The Directors take pleasure in presenting the Sixty Third Annual Report of the Companyand the Audited Statements of Accounts for the financial year ended 31st March2016.
1.0 FINANCIAL PERFORMANCE
| || || || ||(Rs. in lacs) |
|Key Financial Indicators ||For the year ended 31st March 2016 ||For the year ended 31st March 2015 ||For the year ended 31st March 2016 ||For the year ended 31st March 2015 |
| ||Standalone ||Consolidated |
|1.1 Sales & Other Income (Net of Excise Duty Discounts & Incentives) ||41239 ||39225 ||41362 ||39617 |
|1.2 Profit before Interest Depreciation Tax & Exceptional Items ||4630 ||3297 ||4620 ||3256 |
|1.3 Profit before Tax & Exceptional Items ||3378 ||2016 ||3354 ||1963 |
|1.4 Exceptional Items ||(195) ||2811 ||(195) ||2817 |
|1.5 Provision for Tax (including Deferred Tax) ||918 ||1590 ||920 ||1594 |
|1.6 Profit After Tax (PAT) & Exceptional Items ||2265 ||3237 ||2239 ||3186 |
2.0 DIVIDEND AND RESERVES
2.1 The Board of Directors is pleased to recommend a Dividend of 50% (i.e. @ Rs.5/- per Equity Share) for the Financial Year (FY) 2015-16 subject to the approval of theMembers. Dividend for the previous FY 2014-15 was declared @ 50% (i.e. @ Rs. 5/-per Equity Share)*.
2.2 The Dividend for FY 2015-16 shall be paid to those Shareholders and BeneficialOwners whose names appear in the Register of Members as on the date of the Book Closurefor dividend payment.
2.3 The Board recommends transfer of Rs. 227 Lacs (Rs. 324 Lacs)* to General Reserveand the balance of Rs. 6491 Lacs (Rs. 5271 Lacs)* for retention in the Profit& Loss Account.
(*Figures in brackets indicate previous year).
In FY 2015-16 the total Sales and Other Income went up by 5.13%. The year ended withSales and Other Income of Rs. 41239 Lacs (Rs. 39225 Lacs)*.
The Companys Sales and Other Income during FY 2015-16 comprised of the following:3.1 Welding Consumables at Rs. 27470 Lacs (Rs. 27354 Lacs)* recorded a marginal growthof 1% over the previous year.
3.2 Equipment & Project Engineering at Rs.13213 Lacs (Rs. 11306 Lacs)* was higherby around 17% over the previous year due to better performance of Project Engineeringdivision.
3.3 Other Income of Rs. 556 Lacs mainly comprised of forex gain interest rent incomeand profit on sale of investment etc. (Rs. 565 Lacs)*.
(*Figures in brackets indicate previous year).
The Company incurred CAPEX of Rs. 1527 Lacs and CAPEX of Rs. 136 Lacs was in variousstages of progress as of 31st March 2016. The balance CAPEX programme of FY2015-16 shall be completed by end of June 2016. For FY 2016-17 CAPEX is budgetedat Rs.1646 Lacs mainly for the following
(a) Automation at Consumables and Equipment Plants.
(b) Production Equipments to balance lines for achieving capacity levels.
(c) Production related Equipment to improve in-process quality and deviationcontrol.
(d) Analytical Instruments for R&D.
(e) IT Compliances.
5.0 SUBSIDIARY COMPANIES
5.1 Ador Welding Academy Pvt. Ltd. (AWAPL)
AWAPL a Wholly Owned Subsidiary of the Company focuses on creating a pool of skilledwelding technicians to serve a cross-section of industries in the infrastructure sectorand also renders consulting to corporates on setting up / improving their weldingprocesses. AWAPL registered a total revenue of Rs. 158 Lacs (Rs. 131 Lacs)* with a netloss (before exceptional and extraordinary items and tax) of Rs. 24 Lacs (Rs. 53 Lacs)*.
(*Figures in brackets indicate previous year).
5.2 Plasma Laser Technologies Ltd. (PLT)
During FY 2013-14 the Company had recognised diminution in the value of its investmentin PLT and had fully provided for the same in the financial accounts. In FY2014-15 a Petition for liquidation of PLT was filed by the employees of PLT with theDistrict Court sitting in Nazareth Israel. In view of this & orders of District Courtof Nazareth the authority to operate & manage PLT vests with the Court. The dueprocess of law for liquidation is in progress. Your Company does not foresee any furtherliability to devolve on it.
