Uni Abex Alloy Products Ltd Directors Report.

To,

The Members

The Directors have pleasure in presenting herewith the Forty Seventh Annual Report together with the Audited Accounts of the Company for the year ended March 31,2020.

OPERATIONS AND FINANCIAL RESULTS

SUMMARY OF FINANCIAL RESULTS AS PER IND-AS

(Figures in Lakhs)

Particulars 2019-20 2018-19
Revenue from Operations 10,242.51 8986.07
Add: Other income 133.23 77.62
Total income 10,375.74 9063.69
Profit / (loss) before Depreciation 1766.04 1315.10
Less: Depreciation 471.27 467.13
Profit / (Loss) Before Tax 1294.77 847.97
Less : Income Tax for Current Year 224.55 190.00
Less: Income Tax adjustment for previous years -
Less: Deferred Tax adjustment 534.02 (282.99)
Add: Other Comprehensive Income / (Loss) 10.72 (3.13)
Profit / (Loss) After Tax 546.92 937.83
Balance brought forward 2865.15 2105.92
Profit Available for Appropriation 3412.07 3043.73
Proposed Dividend on Equity Shares 98.75 148.13
Dividend Tax on the above NIL 30.45
Transferred to General Reserve NIL NIL

DIVIDEND / RESERVES

Your Directors recommend a dividend of 5/- per Equity share of nominal value of Rs.10 each (i.e. 50%) for the year ended March 31,2020 as against Rs.7.50/- (i.e. 75%) paid for the previous year. The total outgo towards dividend on equity shares amounts to Rs.98.75 Lakhs. Your Directors have decided not to transfer any amount to the Reserves for the year under review.

OPERATIONS

Overall economic slowdown also impacted the order book of your accompany in this year. OEM segments in general and separation industry in particular was in a sluggish mode this year. This impacted order intake for the year. Deferment of tenders in refineries also had an adverse impact in this fiscal. Your company added few new accounts which show potential to grow in future. Owing to a strong order book of previous fiscal company achieved highest ever sales turnover in this year at Rs.98.64 Crs. with effective operational management and some innovative cost management through process improvements your company managed to counter the impact of inflation.

PBIDT for the year under review is Rs.20.18 Crs as against Rs. 16.97 Crs of the previous year.

Your Company reported a profit after tax of Rs.5.47 Crs in the current fiscal as against Rs.9.38 Crs during the last year.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an adequate system of internal controls in all spheres of its operations which are commensurate with the size and the nature of its business. Your Company has in place adequate controls on resource utilization, and provision of accurate and speedy financial statements. The Company ensures compliance with policies and procedures and other statutory and legal obligations on an ongoing basis. Your Companys Internal Financial Controls on its entire processes have been vetted by the Statutory Auditors. Internal control is supplemented by effective and independent internal audit. Management regularly reviews the findings of the Internal Auditors and ensures effective implementation of suggestions/observations of the Internal Auditors. In addition, the Audit Committee of the Board regularly addresses significant issues raised by the Internal and the Statutory Auditors.

PROSPECTS

Prolonged lockdown of all business and manufacturing operations worldwide due to Covid-19 and its aftermath in the form of liquidity crunch, have impacted the economy severely, both domestically and internationally. The working of the Company for the fiscal year 2020-21 will be severely constrained. Nevertheless, your Directors are reasonably optimistic of riding the tide by innovative strategies and proactive focus on opportunities beyond the OEM segment.

QUALITY MANAGEMENT

The Company has set high benchmarks on quality and on on-time delivery, providing a competitive edge in current business scenario. The Companys operations continued to be certified to ISO 9001:2015.

ENVIRONMENT, HEALTH AND SAFETY

As a part of its commitment toward environment, the Company has developed an Environmental Management System along with work practices to ensure high level of safety, health and environment standards. The Company and all its offices and factory have been fully compliant with the Central Government and the State Government directives on lockdown to combat Covid-19. The Companys operations continue to be certified to ISO 14001:2015 and OHSAS 18001:2007.

HUMAN RESOURCE MANAGEMENT

Skill development and training, both behavioural and domain based are ongoing exercises through focused HR processes. Relations between employees and the management continue to remain cordial.

MATERIAL DEVELOPMENTS ON HUMAN RESOURCES INCLUDING NUMBER OF PEOPLE EMPLOYED

As on 31st March 2020, the total numbers of permanent employees on the payrolls of the Company at all the locations was 95.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuant to Section 197(12) read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may email to the Company in this regard.

