending the Meetings of the Board.

B. The percentage increase in the Median remuneration of employees in the financial year:8.15%.

C. The number of permanent employees on the Roll of the Company as on 31stMarch, 2021: 185.

D. 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:

Based on Remuneration Policy of the Company, average salary of the employees increased at the rate of 10% and average managerial remuneration increased at the rate of 23%. This is based on Remuneration Policy of the Company that rewards people based on their contribution to the success of the company and also ensures that external market competitiveness and internal relativities are taken care of.

E. Affirmation that the remuneration is as per the Remuneration Policy of the Company:

The Company affirms that remuneration is as per the remuneration policy of the Company:

F. Name of the top 10 employees in terms of remuneration drawn in the financial year 2021-22:

A statement of top-10 employees in terms of remuneration drawn as per rule 5(2) read with rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed with the report as "Annexure-6".

G. Details of employees who received remuneration in excess of Rs. 102 lakh p.a. or Rs.8.5 Lakhs p.m.:

i. During the year, none of the employees received remuneration in excess of Rs. 102.00 Lakh or more per annum or Rs.8.50 per month for part of the year. In accordance with the provisions of section 197 of the Companies Act, 2013 read with Rule 5(2)of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, therefore there is no information is available to disclose.

ii. During the year, none of the employees received remuneration in excess of that drawn by the Managing Director or Whole-time director and none of the employees hold two percent of the equity shares of the Company.

TRANSFER OF SHARES AND DIVIDEND AMOUNT TO IEPF:

Pursuant to the provisions of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rules") notified by the Ministry of Corporate Affairs, the unclaimed and unpaid dividends amount for the year 2014-15 is required to be transferred to IEPF on the due date as specified in the Notice of the AGM and resulting shares on which no dividend is claimed for a consecutive 7 years will also be transferred to IEPF Authority as per the requirement of the IEPF rules on due date. Further, according to the rules, the resulting shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more also need to be transferred to the Demat account of the IEPF Authority. Accordingly, the company has transferred the unclaimed and unpaid dividends of Rs.6,06,377.75 and has also transferred 8,685 equity shares of Rs. 10/- each to the IEPF Authority for the dividend declared by the company in the year 2013-14.

The details related to dividend remains unpaid-unclaimed from the Company has been given in the Corporate Governance Report attached with the annual report of the Company.

PROVISION OF VOTING BY ELECTRONIC MEANS:

Your Company is providing E-voting facility under section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015.The ensuing AGM will be conducted through VC/OVAM and no physical meeting will be held, and your company has made necessary arrangements with CDSL to provide facility for remote e-voting and e-voting at AGM. The details regarding e-voting facility is provided with the notice of the Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A. Economic Scenario and Outlook:

The world economy is currently weak due to Covid-19 Pandamic and Russia-Ukrain war. There is trend of uncertainty and rising prices.

The European countries are facing crisis on Energy front and rising prices. Thus Industrial production has slowed down and they are not able to meet demands of other countries requiring spares and equipments.

Contrary to Global scenario the Indian Economy is in much better position and growing. Various measures taken by Union Government including investment in infrastructure projects have resulted in high demand within country. The European slow down has brought opportunity to Indian Engineering sector to offer Indian Goods to various countries and brings export opportunity to various countries including Africa, Middle East and Pacific countries. Your Company has translated its product catalogues in various foreign languages for easy penetration in other countries.

The opening balance of pending orders is Rs. 40.61 crores as on 1st April, 2022 with strong order booking during current financial year the Company stands at better order position compared to financial year 2021-22.

During the year 2021-22 Company has capitalized its building shed which was earlier under construction and purchased new machineries. It will help to Company improve its product quality and productivity.

The Company continued to focus on technology upgradation and attractive opportunities available in line ofbusiness.

Company continues with activity of extending product range with development and R&D activity. Company continues enjoy accreditation of ISO 9001-2015, ISO 14001-2015 & ISO : 45001-2018.

B. Industry structure and developments:

Your Company deals only in the one segment i.e. manufacturing and sale of the hi-tech products "Fluid Couplings" which are mainly used in various sector of industries including Thermal Power Plants, Steel, Metal, Cement, Paper, Chemical, Fertilizers, Coal and Ore-mining and Port handling facilities, etc. New projects in these sectors have important contribution towards growth and profitability of the Company.

C. Quality Management System:

The company continued to be certified under ISO:9001:2015 by British Standard Institution BSI Management system for the Company?s quality system. The Quality Management System in the Company is well defined and is well in place.

