Maithan Alloys Ltd Directors Report

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Maithan Alloys Ltd Share Price directors Report

Dear Members,

Your Directors have the pleasure in presenting the 38th Annual Report on the business and operations of the Company along with the Financial Statement for the financial year ended 31 March 2023.

FINANCIAL HIGHLIGHTS

The standalone and consolidated financial performance of the Company for the financial year ended 31 March 2023 is summarised below:

(Rs In Cr.)

Financial Results Standalone Consolidated
2022-2023 2021-2022 2022-2023 2021-2022
Revenue from operations 2,907.56 3,057.59 2,884.95 2,992.46
Other income 180.65 34.79 174.93 32.11
Total Income 3,088.21 3,092.38 3,059.88 3,024.57
Expenses
Operating expenditure 2,406.57 2,005.98 2,298.71 1,924.25
Depreciation and amortisation expense 14.51 15.28 20.21 16.91
Total Expenses 2,421.08 2,021.26 2,300.95 1,941.16
Profit before finance cost ,tax and exceptional items 667.13 1,071.12 740.96 1,083.41
Finance costs 2.16 1.14 2.24 1.14
Exceptional items 101.92 0 101.92 0
Profit Before Taxes 563.05 1,069.98 636.80 1,082.27
Less: Provision for taxation:
- Current tax 137.64 269.37 138.27 269.37
- Deferred tax (1.10) (7.08) (0.46) (5.14)
Profit After Taxes 426.51 807.69 498.99 818.04

STATE OF COMPANYS AFFAIRS AND OPERATIONS

Financial Year 2022-2023 has witnessed another year of robust financial performance of the Company as it clocked again total income of more than Rs3,000 crore. The Company has been able to maintain its top-line despite the continuous challenging factors that prevailed during the year, like geopolitical issues, China- US trade war, effect of Covid-19 pandemic, energy crisis and runaway inflation resulted from Russia-Ukraine conflict, etc.

During the financial year 2022-2023, the total income of the Company stood at Rs3,088.21 crore as compared to Rs3,092.38 crore during the financial year 2021-2022, registering a marginal drop of about 0.13%, whereas the consolidated total income stood at Rs3,059.88 crore as compared to Rs3,024.57 crore in the financial year 2021- 2022, registering a growth of about 1.17%.

However, on account of steep increase in power cost and cost of raw material resulting from the energy crisis and runaway inflation caused by Russia-Ukraine conflict, the Company has been able to post profits which are lower as compare to the previous year. The Profit Before Tax stood at Rs563.05 crore and Profit After Tax stood at Rs426.51 crore in the financial year 2022-2023 as compared to Rs1,069.98 crore and Rs807.69 crore, respectively in the financial year 2021-2022, resulting in a decline of about 47.38 % and 47.19%, respectively.

The Consolidated Profit Before Tax stood at Rs636.80 crore and Profit After Tax stood at Rs498.99 crore for the financial year 2022-2023 as compared to Rs1,082.27 crore and Rs818.04 crore, respectively for the financial year 2021-2022, resulting in a decline of about 41.16% and 39.00%, respectively.

Further Company has received a demand of Rs101.92 cores being arrear electricity charges pertaining to earlier years on account of increase in power tariff notified by the concerned authorities during the year 2022-2023. The cumulative effect has resulted in sharp decline in the profits of the Company.

The Wind Mill division of the Company has achieved sales of Rs1.41 crore during the financial year 2022-2023 and is operating satisfactorily.

There was no change in the nature of business of the Company during the financial year 2022-2023.

OUTLOOK

The information on the Business Overview and Outlook of the Company is discussed in the Management Discussion and Analysis on Page No. 35 to 44 of this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY AND THE DATE OF THE REPORT

None

COMPOSITE SCHEME OF ARRANGEMENT

The Board of Directors (the Board) at its meeting held on 5 May 2021 have approved the Composite Scheme of Arrangement (the Scheme) amongst Ma Kalyaneshwari Holdings Private Limited (MKHPL) and Anjaney Land Assets Private Limited (ALAPL) and Maithan Alloys Limited (MAL) and their respective shareholders and creditors under Sections 230 to 232 read with Section 66 and other applicable provisions of the Companies Act, 2013, subject to requisite statutory/ regulatory approvals as may be required.

