The directors have pleasure in presenting to you the Thirty-Four (34th) Annual Report of the Company and the Audited Financial Statements for the year ended 31st March, 2024.
1. FINANCIAL PERFORMANCE
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(Rs. In Lacs)
|
|
|sr. No.
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Particulars
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2023-24
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2022-23
|
|
i.
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Total revenue
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23,201.07
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19,385.80
|
|
ii.
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(Less): Total expenditure
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18,566.12
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15,435.33
|
|
iii.
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Profit before depreciation, finance cost & tax
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4,634.95
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3,950.47
|
|
iv.
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(Less): Finance cost
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54.38
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62.94
|
|
v.
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(Less): Tax Expenses
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1,026.97
|
909.59
|
|
vi.
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Cash Profit
|
3,553.60
|
2,977.94
|
|
vii.
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(Less): Depreciation
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401.57
|
315.30
|
|
viii.
|
Profit for the year
|
3,152.03
|
2,662.64
|
|
ix.
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Items of Other Comprehensive Income (OCI) for the year
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42.47
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9.41
|
|
x.
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Total Comprehensive Income for the Year
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3,194.50
|
2,672.04
|
|
xi.
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Surplus brought forward
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18,189.74
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16,002.30
|
|
xii.
|
Profit available for appropriation
|
21,384.24
|
18,674.34
|
|
xiii.
|
Dividend on equity shares
|
560.70
|
484.60
|
|
xiv.
|
Surplus carried forward
|
20,823.54
|
18,189.74
|
|
Note: The previous year figures have been regrouped wherever necessary.
|
2. DIVIDEND
Your directors have recommended final dividend of Rs.16.00 (160%) per equity share of the face value of Rs.10 each for the financial year ended on 31st March, 2024 (previous year Rs.14.00 per share). The said dividend if approved by the shareholders at the ensuing Annual General Meeting would involve a cash outflow of Rs.640.80 Lacs against Rs.560.70 Lacs for the previous financial year.
3. OPERATIONS
For the year ended 31st March, 2024 the company has achieved a Revenue of Rs.23,201.07 Lacs, and it has shown the uptrend by 19.60% over the last year of Rs.19,385.80 Lacs. The profit after tax for the year was Rs.3152.03 Lacs, registering a noticeable growth of 18.38% over the profit of Rs.2662.64 lacs in FY 2022-23.
4. FINANCE AND ACCOUNTS
There are no term loans or interests thereon outstanding during the year under review. Your company is at present using financial assistance in the form of working capital facilities from State Bank of India, Ahmedabad with overall banking limits up to Rs. 30.88 Crores to capture its fund based and non-fund-based requirements. The fund-based limits are in the form of Cash credit / PCFC loans and non-fund-based limits are in the form of Bank Guarantees and LCs.
Your company is sufficiently funded from the internal accruals which have been invested in debt market instruments like fixed maturity plans, liquid funds and bond funds. The market value of the investment as at 31st March, 2024 was Rs. 7765.26 Lacs as against Rs. 4325.94 Lacs as at 31st March, 2023. The increase in investment is showing healthy cash flows of the company.
During the year under review, ICRA has conducted the surveillance of credit facilities and re-affirmed the long-term credit ratings to ‘A’ and short-term credit ratings to ‘A1’. The outlook of the long-term ratings is stable.
The financial statements for the year ended on 31st March, 2024 has been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the “Act”) read with the Companies (Accounts) Rules, 2014 as amended from time to time and all other applicable provisions for time being in force. The Notes to the Financial Statements adequately cover the Standalone Audited Statements and form an integral part of this Report.
5. EXPORTS
The export business had been flourishing during the year under review due to overall increase in the orders from the overseas markets.
Exports for the year ended on 31st March, 2024 were at Rs. 5170.87 Lacs as compared to Rs. 4293.84 Lacs for the previous year showing increase by 20.42%.
6. PUBLIC DEPOSITS
Your Company has not accepted any Deposits falling under the meaning as per the provisions of Section 73 of the Act read with the Rules framed there under during the financial year 2023-24.
7. INSURANCE
Taking into consideration the multiple risks from riot, fire, earthquake, terrorism, in-transit damage and other risks considered by the management, your company’s assets are adequately insured.
