Director's Report 3. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE 3.1. Sales Turnover of the Company crossed X 500 Crores for the first time in the Company's History. 3.2. Exports at Rs. 350.59 Crores accounting for 72% of Company's Sales. The Company has crossed the Rs. 350 Crore mark for the first time in export sales. The Company continues to be one of the largest exporter of forgings from India and has received 25 consecutive Annual Awards from The Engineering Exports Promotion Council since 1989. 3.3. The Company has also crossed the Rs. 100 Crore mark for the first time in domestic sales. 3.4. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs. 308.91 Crores. 3.5. The Company has retained its ISO 9001 and TS 16949 Certification for its Quality Management. 3.6. The capital expenditure during the year was Rs. 61.15 Crores. Machining capacity has been substantially increased in line with customer demand. The Company also produces Green Energy in its Solar and in Wind farms. 3.7. The Directors increased the Dividend by 20% over previous year and declared 60%. 4. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER Raw Material - 211.84 crores (42%) 5. MANAGEMENT DISCUSSION AND ANALYSIS : GLOBALSCENE 1. The last fiscal 2014-15 saw a further firming up of equity markets from the increases of previous year. Globally, the availability of "cheap money" was a significant contributing factor for this. 2. North America -The US and Canadian economies continues to exhibit resilience and have shown strong performance compared to their peers amongst G7 economies. Per the World Economic Outlook of the IMF (www.imf.org/external/pubs/ft/weo/2015/01 <http://www.imf.org/external/pubs/ft/weo/2015/01>), "Growth in the US has been energetic, averaging 3.9% annualised in the last three quarters of 2014. Consumption - the main engine of growth - has benefited from steady job creation and income growth, lower oil prices, and improved consumer confidence." 3. The Dow Jones Industrial Average (DJIA) has increased by approximately 7% because US stock markets are seen as a haven for investment in a sea of gloom. 4. Europe - The Euro has weathered the pressures on account of the floundering economies of Portugal, Ireland, Greece and Spain (PIGS countries). The Euro (EUR) has depreciated versus the US Dollar (USD) by about 25% on account of the volatility due to Greece. 5. Germany along with a few countries bordering the North Sea continue to be pillars of the European economy. Their relative prosperity forms the back bone of the efforts to keep the EU and ECU integrated. The moribund labour markets in France is a considerable risk to the very EU itself. The Italian economy is also in stasis with very high public debt leaving very little room for maneuvering. 6. The rigid labour markets of Europe, absence of political union, unwillingness of the German public to bear a higher burden, significant welfare commitments, large share of government spending in the economy, etc., are some of the significant structural issues. Countries like Spain, Ireland, etc., have embarked on a journey of significant and painful structural reforms which are starting to bear fruit. 7. The significant challenge for European leadership is the management of structural reforms and containment of public spending without causing social turbulence. 8. China - the Chinese economy has grown by around 7.7% in 2014, maintaining the same level as in the preceding year. The Chinese economy is showing signs of considerable slow-down on account of slow down in real estate and NPAs in the banking sector. However, because it is a controlled economy, there are reasonable chances of the leadership managing a slow down without a crash landing. Further fall in growth in China is expected to drag the global economy. 9. Japan - Initially benefitted from Abenomics, the radical monetary expansion, fiscal stimulus and structural reforms, promulgated by Mr.Shinzo Abe, the Prime Minister of Japan. However, the effects of the fiscal stimulus have worn off in 2015, during which year a real GDP growth of 1.0% has been achieved as against 1.6% in 2014. 10. Commodities - The Dow Jones Commodity Index (DJCI) has fallen by 25% in the last one year due to considerable weakness in commodities. 11. Overall, Global output is expected to have grown around 3.3% per various economic think tanks. Across mature economies, the 2015 growth outlook has improved significantly to 2.3 percent growth in 2015, compared to 1.9 percent in 2014. 12. The issue of high levels of sovereign debt which most countries have run up over the last two decades, continues to be of serious concern. The next few years appear to be a consolidation phase for the global economy with growth stuck in a range of 3-4%. Getting out of high levels of sovereign debt without derailing economies into recession will be a significant conundrum. INDIA 13. The Indian economy is expected to grow by approximately 7.5% in F15 as compared to about 7.2% in F14. 14 During F15 the automotive industry posted growth rates of approximately 4% in the car segment and 17% in the CV segment. 