MKHPL is holding company of MAL and engaged in Non- banking financial activities. ALAPL is a wholly owned subsidiary of MKHPL and fellow subsidiary of MAL and is engaged in real estate activities. The Scheme provides for Demerger of Real Estate and Ancillary Business of MKHPL into ALAPL and thereafter Amalgamation of MKHPL with MAL.

The Scheme will lead to simplification of the existing holding structure and reduction of shareholding tiers of MAL and shall also facilitate future expansion plans. The Promoters Group of MAL would continue to hold the same number and percentage of shares in MAL before and after the implementation of the Scheme. The Appointed Date of the Scheme shall be same as the Effective Date or such other date as may be approved by the Appropriate Authority.

Subsequently, the Board at its meeting held on 11 November 2021 have approved certain modifications in the Scheme relating to fixation of Appointed Date of the Scheme as 1 November 2021, and other consequential changes thereof. National Stock Exchange of India Limited and the Calcutta Stock Exchange Limited have conveyed their No Objection to the Scheme subject to certain observations / comments. The approval of jurisdictional National Company Law Tribunal. (NCLT) to the Scheme is awaited.

ACQUISITION OF RAMAGIRI RENEWABLE ENERGY LIMITED

During the year under review, the Company has entered into a Shares Purchase Agreement (SPA) with IL&FS Energy Development Company Limited for the acquisition of 100% of the share capital of Ramagiri Renewable Energy Limited (RREL). On completion of the condition precedent to SPA, RREL has become wholly owned subsidiary of the Company w.e.f. 13 January 2023. The acquisition was carried out for a purchase consideration of Rs9.86 crore, financed through internal accruals of the Company. RREL was engaged in generation of electricity through Wind Electricity Generator (WEG). RREL had stopped generating electricity since 1 April 2019.

IMPACT OF THE COVID-19 PANDEMIC

The COVID-19 pandemic continued to threaten the global economy during the year 2022-2023. However, we remain committed to the health and safety of our employees and their families, as well as, business continuity to safeguard the interests of our employees, partners, customers and other stakeholders. The impact

SHARE CAPITAL

The Authorised Share Capital and Paid-up Share Capital of the Company as on 31 March 2023 were Rs80.00 crore and Rs29.11 crore, respectively. During the year under review, the Company has not granted any employees stock option. The Company has neither issued any shares with differential voting rights nor sweat equity shares during the financial year 2022-2023. As at 31 March 2023, none of the Directors of the Company hold any convertible instrument of the Company.

DIVIDEND

Based on the Companys performance, the Board is pleased to recommend for approval of the Members, a dividend of Rs6.00 per equity share of Rs10.00 each (i.e. 60%) for the financial year 2022-2023, to be paid on total equity shares of the Company. The dividend on the equity shares, if approved by the Members, may involve an outflow of Rs17.47 crore towards dividend.

As per the amended Income Tax Act, 1961, the dividend, if declared by the Members at ensuing Annual General Meeting, will be taxable in the hands of the shareholders and the Company will be required to deduct tax at source (TDS) in respect of approved payment of dividend to its shareholders at such applicable rate as prescribed under the Income Tax Act, 1961.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations) the Board of the Company formulated and adopted the Dividend Distribution Policy.

The said Policy is available on the website of the Company at https://www.maithanalloys.com/wp- content/uploads/2021/07/Dividend-Distribution- Policy.pdf

AMOUNT TRANSFERRED TO RESERVES

Nil

DIRECTORS AND KEY MANAGERIAL PERSONNEL Non-Executive Directors & Independent Directors

Mr. Ashok Bhandari (DIN: 00012210) was appointed as an Independent Director by the Board, w.e.f. 9 May 2017 for a period of 5 (five) consecutive years. Accordingly, his tenure as an Independent Director concluded on 8 May 2022. The Board at its meeting held on 12 February 2022, on the recommendation of the Nomination and

Remuneration Committee, re-appointed him as an Independent Director for a second term of 3 (three) consecutive years w.e.f. 9 May 2022, subject to approval of the Members of the Company. Subsequently, the Members at an Extra-Ordinary General Meeting held on 28 March 2022 approved the said re-appointment of Mr. Ashok Bhandari, as an Independent Director of the Company.