8. MANAGEMENT DISCUSSION AND ANALYSIS
(a) Industry Structure and Developments:
As per the recent update from International Monetary Fund (IMF) there is a modest growth projection of 3.1% in 2024 marking an increase from previous forecast. Additionally, there is a decline to 5.8% in global inflation rates in 2024.The year 2024 also marks changing geopolitical situation for several nations which may introduce a degree of uncertainty. Despite potential challenges India’s economic resilience shines with a stable outlook.
Among the challenges, India stood out as a bright spot. The current focus on strengthening the manufacturing capabilities brought the capital goods sector into spotlight. In the engineering sector, demand is fueled by investment and capacity expansion in crucial areas such as power, infrastructure, mining, as well as in sectors like general manufacturing, automotive, process industries goods. The industry continues to invest in technology to enhance operational efficiency and maintain global competitiveness. The sector has witnessed increased in order booking on the back of increasing consumer demand and infrastructure development. The positive economic outlook is reinforced by the government’s proactive measures, as evidenced by the interim budget for fiscal year 2024-25 which targets a capital expenditure more than previous year’s estimates.
The company’s drive towards excellence continues persistently towards bringing innovative and various product offerings for the customers at the competitive prices.
Engineering Business - Driving Innovation and growth:
Engineering segment continues to be a cornerstone of our business, demonstrating resilience and adaptability in an evolving industrial landscape. Our commitment to innovation and delivering value-added solutions has enabled us to secure a strong market position.
a) Building on Recent Successes:
The successful industrial trials of our Non-Chemical Anti-Scaling and Descaling equipment (Smart Rod Systems) marks a significant milestone. Due to the product’s encouraging performance (exceeded our expectations) across diverse industries, we are of the opinion that it will be in the forefront of leading the drive for reasonable growth in the current financial year.
b) Strategic Focus on Innovation:
Aligned with our vision to be a pioneer in industrial solutions, we have intensified our R&D efforts. Our focus is on developing cutting-edge technologies that address critical industry challenges and create sustainable value. A few are listed as below:
• Ion Exchange Membrane Production: As a first-of-its-kind initiative in India, we are collaborating with a large research organization to develop Ion Exchange Membranes. This technology holds immense potential for various industrial applications, including EDI/EDR systems and niche segments.
• Advanced Evaporation Systems: We are in the process of developing ‘first of its kind’ and innovative hybrid MVR/TVR-based Evaporation Systems which is being patented by us. This will enhance energy efficiency and overall system performance and could propel us in becoming the leaders in the field of Evaporators.
• Aevolutionizing Air Pollution Control: We are working on a ‘High Gravity’ based equipment to significantly reduce the operational and capital expenditure of scrubber/stripper systems while improving efficiency as specially for CO2, SO2 & NH3 capture.
• A hemical-Free / CIP Solutions: Also, we are currently conducting trails for developing a ‘Chemical-Free Cleaning-in-place’ (CIP) Solution for the Dairy Sector. Successful alpha trials are underway, paving the way for a transformative offering.
c) Embracing a Broader Innovation Eco system:
Your company is committed to exploring innovative technologies from across the globe. We are open to collaborations with Industry leaders to introduce groundbreaking products, even if they diverge from our current offerings. Our focus on sustainable green energy technologies aligns with this approach. We are particularly interested in exploring opportunities in Hydrogen-based technologies, Desalination Technologies that resonate with Mazda’s philosophy.
Overall, we are confident that our ongoing initiatives will deliver exceptional value to our stakeholders and solidify our position as a preferred partner for cutting-edge engineering solutions.
Food Business:
The FMCG sector in India is thriving, fueled by rising consumer expenditure, rapid urbanization, and shifting lifestyle trends, positioning it as one of the most vibrant and fast-evolving segments in the economy.
Mazda’s Food division met our sales targets this year and successfully crossed the Rupees Thirty crore milestone, reaffirming the effectiveness of our strategic investments in expanding production capacity and enhancing our product offerings. We continue to have suppressed profit margins due to the effects of depreciation resulting from our increased capital expenditures and investments in land and machinery. We are confident that as we continue to drive growth, we will see a corresponding enhancement in our profitability over time.
