Your Directors have pleasure in presenting their Twenty-sixth Annual Report togetherwith the audited Statements of Accounts for the year ended 31st March 2016.
(Rs. in Million)
| || |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Gross Sales ||7782.97 ||7250.51 ||8446.65 ||7996.33 |
|Net Sales/Income from Operations ||6825.42 ||6389.78 ||7489.10 ||7135.61 |
|Profit before Depreciation Interest & Tax ||767.44 ||714.11 ||809.54 ||748.83 |
|Other Income ||31.55 ||18.11 ||31.55 ||19.70 |
|Less: Depreciation & Prior Period adjustments ||235.91 ||228.25 ||266.56 ||261.40 |
|Less: Finance Costs ||216.31 ||188.64 ||223.46 ||197.34 |
|Profit before Tax ||315.22 ||297.22 ||319.52 ||290.09 |
|Provision for Tax ||96.50 ||89.96 ||97.47 ||91.69 |
|Profit after Tax ||218.72 ||207.26 ||222.05 ||198.40 |
Your Directors are glad to recommend a higher dividend of 75% (' 3.75 per share of '5/- each) as against 60% (' 3/- per share of ' 5/- each) paid in the previous year. Thetotal payout on account of dividend including dividend distribution tax plus applicablesurcharge education cess and/or any other cess will be ' 55.32 million.
On standalone basis the Company recorded the total income of ' 6825.42 millionincluding other operating income as against ' 6389.78 million in the previous year anincrease of 6.82%. Pre-tax profit was also correspondingly higher by 6.06% compared to thelast year. The Company earned a pre-tax profit of ' 315.22 million as against ' 297.22million during the year 2014-15.
On consolidated basis the Company recorded the total income of ' 7489.10 million asagainst ' 7135.61 million in the previous year an increase of 4.95%. However the pre-taxprofit is higher by 10.15% i.e. ' 319.52 million as against ' 290.09 million during thefinancial year 2014-15.
The total exports of the Company amounted to ' 328.88 million as against ' 260.19million in the previous year. This represents 4.81% of the total net sales.
TRANSFER TO GENERAL RESERVE
The Company has not transferred any amount to the general reserve during the currentfinancial year.
Under the scheme of arrangement as approved by the Hon'ble Bombay High Court the Boardof Directors in its meeting held on 18.12.2015 allotted 1256222 Equity Shares of ' 5/-each to the shareholders of Atlas Castalloy Limited on transfer of its castingmanufacturing business to the Company. Consequent upon this allotment the paid-up capitalof the Company increased to ' 61281110/-.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge confirm that -
a) in the preparation of the accounts the applicable accounting standards have beenfollowed along with proper explanations relating to material departure;
b) appropriate accounting policies have been selected and applied consistently and havemade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
CRISIL has reaffirmed the Company's long-term rating of A-/Stable and short-term ratingof A2+.
CRISIL believes that the Alicon group will maintain its established market position inthe domestic cast-aluminium automobile components sector and will gradually improve itsfinancial risk profile supported by steady cash accruals and moderate capital expenditure(capex) plans over the medium term.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis is provided as a separatesection in the Annual Report which forms part of the Directors' Report.
LOANS GUARANTEES AND INVESTMENTS
The full particulars of loans guarantees and investments have been disclosed in thefinancial statements.
RELATED PARTY TRANSACTIONS
All the related party transactions entered into during the financial year 2015-16 wereon an arm's-length basis and also in ordinary course of business. Details of all relatedparty transactions are placed before the Audit Committee. The policy on Related PartyTransactions as approved by the Board of Directors is placed on the Company's website.
Since all the transactions with related parties entered into by the Company were inordinary course of business and were on an arm's-length basis Form AOC-2 is notapplicable to the Company.
Your Company has three foreign subsidiaries viz. Alicon Holding GmbH IllichmannCastalloy S.R.O. and Illichmann Castalloy GmbH. Alicon Holding GmbH is the 100% subsidiaryof your Company who in turn is holding 100% capital of Illichmann Castalloy S.R.O.Illichmann Castalloy GmbH is the 100% subsidiary of Illichmann Castalloy S.R.O.