15 Steel prices have dropped by about 3% compared to the highs of the previous year. 16 The INR ended the year lower by approximately 4%, ending the year at a level of Rs. 62.169 per USD. Please refer graph below. Further weakening of the INR is anticipated. However, if FDI inflows are strong, the pressure on the INR will be relieved. 17. The following were important developments witnessed during the year : ? Record sales! - Domestic sales crossed '100 crore mark! Export sales crossed '350 crore mark! ? Record production of 38,260 Tons! ? Adding to the volume of existing parts, were the new parts which were developed in the last 2 years. ? The company has posted a growth of 27% in domestic sales by the development of new parts. Riding on the back of strong global demand, export sales grew by 20%. ? Changes in steel prices which are in line with international markets are being passed on to customers as is the industry practice. ? We are focusing on capacity utilisation, to take advantage of the production capacities created in the last 3 years. 18. Overall sales increased by 22.15%. As highlighted in the Directors' Report, Return On Net Worth is 20.54% and Return On Capital Employed is 25.79%. Current Ratio is 1.92. The total outside liabilities to net worth stands at 0.93. Debt Equity Ratio is 0.41. Human Resources and Industrial Relations 20. Your company continues to focus on the development of its human resources to improve its performance. The company currently has approximately 1330 employees. It is their invaluable contribution that has primarily resulted in your company's position of strength in the industry. 21. Focus on a safe working atmosphere, constantly evolving systems for recognition and reward, consistent communication and imparting skills and training - all these focused on meeting customer needs, characterise the HR development of the Company. 22. Every year, each plant of the Company celebrates 'Founder's Day' in a family atmosphere with all employees and their household members. Health, Safety and Environment 23. The Company follows a policy of zero tolerance towards accidents. Wherever possible, visible controls and fail-safe systems are provided to ensure prevention of accidents. Regular communication, training and periodic reviews of practices play a vital role in maintaining safety standards. 24. The Company ensures compliance with all pollution control regulations. Adequate pollution control equipments have been installed to treat effluents and to control air pollution. Risk Management 25. The Company is a leading manufacturer of automotive components. Automotive industry is subjected to cyclical variations in performance and is very sensitive to policy changes. The market is very competitive. Prices of raw materials change based on supply and demand. Margins remain under constant pressure. Any steep reduction in off-take exposes the Company to high fixed costs. 26. A considerable portion of the customers of the Company are situated outside of India. Hence, demand for the Company's product is subject to the health of the global economy. 27. The Company has spread its risks by increasing the geographic spread of its customer base. The Company proposes to improve capacity utilization in its existing facilities. Working capital management will receive high priority. 28. Our goals in the coming months: ? Focus on improving sales in keeping with market conditions. ? Increase the production capacity to 65,000 Tons. ? Focus on cost reduction continuously - particularly on reducing energy consumption and improving productivity. ? Enhance IT systems with the continued development of the ERP system in place. ? Continue the evolution into green sources of energy in the coming months. ? Reduce the impact on the environment. 6. TRANSFER TO RESERVE Transfer to General Reserve - Rs. 4500 lakhs 7. PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS UNDER SECTION 186 Not applicable 8. DIRECTORS 8.1 Shri. K. Venkatramanan, Director retires by rotation and being eligible, offers himself for reappointment. 8.2 DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL APPOINTED DURING THE YEAR In compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Woman Director has to be inducted in the Board of Directors of the Company, with effect from 01 April 2015. Hence, the Board appointed Smt. Kavitha Vijay ( DIN 01047261), an advocate, as an Additional, Non - Executive, Independent Director on the Board of Directors with effect from 01 April 2015, by way of Circular Resolution. The term of additional directorship terminates as on the date of this Annual General Meeting. The Board recommends the appointment of Smt Kavitha Vijay, as an Independent Director for a period of 5 years. 9. DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL RESIGNED DURING THE YEAR - NIL 10. BOARD AND COMMITTEE MEETING DATES Details are provided in Annexure III of this Report. 11. