Iykot Hitech Toolroom Ltd Directors Report.

Dear Shareholders,

Your Directors have pleasure in presenting the 29th Annual Report of IYKOT HITECH TOOLROOM LTD along with the audited financial statements for the year ended March, 2020.

1. FINANCIAL HIGHLIGHTS

The Financial Results for the year ended 31st March, 2020.

Rupees in Lakhs
Particulars 2019-2020 2018-2019
Revenue from operations 713.43 881.67
Other Income 7.52 4.97
Total Income 720.95 886.64
Total expenses 705.85 805.31
Profit/(Loss) before interest and Depreciation 15.10 81.33
Less: Interest 3.76 1.01
Profit before depreciation 11.34 80.32
Less: Depreciation 16.50 18.07
Profit/(Loss) before tax (-)5.16 62.25
Exceptional Item 0 0
Tax Expenses: - -
Current Year 0.65 16.21
Deferred Tax 1.15 1.71
MAT Credit entitlement 0 0
Other Comprehensive Income 0 0
Transfer to Reserve - -
Profit/(Loss) carried to Balance sheet (-) 6.96 44.33

STATE OF AFFAIRS OF THE COMPANY:

During the year under the review there is no change in the nature of activity of the Company.

IMPACT OF COIVD:

Since March 2020 the COVID-19 Pandemic developed rapidly into a global crisis forcing governments to enforce lock downs of all economic activity. For the Company, the focus immediately shifted to ensuring the health and well being of all employees and on minimising disruption to services.

BUSINESS PERFORMANCE:

During the year under review, the Company has earned loss of Rs. 6.96 lakhs as against net profit of 44.33 lakhs in the previous year. Your Directors are hopeful to maintain the growth in the coming years.

SHARE CAPITAL:

The Paid up Equity Share Capital as on March 31, 2020 was Rs.3,04,20,000. No additions and alterations to the Capital were made during the financial year 2019-2020.

DIVIDEND:

With a view to conserve the resources, Your Board of Directors does not recommend any dividend to the Shareholders for the financial year 2019-20.

TRANSFER OF PROFIT TO RESERVES:

The company has not proposed to transfer any of its profits to reserves.

During the year your Company has transferred the Loss of Rs. 6.96 lacs to the reserve account.

MATERIAL CHANGE AND COMMITMENTS OF THE COMPANY:

There are no Material change and events during the financial year.

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

They have been no loan and guarantees given or made by the Company under Section 186 of the Act, 2013 during the financial year 2019-20.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Company does not have any subsidiaries, associates and joint venture companies.

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

The details of Conservation of Energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are attached as Annexure-1.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

BOARD COMPOSITION

The Board is well constituted with composition of two executive and one non-executive and three independent directors.

Category Name of Director
Executive Directors Mr.S.Iyempandi
Non - Executive Director Mr. N.K.S. Kolappan and Mrs.Sornalatha Usha
Independent Directors Mr.A. Paramasivam, Dr.S. Rajapandian and Mr.M.S. Krishnan

BOARD COMMITTEES:

a) Audit Committee:

In total 4 (four) Meetings of the Board of Directors of the Company were held during the year 2019-20, held on 30th May 2019, 13th August 2019, 13th November 2019, and 13th February 2020. The maximum time gap between any two consecutive meetings did not exceed 120 days.

b) Nomination and Remuneration Committee:

There was no committe meeting during the year 2019-2020

c) Stakeholders Relationship Committee:

There was no committe meeting during the year 2019-2020

AUDIT COMMITTEE:

As required under Section 177 (8) of the Audit Committee comprises of 3 Non-Executive Independent Directors. The Committee was chaired by a Non-Executive Independent Director, DR.S. RAJAPANDIAN with requisite qualification. In the opinion of the Board of Directors, all the Members of Audit Committee are financially literate and also have accounting or related financial Management experience.

The Audit Committee monitors and provides effective observation of the financial control and reporting process, review the financial reporting process, internal audit process, adequacy of internal control systems, review the performance of Statutory Auditors, recommending appointment of Statutory Auditors, Internal Auditors, recommending the Audit fees and also payment for other services.