Mr. Vivek Kaul (DIN: 00345022) was appointed as an Independent Director by the Board, w.e.f. 20 June 2020 for a period of 3 (three) consecutive years. Consequently, he holds office as an Independent Director of the Company till 19 June 2023. The Board of Directors at its meeting held on 14 February 2023, on the recommendation of the Nomination and Remuneration Committee, re-appointed him as an Independent Director for a second term of 3 (three) consecutive years w.e.f. 20 June 2023, subject to approval of the Members of the Company. Accordingly, an Extra-Ordinary General Meeting of the Members is scheduled to be held on 15 June 2023 for the purpose of approving the said re- appointment of Mr. Vivek Kaul, as an Independent Director of the Company.

The Company has received declaration from all the Independent Directors, affirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Listing Regulations.

The Independent Directors have also confirmed that they have complied with Schedule IV of the Companies Act, 2013 and the Companys Code of Conduct. Independent Directors have also confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Further, the Independent Directors have also submitted their declaration in compliance with the provision of Rule 6(3) of Companies (Appointment and Qualification of Directors) Rules, 2014, which mandated the inclusion of an Independent Directors name in the data bank of Indian Institute of Corporate Affairs ("IICA") for a period of one year or five years or life time till they continue to hold the office of independent director.

In the opinion of the Board, all the independent directors are persons of integrity and also possess relevant expertise and experience.

None of the Directors of your Company are disqualified as per the provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under the various provisions of the Companies Act, 2013 and the Listing Regulations.

Executive Directors and Key Managerial Personnel

Mr. Subhas Chandra Agarwalla (DIN: 00088384) and Mr. Subodh Agarwalla (DIN: 00339855) continue to hold their office as the Chairman and Managing Director and Whole-time Director and Chief Executive Officer (CEO) of the Company respectively, during the year 2022-2023.

Mr. Subhas Chandra Agarwalla (DIN: 00088384) was re- appointed as the Chairman and Managing Director of the Company for a period of 3 (three) years with effect from 1 April 2019 by the Members of the Company at the 34th Annual General Meeting held on 20 August 2019. Accordingly, his tenure concluded on 31 March 2022. However, the Board at their meeting held on 12 February 2022, on the recommendation of the Nomination and Remuneration Committee as well as Audit Committee of the Company, re-appointed Mr. Subhas Chandra Agarwalla as the Chairman and Managing Director of the Company for a further period of 3 (three) years with effect from 1 April 2022. Subsequently, the Members at the Extra-Ordinary General Meeting held on 28 March 2022 approved the said re-appointment of Mr. Subhas Chandra Agarwalla as the Chairman and Managing Director of the Company.

Mr. Sudhanshu Agarwalla and Mr. Rajesh K. Shah, continue to hold office as the President and Chief Financial Officer and Company Secretary of the Company respectively, in terms of Section 203 of the Companies Act, 2013.

None of the Key Managerial Personnel have resigned during the financial year 2022-2023.

Retirement by rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Subodh Agarwalla (DIN: 00339855) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Board recommends for the approval of re- appointment of the aforesaid Director at the ensuing Annual General Meeting. The brief details of the Director to be re-appointed is given in the Notice convening the ensuing Annual General Meeting.

EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out the annual performance evaluation through structured evaluation sheets, for each Director (including Independent Directors), its Committees and its own performance based on the criteria laid down in the Remuneration Policy of the Company and in the manner specified by the Nomination and Remuneration Committee of the Company.