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS - None 12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All the transactions with related parties are in the ordinary course of business and on arm's length basis; and there are no material contracts or arrangement or transactions at arm's length basis. Such transactions done in the ordinary course of business has been specified in the Notes on accounts 13. POLICY ON RELATED PARTY TRANSACTION The Company has a policy on Related Party Transaction and the same has been displayed on the Company's website 14. NOMINATION AND REMUNERATION POLICY A Board level Committee of Nomination and Remuneration Committee has been constituted and the Board had adopted Nomination and Remuneration Policy. Human Resources Policy of the Company considers Human Resources as its valuable asset. 15. CORPORATE SOCIAL RESPONSIBILITY A Board Level Committee of CSR has been constituted and the Board has adopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy are Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business Projects. Annual Report on CSR has been provided in Annexure III of this Report. 16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES • The Board shall have minimum 3 and maximum 15 directors, unless otherwise approved. • No person of age less than 21 years shall be appointed as a director on the Board. • The Company shall have such person on the Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Agreement, Memorandum of Association and Articles of Association of the Bank and all other statutory provisions and guidelines as may be applicable from time to time. • Composition of the Board shall be in compliance with the requirements of Clause 49 of the Listing Agreement of the Stock Exchanges. • Majority of the Directors shall have specialised knowledge/experience in the areas like Agriculture, Banking, SSI, Legal, Risk Management, Accountancy, Finance, Windmill, manufacturing of forgings etc. • Except for the Vice Chairman and Managing Director and the Joint Managing Director, no other directors are paid remuneration, but are paid only sitting fees and Commission subject to the ceiling provided in the Companies Act, 2013. • Vice Chairman and Managing Director / CEO, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the Company. • All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct. Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields. 17. PARTICULARS OF EMPLOYEES The information required under Section 197(12) of the Companies Act, 2013 and the rules made there under, as amended, has been given in the annexure appended hereto and forms part of this report. 19 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE Not applicable 20 MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURED SINCE 31.03.2015 TILL THE DATE OF THIS REPORT: Not applicable 21 DIRECTORS RESPONSIBILITY STATEMENT: The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that - 21.1 In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures; 21.2 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 at the end of the financial year and of the profit or loss of the company for that period; 21.3 The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 21.4 The directors had prepared the annual accounts on a going concern basis. 21.5 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. 21.6 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. 22 ESTABLISHMENT OF VIGIL MECHANISM The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue . The Whistle Blower Policy covering all employees and directors is hosted on the Company's website. 23 ADEQUACY OF INTERNAL FINANCIAL CONTROL Company has a process to continuously monitor the existing controls and identify gaps, if any. It implements new / improved controls wherever the effect of such gaps would have a material effect on the Company's operation. 24 CORPORATE GOVERNANCE REPORT The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3. 25 ANNUAL RETURN An extract of Annual Return as on 31 March 2015 pursuant to Section 92 ( 3) of the Companies Act, 2013 and forming part of the report is attached separately. 26 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS; 1. Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feed back forms for evaluation of the Board, Independent Directors and Chairman. 2. Independent Directors at a meeting without anyone from the non-independent directors and management, considered/evaluated. Their meeting was held on 20 October 2014 the Board's performance, performance of the Chairman and other non-independent Directors. 3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant director) 27 FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS • M M Forgings Limited has put in place a system to familiarise the independent directors about the company, its products, business and the on-going events relating to the company, its products, business and the on-going events relating to the Company. • Independent Directors of the Company are made aware of their role, responsibilities and liabilities at the time of their appointment / re-appointment , through a formal letter of appointment, which also stipulates various terms and conditions of their engagement. • They are also made aware of Company's Board and Board Committee framework, policies and procedures. • As part of Board Discussions, presentations on business of the Company are made to the directors from time to time. • Important announcements and press releases for various news related to the company are forwarded to the directors from the time - to time. • Each member of the Board, including the independent directors, have been given complete access to any information relating to the Company. 