A separate section on the performance and financial position of each of thesubsidiaries in Form AOC-1 is annexed as Annexure I and forms part of this report.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial accounts are prepared on the basis of financial statements ofthe subsidiary companies in accordance with the Accounting Standards 2123 and 27 issuedby the Institute of Chartered Accountants of India. The said consolidated accounts formspart of this report and accounts.
Pursuant to the provisions of Section 136 of the Companies Act 2013 the Company hasplaced separate audited accounts of its subsidiaries on its website www.alicongroup.co.in. The Company will makeavailable the audited annual accounts and related information of its subsidiaries uponrequest by any of its shareholders.
MATERIAL CHANGES AND COMMITMENT
There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of this report.
Your Company has not accepted any deposit from the public its shareholders oremployees during the financial year under review.
CONSERVATION OF ENERGY ETC.
Information pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo as required under the provisions of Section 134 (3) (m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexedherewith as an Annexure II and forms part of this report.
The management continuously accesses the risk involved in the business and all outefforts are made to mitigate the risk with appropriate action. All the assets of theCompany are adequately covered by comprehensive insurance.
A detailed note on risk management is given under the Management Discussion andAnalysis of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company's philosophy rests on dovetails the community need with the organisationalinvolvement adding value in all initiatives with the community.
Brief outline on the Corporate Social Responsibility (CSR) Policy of the Company andthe initiative undertaken by the Company on CSR activities during the year are set out inthe format prescribed in the Companies (Corporate Social Responsibility Policy) Rules2014 and is annexed as Annexure III to this report. The said CSR Policy is hosted on theCompany's website.
In line with the requirement of the Companies Act 2013 as also SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors hasconstituted committees. Details of these committees along with their terms of referencecomposition and meetings held during the year are provided in the Corporate GovernanceReport.
A separate report on Corporate Governance is annexed which forms part of this report.A certificate of CEO and CFO of the Company confirming the correctness of the financialand cash flow statements adequacy of the internal control measures and reporting ofmatters to the Audit Committee is also annexed and forms part of this Directors' Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Majakatsu Uchiyama Alternate Director to Mr. J. Suzuki resigned on 26th February2016 due to ill health. The Board of Directors places on record their deep sense ofappreciation for the valued guidance provided by Mr. Uchiyama during his association withthe Company as Alternate Director.
Mr. Junuchi Suzuki shall retire by rotation at the forthcoming Annual General Meetingand being eligible has offered himself for re-appointment.
Information and brief profile of Mr. Junuchi Suzuki who is seeking re-appointment isprovided in the annexure to the notice convening the 26th AGM.
During the year under review none of the non-executive directors had any pecuniaryrelationship or transactions with the Company.
Pursuant to the provisions of Section 203 of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 Mr. S. Rai is the ManagingDirector Mr. R. Sikand is Chief Executive Officer Mr. Vimal Gupta is the Chief FinanceOfficer and Mr. PS. Rao is the Company Secretary.
DECLARATION OF INDEPENDENCE
All the independent directors have submitted declarations as required pursuant toSection 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as stipulated in Section 149(6) of the Act.
NOMINATION & REMUNERATION POLICY
The Nomination and Remuneration Policy recommended by the Nomination & RemunerationCommittee is duly approved and adopted by the Board of Directors. The said policy isannexed to the report as Annexure IV.
NUMBER OF MEETINGS OF THE BOARD
Six meetings of the Board of Directors and one meeting of Independent Directors wereheld during the year under review. Corporate Governance Report which forms part of thisreport contains the details about the Board meetings as also meeting attended by eachDirector of the Company.
Pursuant to the provisions of the Act erstwhile Clause 49 of the Listing Agreement andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors had done the annual evaluation of its own performance its committees andindividual directors. The Nomination and Remuneration Committee reviewed the performanceof the individual directors on the basis of criteria such as the contribution of theindividual director to the Board and committee meetings.
In a separate meeting of independent directors performance of nonindependentdirectors performance of the Board as a whole was evaluated taking into account theviews of executive directors and nonexecutive directors.
