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Ahimsa Industries Ltd.

BSE: 532594 Sector: Industrials
NSE: AHIMSA ISIN Code: INE136T01014
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Ahimsa Industries Ltd. (AHIMSA) - Director Report

Company director report

To

The Members

AHIMSA INDUSTRIES LIMITED AHMEDABAD

Your Directors have pleasure in presenting their Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 31 2017.

FINANCIAL SUMMARY

Particulars 2016-2017 2015-2016
Total Revenue 597939019.14 608806639.31
Total Expenditure 577174595.05 587424333.48
Profit /(Loss) Before Tax 20764424.09 21382305.83
Less: Current Tax (5940944.00) (6665957.00)
Deferred Tax (1286498.00) 3678183.00
Profit /(Loss) after Taxation 13536982.09 18394531.83
Balance carried to Balance Sheet 13536982.09 18394531.83

FINANCIAL HIGHLIGHTS AND OPERATION

The Key highlights pertaining to the business of the company for the year 2016-17 andperiod subsequent there to have been given hereunder:

• The total revenue of the Company during the financial year 2016-17 was Rs.597939019.14 against the total revenue of Rs.608806639.31in the previous financialyear 2015-16.

• The total expenses of the Company during the financial year 2016-17 was Rs.577174595.05 against the expenses of Rs.587424333.48in the previous financial year2015-16.

• The Profit after tax is Rs.13536982.09 for the financial year 2016-17 ascompare to Rs.18394531.83 in the previous financial year 2015-16.

• The Directors trust that the shareholders will find the performance of thecompany for financial year 2016-17 to be satisfactory. The Earning per Share (EPS) of thecompany is 2.47 per share.

DIVIDEND

With a view to provide a cushion for any financial contingencies in the future and tostrengthen the financial position of the Company your Directors have decided not torecommend any dividend for the period under review.

RESERVES

During the current financial year our Company's net profit was Rs. 13536982.09 asagainst the profit of Rs. 18394531.83 in P.Y. 2015-16 Your Directors have transferredwhole amount of Profit Rs. 13536982.09 to Reserve for strengthen the financial positionof the Company in nearest future.

CHANGE IN THE NATURE OF BUSINESS

For sustained growth in the future Company wants to rely on the main businesses ofcompany; there is no change in the nature of the business of the Company during the year.

CAPITAL STRUCTURE

The Authorized Share Capital of the Company is Rs. 75000000 (Rupees Seven Crore Fiftylacs only) divided into 7500000 (Seventy-Five lacs) equity shares of Rs. 10 each.

The Paid up share capital of the Company is Rs. 54739900 (Rupees Five CroreForty-Seven lacs thirty-Nine thousand Nine hundred only) divided into 5473990(Fifty-Four lacs Seventy- Three Thousand Nine hundred and Ninety) equity shares of Rs. 10each.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

There are no material changes and commitments affecting the financial position of thecompany have occurred between the end of the financial year of the company to which thefinancial statements relate and the date of this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE

No significant and material orders were passed by the regulators or courts or tribunalswhich affect the going concern status and future operation of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

DIRECTOR RITIRED BY ROTATION

Mr. Jignesh A. Shah (DIN: 00006339) Director of the Company retires from office byrotation in accordance with the requirement of the Companies Act 2013 and being eligibleoffers himself for reappointment.

APPOINTMENT OF DIRECTOR

Appointment of Mr. Kiritkumar H. Trivedi as an additional director in the Board meetingheld on 26th May 2016 and regularized him as a Non- Executive Director in theAnnual General Meeting held on 30th June 2016 of the Company.

CHANGES IN KEY MANAGERIAL PERSONNEL

• The Company has taken note of the resignation given by Ms. Gajara J. Joshi(Membership No. A37875) as Company Secretary and Compliance Officer of Company as on 4thApril 2016.

• The Company has appointed Ms. Poonam P. Panchal (Membership No. A44616) asCompany Secretary and Compliance Officer of Company in the meeting of Board of Directorsheld on 26th May 2016.

DISCLOSURE OF REMUNERATION OF EMPLOYEES COVERED UNDER RULE 5(2) & (3) OF THECOMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:

The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 are not applicable to the Company as none of theemployees of the company has received remuneration above the limits specified in the Rule5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel)Rules 2014 during the financial year 2016-17.

The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 is given in the Statement annexed herewith as Annexure I.

MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company met 7 times during the year on 02/04/201626/05/2016 09/08/2016 15/10/2016 28/10/2016 13/01/2017 and 17/02/2017 in respect ofwhich proper notices were given and the proceedings were properly recorded signed andmaintained in the Minutes book kept by the Company for the purpose. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013

Name of Directors Category Meetings held during the tenure of the Directors Meetings Attended Attendance at the last AGM held on 30th June 2016 No. of committee/ membership in which he/she is a member and Chairperson
Mr. Ashutosh D. Gandhi Promoter / Managing Director 7 7 Yes None
Mrs. Sneha A. Gandhi Whole-time Director 7 7 Yes None
Mr. Ashish N.Shah Independent &Non- Executive Director 7 7 No Chairman in two Committee. Member in four Committee
Mr. Bhadresh A. Trivedi Independent &Non- Executive Director 7 7 No Chairman in two Committee. Member in four Committee
Mr. Jignesh A. Shah Non-Executive Director 7 7 Yes Member in three Committee
Mr. Kiritkumar H. Trivedi Non-Executive Director 6 5 Yes None

MEETING OF AUDIT COMMITTEE

The members of Audit Committee met 6 times during the year on 02/04/2016 22/04/201626/05/2016 09/08/2016 28/10/2016 and 17/02/2017 as per provisions of Section 177 of theCompanies Act 2013 and applicable provisions.

Mr. Ashish N. Shah (DIN: 00089075) is chairman of Audit Committee.

Members Category Meetings held during the tenure of the Directors Meetings attended
Mr. Ashish N. Shah Independent & NonExecutive Director 6 6
Mr. Bhadresh A. Trivedi Independent & NonExecutive Director 6 6
Mr. Jignesh A. Shah Non-Executive Director 6 6

MEETING OF NOMINATION AND REMUNERATION COMMITTEE

The members of Nomination and Remuneration Committee met 5 times during the year on02/04/2016 26/05/2016 09/08/2016 28/10/2016 and 17/02/2017 as per provisions of Section178 of the Companies Act 2013 and applicable provisions.

Mr. Ashish N. Shah (DIN: 00089075) is chairman of Nomination and RemunerationCommittee.

Members Category Meetings held during the tenure of the Directors Meetings attended
Mr. Ashish N. Shah Independent & NonExecutive Director 5 5
Mr. Bhadresh A. Trivedi Independent & NonExecutive Director 5 5
Mr. Jignesh A. Shah Non-Executive Director 5 5

MEETING OF STAKEHOLDER RELATIONSHIP COMMITTEE

The members of Stakeholder Relationship Committee met 5 times during the year on02/04/2016 26/05/2016 09/08/2016 15/10/2016 and 13/01/2017 as per provisions of Section178 of the Companies Act 2013 and applicable provisions.

Mr. Bhadresh A. Trivedi (DIN: 07218969) is the Chairman of Stakeholder RelationshipCommittee.

Members Category Meetings held during the tenure of the Directors Meetings attended
Mr. Ashish N. Shah Independent & NonExecutive Director 5 5
Mr. Bhadresh A. Trivedi Independent & NonExecutive Director 5 5
Mr. Jignesh A. Shah Non-Executive Director 5 5

MEETING OF INDEPENDENT DIRECTORS

The independent directors of company met 3 times during the year on 02/04/201609/08/2016 and 13/01/2017 as per Regulation 24 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Mr. Bhadresh A. Trivedi (DIN: 07218969) is the Chairman of Independent DirectorsMeeting.

Members Category Meetings held during the tenure of the Directors Meetings attended
Mr. Ashish N. Shah Independent &Non- Executive Director 3 3
Mr. Bhadresh A. Trivedi Independent &Non- Executive Director 3 3

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and as per the provisions of SEBI(LODR) Regulations 2015 the Board has carried out an annual performance evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Audit Nomination & Remuneration Stakeholder Relationship Committees and takescare of recommendation made by independent directors.

DECLARATION BY INDEPENDENT DIRECTORS:

A declaration by both Independent Directors that they meet the criteria of independenceas provided in sub-section (6) of Section 149 of the Companies Act 2013 is enclosed as AnnexureII and III.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel including criteria for determining qualifications positiveattributes and independence of Directors. More details of the same are given in theCorporate Governance Report.

NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES

At the end of the financial year under review none of the company have become or ceasedto be subsidiaries joint ventures or associate companies.

AUDITORS

1. STATUTORY AUDITOR

M/s Mistry and Shah (Firm Registration No 122702W)Chartered Accountants Gandhinagarhave been appointed as Statutory Auditors of the Company for a period of 5 years at thelast annual general meeting held on 30th June 2016 subject to ratification oftheir appointment by the members at every annual general meeting. As required underRegulation 33(d) of SEBI(LODR) Regulations 2015 the Auditors have confirmed that theyhold a valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.