28 AUDITORS: The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tiruchirapalli being eligible, offer themselves for reappointment. 29 SECRETARIAL AUDIT REPORT Pursuant to the requirements of the Companies Act, 2013, the Company has appointed M/s S. Dhanapal & Associates, Practicing Company Secretaries ( C.P. No. 7028 ) as the Secretarial Auditor for FY 2015 whose report of 18 May 2015 is attached separately to this report. 30 COST AUDITOR Pursuant to the provisions contained in Rule 14 of the Companies (Audit and Auditors) Rules, 2014 Shri. S. Hariharan (C.P. No. 20864) has been appointed as Cost Auditor for the financial year 2015-16. 31 EXPLANATION TO AUDITOR'S REMARKS Not applicable 32 SEEL- Subsidiary Company Srivatsa Electric and Electronic Limited - The final Order for dissolution of the Company has been received from the High Court, Chennai. 33 DEPOSITS: The Company does not have any deposits. Fresh deposits are not being accepted by the Company. 34 ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE: Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure 35 DECLARATION GIVEN BY INDEPENDENT DIRECTORS: All the Independent Directors have given the necessary declarations to the Company as required under sub section (6) of Section 149 of the Companies Act, 2013. 36 PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE During the year under review, pursuant to the new legislation, 'Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013' introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There were no cases reported during the year under review under the said Policy. 37 ACKNOWLEDGEMENT: Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, State Bank of India and State Bank of Travancore. Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort. Above all the Directors thank the shareholders for their continued confidence in the management. For and On behalf of the Board N. SRINIVASAN Chairman Place : Kodaikanal Date : 18-May-2015 Director's Report 3. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE 3.1. Sales Turnover of the Company crossed X 500 Crores for the first time in the Company's History. 3.2. Exports at Rs. 350.59 Crores accounting for 72% of Company's Sales. The Company has crossed the Rs. 350 Crore mark for the first time in export sales. The Company continues to be one of the largest exporter of forgings from India and has received 25 consecutive Annual Awards from The Engineering Exports Promotion Council since 1989. 3.3. The Company has also crossed the Rs. 100 Crore mark for the first time in domestic sales. 3.4. The Company continues to be a net foreign exchange earner. The net foreign exchange earnings during the current year were Rs. 308.91 Crores. 3.5. The Company has retained its ISO 9001 and TS 16949 Certification for its Quality Management. 3.6. The capital expenditure during the year was Rs. 61.15 Crores. Machining capacity has been substantially increased in line with customer demand. The Company also produces Green Energy in its Solar and in Wind farms. 3.7. The Directors increased the Dividend by 20% over previous year and declared 60%. 4. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER Raw Material - 211.84 crores (42%) 5. MANAGEMENT DISCUSSION AND ANALYSIS : GLOBALSCENE 1. The last fiscal 2014-15 saw a further firming up of equity markets from the increases of previous year. Globally, the availability of "cheap money" was a significant contributing factor for this. 2. North America -The US and Canadian economies continues to exhibit resilience and have shown strong performance compared to their peers amongst G7 economies. Per the World Economic Outlook of the IMF (www.imf.org/external/pubs/ft/weo/2015/01 <http://www.imf.org/external/pubs/ft/weo/2015/01>), "Growth in the US has been energetic, averaging 3.9% annualised in the last three quarters of 2014. Consumption - the main engine of growth - has benefited from steady job creation and income growth, lower oil prices, and improved consumer confidence." 3. The Dow Jones Industrial Average (DJIA) has increased by approximately 7% because US stock markets are seen as a haven for investment in a sea of gloom. 4. Europe - The Euro has weathered the pressures on account of the floundering economies of Portugal, Ireland, Greece and Spain (PIGS countries). The Euro (EUR) has depreciated versus the US Dollar (USD) by about 25% on account of the volatility due to Greece. 5. Germany along with a few countries bordering the North Sea continue to be pillars of the European economy. Their relative prosperity forms the back bone of the efforts to keep the EU and ECU integrated. The moribund labour markets in France is a considerable risk to the very EU itself. The Italian economy is also in stasis with very high public debt leaving very little room for maneuvering. 