6.0 CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated financial statements relate to Ador Welding Ltd. and its wholly ownedsubsidiary Ador Welding Academy Private Ltd. These consolidated financial statements areprepared in compliance with all the applicable Accounting Standards. The standalonefinancial statements of AWAPL are posted onto the website of the Company at the belowweblink: http://www.adorwelding.com/images/pdf/key_financials/2016/financial-ftatementsf-for-fy-2015-16.pdf and hence the same are notannexed with this 63rd Annual Report.
The Annual Accounts and other related information of the said Subsidiary Company willalso be made available to the shareholders of the Holding Company.
The Annual Accounts of the Subsidiary Company are available for inspection by theshareholders at the registered office of the Company and your Company shall furnish aphysical copy of the detailed accounts of subsidiary to any shareholder of AWL onrequest.
7.0 RISK MANAGEMENT
Your Company has formulated an Enterprise Risk Management (ERM) framework to managevarious financial & non-financial risks amongst other things.
The Company has also adopted the ERM Policy which helps to continuously assess &monitor the risks assumed by the Company. The processes are in place for identifyingevaluating and managing the risks. Based on the ERM Policy the Board further states thatthere are no elements of risks which threaten the existence of the Company.
8.0 RELATED PARTY TRANSACTIONS
The Policy on Related Party Transactions is approved by the Board of Directors and thesame is uploaded on the Companys website: http://www.adorwelding.com/images/pdf/corporate_policies/RPT_policy.pdf
During FY 2015-16 the Company entered into certain Related Party Transactions in theordinary course of business and on arms length basis with the prior approval of the AuditCommittee. The Audit Committee grants omnibus approval alongwith the Annual Budget for thetransactions with the related parties which are foreseen & repetitive in nature. Adetailed summary of Related Party Transactions vis--vis the omnibus approval is placedbefore the Audit Committee & the Board of Directors for their review on a quarterlybasis.
There are no materially significant Related Party Transactions executed between theCompany & its Promoters Directors Key Managerial Personnel or other designatedpersons that may have a potential conflict with the interest of the Company at large.None of the Directors have any pecuniary relationships or transactions vis--visthe Company.
9.0 EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) and 134(3)(a) of the Companies Act 2013 read with Rule12(1) of the Companies (Management and Administration) Rules 2014 the extract of AnnualReturn is appended hereto as Annexure - I and forms part of this Report.
10.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)
As part of our CSR initiatives the Company spent Rs. 18.20 Lacs during FY 2015-16 outof the budgeted CSR expenditure of Rs. 46.64 Lacs on various projects in the followingareas:
Promoting education among children women and underprivileged including specialeducation & employment enhancing vocation skills especially skill development.
Promoting sanitation hygiene and making available safe drinking water or means for thesame to the underprivileged.
The above projects are in accordance with Schedule VII to the Companies Act 2013. Theunspent amount of Rs.28.44 Lacs was budgeted towards the following projects which wereunder consideration as of 31st March 2016:
1. Setting up vocational training facilities / centres in Pimpri Chakan & Murud.
2. River clean up project in Pune.
The Annual Report on CSR activities is annexed hereto as Annexure II.
The composition of the CSR Committee is covered under the Corporate Governance Reportwhich is annexed to this Report as Annexure IV.
11.0 LOANS & GUARANTEES
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
12.0 FIXED DEPOSITS
The Company has neither accepted nor renewed Fixed Deposits during FY 2015-16 and FY2014-15.
The properties / assets of the Company are adequately insured.
14.0 ENERGY CONSERVATION TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
The information required under Section 134(3)(m) of the Companies Act 2013read with the Companies (Accounts) Rules 2014 with respect to conservation of energytechnology absorption & foreign exchange earnings / outgo is appended hereto asAnnexure - III.