Further, during the year under review, the Independent Directors of the Company reviewed (i) the performance of Non-Independent Directors and the Board as a whole,

(ii) the performance of the Chairman of the Company and

(iii) assessed the quality, quantity and timeliness of the flow of information between the Company Management and the Board.

NUMBER OF MEETINGS OF THE BOARD

During the financial year 2022-2023, 4 (four) meetings of the Board were duly convened, held and concluded. The details of the Board Meetings have been furnished in the Report on Corporate Governance forming part of this Directors Report. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations.

COMMITTEES OF THE BOARD

The details of the following committees of the Board along with their composition and meetings held during the financial year 2022-2023 are given in the Report on Corporate Governance forming part of this Directors Report.

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Risk Management Committee

5. Corporate Social Responsibility Committee

REMUNERATION POLICY

The Remuneration Policy of the Company is attached with the Report on Corporate Governance forming part of this Directors Report.

The said Policy lays down a framework in relation to the remuneration of all the Directors, Key Managerial Personnel and other Employees on the pay roll of the Company and inter-alia provides the following:

1. The provisions relating to the appointment criteria and qualifications, term/tenure, removal, retirement of Directors, Key Managerial Personnel and other Employees.

2. The Remuneration Components including the basis for payment of remuneration to Executive and Non- Executive Directors (by way of siffing fees), Key Managerial Personnel, and other Employees.

3. The criteria for performance evaluation for the Independent & Non-Executive Directors, Executive Directors, the Board as a whole and the Committees of the Board.

The above policy has also been posted on the website of the Company at www.maithanalloys.com.

VIGIL MECHANISM

The Vigil Mechanism established by the Company empowers the directors and employees and others concerned to report their genuine concerns relating to the Company and provides for adequate safeguards against victimisation of those who use such mechanism and also provides for direct access to the Chairperson of the Audit Committee in exceptional cases.

The Audit Committee has been empowered to review the functioning of the Vigil Mechanism. A copy of the Vigil Mechanism Policy is available on the Companys website at www. maithanalloys.com.

RISK MANAGEMENT

Business risks exist for every enterprise having national and international exposure. The Company has a Risk Management Policy to control and minimise the risk factors of the Company and the said Policy is being implemented and monitored by the Risk Management Committee. A brief detail on the Risk Management and the key business risks identified by the Company and its mitigation plans are provided at Page No. 42 of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has adopted Corporate Social Responsibility (CSR) Policy and the same is available on the Companys website at www.maithanalloys.com.

During the financial year 2022-2023, the Company has spent more than 2% of the average net profits of the three immediately preceding financial years on various

CSR activities. The expenditure has been carried out mainly in the areas of education, health care (including preventive health care), animal welfare, sports, etc. as specified under Schedule VII of the Companies Act, 2013 and CSR Policy of the Company.

Further, the Company has constituted a trust in the name of BMA Foundation, to carry out its CSR activities in addition to making donations to other charitable organisations and Non-Government Organizations.

The Annual Report on CSR activities during the financial year 2022-2023, in prescribed form, including the brief contents/salient features of the CSR Policy of the Company, as approved by the CSR Committee is annexed herewith as Annexure-A.

DEPOSITS

The Company did not accept any deposit from the public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year 2022-2023 and as such, no amount of principal, interest, unpaid or unclaimed deposit remained unpaid or unclaimed or was outstanding as on the Balance Sheet date.

CREDIT RATING

The Companys credit rating from CARE continues to be CARE AA; Stable (i.e. Double A; Outlook: Stable) for long-term bank facilities and CARE A1+ (i.e. A One Plus) for short-term bank facilities.

Further, India Ratings & Research Private Limited has affirmed IND A1+ rating for our non-fund based working capital limit, vide their letter dated 6 December 2022.

Such ratings reflects the Companys robust operating efficiency and indicates that the Company has strong capacity for timely payment of debt obligations and carries low credit risk

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT

The internal control systems of the Company are brought under regular review and evaluations in consultation with the internal auditors. The Companys internal control systems are commensurate with the Companys size and nature of business, enabling it to safeguard assets, prevent and detect frauds as well as other irregularities. The Internal Audit is conducted other irregularities. The Internal Audit is conducted periodically across all locations of the Company by firms of Chartered Accountants who verify and report on the efficiency and effectiveness of internal controls.