PARTICULARS OF DIRECTORS REMUNERATION:

The ratio of the remuneration of each director to the median remuneration of the employees

Sr. No. Name of Director and Designation Remuneration of Director for financial year 2019-20 Previous years Remuneration includes sitting Fees % increase/ decrease in Remuneration over the Financial year 2018-19 Ratio of Remuneration of each Director to median remuneration of employees Comparison of the remuneration of the KMP against the performance of the Company
1 F. D. Neterwala - Chairman 410000 400000 2.5% 0.75 : 1.00 -
2 R. B. Mehta - Director 100000 120000 -16.67% 0.18 : 1.00 -
3 A. F. Neterwala - Director 160000 200000 -20.00% 0.29 : 1.00 -
4 P. F. Neterwala - Director 50000 100000 -50% 0.09 : 1.00 -
5 M. K. Fondekar - Director 200000 200000 0.00% 0.37 : 1.00 -
6 H. R. Prasad - Director 440000 430000 2.33% 0.81 : 1.00 -
7 F. K. Banatwalla - Director 430000 430000 0.00% 0.79 : 1.00 -
8 Jimmy Parakh - Director 200000 410000 -51.22% 0.37 : 1.00 -

The sitting fees per Board Meeting attended is Rs.50,000/-, as also for each meeting of the Audit Committee attended. For attending all other Committee Meetings, the fees per meeting is Rs.10,000/- (except Stakeholders Relationship Committee, where no fee is paid).

PARTICULARS OF REMUNERATION OF KEY MANAGERIAL PERSONNEL:

The percentage increase in remuneration of: • Chief Executive Officer 13.50%
• Chief Financial Officer 12.50%
• Company Secretary 9.7%
• Median remuneration of employees 11.6%
Number of permanent employees on the rolls of company 95 (As on 31st March, 2020)
Average percentage increase made in the salaries of employees other than the key managerial personnel in the last financial year i.e. 2019-20. 13.1%
Affirmation that the remuneration is as per the remuneration policy of the company It is hereby affirmed that the remuneration paid is as per the remuneration policy for Directors, Key Managerial personnel and other employees.

DIRECTORS

a) In terms of the provisions of Section 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder:

i. Mr. H.R. Prasad and Mr. F.K. Banatwalla were re-appointed as Independent Directors for the second term of five years commencing from 01.04.2019 and ending 31.03.2024 by Postal Ballot.

ii. Mr. M.K. Fondekar was appointed as an Independent Director, for the first term of five years at the 46th Annual General Meeting of the Company held on 8th August, 2019 to hold office up to 08.08.2024.

b) Purssuant to the provisions of Section 152(6) of the Companies Act, 2013 and the Rules made thereunder, Mr. F.D. Neterwala and Mrs. P.F. Neterwala retire by rotation at the ensuing General Meeting and are eligible for re-appointment.

c) Pursuant to the Provisions of Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, continuation of tenure of Mr. R. B. Mehta on attaining the age of 75 years is proposed for the approval of members at the ensuring General Meeting.

COMMITTEES OF THE BOARD

In terms of the provisions of the Companies Act, 2013 as applicable to Listed Companies, the following Committees of the Board have been duly constituted

I. Audit Committee:

The Audit Committee Members as at March 31,2020 comprised of:

Name of Director Category
Mr. F. K. Banatwalla Chairman & Independent Director
Mr. F. D. Neterwala Promoter - Non Executive Director
Mr. H. R. Prasad Independent Director
Mr. Jimmy Parakh Independent Director

The information generally provided to the Committee for its consideration and approvals include:

- Quarterly, half yearly and annual financial results of the Company and performance report on its business segments;

- Annual budget and performance targets;

- Appointment of statutory and internal auditors;

- Appointment of key managerial personnel;

- Review of foreign exchange exposures and exchange rate movement, if material;

- Contracts in which Director(s) are interested or deemed to be interested;

- Defaults in payment of statutory dues, if any;

- Related party transactions;

- Compliance of various laws and Indian Accounting Standards - IND-AS;

- Any remarks/ observances/ findings made by the Statutory and Internal Auditors of the Company;

- Making of loans and investment of surplus funds;

- Whistle blower policy /vigil mechanism

During the Financial Year 2019-20, 4 Meetings of the Audit Committee were held.

II. Nomination and Remuneration Committee:

The Nomination and Remuneration Committee as at March 31,2020 comprised of:

Name of Director Category
Mr. H. R. Prasad Chairman & Independent Director
Mr. R. B. Mehta Promoter - Non Executive Director
Mr. F. K. Banatwalla Independent Director

The Committee frames the Remuneration Policy and recommends remuneration / revision / merit increment and related matters in respect of Chief Executive Officer, Chief Financial Officer, Company Secretary and Senior Executives.