The composition of the Audit Committee and particulars of meetings attended by the Members of Audit Committee are given below:

Name of the Director No. of Meetings Held No. of Meeting attended
Dr. S. Rajapandian 4 4
Mr. N.K.S.Kolappan 4 4
Mr. A. Paramasivam 4 4

During the year ended on 31.03.2020, Four Meetings of the Audit Committee were held on 30.05.2019, 13.08.2019, 13.11.2019 and 13.02.2020. The Chairman of the Audit Committee has the accounting or related financial management expertise.

Statutory Auditors, Internal Auditors and Company Secretary has also attended the Audit Committee meeting when invited by the Committee.

The Audit Committee reviewed the quarterly, half yearly and annual financial statements of the Company before submission of the Board of Directors. The Committee also reviewed the Internal Audit reports, related party transactions etc., from time to time. It has also taken on record the appointment of Statutory Auditors, Internal Auditors and recommended to the Board the remuneration payable to them.

The role of Audit Committee and terms of reference specified by the Board to the Audit Committee are wide enough to cover the mandatory items, as required, under clause 49 of the Listing Agreement.

• Review of the Companys financial reporting process, the financial statements and financial/ risk management policies.

• Review Quarterly, Half Yearly and Audited Financials

Accounts of the Company and discuss with Auditors.

• To meet and review with External and Internal Auditors of the Internal Control Systems and ensure their Compliance.

• To review matters as required under the terms of Listing Agreement.

• To investigate matters referred to it by the Board.

DIRECTORS

Independent Directors Declaration

All Independent Directors have given declarations that they meet the Criteria of independence laid down under Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015 in respect of financial year ended 31st March, 2020, which has been relied on by the Company and placed at the Board Meeting.

KEY MANAGERIAL PERSONNEL

The key managerial personnel of the Company are as under:

1. Mr. S. Chandrasekar - Chief Financial Officer (appointed on 30th July, 2018).

2. Mr. P Udayakumar - Company Secretary (appointed on 1st June, 2019)

STATUTORY AUDITORS:

M/s.Vivekanandan Associates, Chartered Accountants, (Registration Number 052685) have been appointed as statutory auditors of the company at the Annual General Meeting held on 27th September, 2017 for five years and they continue to be the Auditors.

COMMENT ON STATUTORY AUDITORS REPORT:

There are no qualifications, reservations, remarks or disclaimers made by M/s. Vivekanandan Associates, Chartered Accountants, Statutory Auditor, in their audit report. The Statutory Auditor have not reported any incident of fraud to the Audit Committee of the Company during the financial year 2019-20 and has given unmodified report.

SECRETARIAL AUDITOR:

Pursuant to the requirements of Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mrs. Lakshmi Subramaia, SECRETARIAL AuDITORS of M/s. Lakshmmi Subramanian & Associates, Practising Company Secretaries, (CP No.1087, FCS:3534),was appointed to conduct the Secretarial Audit for the financial year 2019-2020.

The Secretarial Audit report as received from the Secretarial Auditor is annexed to this report as Annexure 2.

COMMENT ON SECRETARIAL AUDIT REPORT

INTERNAL CONTROL AND ITS ADEQUACY:

The internal auditors of the Company during the year regularly conducted audit and submitted their quarterly reports, which were reviewed by the Audit Committee. The auditor also reported in his IFC report that the Company has adequate Internal Control system, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee. During the year, such controls were tested and no reportable material weaknesses in the design or operative were observed.

COST AUDITOR:

Since the Company has no manufacturing activity at present, and the provisions of Appointment of Cost Auditor pursuant to the Companies Act, 2013 are not applicable, no Cost Auditor has been appointed by the Company during the financial year.

SECRETARIAL STANDARDS:

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

RELATED PARTY TRANSACTIONS:

During the year 2019-2020, the Company had entered into any material transaction with related parties pursuant to the provisions of Section 188 of the Companies Act, 2013. The particulars of contracts or arrangements with related parties are given in Annexure - 3 (Form AOC-2).