15.0 CORPORATE GOVERNANCE
As per the Listing Agreements executed with the Stock Exchanges the Company has beenfollowing the Corporate Governance Code from FY 200102 onwards. The Company hascomplied with all the requirements of the Corporate Governance as per the provisions ofClause 49 of the Listing Agreement executed with the Stock Exchanges for the period 01stApril 2015 to 30th November 2015 and of the Regulation 27(2) of the SEBI(Listing Obligations and Disclosure Requirements)
Regulations 2015 for the period 01st December 2015 to 31stMarch 2016 and a separate Report is attached hereto as Annexure - IV.
The Corporate Governance Compliance Certificate received from M/s. Walker Chandiok& Co. LLP Chartered Accountants Statutory Auditors of the Company is also attachedto this Report.
The Management Discussion and Analysis Report as mandated under the Code of CorporateGovernance is also attached to this Report as Annexure - V.
16.0 SIGNIFICANT AND MATERIAL ORDERS
During FY 2015-16 there were no significant orders passed against the Company by theregulators or courts or tribunals impacting the going concern status and theCompanys operations in future.
17.0 NOMINATION & REMUNERATION POLICIES
As required under the provisions of Section 178(3) of the Companies Act 2013 theCompany has adopted the policies for Directors appointment and remunerationincluding criteria for determining qualifications positive attributes independence ofDirector etc. The details of the Remuneration Policy for Directors are explained in theCorporate Governance Report attached hereto as Annexure - IV.
18.0 INDEPENDENT DIRECTORS
All the Independent Directors of the Company have submitted declaration of theirindependence as required under Section 149 (6) of the Companies Act 2013.
19.0 DIRECTORS AND KEY MANAGERIAL PERSONNEL
19.1 Mr. Aditya T. Malkani (DIN: 01585637) and Mr. Deep A. Lalvani (DIN: 01771000)Directors of the Company retire by rotation as per the Articles of Association of theCompany and are eligible for re-appointment.
The Board of Directors pursuant to Section 152 of the Companies Act 2013 & Rule 8of the Companies (Appointment and Qualification of Directors) Rules 2014 has receivedForm MBP-1 and Consent to act as a Director in Form DIR-2 from M/s. Aditya T. Malkani& Deep A. Lalvani.
19.2 Necessary Resolutions for the re-appointment of the aforesaid Directorshave been included in the Notice convening the ensuing AGM and details of the proposedappointees are mentioned in the Appendix to the Explanatory Statement to the Notice. 19.3The Board of Directors of the Company at its Meeting held on 07th May 2015 re-designatedMrs. N. Malkani Nagpal (DIN: 00031985) as the Whole-time Director for a period of 3 yearsand the same was approved by the Members at the 62nd Annual General Meeting.19.4 During FY 2015-16 Mr. Sanjay Hede CFO tendered his resignation and was relievedfrom the services of the Company on & w.e.f. 29th May 2015.
The Board of Directors appointed Mr. Girish A. Patkar as the CFO of the Company w.e.f.29th October 2015.
20.0 DIRECTORS PERFORMANCE EVALUATION
The Company has conducted a formal annual performance evaluation by the Board of itsown performance & that of its committees and individual Directors including theExecutive Chairman & the Independent Directors. The detailed manner of evaluation hasbeen explained in the Corporate Governance Report in Annexure IV.
21.0 DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) & 134(5) of the Companies Act 2013 the Board ofDirectors of the Company hereby confirm that:
a) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed alongwith proper explanation relating to material departures if any;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true& fair view of the state of affairs of the Company at the end of the financial yearand of the profit of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing & detecting fraud and other irregularities;
d) the Directors have prepared the Annual Accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate & were operatingeffectively and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all the applicable laws and that such systems were adequate & operatingeffectively.
22.0 AUDIT COMMITTEE AND ITS RECOMMENDATIONS
The composition of the Audit Committee is covered under the Corporate GovernanceReport which is annexed to this Report as Annexure - IV.
The Board has accepted all the recommendations of the Audit Committee and hence thereis no further explanation to be provided for in this Report.
23.0 NUMBER OF BOARD MEETINGS
The Company has conducted 4 (four) Board meetings during FY 2015-16 and the detailsthereof are covered under the Corporate Governance Report which is annexed to this Reportas Annexure - IV.