6. The rigid labour markets of Europe, absence of political union, unwillingness of the German public to bear a higher burden, significant welfare commitments, large share of government spending in the economy, etc., are some of the significant structural issues. Countries like Spain, Ireland, etc., have embarked on a journey of significant and painful structural reforms which are starting to bear fruit. 7. The significant challenge for European leadership is the management of structural reforms and containment of public spending without causing social turbulence. 8. China - the Chinese economy has grown by around 7.7% in 2014, maintaining the same level as in the preceding year. The Chinese economy is showing signs of considerable slow-down on account of slow down in real estate and NPAs in the banking sector. However, because it is a controlled economy, there are reasonable chances of the leadership managing a slow down without a crash landing. Further fall in growth in China is expected to drag the global economy. 9. Japan - Initially benefitted from Abenomics, the radical monetary expansion, fiscal stimulus and structural reforms, promulgated by Mr.Shinzo Abe, the Prime Minister of Japan. However, the effects of the fiscal stimulus have worn off in 2015, during which year a real GDP growth of 1.0% has been achieved as against 1.6% in 2014. 10. Commodities - The Dow Jones Commodity Index (DJCI) has fallen by 25% in the last one year due to considerable weakness in commodities. 11. Overall, Global output is expected to have grown around 3.3% per various economic think tanks. Across mature economies, the 2015 growth outlook has improved significantly to 2.3 percent growth in 2015, compared to 1.9 percent in 2014. 12. The issue of high levels of sovereign debt which most countries have run up over the last two decades, continues to be of serious concern. The next few years appear to be a consolidation phase for the global economy with growth stuck in a range of 3-4%. Getting out of high levels of sovereign debt without derailing economies into recession will be a significant conundrum. INDIA 13. The Indian economy is expected to grow by approximately 7.5% in F15 as compared to about 7.2% in F14. 14 During F15 the automotive industry posted growth rates of approximately 4% in the car segment and 17% in the CV segment. 15 Steel prices have dropped by about 3% compared to the highs of the previous year. 16 The INR ended the year lower by approximately 4%, ending the year at a level of Rs. 62.169 per USD. Please refer graph below. Further weakening of the INR is anticipated. However, if FDI inflows are strong, the pressure on the INR will be relieved. 17. The following were important developments witnessed during the year : ? Record sales! - Domestic sales crossed '100 crore mark! Export sales crossed '350 crore mark! ? Record production of 38,260 Tons! ? Adding to the volume of existing parts, were the new parts which were developed in the last 2 years. ? The company has posted a growth of 27% in domestic sales by the development of new parts. Riding on the back of strong global demand, export sales grew by 20%. ? Changes in steel prices which are in line with international markets are being passed on to customers as is the industry practice. ? We are focusing on capacity utilisation, to take advantage of the production capacities created in the last 3 years. 18. Overall sales increased by 22.15%. As highlighted in the Directors' Report, Return On Net Worth is 20.54% and Return On Capital Employed is 25.79%. Current Ratio is 1.92. The total outside liabilities to net worth stands at 0.93. Debt Equity Ratio is 0.41. Human Resources and Industrial Relations 20. Your company continues to focus on the development of its human resources to improve its performance. The company currently has approximately 1330 employees. It is their invaluable contribution that has primarily resulted in your company's position of strength in the industry. 21. Focus on a safe working atmosphere, constantly evolving systems for recognition and reward, consistent communication and imparting skills and training - all these focused on meeting customer needs, characterise the HR development of the Company. 22. Every year, each plant of the Company celebrates 'Founder's Day' in a family atmosphere with all employees and their household members. Health, Safety and Environment 23. The Company follows a policy of zero tolerance towards accidents. Wherever possible, visible controls and fail-safe systems are provided to ensure prevention of accidents. Regular communication, training and periodic reviews of practices play a vital role in maintaining safety standards. 24. The Company ensures compliance with all pollution control regulations. Adequate pollution control equipments have been installed to treat effluents and to control air pollution. Risk Management 25. The Company is a leading manufacturer of automotive components. Automotive industry is subjected to cyclical variations in performance and is very sensitive to policy changes. The market is very competitive. Prices of raw materials change based on supply and demand. Margins remain under constant pressure. Any steep reduction in off-take exposes the Company to high fixed costs. 