Key Drivers of Performance are listed below:
a) Expanded Product Line:
We have continued to develop new flavours and product lines, in our instant drinks range and in our food colouring range. These efforts have not only attracted new customers but also increased the average spending of our existing customer base. In the domestic segment, we have a few releases planned for 2024 which will open up new segments for our division.
b) Improved Marketing Strategies:
Our investment in optimizing the distribution network and expanding our retail presence has paid off. By partnering with new distributors and enhancing our domestic presence through targeted marketing and promotional campaigns, we penetrated previously untapped markets and achieved higher sales volumes. Additionally, we have expanded our domestic distribution reach in Gujarat by hiring our own sales team and appointing super-stockists.
c) Customer Acquisition:
We have been successful in finding new customers within the markets where we are already present, leveraging our strong brand reputation and extensive product range. Given the brand loyalty our Brands enjoy across the globe, we are attracting more traders and distributors internationally asking for our products.
d) Increased Capital Expenditures:
Our capital expenditures were focused on expanding production capacity and enhancing operational efficiencies. While these investments have resulted in higher depreciation and suppressed profit margins in the short term, they are crucial for our long-term growth strategy.
e) Future Outlook:
The strategic investments made by the Food Division have positioned us for sustained long-term success. With our expanded production capacity, diversified product portfolio, and enhanced operational efficiencies, we are well-equipped to capitalize on future market opportunities. The strong foundation laid in the previous years, evidenced by our increased turnover and expanded market reach, sets the stage for continued revenue growth and improved financial performance in the coming years.
(b) Opportunities & threats:
Our future growth strategy is based on several initiatives. We are pursuing improvement in our machineries, improving our design modules, upgradation of use of information technology and product design improvements through various in-house research.
The growth in demand of our products is clearly visible, with more markets opening up for engineering sector, capacity addition in manufacturing of food products and, the overall food industry and engineering markets are expected to remain healthy in 2024-25.
Threats relating to changes in the global markets such as recent financial meltdown, regulatory or political changes and alteration in the government policies may affect the company outlook and performance. We acknowledge the existence of certain market challenges, including volatility in material prices and the availability of high-quality steel.
(c) Segment-wise Performance:
Your company has divided its business in two segments i.e., Engineering Division and Food division.
The company reported steady performance in the financial year 2023-24. During the year under review, the turnover of engineering business has increased by 18% and profits for the engineering division showed an increase of 3.40% compared to the previous financial year.
The food division has shown an increase in turnover by 13% and reduction in profits by 53% compared to the previous financial year mainly due to depreciation effect of the new factory set up.
(d) Outlook:
The Indian economy has been performing well, with robust consumption activity and increasing disposable income. Globally, the economic outlook is cautiously optimistic. The risks to global growth are broadly balanced, and a soft landing is possible. Amidst a challenging global scenario, India has emerged as a significant economic and geopolitical power. As per National Statistical Office (NSO), the real GDP growth is estimated at 8.2% for FY 2024 as compared to 7.0% in FY 2023.
The outlook of the company appears strong due to a healthy order book value.
(e) Risk and concerns:
The company could be susceptible to strategy, innovation and business or product portfolio related risks if there is any significant and unfavorable shift in industry trends, customer preferences and change in commodity prices of Raw materials.
Mazda does have the benefit of being well entrenched with many of its customers and getting repeat orders.
Risk emerging from global markets, regulatory or political changes could affect the company’s operations and outlook. Pricing risks are their while quoting with lesser margins to obtain orders matching the prices of competition, leading to pressure on margins during execution. Such risks are averted by fixing minimum margins to be targeted and approval process for additional discounts, based on commercial justification and ensuring margin through back-to-back contracts wherever possible and with consent of client.
Process linkages right from obtaining orders to handing over to Client by planning effectively, timely deployment of resources, adherence to budgets and timelines. In the absence of proper linkage in this regard, actual cost and timelines may vary adversely.
(f) Internal control systems, its adequacy and risk management:
Your Company conducts its business with integrity, high standards of ethical behavior and in compliance with all applicable laws and regulations that governs its business. The company has in place a well-designed strong internal control system in accordance with the size and nature of business and complexity of operations. Internal Control Systems are implemented:
• To safeguard the Company’s assets from loss or damage.
• To keep constant check on cost structure.
• To provide adequate financial and accounting controls and implement accounting standards.
• To detect and prevent fraud and to protect the resources of organization.
• To improve operational efficiency by improving the accuracy and timeliness of financial reporting.
• To set out rules and procedures to ensure the integrity of the financial statement.
During the year, the Company has taken steps to review and document the adequacy and operating effectiveness of internal controls. Nonetheless, your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
Internal controls are continuously evaluated by the internal auditors and Management. Findings from the internal audits are reviewed by the management and the Audit Committee. The corrective actions and controls have been put in the place wherever necessary.
