Your Directors are pleased to present their Twenty seventh Annual Report together withthe audited Statements of Accounts for the year ended 31st March 2017.
(Rs. in Millions)
| ||Standalone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Gross Sales ||8061.85 ||7782.97 ||8666.37 ||8446.64 |
|Net Sales/Income from Operations ||7123.31 ||6825.43 ||7727.83 ||7489.10 |
|Profit before Depreciation Interest & Tax ||861.55 ||767.44 ||905.83 ||809.55 |
|Other Income ||36.79 ||31.55 ||37.45 ||31.56 |
|Less: Depreciation & amortization expenses ||250.01 ||235.91 ||272.98 ||266.55 |
|Less: Finance Costs ||258.90 ||216.31 ||265.29 ||223.48 |
|Profit before Tax ||352.66 ||315.22 ||367.65 ||319.52 |
|Provision for Tax ||104.72 ||96.50 ||105.92 ||97.44 |
|Profit after Tax ||247.94 ||218.72 ||261.73 ||222.08 |
Based on the Company's performance your Directors are pleased to recommend a higherdividend of 85% (Rs. 4.25 per share of Rs. 5/- each) as against 75% (Rs. 3.75 per share ofRs. 5/- each) paid in the previous year. The dividend on equity shares if approvedby the shareholders would involve a cash outflow ofRs. 62.69 million including dividendtaxes. Dividend will be free of tax in the hands of the shareholders.
On standalone basis turnover increased by 4.36% whereas pre-tax profit improved byabout 12%. The Company recorded the net sales of Rs. 7123.31 million including otheroperating income as against Rs. 6825.43 million in the previous year. The Company earned apre-tax profit Rs. 352.66 million as against Rs. 315.22 million a year ago.
On consolidated basis though the turnover for the year under review improvedmarginally the pre-tax profit was higher by 15% compared to previous financial year. Thenet sales including other operating income for the year under review was Rs. 7727.83million as against Rs. 7489.10 million in the previous year and pre-tax profit was Rs.367.65 million as against 319.52 million a year ago.
During the year the Company continued to explore domestic as well as export markets. Adetailed discussion on operations for the year ended 31st March 2017 is given in theManagement Discussion and Analysis Section.
The Company has not transferred any amount to the general reserve during the currentfinancial year.
EXPORTS of The total exports (from India) of the Company amounted to Rs. 526.72million as against Rs. 328.89 million in the previous year. This represents 7.39 %of the total net sales. Exports in the current year would be higher since effortsof the management of your Company are expected largely to fructify in the current year.
During the year under review and to-date your Company has not issued any shares withdifferential rights. Hence no information as required under Section 43(a)(ii) of theCompanies Act2013 read with Rule 4(4) of the Companies (Share Capital and Debentures)Rules 2014 is furnished.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Directors to the best oftheir knowledge confirm
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 judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that
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 improved the Company's long-term rating of A-/ Stable outlook to A-/Positive outlook and short-term rating 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 guarantee given investments made or loan given or securityprovided as per the provisions of Section 186 of the Companies Act2013 are given in thenotes to the financial statements (refer to note no.12).
RELATED PARTY TRANSACTIONS
During the year under review your Company had in ordinary course of business enteredinto contract/arrangement/ transactions with related parties which were on arm's lengthbasis and none of which could be considered as material in accordance with the policy ofyour Company on materiality of related party transactions. Details of all relatedparty transactions are placed before the Audit Committee. The policy on RelatedParty Transactions as approved by the Board of Directors is placed on the Company'swebsite.
Since all the transactions with related parties entered into by the Company were inordinary course of business and were on arm's length basis Form AOC-2 is not applicableto 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%subsidiary of your Company who in turn is holding 100% capital of Illichmann CastalloyS.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 21 23 and 27 issuedby the Institute of Chartered
Accounts of India. The said consolidated accounts forms part of this report andaccounts.
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 make available the audited annual accounts and related information of itssubsidiaries upon request by any of its shareholders.
MATERIAL CHANGES AND COMMITMENT
No material change and commitment which could affect your Company's financial positionhas occurred between the end of the financial year 2016-17 and the date of this report.
CHANGE IN NATURE OF BUSINESS
During the year under review there was no change in the nature of business of yourCompany.
Your Company has not accepted any deposit from the public its shareholders oremployees during the financial year under
INTERNAL FINANCIAL CONTROLS
The internal financial control adopted and followed by your Company are adequate andare operating effectively. Your Company has adopted a dynamic internal financialcontrols framework formulated by Asit Mehta & Associates based on the bestpractices followed in the industry. During the year under review no material orserious observation is made by the Internal Auditors of your Company.
CONSERVATION OF ENERGY ETC.
Information pertaining to conservation of energy technology absorption and foreignexchange earning 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 isannexed herewith as an Annexure II and forms part of this report.
The Company has Risk Management Committee. This committee is responsible forreviewing the risk management plan and its effectiveness. The audit committee also reviewsthe financial risk and its control. The management also continuously access the riskinvolved in the business and all out efforts are made to mitigate the risk withappropriate action. All the assets of the Company are adequately covered by comprehensiveinsurance.
A detailed note on risk management is given under financial review section of theManagement Discussion and Analysis of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company's philosophy rests on dovetails the community need with the organizationalinvolvement adding value in all initiatives with the community. The Promoters ofyour Company has set up the trust viz. Bansuri Foundation'. Your Companyactively works in association of the said foundation providing services in communityhealthcare women's' empowerment rural education and village development.