• AUDITORS' REPORT

The notes on financial statement referred to in the auditor's report are selfexplanatory. There is adverse remark made by the auditors in their report as follows:

The total amount outstanding relating to Tax Deducted at Source (TDS) which areverified through the Traces Portal are attached in the below mentioned table:

Financial Year Default ( Amount in Rs.)l
2015-16 7426.50
2013-14 124.00
Prior Years 62946.00
Total 70496.50

Clarification by Board:

Company has taken up the matter with Income Tax Department to understand the nature ofpending TDS liabilities. Company has also submitted justification report &Consolidation File on Traces Portal. Company understands that there is no pending TDSliability as per its records. However after verifying the reason and response to bereceived from the Income Tax Department Company will discharge the TDS liability if anyarises.

2. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Act and Rules made there under Mr. Nitesh P. ShahPracticing Company Secretary Ahmedabad have been reappointed as a Secretarial Auditor ofthe Company in the meeting of Board of Director held on 28th October 2016. Thereport of the Secretarial Auditor is enclosed as Annexure IV to this report. Thereport is self-explanatory and do not call for any further comments.

3. INTERNAL AUDIT & CONTROLS

The Company in its Board Meeting held on 13th January 2017 appointed M/sAbhijit Wani & Associates (F.R.N. No. 142935W)Chartered Accountant Ahmedabad asInternal Auditor of the Company to fill the Casual Vacancy caused by the resignation ofM/S Pooja C. Shah & Associates (F.R.N. No. 137341W) Chartered Accountant Ahmedabad.

During the year the Company continued to implement his suggestions and recommendationsto improve the control environment. Their scope of work includes review of processes forsafeguarding the assets of the Company review of operational efficiency effectiveness ofsystems and processes and assessing the internal control strengths in all areas. InternalAuditor's findings are discussed with the process owners and suitable corrective actionstaken as per the directions of Audit Committee on an ongoing basis to improve efficiencyin operations.

REPORTING ON SUSTAINABILITY

We are continuously striving to promote better and more effective sustainability policyand practices. In order to ensure transparent communication of our sustainability effortsto all our stakeholders we have made conscious efforts through technology innovation andeffective communication and transparency.

VIGIL MECHANISM

In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished and Chairman of Audit Committee is responsible for issue pertaining to same.

EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report as ANNEXURE V.

INTERNAL CONTROL SYSTEMS

The Company's internal control systems are adequate and commensurate with the natureand size of the Company and it ensures:

• Timely and accurate financial reporting in accordance with applicable accountingstandards.

• Optimum utilization efficient monitoring timely maintenance and safety of itsassets.

• Compliance with applicable laws regulations and management policies.

DEPOSITS

The Company has neither accepted/invited any deposits u/s 73 to 76 of the CompaniesAct 2013 during the period.

PARTICULARS OF LOANS GUARANTEES ADVANCES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

The particulars of Loans guarantees or investments made under Section 186 arefurnished hereunder:

Details of Loans:

SR No Date of making loan Detail of Borro wer Amount Purpose for which the loan is to be utilized by the recipient Time period for which it is given Date of Board Resoluti on Date of Special Resolution (if required) Rate of Interest Expect ed rate of return

NA

Details of Investments:

SR No Date of invest ment Details of Investee Amount Purpose for which the proceeds from investment is proposed to be utilized by the recipient Date of Board Resolution Date of Special Resolution (if required) Expected rate of return
NA

Details of Guarantee / Security Provided:

SR

No

Date of providing security/ guarantee Details of recipient Amount Purpose for which the security/ guarantee is proposed to be utilized by the recipient Date of Board Resolution Date of Special Resolution

(if

required)

Comm

ission

NA

PARTICULARS OF MATERIAL CONTRACTS OR ARRANGEMENTS MADE WITH THE RELATED PARTIES

The company has not entered into any material contract or arrangements with relatedparties referred to in sub-section (1) of section 188 of the Companies Act 2013.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013

There was no case filled during the year under the sexual harassment of women atworkplace (Prevention Prohibition &Redresser) Act 2013. Further Company ensures thatthere is a healthy and safe atmosphere for every women employee at the workplace and madethe necessary policies for safe and secure environment for women employee.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 134 read with the Companies(Accounts) Rules 2014 regarding conservation of energy and technology absorption arefurnished hereunder in Annexure VI

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company is pleased to report that during the year under reporting the industrialrelations were cordial.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3)(c) and (5) of the Companies Act 2013it is hereby confirmed:

• that in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;

• that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and the profit or loss of the Company for the period ended 31.03.2017.

• that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

• that the Directors had prepared the annual accounts on a going concern basis.

• that the directors had laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively.

• that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

CORPORATE GOVERNANCE

Details regarding Corporate Governance Report of the Company regarding compliance ofthe conditions of Corporate Governance pursuant to SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 with stock exchanges are annexed herewith as AnnexureVII

ACKNOWLEDGEMENT

Your Directors take this opportunity to place on record the appreciation of thevaluable contribution and dedication shown by the employees of the Company RTA Auditorsand Practicing Company Secretary which have contributed to the successful management ofthe Company's affairs.