EXTRACT OF ANNUAL RETURN:

The details forming part of extract of Annual Return in form MGT-9 as provided under Sub Section (3) of the Section 92 of the Companies Act, 2013 (the Act) is annexed herewith as Annexure - 4 to this report.

RISK MANAGEMENT POLICY:

The risk management is overseen by the Audit Committee of the Company on a continuous basis. Major risks, if any, identified by the by the business and functions are systematically addressed through mitigating action on a continuous basis. The risk management policy is available in the Company website: www.iykot.com

PERSONNEL

The Information required under Section 197 (12) of Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, forms part of this Report as Annexure 5.

The Information of employees as per Rule 5(2) of the said Act for the year is "Nil".

PREVENTION OF SEXUAL HARASSMENT POLICY:

The Company has in place Prevention of sexual harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (Permanent, contractual, temporary, trainees) are covered under this policy.

The said policy is placed in the website of the Company viz www.iykot.com

The Company has zero tolerance for sexual harassment at workplace and has in place a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2017-18, the Company has not received any complaints on sexual harassment.

Your Directors state that during the year under review, the Committee met on <<date>> and observed that there was no case filed pursuant to the Sexual Harassment of the woman at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits

from public was outstanding as on date of the Balance Sheet.

CORPORATE GOVERNANCE REPORT

Since your Companys paid up Equity Capital, and Net worth is less than Rs. 10 Crores and Rs. 25 Crores respectively, the provisions of revised Clause 49 relating to Corporate Governance, vide SEBI Circular number CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014 is not applicable to the Company.

NUMBER OF MEETINGS OF THE BOARD:

4 (Four) Meetings of the Board of Directors of the Company were held during the year 2019-20 which were 30.05.2019, 13.08.2019, 13.11.2019 and 13.02.2020. The Maximum time gap between any two consecutive meetings did not exceed 120 days.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act, 2013 and of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder Relationship Committee. The Manner in which the evaluation has been carried out is explained below.

A) EVALUATION OF DIRECTORS BY INDEPENDENT DIRECTORS MEETING:

During the year under review, the Independent Directors met on 13.08.2019, inter alia to:

(i) Review the performance of Non - Independent directors and the Board as a whole.

(ii) Review the performance of the Chairperson of the Company, taking into account the views of executive directors and non-executive directors.

(iii) Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

B. EVALUATION OF INDEPENDENT DIRECTORS BY DIRECTORS MEETING:

During the year under review, the Directors (other than Independent Directors) met on 13.11.2019, inter alia to:

(i) Review the performance of the Independent Directors of the Company, taking into account the views of Executive Directors and Non- Executive Directors.

(ii) Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

POLICIES:

The Company has the following policies which are applicable as per the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 which are placed on the website of the Company www.iykot.com

(i) Code of conduct for Directors and Senior Management

(ii) Policy of Directors Appointment and Remuneration

(iii) Policy on determining materiality of events

(iv) Policy on documents preservation and archival

(v) Terms of appointment of Independent Directors

(vi) Nomination & Remuneration Policy

(vii) Policy on Related Party Transactions

(viii) Policy on sexual harassment of women at work place (Prevention, Prohibition and redressal) Act, 2013

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT:

The Board of Directors has adopted a policy and procedure on Code of Conduct for the Board Members and employees of the Company in accordance with the SEBI (Prohibition of Insiders Trading) Regulations, 2015. This Code helps the Company to maintain the Standard of Business Ethics and ensure compliance with the legal requirements of the Company.

The Code is aimed at preventing any wrong doing and promoting ethical conduct at the Board and by employees. The Compliance Officer is responsible to ensure adherence to the Code by all concerned.