24.0 STATUTORY AUDITORS
At the last Annual General Meeting held on 30th July 2015 M/s.Walker Chandiok & Co. LLP Chartered Accountants (FRN: 001076N/ N500013) wereappointed as statutory auditors of the Company to hold office till the conclusion of theAnnual General Meeting to be held in the calendar year 2019. In terms of the firstproviso to Section 139 of the Companies Act 2013 the appointment of the auditors shallbe placed for ratification at every subsequent Annual General Meeting since their firstappointment. Accordingly the appointment of M/s. Walker Chandiok & Co. LLP CharteredAccountants as the Statutory Auditors of the Company is placed for ratification by theshareholders. In this regard the Company has received a certificate from the Auditors tothe effect that if they are re-appointed it would be in accordance with the provisions ofSection 141 of the Companies Act 2013.
25.0 STATUTORY AUDITORS REPORT
There are no qualifications in the Auditors Report & therefore there are nofurther explanations to be provided for in this Report.
26.0 SECRETARIAL AUDITOR & ITS REPORT
The Board of Directors had appointed M/s. N. L. Bhatia & Associates (UniqueIdentification Number: S1996MH016600) a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company for FY 2015-16. The Secretarial AuditReport is annexed herewith as Annexure - VI. There are no qualifications in the saidReport and therefore there are no further explanations to be provided for in this Report.
27.0 COST AUDITOR
Pursuant to the provisions of Section 148 of the Companies Act 2013 the Board ofDirectors had appointed Mr. Vishvesh Desai Cost Accountant Pune as the Cost Auditor ofthe Company for FY 2015-16.
The brief information of the Cost Auditor and the Cost Audit Report is as under:
27.1 Name of the Cost Auditor: CMA Vishvesh Desai 27.2 Address: 10 Prabhakarsmruti CHSLtd. 4th Lane Dahanukar Colony Kothrud Pune 411 029Maharashtra India. 27.3 Membership No.: F-7330 27.4 Firm Regn. No. : 102151 27.5 Due datefor filing Cost Audit Report (XBRL) for FY 2014-15 by the Cost Auditor with the CentralGovernment: Within 180 days from the end of the financial year. 27.6 Actual Date of filingof Cost Audit Report for FY 2014-15 with the Central Government: 16thSeptember 2015 The Company has appointed M/s. Kishore Bhatia & Associates CostAccountants Mumbai (Firm Registration No. 00294) as the Cost Auditors for FY 2016-17. Asrequired under the Companies Act 2013 the remuneration payable to the Cost Auditor forFY 2016-17 is placed before the Members at the ensuing Annual General Meeting forratification. Accordingly a Resolution seeking Members ratification for theremuneration payable to M/s. Kishore Bhatia & Associates Cost Auditors is included atItem No. 6 of the Notice convening the Annual General Meeting.
28.0 VIGIL MECHANISM & WHISTLE BLOWER POLICY
The Company has framed a policy on Vigil Mechanism-cum-Whistle Blower which enablesany Director / employee of the Company to report their genuine concerns / instances of anyunethical / improper activity directly to the Chairman of the Audit Committee as aProtected Disclosure. The detailed policy is also posted on the Companys intranetPortal SANVAD and onto its website http://www. adorwelding.com/images/pdf/corporate_policies/whistle_Blower_cum_Vigil_Mechanism_ Policy.pdf
29.0 PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has adopted a policy under The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. During FY 2015-16 the Companyreconstituted the Committee as required under the Act & Rules made thereunder and hascarried out awareness programs. No complaints were received by the Committee during FY2015-16.
30.1 The industrial relations at all the Plants and Offices of the Company continue toremain harmonious cordial and peaceful.
30.2 The information required pursuant to Section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of the employees of the Company is annexed herewith as Annexure- VII.
30.3 The manpower strength of the Company as at the date of this Report is 616.
Your Directors take this opportunity to place onrecordtheirwarmappreciationfortheinvaluable contribution and spirit of dedication shown bythe employees at all levels during FY 2015-16. The Directors also express their deepgratitude for the business assistance co-operation and support extended to your Companyby its Customers Distributors Dealers Suppliers Service Providers Bankers variousGovernment Organisations / Agencies & Shareholders and look forward to their continuedsupport and co-operation in future also.
| ||For and on behalf of the Board |
| ||Aruna B. Advani |
|Place: Mumbai ||Executive Chairman |
|Date:10th May 2016 ||(DIN: 00029256) |