Mysore Petro Chemicals Ltd Directors Report.

To the Members,

Your Directors have pleasure in presenting the Forty Ninth Annual Report together with the Audited Statements of Accounts and the Auditors Report of your Company for the financial year ended 31st March, 2019.

1. Financial Results

(र in lakhs)

Particulars 2018-19 2017-18
Total Revenue 4,133.58 1,656.77
Profit before interest, depreciation and taxes 539.08 677.72
Depreciation 68.00 78.21
Finance Cost 4.41 6.84
Profit before tax and exceptional item 466.67 592.67
Exceptional item - 6459.20
Provision for taxation 73.74 1697.04
Profit after tax 392.93 5354.83
Balance brought forward 234.19 1867.06
Balance available for appropriation 7,557.21 7,221.89
Appropriation:
Proposed dividend for the financial year 131.67 131.67
Corporate dividend tax 27.07 27.07
Transferred to general reserves - -
Surplus retained in profit and loss account 7,398.47 7,159.54
EPS before exceptional item 5.97 9.97
After exceptional item 5.97 81.34

2. Overview of Companys Financial Performance

The Company is engaged in the trading of petrochemicals products. During the financial year 2018-19, total revenue amounted to र 4,133.58 lakhs as compared to र 1,656.77 lakhs in the previous year and the Profit after tax fell to र 392.93 lakhs as compared to profit of र 5,354.83 lakhs in 2017-18.

3. Dividend

Your Directors are pleased to recommend dividend of र 2/- (20%) per equity share of र 10/- each. The total outgo on account of dividend (including dividend distribution tax) for the current year amounts to र 158.74 lakhs (previous year र 158.74 lakhs).

4. Management Discussion and Analysis

The Company has sold it Maleic Anhydride business to I G Petrochemicals Ltd. in 2017. The Phthalic Anhydride plant at Raichur was shut down in 2013 due to economic unavailability.

Presently, the Company is engaged in the trading of Orthoxylene (OX), Phthalic Anhydride (PA), Maleic Anhydride (MA), Benzoic Acid (BA) and other petrochemical products. The Company is in the process of evaluating and exploring new markets for business.

5. Share Capital

The paid-up equity share capital of the Company as at 31st March, 2019 was र 658.76 lakhs. During the year under review, the Company has not issued any shares.

6. Deposits

The Company has not accepted any deposits from the public during the year under review.

7. Particulars of Loans, Investments and Guarantee

Details of Loans, Guarantee and Investment covered under the provision of the Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

8. Corporate Social Responsibility (CSR) Initiative

In accordance with the provisions of Section 135 of the Companies Act, 2013 ("the Act") and the rules framed thereunder, the CSR Committee reviews and monitors the projects and expenditures incurred by the Company. During the year 2017-18, the Company was required to spend an amount of र 12.52 lakhs towards CSR activities as mandated under the CSR Policy of the Company read the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014. However, the Company could only spend र 2.00 lakhs towards the CSR activities and र 10.52 lakhs remained unspent and the same was carried forward and spent during the year 2018-19. The report on CSR is annexed as "Annexure-A".

9. Director and Key Managerial Personnels

a. Re-appointments

In accordance with the provision of Section 152 of the Act, read with the Companies (Management and Administration) Rules, 2014, Shri S N Maheshwari retires by rotation and being eligible has offered himself for re-appointment.

Shri Shrikant Somani and Shri Anil Kochar were appointed as Independent Directors of the Company by the members at an Annual General Meeting held in 2014 for a period of five years.

Smt. Uma Acharya was appointed as Independent Directors of the Company by the members at an Annual General Meeting held in 2015 for a period of five years.

In accordance with the provisions of Section 149 of the Act, the Independent Directors shall be eligible to seek re-appointment for a second term of five years subject to the approval of the members by special resolution. The said Independent Directors have given their consent for re-appointment.

The Company has received notices under Section 160 of the Act, from a Member proposing the re-appointment of Shri Shrikant Somani, Shri Anil Kochar and Smt Uma Acharya, as Independent Directors of the Company. Approval of the Members are being sought by special resolutions for reappointment as Independent Directors for a second term of five consecutive years.

All I ndependent Directors of the Company have furnished declarations under Section 149(7) of the Act confirming that they meet the criteria of independence laid down in Section 149(6) of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

b. Resignation

Shri M M Jayakar resigned as Independent Director with effect from 27th March, 2019 due to personal reasons. The Board places on record sincere appreciation for the invaluable contribution and guidance of Shri M M Jayakar during his association with the Company.

c. Number of Meetings of the Board

During the year, six Board Meetings were convened and held, which are disclosed in the Report on Corporate Governance forming part of the Annual Report of the Company.

d. Performance Evaluation

As stipulated by the Code of Independent Directors pursuant to Act and the SEBI Listing Regulations, a separate meeting of the Independent Directors of the Company was held to review the performance of Non-independent Directors (including the Chairman) and the entire Board. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform and discharge their duties.