The Management is responsible for the Companys internal financial control over financial reporting and the financial reporting process. The Audit Committee reviews the internal financial control over financial reporting to ensure that the accounts of the Company are properly maintained in accordance with the prevailing laws, rules and regulations.

FINANCIAL REVIEW

For detailed financial review kindly refer to the Management Discussion and Analysis on Page No. 41 of this Annual Report.

CASH FLOW STATEMENT

In terms of Regulation 34 of the Listing Regulations and other applicable provisions, the Annual Financial Statement contains the Cash Flow Statement for the financial year 2022-2023, forming part of this Annual Report.

HOLDING COMPANY

Ma Kalyaneshwari Holdings Private Limited continues to be holding company of Maithan Alloys Limited.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

The Company, as on 1 April 2022, had five subsidiaries namely, AXL-Exploration Private Limited, Anjaney Minerals Limited, Salanpur Sinters Private Limited, Maithan Ferrous Private Limited and Impex Metal & Ferro Alloys Limited.

During the year 2022-2023, Ramagiri Renewable Energy Limited became wholly-owned subsidiary of the Company.

Consequently, the Company had six subsidiaries namely, AXL-Exploration Private Limited, Anjaney Minerals Limited, Salanpur Sinters Private Limited, Maithan Ferrous Private Limited, Impex Metal & Ferro Alloys Limited and Ramagiri Renewable Energy Limited, as on 31 March 2023.

There has been no material change in the nature of the business of the subsidiaries during the year 2022-2023.

None of the Companies have ceased to be the Companys Subsidiary during the financial year 2022-2023.

None of the Companies have become and/or ceased to be the Companys Joint Ventures or Associate Companies during the financial year 2022-2023.

Further, the Company had no material subsidiary(ies) or Joint Venture(s) or Associate Company(ies) during the financial year 2022-2023.

The "Policy on Material Subsidiary" is available on the website of the Company. The link for the said policy is http://www.maithanalloys.com/wp-content/uploads/ 2019/07/Policy-on-Material-Subsidiary.pdf.

In terms of Section 129(3) of the Companies Act, 2013, a Statement containing the salient features of the financial statement of subsidiaries / associate companies / joint ventures of the Company in the prescribed form AOC-1 has been attached with the Financial Statement of the Company, forming part of this Annual Report.

HIGHLIGHTS OF PERFORMANCE OF EACH OF THE SUBSIDIARIES

In accordance with Section 136 of the Companies Act, 2013, the audited Financial Statement including the Consolidated Financial Statement together with the related information of the Company and the audited accounts of each of its subsidiary are available on Companys website at www.maithanalloys.com.

The audited accounts of the subsidiary companies are available for inspection by any Member on any working day during the business hours at the registered office of the Company. The said documents shall be made available on receipt of a written request from a Member of the Company.

AXL-Exploration Private Limited (AXL)

AXL is awaiting necessary approval of government authorities for renewal of its mining lease.

During the financial year 2022-2023, AXL has suffered a loss of Rs0.13 crore.

The net worth of AXL as on 31 March 2023 is Rs0.20 crore.

Anjaney Minerals Limited (AML)

AML continues to explore various opportunities for acquiring mines. During the financial year 2022-2023 it has earned Rs0.18 crore as Other Income and has earned profit of Rs0.13 crore.

The net worth of AML as on 31 March 2023 is Rs6.59 crore.

Salanpur Sinters Private Limited (SSPL)

During the financial year 2022-2023, SSPL has earned Rs4.99 crore as Other Income and reported a loss of Rs0.03 crore.

The net worth of SSPL as on 31 March 2023 is Rs6.03 crore.

Maithan Ferrous Private Limited (MFPL)

During the financial year 2022-2023, MFPL has earned Rs0.01 crore as Other Income and has suffered a loss of Rs0.23 Crore.