The Directors also take this opportunity to thank all the stakeholders InvestorsClients Banks Government Regulatory Authorities and Stock Exchange for their continuedsupport.

By Order of the Board of Directors
AHIMSA INDUSTRIES LIMITED
Ashutosh Damubhai Gandhi
Place: Ahmedabad Managing Director
Date: 17th June 2017 DIN:00654563
Sneha Ashutosh Gandhi
Place: Ahmedabad Whole time Director
Date: 17th June 2017 DIN:00654675

ANNEXURE I

PARTICULARS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5 OFTHE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

i. The ratio of the remuneration of each director to the median employee's remunerationfor the financial year and such other details as prescribed is as given below:

Sr. No. Name Ratio
1 Mr. Ashutosh D. Gandhi (Managing Director) 11.79 : 1
2 Mrs. Sneha A. Gandhi ( Whole time Director) 7.86 : 1

ii. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

Sr. No. Name Designation % increase
1 Mr. Ashutosh D. Gandhi Managing Director 9.23 %
2 Mrs. Sneha A. Gandhi Whole time Director 9.23 %
3 Mr. Shrenik M. Khatwala Chief Financial Officer 7.11 %
4 Mr. Sanjay B. Agrawal Chief Executive Officer 25.53 %
5 Ms. Poonam P. Panchal Company Secretary -

iii. The percentage increase in the median remuneration of employees in the financialyear : 8.99%

iv. The number of permanent employees on the rolls of company: 38

v. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and any exceptionalcircumstances for increase in the managerial remuneration:

The average percentage increase already made in the salary of the employees other thanmanagerial personnel in the financial year i.e. 2016-17 is 10.95% whereas Remuneration ofmanagerial Personnel is 23.02%

vi. If remuneration is as per the remuneration policy of the company: Yes

By Order of the Board of Directors
AHIMSA INDUSTRIES LIMITED
Ashutosh Damubhai Gandhi
Place: Ahmedabad Managing Director
Date: 17th June 2017 (DIN: 00654563)

ANNEXURE VI

1. CONVERSATION OF ENERGY:

• Energy conservation has been an important thrust area for the Company and iscontinuously monitored. The adoption of energy conservation measures has helped theCompany in reduction of cost and reduced machine down-time.

• Energy conservation is an ongoing process and new areas are continuouslyidentified and suitable investments are made wherever necessary.

• Various on-going measures for conservation of energy include (i) use of energyefficient lighting and better use of natural lighting (ii) reduction of energy loss and(iii) replacement of outdated energy intensive equipment.

2. THE STEPS TAKEN BY THE COMPANY FOR UTILISING ALTERNATIVE SOURCES OF ENERGY

• Ahimsa Industries Limited installed Solar Roof Top Project in November 2016 atthe roof of its manufacturing facilities with capacity to generate power of 142 KW at atotal cost of Rs. 90 lacs.

• As per the feasibility study conducted by technical consultants Solar Roof TopProject is expected to generate power worth Rs. 1 lacs to Rs. 15 lacs per month.

• Power generated by the above mentioned Solar Roof Top modules is summarized asunder

Month KWH
January 2017 44000 KWH
February 2017 55000 KWH
March 2017 74000 KWH

3. POWER CONSUMPTION IN RESPECT OF:

• Total energy consumption and energy consumption per unit of production is givenin the table below:

Particular Unit 2016-17 2015-16
Total Unit KWH 2221281 2157703
Total Amount Rs. 13245150 15296150
Rate per Unit 5.96 7.09

4. TECHNPLOGY ABSORPTION:

• The efforts made towards technology absorption: NA

• The benefits derived from technology absorption: NA

• The Company has not imported any technology for its products.

• The Company has not specific Research and Development Department. However theCompany carries out research and development in several areas including material &process developments towards efficiency improvements quality improvements wastereduction etc. Apart from process improvements the research and development also aims atfinding equivalent substitutes of various inputs and packaging materials to have costsavings without compromising quality.

• The Company has derived benefits of product diversification cost reduction andbetter quality as a result of the above efforts.

• The research and development is an on-going exercise and suitable efforts willcontinue to be made in future.

5. FOREIGN EXCHANGE EARNING AND OUTGO:

• The information required to be given in respect of foreign exchanges Earning andoutgo for the F.Y. 2016-17 are as follows:

i. Foreign Exchange Earnings during F.Y. 2016-17:

Particulars Amount ( In Rs.)
CIF Value of Exports 26272958.32
FOB Value of Exports 6108970.00
Total 32381928.32

ii. Foreign Exchange Outgo during F.Y. 2016-17:

Particulars Amount ( In Rs.)
Advertisement Expenses 134024.00
Travelling Expenses 119928.00
Total 253952.00