All Independent Directors have given their respective declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.

e. Remuneration Policy

The details of Remuneration policy forms part of the Corporate Governance Report.

The information relation to remuneration as required pursuant to Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("the said Rules") are given below:

i. Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year -

Shri M M Dhanuka, Managing Director & CEO - 26 : 1

ii. The Percentage increase in the remuneration of Managing Director, Chief Financial Officer and Company Secretary for the Financial Year-

Shri M M Dhanuka, Managing Director & CEO - 78%

Shri Nilesh Panchal, Chief Financial Officer - 12%

Smt. Pragati Nathani, Company Secretary - N.A.

iii. The percentage increase in the median remuneration of the employee in the financial year - 12%

iv. Number of permanent employee on the payrolls of the Company - 5

v. Average percentage increase made in the salaries of employees other than managerial personnel in the last financial year was Nil whereas the increase in the managerial remuneration was 12%.

It is hereby affirmed that the remuneration paid during the year is as per the Remuneration Policy of the Company.

The information under the Rule 5(2) of the said Rules will be provided to the members upon request in terms of the first proviso to the Section 136 of the Act.

10. Directors Responsibility Statement

To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Act we state:

a. that in the preparation of the annual financial statements for the year ended 31st March, 2019, all the applicable accounting standards have been followed and no material departures have been made from the same;

b. that appropriate accounting policies have been selected and applied consistently and have 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 ended 31st March, 2019 and of the profit of the Company for that year;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

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

11. Particulars of Contracts and Arrangements with Related Parties

All transactions entered into with related parties as defined under the Act and Regulation 23 of SEBI Listing Regulations during the financial year were in the ordinary course of business and on an arms length basis and do not attract the provisions of Section 188 of the Act.

The necessary disclosures regarding the transactions are given in the notes to accounts.

12. Statutory Auditor

M/s MSKA & Associates were appointed as Statutory Auditors of the Company by the members of the Company at the 47th AGM.

13. Secretarial Audit

The Secretarial Audit Report for the year 2018-19 provided by M/s. Makarand M Joshi and Co., Practicing Company Secretaries is annexed herewith as "Annexure-B". The report of the Auditor contains two qualifications on account of delay in submission of the proceedings of AGM which was due to a national holiday on 15th August, 2018 and the inadequacy of information in Management Discussion and Analysis was due to closure of manufacturing operations.

14. Energy Conservation, Technology Absorption and Foreign Exchange Earning and Outgo

The information on conservation of energy, technology absorption is not applicable to the Company. During the year under review, the foreign exchange outgo was र 192.39 lakhs (previous year र 321.61 lakhs)

15. Report on Corporate Governance

The Company has taken the requisite steps to comply with the recommendations concerning Corporate Governance. The disclosures as required under Schedule V to the SEBI Listing Regulations together with a certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance forms part of this Annual Report.

16. Annual Return

The Annual Return of the Company in form MGT-7 for the year 2018-19 is available on the website of the Company and can be accessed at www.mysorepetro.com

17. Transfer to Reserves

The undistributed profits amounting to र 234.19 lakhs is proposed to be retained in the Statement of Profit & Loss.

18. Subsidiaries, Joint Ventures and Associate Companies

During the year under review, the Company has entered into joint venture arrangement with Blue Lotus International Limited by purchasing 5 shares in it.

19. Transfer of shares to IEPF

In compliance with the provisions of Section 124(6) of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules") and amendments thereto, Company had during the financial year 2017-18 transferred the shares to IEPF Authority in respect of shares on which dividend has not been paid or claimed for seven consecutive years.

Members whose shares are so transferred can claim their dividend and shares from the IEPF authority by filing Form I EPF-5 at www.iepf.gov.in . Member should also note that only one consolidated claim can be filed in a financial year as per the IEPF Rules. Members are advised to claim any un-encashed dividends.

The Company Secretary of the Company has been designated as the Nodal Officer who can be contacted for any guidance/assistance to claim the dividend and shares from IEPF Authority.

20. Contribution to the Exchequer

The Company has contributed र 787.35 lakhs to the exchequer on account of income tax, GST, etc.

21. Vigil Mechanism

The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the Companys website www.mysorepetro.com . There was no fraud or irregularity noticed during the year under review.

22. Prevention of Sexual Harassment

The Company is an equal opportunity provider and has zero tolerance in any form or manner towards the sexual harassment of women at work place. In accordance with the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a policy on prevention, prohibition and redressal of sexual harassment of women at work place.

No complaints pertaining to sexual harassment of women employees were received during the year.

23. Cautionary Statement

Statements made in this report describes the Companys objectives, projections and estimates and may be forward looking and are stated as required by applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include market conditions, Government regulations, exchange rate fluctuations, interest and other costs.

24. Acknowledgement

Your Directors would like to express their appreciation for the co-operation and assistance received from the customers, shareholders, vendors, bankers, financial institutions, employees and other stakeholders for their continued support.

For and on behalf of the Board
M M Dhanuka
Mumbai Chairman & Managing Director
29th May, 2019 DIN - 00193456