D. Internal Control System:

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The transactions are recorded and reported in conformity with generally accepted accounting practices. The internal control systems and procedures ensure reliability of financial reporting, compliance with the Company?s policies and practices, governmental regulations and statutes. Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.

E. Opportunities and Threats:

Since your company is catering the needs of almost all sectors of Industries, therefore it has a good business cushion against recession in one or other sector as the other sector may improve concurrently.

The Indian Government focus on infrastructure growth will offer more opportunities to capital goods sector.

We witnessed broad-based cost pressures and continue to manage the same. Covid-19 is also threat for us.

Apart from the normal risk demand-supply conditions, raw material prices, competitor strategies, changes in government regulations, tax regimes, economic developments within the country and globally no major risks are foreseen.

F. Human Resources:

We are committed to provide our employees with a work environment that is based on fairness, openness and mutual respect. Our on-ground work force and our employees together are the key to successes of our Company.

The Company emphasizes on the highest level of professional ethics, personal decorum, adherence to deadliness, compliance to standards and customer service.

The Company continues with its dedicated efforts to identify talent and has been recognized for its exemplary people-related parties in the Industry.

G. Health, Safety and environment measures:

Company is committed to meet the highest international standards of health, safety and environmental performance. It continues to accord highest priority to conducting safe operations while being responsible towards the environment and ecology.

The Company focused on safe operations in line with its commitments to improve its health, safety and environment performance. As a part of our drive to standardize our health, safety & environment management, company has certified under occupational health & safety management system (OHSAS 18001: 2007) for the manufacture of Fluid Couplings and Flexible Couplings and environment management system (ISO 14001: 2004) by BSI.

We continue to closely monitor the pandemic situation across the globe and place a high priority on the health and safety of our employees.

Internal and external safety audits and inspections were carried out regularly. Emergency management plans have been developed to deal with any emergency within the factory premises.

H. Segment Reporting & Finance performance of the Product:

Company has only one segment i.e. manufacturing of fluid couplings and the financial performance of the product is being incorporated in the Director?s Report section.

I. Cautionary statement:

Statement made in the management discussion and analysis report as regards the expectations or predictions are forward looking statements within the meaning of applicable laws and Regulations. Actual performance may deviate from the explicit or implicit expectations.

J. Details of Significant Changes in Key Financial Ratios:

Details of Key Financial Ratios were provided under the "Standalone financial statement" in note number 48.14 under additional regulatory information. Hence not reproduced in the Board Report.

Return on Net worth is as follows:-

Key Ratio	2021-22	2020-21	Variation in %	Comments
Return on Net worth (Any Change)	17.08%	14.51%	17.69%	Increase in Profit

K. Compliance with Indian Accounting Standards

In the preparation of the financial statements, the Company has followed the Indian Accounting Standards as notified. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.

INDUSTRIAL RELATIONS:

Company?s Industrial relations continued to be healthy, cordial and harmonious during the period under review.

CASE FILED BY THE COMPANY UNDER IBC, 2016:

The company has not filed any application or there is no application or proceeding pending against the company under the Insolvency and Bankruptcy Code, 2016 during the year under review. After closure of the Financial Year, the company has filed an application u/s 9 of IBC, 2016 in the capacity of Operational Creditor against BGR Energy Systems Ltd. on 29th June, 2022 which is pending before the Adjudicating Authority, Amravati Bench.

GENERAL:

Your Directors state that during the year under review:

a. The Company has not issued shares (including sweat equity shares) to employees of the Company under any scheme;

b. There is no requirement to conduct the valuation by the bank and Valuation done at the time of one-time Settlement during the period under review;

c. Neither the Managing Director nor the Whole-time Directors receive any remuneration or commission from its subsidiary.

d. The Company has complied with the applicable Secretarial Standards under the Companies Act,2013.

e. There are no voting rights exercise by any employee of the Company pursuant to the section 67(3) read with the Rule 16 of the Companies (Share Capital and Debenture) Rules, 2014.

ACKNOWLEDGEMENTS:

Your directors place on record their appreciation of the continued support extended during the year by the company?s customers, business associates, suppliers, bankers, investors and Government authorities. They also place on record their appreciation of the dedication and contributions made by all the employees for their commitment, hard work and support. Your directors would also like to thank all their shareholders for their continued faith in the company and expect the same in future.

	For and behalf of the Board
	(ASHOK JAIN)
Place: Indore (M.P.)	CHAIRMAN & MANAGING DIRECTOR
Date: 13th August, 2022	DIN : 00007813