26. A considerable portion of the customers of the Company are situated outside of India. Hence, demand for the Company's product is subject to the health of the global economy. 27. The Company has spread its risks by increasing the geographic spread of its customer base. The Company proposes to improve capacity utilization in its existing facilities. Working capital management will receive high priority. 28. Our goals in the coming months: ? Focus on improving sales in keeping with market conditions. ? Increase the production capacity to 65,000 Tons. ? Focus on cost reduction continuously - particularly on reducing energy consumption and improving productivity. ? Enhance IT systems with the continued development of the ERP system in place. ? Continue the evolution into green sources of energy in the coming months. ? Reduce the impact on the environment. 6. TRANSFER TO RESERVE Transfer to General Reserve - Rs. 4500 lakhs 7. PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS UNDER SECTION 186 Not applicable 8. DIRECTORS 8.1 Shri. K. Venkatramanan, Director retires by rotation and being eligible, offers himself for reappointment. 8.2 DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL APPOINTED DURING THE YEAR In compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Woman Director has to be inducted in the Board of Directors of the Company, with effect from 01 April 2015. Hence, the Board appointed Smt. Kavitha Vijay ( DIN 01047261), an advocate, as an Additional, Non - Executive, Independent Director on the Board of Directors with effect from 01 April 2015, by way of Circular Resolution. The term of additional directorship terminates as on the date of this Annual General Meeting. The Board recommends the appointment of Smt Kavitha Vijay, as an Independent Director for a period of 5 years. 9. DEATILS OF DIRECTORS OR KEY MANAGEMENT PERSONNEL RESIGNED DURING THE YEAR - NIL 10. BOARD AND COMMITTEE MEETING DATES Details are provided in Annexure III of this Report. 11. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS - None 12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All the transactions with related parties are in the ordinary course of business and on arm's length basis; and there are no material contracts or arrangement or transactions at arm's length basis. Such transactions done in the ordinary course of business has been specified in the Notes on accounts 13. POLICY ON RELATED PARTY TRANSACTION The Company has a policy on Related Party Transaction and the same has been displayed on the Company's website 14. NOMINATION AND REMUNERATION POLICY A Board level Committee of Nomination and Remuneration Committee has been constituted and the Board had adopted Nomination and Remuneration Policy. Human Resources Policy of the Company considers Human Resources as its valuable asset. 15. CORPORATE SOCIAL RESPONSIBILITY A Board Level Committee of CSR has been constituted and the Board has adopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy are Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business Projects. Annual Report on CSR has been provided in Annexure III of this Report. 16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES • The Board shall have minimum 3 and maximum 15 directors, unless otherwise approved. • No person of age less than 21 years shall be appointed as a director on the Board. • The Company shall have such person on the Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Agreement, Memorandum of Association and Articles of Association of the Bank and all other statutory provisions and guidelines as may be applicable from time to time. • Composition of the Board shall be in compliance with the requirements of Clause 49 of the Listing Agreement of the Stock Exchanges. • Majority of the Directors shall have specialised knowledge/experience in the areas like Agriculture, Banking, SSI, Legal, Risk Management, Accountancy, Finance, Windmill, manufacturing of forgings etc. • Except for the Vice Chairman and Managing Director and the Joint Managing Director, no other directors are paid remuneration, but are paid only sitting fees and Commission subject to the ceiling provided in the Companies Act, 2013. • Vice Chairman and Managing Director / CEO, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the Company. • All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct. Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields. 17. PARTICULARS OF EMPLOYEES The information required under Section 197(12) of the Companies Act, 2013 and the rules made there under, as amended, has been given in the annexure appended hereto and forms part of this report. 19 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE Not applicable 20 MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURED SINCE 31.03.2015 TILL THE DATE OF THIS REPORT: Not applicable 21 DIRECTORS RESPONSIBILITY STATEMENT: The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that - 21.1 In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures; 21.2 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 at the end of the financial year and of the profit or loss of the company for that period; 21.3 The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 21.4 The directors had prepared the annual accounts on a going concern basis. 