The Company ensures the periodical Internal Audit is conducted by an independent auditor, whose report is submitted to the Audit Committee and Board of Directors for consideration. During the financial year 2023-24, no significant deficiencies/ material weaknesses that might impact financial statements have been reported by the Internal Auditor as at the Balance Sheet date.
(g) Financial performance including Financial Ratios with respect to operational performance:
The discussion covers the financial results and other developments during the year under review in respect of the company’s published result prepared as per Indian Accounting Standards (IND AS). Highlights below are given only for comparison.
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Financial Highlights for operating performance of financial year 2023-24:
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|
(Rs. In lacs)
|
|
Particulars
|
2023-24
|
2022-23
|
|
Total Income
|
23,201.07
|
19,385.80
|
|
EBITDA
|
4,634.95
|
3,950.47
|
|
PBT
|
4,179.00
|
3,572.23
|
|
PAT
|
3,152.03
|
2,662.64
|
|
Financial Ratios pursuant to Regulation 34 of SEBI (LODR) Regulations, 2015:
|
|
Ratios
|
2023-24
|
2022-23
|
|
(a) Current Ratio
|
6.82
|
4.25
|
|
(b) Debt-Equity Ratio
|
-
|
-
|
|
(c) Debt Service Coverage Ratio*
|
107.90
|
172.43
|
|
(d) Return on Equity (ROE) ratio (%)
|
15.83
|
15.22
|
|
(e) Inventory Turnover Ratio
|
5.08
|
4.38
|
|
(f) Trade Receivables Turnover Ratio
|
6.45
|
4.89
|
|
(g) Trade Payables Turnover Ratio
|
6.34
|
6.80
|
|
(h) Net Capital Turnover Ratio
|
1.64
|
1.73
|
|
(i) Net Profit Ratio (%)
|
13.98
|
13.90
|
|
(j) Return on Capital Employed (%)
|
19.29
|
18.89
|
|
(k) Return on Investment (%)
|
9.88
|
4.46
|
(h) Details of change in Return on Net Worth as compared to the previous financial year:
The Net Worth of the company stood at Rs. 18590.24 Lacs for the previous financial year as compared to Rs. 21,224.04 Lacs for the year 2023-24, whereas Return on Net Worth for the Year 2023-24 was 14.17% as compared to 14.32% for the previous financial year 2022-23.
(i) Material developments in Human Resources, Industrial Relations, and Health, Safety & Environment:
The company has a strong committed work force nurtured and backed by its professional culture coupled with innovative HR process aimed at strategic alignment with the business objectives.
The number of employees as on 31st March, 2024 was 233.
Your company’s manufacturing facility at all five units and corporate office are ISO 9001:2015 & 14001:2015, and 45001:2018 certified.
9. EMPLOYEE STOCK OPTION
Your company has not issued any Stock Option to their employees.
10. SUBSIDIARIES AND JOINT VENTURES
There are no subsidiaries or joint ventures of your company.
11. DIRECTORS
As on 31st March, 2024, the Company has eight Directors comprising of two Whole-Time Directors and six Non-executive Directors out of which Three are Independent Directors. There are three women directors out of the Eight Directors.
In accordance with the provisions of Section 152 of the Act and Articles of Association of the company, Mrs. Houtoxi Contractor (DIN: 00499260) and Mrs. Shanaya Mody Khatua (DIN: 01241585), Directors retires by rotation at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment. The Board recommends their re-appointment for the consideration of the Members of the company at the forthcoming Annual General Meeting.
A resolution seeking shareholders’ approval for their re-appointment along with other required details forms part of the Notice.
In pursuance to the provisions of Section 149(10) & (11) of the Act, the tenure of the three Independent Directors is coming to an end at the ensuing Annual General Meeting. The Board of Directors wish to sincerely appreciate and express gratitude for the extensive knowledge and invaluable guidance provided by Mr. Mohib Khericha, Mr. Saurin Palkhiwala and Mr. Nilesh Mankiwala during their distinguished tenure with the Company. Their innovative ideas and strategic thinking have been instrumental in propelling the company to new heights, and their contributions are deeply recognized and admired.
Mr. Mohib Khericha, Chairman of the company being associated with the company since 1992, will be continuing his position as a Non-Executive and now being non-independent Director of the company after completion of his tenure as Independent Director.