The net worth of MFPL as on 31 March 2023 is Rs4.71 crore.

Impex Metal & Ferro Alloys Limited (IMPEX)

The Company acquired IMPEX through a liquidation process in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 during the year

2021- 2022. Post acquisition, IMPEX successfully commenced its production during December-2021.

During the financial year 2022-2023, the Company has posted total income of Rs 390.17 crore and earned a profit (including comprehensive income) of Rs72.93 crore.

The net worth of the Company as on 31 March 2023 is Rs69.07 crore.

Ramagiri Renewable Energy Limited (RREL)

During the year under review, the Company has acquired of 100% of the share capital of RREL w.e.f. 13 January 2023. RREL was engaged in generation of electricity through Wind Electricity Generator (WEG). RREL had stopped generating electricity since 1 April 2019.

RREL has reported a profit of Rs18.12 crore during the financial year 2022-2023 consequent upon writing off of its old debts of Rs18.99 crore.

The net worth of RREL as on 31 March 2023 is Rs1.89 crore.

All the above companies are unlisted non-material subsidiaries of the Company in terms of Regulation 16(c) read with Regulation 24(1) of the Listing Regulation and their contribution to the overall performance of the Company is insignificant except IMPEX who has posted a Total Income of Rs390.17 Crore with a profit (including comprehensive income) of Rs72.93 crore during the year

2022- 2023.

NDIAN ACCOUNTING STANDARDS

Your Company is required to comply with the prescribed Indian Accounting Standards (Ind AS) in preparation of its Financial Statements in terms of Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015.

Consequently, the Financial Statement of the subsidiaries of the Company namely, AXL-Exploration Private Limited, Anjaney Minerals Limited, Salanpur Sinters Private Limited, Maithan Ferrous Private Limited, Impex Metal & Ferro Alloys Limited and Ramagiri Renewable Energy Limited have also been prepared and reported in compliance with Ind AS.

CONSOLIDATED FINANCIAL STATEMENT

The Company has prepared a Consolidated Financial Statement of the Company and all of its subsidiaries, pursuant to the provisions of Section 129 of the Companies Act, 2013. The Consolidated Financial Statement of the Company along with its subsidiaries for the financial year ended 31 March 2023 forms part of this Annual Report.

AUDITORS REPORT

The Auditors Report read along with notes on accounts is self-explanatory and therefore, does not call for any further comment. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, the auditors have not reported any instances of fraud committed in the Company by its officers or employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013

STATUTORY AUDITORS

Singhi & Co., Chartered Accountants (Firm Registration No: 302049E) were appointed as the Statutory Auditors of the Company at the 37th Annual General Meeting of the Company to hold office till the conclusion of the 42nd Annual General Meeting to be held in the year 2027. Further, Singhi & Co., Chartered Accountants, have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India, as required under the Listing Regulations.

COST RECORDS AND COST AUDIT

The Company is required to maintain cost records, as specified by the Central Government under Section 148(1) of the Companies Act, 2013. Accordingly such accounts and records are made and maintained by the Company.

Further, the Board has re-appointed S. K. Sahu & Associates, Cost Accountants (Registration No.: 100807) as the Cost Auditor and fixed their remuneration for auditing the cost records of the Company for the financial year 2023-2024. Their remuneration is subject to the approval of Members at the ensuing Annual General Meeting.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act, 2013 and Rules framed there under, the Board had appointed M/s. Patnaik & Patnaik, Company Secretaries (Certificate of Practice No.: 7117), to conduct Secretarial Audit for the financial year 2022-2023 and the Secretarial Audit Report as submitted by them for the financial year 2022- 2023 is annexed herewith as Annexure-B.

There is no qualification, reservation, adverse remark or disclaimer in the said Secretarial Audit Report given by said Auditor and therefore, does not call for any further comment.

ANNUAL RETURN

A copy of Annual Return of the Company referred to in Section 92(3) of the Companies Act, 2013 is available on the Companys website atwww.maithanalloys.com and web-link thereof is https://www.maithanalloys.com /annual-return-information/. Annual Return of the Company is also available on the website of Ministry of Corporate Affairs at www.mca.gov.in.