During the year 2019-2020, two meetings of the Nomination and Remuneration Committee were held.

III. Stakeholders Relationship Committee

The composition of the Stakeholders Relationship Committee as at March 31,2020 is as under:

Name of the Director Category
Mr. F. D. Neterwala Non-Executive Director
Mr. R. B. Mehta Non-Executive Director
Mr. A. F. Neterwala Non-Executive Director
Mr. Jimmy Parakh Independent Director

The Committee meets as often as necessary. In accordance with the authority granted by the Board the, Stakeholders Relationship Committee, deals with the following matters concerning shareholders, on fortnightly basis:

- Transfer/Transmission/Deletion/Name change of physical shares

- Split/Sub-division, consolidation and duplicate share certificates of physical shares as approved by the Board. Re-materialization of Shares.

IV. Corporate Social Responsibility Committee (CSR):

The composition of the CSR Committee as at March 31,2020 is as under:

Name of the Director Category
Mr. F. D. Neterwala Non-Executive Director
Mr. H. R. Prasad Independent Director
Mr. A. F. Neterwala Non-Executive Director

The Committee frames the CSR Policy of the Company; identifies the projects which the Company can undertake towards the CSR initiatives and recommends the same to the Board of Directors for its approval.

One meeting of the CSR Committee was held during the year.

BOARD MEETINGS:

During the period from 1st April, 2019 to 31st March, 2020, four meetings of the Board were held as under:

- 28th May, 2019

- 13th August, 2019

- 13th November, 2019

- 13th February, 2020

BOARD EVALUATION:

The formal procedure for evaluation by the Board of its own performance and that of its Committee and Individual Directors was done.

The meeting of the Independent Directors of the Company was held on 28th May, 2019.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Directors, based on the representations received from the Operating Management, confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(b) In consultation with the Statutory Auditors, appropriate accounting policies have been selected and applied consistently and judgments 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 31,2020 and of the profit for year ended on that date;

(c) To the best of their knowledge and ability, proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the applicable provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, if any;

(d) The annual accounts have been prepared on a going concern basis.

(e) The Directors have laid down internal financial controls in respect of policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to the Companys policies, the safe guarding of its assets, the accuracy and completeness of the accounting records and timely preparation of reliable financial information and such internal controls are adequate and were operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

KEY MANAGERIAL PERSONNEL

Your Directors regret to report the sad and sudden demise of Mr. Milind Ashar, the Company Secretary and Compliance Officer on 12th December, 2019.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Bhautesh Shah has been appointed as the Company Secretary and Compliance Officer with effect from 14th May, 2020 by the Board of Directors at its meeting held on 29th June, 2020.

ABSTRACT OF ANNUAL RETURN:

Pursuant to the provision of Section 134 (3) (a) of the Companies Act, 2013 an abstract of the Annual Return for 2019-20 in the prescribed format is attached (Annexure I) and forms an integral part of the Report.

DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to Section 149 (7) of the Companies Act, 2013 each of the Independent Director of the Company, has given a declaration at the Board Meeting to the effect that he meets the criteria of Independence as provided in Section 149 (6) of the Companies Act, 2013.

COMPANYS POLICY ON DIRECTORS APPOINTMENT, REMUNERATION ETC:

The Nomination and Remuneration Committee of the Board is evolving a policy on appointment and remuneration and other matters as provided in Section 178 (3) of the Companies Act, 2013. Any further appointment of executive Director and his remuneration or appointment of an Independent Director would be based on the policy that is being evolved.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not provided any loans or given any guarantee / security to any person.

Details of working Capital facilities and Term Loans obtained by the Company are provided in the Notes no 21 and 18 in the Notes to financial statement. Details of investment made by the Company are provided in Note no 7 in the Notes to Financial Statements, under Investment Schedule. These Investments are made by the Company in ordinary course of business, out of the surplus funds presently available with the Company, with a view to get an effective return.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS COVERED UNDER SECTION 188 OF THE COMPANIES ACT, 2013:

Your Company has formulated a policy on related party transactions. This policy deals with the review and approval of related party transactions. The Board of Directors of the Company has approved the criteria for making the omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at arms length. All related party transactions are placed before the Audit Committee for review and approval.

All related party transactions entered during the Financial Year were in ordinary course of the business and on arms length basis. No material related party transactions were entered during the Financial Year by your Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

Members may refer to note no. 35 to the financial statement which sets out related party disclosures pursuant to IND- AS - 24.

CONSERVATION OF ENERGY, TECHNOLOGY & FOREIGN EXCHANGE EARNINGS AND OUTGO.