Policy on appointment of directors and remuneration as provided in Section 178(3) ofthe Companies Act 2013 has been dealt with in the corporate governance report whichforms part of the Directors' Report.
The Company has in place an Audit Committee in terms of the requirements of theCompanies Act 2013 read with the rules made thereunder and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
The details pertaining to the audit committee are included in the Corporate GovernanceReport which forms part of this report.
INTERNAL CONTROL SYSTEM
Adequate internal control systems are in place to maintain quality of product properaccounting as per norms and standards prescribed asset maintenance and its proper use.The Company has an independent internal auditor who periodically undertakes the auditunder the direction of the Audit Committee and submit his reports to the Audit Committee.
The relations between the management and employees remained cordial throughout theyear.
The particulars of employees require under Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as Annexure V and formspart of this report.
Information required under Section 197(12) of the Companies Act 2013 read with Rule5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and forming part of this report is given in a separate annexure. The saidannexure is not being sent along with this report to the members of the Company in linewith the provisions of Section 136 of the Companies Act 2013. Members who are interestedin obtaining these particulars may write to the Company. The aforesaid annexure is alsoavailable for inspection by the members at the registered office of the Company 21 daysbefore the 26th Annual General Meeting and upto the date of the said AGM during normalbusiness hours on working days.
The Company has not issued any ESOP to its employees.
According to Directors there is no adverse remarks made by Statutory Auditors in theirreport. Notes to the accounts are self-explanatory to comments/observation made by theauditors in their report. Hence no separate explanation is given.
Asit Mehta & Associates Chartered Accountants Statutory Auditors of your Companyshall retire at the forthcoming Annual General Meeting. However they are eligible forreappointment. Pursuant to Section 139 (2) of the Companies Act 2013 Audit Committee andthe Board of Directors of the Company have recommended their appointment for a period ofone year i.e. from the conclusion of the 26th Annual General Meeting till the conclusionof the 27th AGM. M/s. Asit Mehta & Associates have confirmed that their appointmentif made will be within the eligibility criteria prescribed under Section 141 (3) of theCompanies Act 2013.
Members are requested to appoint the Auditors and fix their remuneration.
SECRETARIAL AUDIT REPORT
During the year Secretarial Audit was carried out by Mr. Upendra C. Shukla PractisingCompany Secretary for the financial year 2015-16. The report on the Secretarial Audit isappended as Annexure VI to this report. According to the Board of Directors the reportdoes not have any adverse remark.
EXTRACT OF ANNUAL RETURN
An extract of Annual Return in Form MGT-9 in pursuance to the provisions of Section92(3) of the Companies Act 2013 is annexed to this report as Annexure VII and forms partof this report.
RECEIPT OF REMUNERATION BY MANAGING DIRECTOR FROM SUBSIDIARY COMPANY
Mr. S. Rai Managing Director of the Company has not received any remuneration fromany of its subsidiary companies.
The Company has a vigil mechanism policy to deal with instances of fraud andmismanagement. The whistleblower policy adopted by the Board of Directors is hosted on thewebsite of the Company.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT 2013
In compliance to the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 your Company has a duly constituted internal complaintcommittee. The Committee has formulated policy to ensure protection to its femaleemployees.
REPORTING OF FRAUD
The Auditors of the Company have not reported any fraud as specified under the secondproviso of Section 143(12) of the Companies Act 2013.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
During the year under review there were no material and significant orders passed byany of the regulators or courts or tribunals impacting the going concern status and theCompany's operations.
Your Directors wish to thank Enkei Corporation Japan our technical collaborator fortheir valued support and guidance for development of new parts. Your Directors also takethis opportunity to thank all the customers vendors bankers and other businessassociates for their continued support. Your Directors also thank all the employees fortheir commitment hard work and contribution to the Company's excellent performance. YourDirectors are thankful to all the shareholders of the Company for their unstinted supportand confidence reposed in the management of the Company.
On behalf of the Board of Directors
|(S. Rai) ||(A.D. Harolikar) |
|Managing Director ||Director |
|Place: Shikrapur Pune || |
|Date: August 2 2016 || |