MANAGERIAL REMUNERATION

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures and other details are as follows:

(a) (i) the ratio of the remuneration of each Director

to the median remuneration of the employees of the Company for the financial year; and

(ii) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year.

Name Designation Ratio of remuneration % increase in remuneration
1. Mr. Subhas Chandra Agarwalla Chairman & Managing Director 769.80 Note 1
2. Mr. Subodh Agarwalla Whole-time Director & Chief Executive Officer 615.84 Note 1
3. Mr. Sudhanshu Agarwalla President & Chief Financial Officer N.A. 4.32%
4. Mr. Rajesh K. Shah Company Secretary N.A. 13.37%

N.A.= Not Applicable

Note 1: There is no change in the remuneration structure; however, the overall remuneration paid in the financial year 2022-2023 is lower than the remuneration paid in the financial year 2021-2022.

The Non-Executive Directors (including Independent Directors) of the Company are entitled to siffing fee only within the statutory limits provided under the Companies Act, 2013. The details of remuneration of each Non- Executive Director have been provided in the Report on Corporate Governance. The ratio of remuneration of said Non-Executive Directors to the median remuneration of the employees of the Company and percentage increase in remuneration of said Non-Executive Directors, during the financial year 2022-2023 are not comparable and therefore not considered for the above purpose.

(b) the percentage increase in the median remuneration of employees in the financial year -

The median remuneration of the employees in the financial year 2022-2023 on gross monthly basis was increased by 17.12%.

(c) the number of permanent employees on the roll of Company -

There were 565 employees as on 31 March 2023 on the pay roll of the Company.

(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 -

The average percentage increase in the salaries of employees other than the managerial personnel during the financial year 2022-2023 on the basis of entitlement was 4.43%. There was no increase in the managerial remuneration during the financial year 2022-2023 (refer Note 1 above).

The managerial personnel are entitled to remuneration partly by way of fixed remuneration being monthly remuneration and partly by way of variable remuneration being a percentage on the profit of the Company, whereas the majority of employees other than the managerial personnel are paid by way of fixed remuneration only. The increase in the remuneration of non-managerial employees depends upon various factors like industry standards, cost of living, individual performance of the employee during the financial year, etc.

(e) affirmation that the remuneration is as per the remuneration policy of the Company-

It is hereby affirmed that the remuneration paid during the financial year 2022-2023 is as per the Remuneration Policy of the Company

PARTICULARS OF EMPLOYEES

A statement in terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) & (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed as Annexure-C.

In terms of the provisions of Section 197(14) of the Companies Act, 2013 it is hereby confirmed that neither the Managing Director nor the Whole-time Director of the Company has received any remuneration or commission from the holding or any subsidiary of the Company during the financial year 2022-2023.

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

None

PARTICULARS OF LOANS, GUARANTEES OR INVESTME- NTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 (I) Details of Loans: The Company has granted advances to its subsidiaries. Please refer to Note Nos. 18, 20 and 53(b) and 53(c) to the Standalone Financial Statement.

(ii) Details of Investments: Please refer to Note Nos. 8,9 and 14 to the Standalone Financial Statement.

(iii) Details of Guarantees given or Securities provided:

The Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or persons, during the financial year 2022-2023.

The Loan/Advances and Investment given or made by the Company in the respective subsidiaries are for the business purpose of such subsidiaries only.

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

The statement containing the necessary information on conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith as Annexure-D.

DISCLOSURES RELATING TO SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has not received any complaint in respect of sexual harassment during the financial year 2022- 2023 nor was any complaint pending at the beginning or end of the financial year 2022-2023.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the Listing Regulations, a Report on Corporate Governance and a Certificate from the Statutory Auditors of the Company confirming compliance of the conditions of Corporate Governance, is annexed herewith as Annexure-E and Annexure- F, respectively.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial conditions and results of operations of the Company for the year under review, as stipulated under Regulation 34 of the Listing Regulations is given as a separate section in this Annual Report on Page No. 35 to 44 and forms part of this Directors Report.