The particulars required to be disclosed pursuant to Section 134 (3) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rule, 2014 are given in Annexure II (A), and is an integral part of this Report.

RISK MANAGEMENT POLICY:

The Board of Directors has identified risks and steps to mitigate the same, if and when need arises. However the executive Management has an adequately defined framework for risk management. The Company, like all business in the country, is exposed to business and economic risk arising out of market conditions, vagaries of monsoon and force majeure events like Covid-19.

CORPORATE SOCIAL RESPONSIBILITY:

The Annual Report on CSR activities in term of the provisions of Companies (Corporate Social Responsibilities Policy) Rules, 2014 is at Annexure II (B) and is an integral part of this Report.

CORPORATE GOVERNANCE:

As per circular No. CIR/CFD/POLICY/CELL/7/2014 dated 15th September, 2014, the compliance with the provisions of Regulation 27 of SEBI (Listing Obligation & Disclosure Requirements), 2015 is not mandatory for the Company. Nevertheless the Company has been complying the provisions on voluntary basis.

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed under the SEBI (Listing Obligation & Disclosure Requirements), 2015 are generally complied with. A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditors certification on its compliance.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Board of Directors of the Company has established a robust vigil mechanism process and to govern the same a well-defined whistle blower policy has been adopted by the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual Harassment Policy since 2009 as per the Supreme Court Guidelines which is in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2019-20.

- No of complaints received: NIL

- No of complaints disposed off: NIL STATUTORY AUDITORS:

As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company at the 44th Annual General Meeting of the Company held on 4th August, 2017 had appointed Messrs. walker Chandiok and Company, LLP (Firm Registration No. 001076N/N500013), as Statutory Auditors of the Company, to hold office for a period of 5 (Five) consecutive financial years, from the conclusion of the Forty Fourth Annual General Meeting of the Company until the conclusion of the Forty Ninth Annual General Meeting of the Company. The Company had received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder.

The Report given by Messrs. walker Chandiok and Company, LLP (Firm Registration No. 001076N/N500013), as Statutory Auditors of the Company on the financial statement of the Company for the year 2019-20 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

INTERNAL AUDITORS:

M/s. Engineer & Mehta, Chartered Accountants, Mumbai are the Internal Auditors of the Company. In a year they carry out three Internal Audit Runs which is commensurate with the size of the Company, and nature of its business.

SECRETARIAL AUDIT:

The Company had appointed M/s. P. Naithani and Associates, a firm of Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the FY 2019 - 20 is annexed herewith as Annexure III. There are no reservations or qualifications made in the Audit Report.

The Company has obtained a Secretarial Compliance Report pursuant to Regulation 24 (A) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 for FY 2019-20 which is annexed herewith as Annexure IV. There are no reservations or qualifications made in this report.

The Company has obtained a certificate pursuant to Regulation 343 and Schedule V para C clause 10(i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 certifying that none of the Directors of the Company is barred or disqualified for being appointed as Director for the Financial Year ending 31st March, 2020. The same is annexed herewith as Annexure V.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. P. Naithani and Associates, a firm of Practicing Company Secretaries to undertake the Secretarial Audit of the Company for F.Y. 2020-21.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION:

The worldwide pandemic Covid-19 started impacting India towards the end of February, 2020 and its severity increased alarmingly, endangering the life of people. To mitigate the impact of the pandemic and minimize loss of human lives, the Central Government enforced national lockdown of people in their homes which resulted in shutdown of all manufacturing and commercial operations and activities barring those most essential to life operations and services. The initial lockdown of over five weeks was extended from time to time as the situation warranted. The lockdown was selectively and gradually relaxed but not totally lifted nationwide. The pandemic has crippled economies worldwide and there is no knowing when these would be up on their feet and running. Under such extenuating circumstances, the Directors are not in a position, at this stage to assess the impact on the Companys operations and financial results for the year 2020-21.

APPRECIATION:

Your Directors place on record their appreciation of the continued support and cooperation extended to the Company by the Central and State Government agencies, and by our Shareholders, Customers, Suppliers, Bankers, Employees at all levels, Employees Union and other Business Associates.

Your Directors take this opportunity to place on record, on their behalf as well as on behalf of the stakeholders, their appreciation and gratitude to the Central and State Governments, Municipal Corporations, Medical fraternities, Police and Security forces, Cleaning and Sanitation staff and all agencies and their employees for their yeomen efforts in battling Covid-19 even at the risk of their own lives.

CAUTIONARY NOTE:

Certain statements in the Directors Report and Management & Discussion Analysis section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

On Behalf of the Board of Directors
Place: Mumbai F. D. Neterwala
Date: 29th June, 2020. Chairman
Din: 00008332