Henceforth, three new independent directors are proposed to be appointed at the ensuing Annual General Meeting of the company. A special resolution proposing appointment of Mr. Mihir Dinesh Mehta (Din: 10733016), Mr. Ashok Ruplal kavdia (Din: 00054601) and Mrs. Shetal Utkarsh Bhatt (Din: 10733013) as an Independent Directors of the Company with effect from September 09, 2024 for the term of five years is part of the notice of the ensuing annual general meeting.
Pursuant to the provisions of Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’) and Secretarial Standard-2 on General Meetings issued by ICSI, brief particulars of the directors proposed to be appointed / re-appointed are provided as an annexure to the notice convening the Annual General Meeting.
All the directors of the company had confirmed that they are not disqualified under the provisions of the Section 164 of the Act.
Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations read with Regulation 25 of the SEBI Listing Regulations and have complied with the Code prescribed in Schedule IV to the Act.
The Board is of the opinion that the Independent Directors of the Company have fulfilled the conditions as specified in SEBI Listing Regulations, are independent of the management, possess requisite qualifications, experience, proficiency and expertise in the fields of finance, auditing, tax and risk advisory services, banking, financial services, investments and they hold highest standards of integrity.
All Independent Directors of your company are registered with IICA. There has been no change in the circumstances affecting their status as independent directors of the Company during the year under review.
12. KEY MANAGERIAL PERSONNEL
Pursuant to provisions of Sections 2(51) and 203 of Act read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following persons act as Key Managerial Personnel of the company during the year under review;
a. Mr. Percy Avari, Whole-Time Director (DIN:00499114)
b. Mrs. Shanaya Mody Khatua, Whole-Time Director (DIN: 01241585)
c. Mr. Cyrus Bhagwagar, Chief Financial Officer
d. Mr. Nishith Kayasth, Company Secretary
During the year under review, there are no change in the Key Managerial Personnel of the company.
13. NUMBER OF MEETINGS OF THE BOARD
During the year under review, the Board of Directors met for four (4) times, as prescribed under the Act and SEBI Listing Regulations. The relevant details, including composition of the Board, dates of meetings, attendance and various committees of the Board are given in the Corporate Governance Report forming part of this report.
14. BOARD EVALUATION
According to the provisions of the Act and Regulation 17 of SEBI Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors. Further, the Nomination & Remuneration Committee has carried out the performance evaluation of Senior Management including the Company Secretary and Chief Financial Officer of the company.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated by the Independent Directors. The evaluation of Chairman was done based on criteria which among others included managing relationship with shareholder, employees, board, management and leadership qualities. The performance of all Executive Directors as well as Independent Directors has been evaluated by whole Board based on the criteria which includes participation at Board/Committee Meetings, managing relationships with other fellow members and Senior management, personal attributes like ethics and integrity etc. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report forming part of this report.
The Board of Directors expressed their satisfaction with the evaluation process.
15. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3) (c) of the Act, with respect to Directors’ Responsibility Statement, your Directors hereby confirm the following:
(i) In the preparation of the annual accounts for the year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) The Directors have 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 as at 31st March, 2024 and of the profit of the company for the year ended on that date;
(iii) The Directors have 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 have prepared the annual accounts on a going concern basis;
(v) The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;
(vi) 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.
16. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION
The requisite details as required by Section 178(3) & (4) of the Act and as per the requirement of SEBI Listing Regulations is given in the Corporate Governance Report forming part of this report.
The policy of the company on Directors’ appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Act, is available on the website, i.e., https://www.mazdalimited.com/Remuneration-Nomination-policy_MazdaLimited.pdf
17. ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014, the Annual Return is available on the website of the company i.e., on https://www.mazdalimited. com/investor-relation.html
18. AUDIT COMMITTEE
The Audit Committee of the Board consists of three Directors viz. Mr. Mohib Khericha, Mrs. Sheila Mody and Mr. Saurin Palkhiwala. Two of them are Independent Directors. The composition, role, terms of reference and powers of the Audit Committee are in accordance with the provisions of Regulation 18 of SEBI Listing Regulations and Section 177 of the Act and Rules framed thereunder. The details of related party transactions are placed before the Audit Committee for periodical review of the same. The Company has in place a Vigil Mechanism, details of which are available on the Company’s website.
The details pertaining to composition of audit committee, their attendance is included in the Corporate Governance Report, which forms part of this report.