PARTICULARS OF CONTRACTS OR ARRANGE- MENTS WITH RELATED PARTIES

Your Company always strives to enter into transactions with its related parties in the course of its business at arms length basis and the management believes that the related party transactions are on arms length basis as explained under Section 188 of the Companies Act, 2013. There were contract/arrangement/transactions entered into by the Company with its related parties, as provided in Section 188(1) of the Companies Act, 2013 based on various business exigencies such as liquidity, profitability and capital resources, during the financial year 2022-2023.

All related party transactions entered into by the Company were approved by the Audit Committee. Details of related party transactions entered into by the Company, in terms of applicable Accounting Standards have been disclosed in the notes to the Standalone Financial Statement forming part of this Report.

Pursuant to Regulation 34 (3) read with Schedule V of the Listing Regulations, disclosure of transactions of the Company with its Promoter Group Company, holding more than ten percent (10%) of Equity Shares in the Company have been disclosed in the Note No. 54 to the Standalone Financial Statement forming part of this Report.

The Material Related Party Transaction Policy formulated in compliance with the requirement of the Companies Act, 2013 and Listing Regulations, to deal with related party transactions, is available on the website of the Company and web-link for the same is

http://www.maithanalloys.com/wp-content/uploads/2019/07/Related-Party-Transaction-Policy.pdf.

The disclosures of Related Party Transactions as required in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 containing the particulars of contract or arrangements entered into by the Company with related party referred to in Section 188(1) of the Companies Act, 2013 including certain arms length transactions, in prescribed Form AOC-2 is annexed herewith as Annexure-G.

BUSINESS RESPONSIBILITY AND SUSTAINAB- ILITY REPORT

Pursuant to Regulation 34 of the Listing Regulations, a Business Responsibility and Sustainability Report describing the initiatives taken by the Company, from an environmental, social and governance perspective, in the prescribed format is annexed herewith as Annexure-H.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board and General Meetings.

TRANSFER OF SHARES AND UNPAID/ UNCLAIMED DIVIDENDS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

A. Transfer of Unpaid / Unclaimed Dividend

In terms of the provisions of Section 124(5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as applicable, the Company has transferred the unpaid/unclaimed dividends amounting to Rs50,384.00 for the financial year 2014-2015 to the IEPF during the year under review.

Further, a statement containing the details of dividend for the period from financial year 2015- 2016 to 2021-2022 that remained unpaid / unclaimed are available on the website of the Company at www.maithanalloys.com.

B. Transfer of Shares to IEPF

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as applicable, all shares in respect of which dividend has remained unpaid/unclaimed for 7 (seven) consecutive years or more are required to be transferred to IEPF. Accordingly, 33 (Thirty-three) equity shares of the Company belonging to 3 (Three) shareholders in respect of which dividend (as declared by the Company) remained unpaid/ unclaimed for 7 (seven) consecutive years have been transferred to IEPF during the year under review. The Company has transferred 6,064 shares to IEPF till 31 March 2023.

A statement containing details in respect of shares so transferred, including the name of shareholders, folio number or DP ID/Client ID are available on the website of the Company at www.maithanalloys.com.

Further, any person whose shares and unclaimed dividend are transferred to IEPF may claim the same by submiffing an online application in Form IEPF-5, available at www.iepf.gov.in, by following the procedure as prescribed in Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) 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 profit of the Company for that period;

(iii) the directors had taken proper and sufficient care 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;

(iv) the directors had prepared the annual accounts on a going concern basis;

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

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

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank all the shareholders, bankers, suppliers, regulatory and other government authorities for their assistance, cooperation and confidence reposed in your Company.

Your Directors also extend their deep sense of appreciation to the employees of the Company.

For and on behalf of the Board of Directors
S. C. Agarwalla Subodh Agarwalla
Place: Kolkata Chairman & Managing Director Whole-time Director & CEO
Date: 23 May 2023 DIN:00088384 DIN:00339855

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