21.5 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. 21.6 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. 22 ESTABLISHMENT OF VIGIL MECHANISM The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in vogue . The Whistle Blower Policy covering all employees and directors is hosted on the Company's website. 23 ADEQUACY OF INTERNAL FINANCIAL CONTROL Company has a process to continuously monitor the existing controls and identify gaps, if any. It implements new / improved controls wherever the effect of such gaps would have a material effect on the Company's operation. 24 CORPORATE GOVERNANCE REPORT The guidelines evolved by SEBI were applicable to the company. The company is committed to ethical management and excellence in performance. Details are provided in Annexure 3. 25 ANNUAL RETURN An extract of Annual Return as on 31 March 2015 pursuant to Section 92 ( 3) of the Companies Act, 2013 and forming part of the report is attached separately. 26 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS; 1. Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feed back forms for evaluation of the Board, Independent Directors and Chairman. 2. Independent Directors at a meeting without anyone from the non-independent directors and management, considered/evaluated. Their meeting was held on 20 October 2014 the Board's performance, performance of the Chairman and other non-independent Directors. 3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant director) 27 FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS • M M Forgings Limited has put in place a system to familiarise the independent directors about the company, its products, business and the on-going events relating to the company, its products, business and the on-going events relating to the Company. • Independent Directors of the Company are made aware of their role, responsibilities and liabilities at the time of their appointment / re-appointment , through a formal letter of appointment, which also stipulates various terms and conditions of their engagement. • They are also made aware of Company's Board and Board Committee framework, policies and procedures. • As part of Board Discussions, presentations on business of the Company are made to the directors from time to time. • Important announcements and press releases for various news related to the company are forwarded to the directors from the time - to time. • Each member of the Board, including the independent directors, have been given complete access to any information relating to the Company. 28 AUDITORS: The retiring auditors of the Company, G. Ramesh Kumar & Co., Chartered Accountants, Tiruchirapalli being eligible, offer themselves for reappointment. 29 SECRETARIAL AUDIT REPORT Pursuant to the requirements of the Companies Act, 2013, the Company has appointed M/s S. Dhanapal & Associates, Practicing Company Secretaries ( C.P. No. 7028 ) as the Secretarial Auditor for FY 2015 whose report of 18 May 2015 is attached separately to this report. 30 COST AUDITOR Pursuant to the provisions contained in Rule 14 of the Companies (Audit and Auditors) Rules, 2014 Shri. S. Hariharan (C.P. No. 20864) has been appointed as Cost Auditor for the financial year 2015-16. 31 EXPLANATION TO AUDITOR'S REMARKS Not applicable 32 SEEL- Subsidiary Company Srivatsa Electric and Electronic Limited - The final Order for dissolution of the Company has been received from the High Court, Chennai. 33 DEPOSITS: The Company does not have any deposits. Fresh deposits are not being accepted by the Company. 34 ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE: Disclosures as per requirements of Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988 with respect to Energy Conservation, Technology Absorption, Research & Development and Foreign Exchange Earnings / Outgo are given in Annexure 35 DECLARATION GIVEN BY INDEPENDENT DIRECTORS: All the Independent Directors have given the necessary declarations to the Company as required under sub section (6) of Section 149 of the Companies Act, 2013. 36 PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE During the year under review, pursuant to the new legislation, 'Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013' introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There were no cases reported during the year under review under the said Policy. 37 ACKNOWLEDGEMENT: Your Directors would like to express their gratitude for the cooperation and continued assistance received from Citibank N.A., DBS bank, State Bank of India and State Bank of Travancore. Your Directors wish to record their appreciation for the exemplary services rendered by the employees of the company. The results achieved would not have been possible but for their outstanding effort. Above all the Directors thank the shareholders for their continued confidence in the management. For and On behalf of the Board N. SRINIVASAN Chairman Place : Kodaikanal Date : 18-May-2015 |