During the year under review, the Board has accepted all the recommendations made by the Audit Committee.
19. SHARE CAPITAL
The share capital of the company as on date of the report is Rs. 4,00,50,000/- consisting of 40,05,000 equity shares of Rs. 10.00 each.
20. TRANSFER TO RESERVES
The company has not transferred any amount to the General Reserve for the financial year ended 31 st March, 2024.
21. CHANGES IN THE NATURE OF BUSINESS, IF ANY
During the year under review, there were no changes in the nature of business carried out by the company. The company has not changed the class of business in which the company has an interest.
22. REPORTING OF FRAUD BY STATUTORY AUDITORS
There was no instance of fraud during the year under review, which required the Statutory Auditor to report to the Audit Committee and / or Board under section 143 (12) of the Act.
23. AUDITORS AND AUDITORS’ REPORT • Statutory Auditor
At the 32nd Annual General Meeting held on 28th September, 2022, the members approved re-appointment of M/s Mayank Shah & Associates, Chartered Accountants, Ahmedabad (Registration No. 106109W) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of 32nd AGM up to the conclusion of 37th AGM to be held in the year 2027.
The Board has taken note and M/s Mayank Shah & Associates, Chartered Accountants, have confirmed their eligibility under section 141 of the Act and the Rules framed thereunder as Statutory Auditors of the company. As required under
SEBI Listing Regulations, the Auditors have also confirmed that they hold a valid certificate issued by the peer review Board of the Institute of Chartered Accountants of India.
There are no qualifications, reservations or adverse remarks or disclaimers made by the auditors in their report on the financial statements of the company for the financial year ended 31st March, 2024. The notes on the Financial Statements referred to in the Auditors’ Report are self-explanatory and do not call for any comments or explanations.
• Secretarial Auditor
Pursuant to requirement of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Rutul Shukla & Associates, Practicing Company Secretaries (COP: 7470), to undertake the Secretarial Audit and to provide Annual Secretarial Compliance Report of the company for the financial year 2023-24. Secretarial Audit Report is given by M/s Rutul Shukla & Associates, Practicing Company Secretaries and is attached herewith as Annexure-A.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
• Cost Auditor
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, (including any statutory modifications and re-enactments thereof) the cost audit records maintained by the company in respect of its manufacturing of other Engineering Goods activity is required to be audited.
As per the requirement of Section 148(3) of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors have, based on the recommendation of the Audit Committee, appointed M/s. V. H. Shah & Co., Cost Accountant, Ahmedabad (Registration No. 100257) to audit the cost accounts of the company for the financial year 2023-24. As required under the Act, necessary resolution seeking members’ ratification for the remuneration payable to M/s. V. H. Shah & Co., is forming part of the notice convening 33rd Annual General Meeting of the company.
The firm M/s. V. H. Shah & Co., Cost Accountant was dissolved during the period under review due to the sad demise of one of the partners of the firm. Due to the casual vacancy arise in the office of the cost auditor the same had been filed by the Board of Directors as per Rule 6 (3A) of the Companies (Cost Records and Audit) Rules, 2014 and appointed M/s. Nisha Patel & Associates, Cost Accountant to conduct the cost audit for the financial year 2023-24. Ms. Nisha Patel was the partner of M/s. V. H. Shah & Co., Cost Accountants and Cost auditor of the company.
The Cost Audit Report for the financial year 2023-24 will be submitted to the Central Government in the prescribed format within the time line prescribed under the rules.
24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
Particulars of loans and guarantees given and the investments made by the company as at 31st March, 2024 form part of the Notes to the financial statements provided in this integrated Annual Report.
During the financial year under review, the company has made investments in schemes of various mutual and debt funds. The market value of investments as at 31st March, 2024 was Rs. 7,765.26 Lacs.
25. RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and SEBI Listing Regulations, your company has formulated a Policy on Related Party Transactions which is available on company’s website at https://www.mazdalimited.com/Related-Party-Transaction-Policy_ MazdaLimited.pdf.
This Policy deals with the review and approval of related party transactions. The Board of Directors of the company has approved the criteria for giving the omnibus approval by the Audit Committee within the overall framework of the Policy on Related Party Transactions.
All related party transactions entered during the year under review were on arm’s length basis and were in the ordinary course of business. All transactions with related party were reviewed and approved by the audit committee. No material contracts or arrangements with related parties were entered into during the year under review. Accordingly, the disclosure of Related Party Transactions as required in terms of Section 134(3)(h) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 in Form AOC -2 is not applicable to your company.