The Code lays down the standard of Conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

All the Board Members and the Senior Management Personnel have confirmed Compliance with the Code.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM:

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulations 34 (3), 18 (3) and 46 of SEBI (LODR) Regulations, 2015, the Board of Directors had approved the policy on Vigil Mechanism, Whistle Blower and the same was hosted on the website of the Company. The Policy inter alia provides to direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no director/employee has been access to the Chairman of the Audit Committee and that no complaints were received during the year.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under the Companies Act, 2013 are covered under the Boards policy formulated by the Company and is available on the Company website: www.iykot.com

DISCLOSURE OF SHARES HELD BY PROMOTERS IN DEMAT FORM:

The promoters of the Company hold all their shares in demat form. The details of Shareholding of the Promoters are given in MGT-9 (Annexure -4 to this report).

CORPORATE SOCIAL RESPONIBILITY (CSR):

Your Company is having accumulated losses and not having profits more than Rs. 5 Crores in the year 2019-20 or net worth more than Rs. 500 Crores or Turnover of more than Rs. 1000 Crores in the previous financial year and therefore Constituting of a CSR Committee and its Compliance in accordance with the provisions of Section 135 of the Act, does not arise.

DETATILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS / TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

During the year, there were no such instances of significant and material orders passed by the regulators, courts or tribunals.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Industry Structure and Developments

Since your companys paid up Equity capital and Net worth is less than Rs.10 crores and Rs.25 crores respectively, hence not applicable to the company.

Opportunities and Threats:

Our Company project has resulted in high quality output which has resulted to tie up long term contracts with the customers. Our main concern is, continuous competition from other manufactures in the same line of production.

Segment wise performance:

Risks and Concerns:

Our main concern is, continuous competitive from other manufacturers in the same lien of production by reducing the price in the market due to which the Company has to reduce the price to retain its share in the market.

Internal Control system and their adequacy:

The Company maintains its adequacy internal controls to have efficient operations. Also the Company maintains all statutory rules, regulations, laws as applicable from time to time and protection of resourced and assets.

Financial performance with respect to operational performance:

Summary of statement of profit and loss account is given below.

Revenue:

Your Company net revenue decreased by Rs 168 lakhs due to decrease of sales while comparing the previous year and other income has increased by Rs 2.55 lakhs

Expense:

Purchase of stock in trade , no change in this expenses

Change in inventories inceased by Rs 5.69 lakhs due to change in the production cycle

Employees benefit expenses increased by 5% due to salary increase existing employees and new recruitment of staffs.

Depreciation cost decreased by Rs 1.56 lakhs due to change of accounting policy as per the Companies Act, 2013 and inputs of capital assets.

Finance cost increased by Rs 1.38 lakhs due to increase of Bank interest on borrowings and repayment.

Power and fuel decreased by Rs.6.66 lakhs due decreased in productivity.

Other expenses increased by Rs 11.40 lakhs due to cost increase of other overheads

Total expenses decreased by Rs. 98.28 lakhs which is reasonable while comparing the production and cost escalation of variable and fixed overheads.

Material developments in human resources / Industrial relations front:

Training on all sectors are given to its employees periodically and motivated to work in line with the development of the industry.

The willingness and Commitment of the employees help the Company to stand tall among its customer in quality and service. The Company has the total employee strength of 112.

Listing with Stock Exchange

The Shares of the Company are listed in the Bombay Stock Exchange.

DIRECTORS RESPONIBILITY STATEMENT:

Pursuant to the requirement of Section 134 (5) of the Act, the Directors hereby confirm:

1. That in the Preparation of Final Accounts, the applicable Accounting Standards has been followed along with proper explanation relating to material departures;

2. That they had selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the Company for that period.

3. That they had taken proper and sufficient care for the maintenance of adequacy Accounting Records in accordance with the provisions of the Act, for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

4. That they had prepared the Annual Accounts on a Going Concern basis.

5. That they laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and

6. That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKOWLEDGEMENT:

Your Directors wish to place on record their appreciation of the Contributions made by employees at all levels, towards the continued growth and prosperity of your Company.

Directors also take this opportunity to convey their thanks to all the valued shareholders of the Company and to the Bakers for their valuable services.

For and on behalf of the Board

(Sd/-)
S. IYEMPANDI
Place: Chennai Managing Director
Date : 18.08.2020 DIN No.00891670