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 hostedon the
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 termsof reference composition and meetings held during the year are provided in the CorporateGovernance Report.
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 thefinancial and cash flow statements adequacy of the internal control measures andreporting of matters to the Audit Committee is also annexed and forms part this Directors'Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Terms of appointment of Mr. S. Rai as Managing Director expires on 31st October 2017.The Board of Directors of your Company based on the recommendation made by the Nominationand Remuneration Committee proposes re-appointment of Mr. S. Rai as Managing Director fora further period of five years with effect from 1st
To comply with the requirements of the Companies Act 2013 and Articles of Assoicationof the Company Mrs. Pamela Rai shall retire by rotation in the forthcoming Annual GeneralMeeting and being eligible she offers hereself for reappointment.
Profile of Mr. S. Rai and Mrs. Pamela Rai as rquired under Regulation 36(3) of theSEBI (Listing Obligations and Disclosure Requiremnets)
Regulations 2015 and Secretarial Standard - 2 on General Meetings are given in theNotice of the forthcoming 27th Annual General Meeting.
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 Managing DirectorMr. R. Sikand Chief Executive Officer Mr. Vimal . P.S. Rao Company Gupta ChiefFinancial Officer Secretary are the key managerial personnel of the Company.
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 policyis annexed to the report as Annexure IV.
NUMBER OF MEETING OF THE BOARD
Five meetings of the Board of Directors and one meeting of Independent Directors wereheld during the year under review. Corporate Governance Report which forms part ofthis report contains the details about the Board meetings as also meeting attended byeach Director of the Company.
Pursuant to the provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board of Directors had done the annual evaluation ofits own performance its committees and individual directors. The Nomination andRemuneration Committee reviewed the performance of the individual directors on the basisof criteria such as the contribution of the individual director to the Board and committeemeetings.
In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole was evaluated taking into account theviews of executive directors and non-executive 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 Act2013 read with the rules made thereunder and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The details pertaining to the audit committeeare included in the Corporate Governance Report consecutive years as providedwhich formspart 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 through out theyear.
The particulars of employees as required under rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are attached as Annexure V.
In terms of Rule 5 (2) of the Companies (Appointment and Remuneration of ManagementPersonnel) Rule 2014 the details of top ten employees of the Company in terms ofremuneration drawn and details of employees who were in receipt of remuneration exceedingRs. 10200000/- per annum if employed through-out the year or Rs. 850000/- permonth if employed for a part of the financial year are appended and formspart of this report. The said annexure is not being sent alongwith this report tothe members of the Company in line with the provisions of Section 136 of the CompaniesAct 2013. Members who are interested in obtaining these particulars may write to theCompany. The aforesaid annexure is also available for inspection by the members atthe Registered Office of the Company 21 days before the 27th Annual General Meeting andupto the date of said Annual General Meeting during normal business hours on working days.
EMPLOYEES STOCK OPTION SCHEME (ESOS)
Your Company has adopted Alicon Employees Stock Option Scheme 2015 (ESOS 2015)for granting options to eligible employees of your Company. This Scheme wasapproved by the Members of your Company at their 25th Annual General Meeting held on 30thDecember 2015.
Disclosure as required under Section 62(1)(b) of the Companies Act2013 read with Rule12(9) of the Companies (Share Capital and Debentures) Rules and Regulations 14 of the SEBI(Share Based Employee Benefits) Regulations 2014 is annexed herewith as an Annexure VIand forms part of this report.
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 present Statutory Auditors of yourCompany have served your Company for a period of Section morethan two terms of five 139of the Companies Act 2013 and shall retire on conclusion of the forthcoming 27th AnnualGeneral Meeting. Upon recommendation of the Audit Committee the Board of Directorsof your Company proposes the appointment of M/s. Kirtane & Pandit LLP CharteredAccountants (ICAI Registration No. 105215W/W100057) who shall hold the office fromconclusion of the 27th Annual General Meeting for a term of three consecutive years i.e.until the conclusion of the 30th Annual General
Meeting subject to ratification by the members at 28th 29th and 30th Annual GeneralMeeting to be held in the financial year 2018 2019 and 2020. A certificate fromM/s. Kirtane & Pandit Chartered Accountants is received to the effect that they areeligible for appointment and their appointment as statutory auditors if made will bewithin the provisions of Section 141 read with Section 139 of the Companies Act2013 readwith the rules made thereunder.
The Board places on record its appreciation for the services rendered by M/s. AsitMehta & Associates Chartered Accountants during their tenure as Statutory Auditorsof your Company.
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 2016-17. The report on the SecretarialAudit is appended as Annexure VII to this report. According to the Board ofDirectors the report does 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 VIII 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 whistle blower policy adopted by the Board of Directors is hosted onthe website of the Company.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT2013
In compliance to the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 your Company has a duly constituted internalcomplaint committee. The Committee has formulated policy to ensure protection toits female employees.
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 alsotake this opportunity to thank all the customers vendors bankers and other businessassociates for their continued support. Your Directors also thank all the employeesfor their commitment hard work and contribution to the Company's excellent performance.Your Directors are thankful to all the shareholders of the Company for their unstintedsupport and confidence reposed in the management of the Company.
| ||On behalf of the Board of Directors || |
| ||(S. Rai) ||(A.D. Harolikar) |
|Place: Shikrapur Pune ||Managing Director ||Director |
|Date: 8th August 2017 ||DIN: 00050950 ||DIN:00239460 |