The related party disclosures as specified in Para A of Schedule V read with Regulation 34(3) of the SEBI Listing Regulations are given in the Financial Statements.
26. STATE OF AFFAIRS OF THE COMPANY
The state of affairs of the company are mentioned in the Management Discussion and Analysis Report.
27. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no 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 this report, except as disclosed elsewhere in the report.
28. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS & OUTGO
The particulars relating to conservation of energy and technology absorption, as required to be disclosed in terms of Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, is attached as Annexure - B.
29. MITIGATION OF RISK
Your company has been addressing various risks impacting the company which is provided in the Management Discussion and Analysis Report. However, as per the Listing Regulation constitution of Risk Management Committee for enforcing Risk Management Policy is not applicable to the company.
30. CORPORATE SOCIAL RESPONSIBILITY POLICY (CSR)
In accordance with the provisions of Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 your company has amended the policy as per the recommendation of the CSR Committee with the approval of the Board. The CSR policy is available on the website of the company at https://www.mazdalimited.com/CSR-Policy_MazdaLimited. pdf.
The composition of the Committee and other details are provided in Corporate Governance Report.
The company has implemented various CSR activities through implementing agencies and the activities undertaken by the company are in accordance with the Schedule VII of the Act. The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-C.
31. PARTICULARS OF REMUNERATION OF MANAGERIAL PERSONNEL AND RELATED DISCLOSURES
The Board of Directors on the recommendations of the Nomination and Remuneration Committee (NRC), has framed a Policy on selection and appointment of Director(s), Senior Management Personnel and their remuneration. The salient features of Remuneration Policy is stated in the Corporate Governance Report and the policy is available on the website of the company i.e. https://www.mazdalimited.com/Remuneration-Nomination-policy_MazdaLimited.pdf.
The statement of disclosure of Remuneration under Section 197(12) of the Act read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure - D to this Report.
In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a Statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report in Annexure- D to this Report.
32. REPORT ON CORPORATE GOVERNANCE
The Board of Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, the company has complied with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report together with a certificate from the Secretarial Auditor confirming the compliance is forming part of the Report on Corporate Governance, which forms part of the Annual Report.
33. SIGNIFICANT ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANY’S OPERATIONS
To the best of our knowledge, the company has not received any such orders passed by the regulators, courts or tribunals during the year, which may impact the going concern status or company’s operations in future.
34. INTERNAL FINANCIAL CONTROL SYSTEM
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2023-24.
35. THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the workplace. A detailed POSH Policy is in place as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Act”).
The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, there were no cases filed pursuant to the said Act.
36. COMPLIANCE WITH SECRETARIAL STANDARDS
The applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’ respectively, have been duly complied by your Company during the financial year under review.
37. VIGIL MECHANISM / WHISLTE BLOWER POLICY
Pursuant to the provisions of Section 177 (9) & (10) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI Listing Regulations, the Board has framed a ‘Whistle Blower Policy and Vigil Mechanism’.
The Company believes in the conduct of the matters in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior.
The Policy has been framed with a view to provide a mechanism, inter alia, enabling stakeholders including Directors, individual employees of the Company and their representative bodies to freely communicate their concerns about illegal or unethical practices and to report genuine concerns or grievances as also to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct.
The policy can be accessed on the company’s website at https://www.mazdalimited.com/Vigil-Mechanism-policy_MazdaLimited. pdf.
During the year, no person has been declined access to the Audit Committee, wherever desired.
38. ESOP
The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
39. Insolvency and Bankruptcy Code, 2016
There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.
40. APPRECIATION
Your Directors are highly grateful for the unstinted support of the Stakeholders, including the Central and State Government Authorities, Stock Exchanges, Financial Institutions, Analysts, Advisors, Local Communities, Customers, Vendors, Business Partners, Shareholders, and Investors forming part of the company for their faith, trust and confidence reposed in the company.
Your directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees to ensure that the company continues to grow and excel in future.
41. CAUTIONARY NOTE
Statements in the “Management Discussion and Analysis” describing the Company’s objectives, expectations or predictions are as perceived currently. Actual results may differ materially from those expressed in this statement. Important factors that could influence the company’s operations include supply and demand conditions affecting selling prices of finished goods, input prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
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