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Austin Engineering Company Ltd.

BSE: 522005 Sector: Engineering
NSE: N.A. ISIN Code: INE759F01012
BSE LIVE 15:50 | 14 Dec 68.60 -5.55
(-7.48%)
OPEN

70.50

HIGH

74.70

LOW

66.05

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 70.50
PREVIOUS CLOSE 74.15
VOLUME 9313
52-Week high 78.60
52-Week low 45.10
P/E
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 68.60
Sell Qty 235.00
OPEN 70.50
CLOSE 74.15
VOLUME 9313
52-Week high 78.60
52-Week low 45.10
P/E
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 68.60
Sell Qty 235.00

Austin Engineering Company Ltd. (AUSTINENGGCO) - Director Report

Company director report

To

The Members

Your Directors have pleasure in submitting their 38th Annual Reportof the Company together with the Audited Statements of Accounts for the year ended 31stMarch 2016.

FINANCIAL RESULTS :

The Company's financial performance for the year ended March 31 2016 along withprevious year figure is summarized as here under:

STAND ALONE

(Rs. In Lacs)
Year ended 31st March 2016 Year ended 31st March 2015
Gross profit before Interest Depreciation and Tax 85.42 668.55
Less: Interest and Depreciation 224.17 225.03
Profit/(Loss) before Tax (138.75) 443.52
Less: Provision for Taxation - 159.50
Deferred Tax Assets (18.06) (44.55)
Profit/(Loss) after Tax (120.69) 328.57
Add: Balance brought forward from last year 3841.95 3641.48
Profit available for appropriations Appropriations: 3721.26 3970.05
Adjustment Relating to fixed Asset - 25.31
Proposed Dividend - 52.17
Provision for Tax on Proposed Dividend - 10.62
Transfer to General Reserve - 40.00
Balance carried forwarded to next year 3721.26 3841.95

REVIEW OF BUSINESS OPERATION AND FUTURE PROSPECTS :

The performance of the Company during the year under review is not fair as compared tothe last year. This was mainly due to the decline in sales on export front. The totalsales during the year were Rs. 7003.95 Lacs as against Rs. 9829.87 Lacs in the previousyear. The sales on export front during the year under review were Rs. 2117.58 Lacs ascompared to Rs 4934.76 Lacs in the previous year and thus thereby overall decline in thetotal sales. The sales on domestic front however increased marginally.

The Company has incurred net loss of Rs. 120.69 Lacs during the period under review asagainst the net profit of Rs. 328.58 Lacs in the last year. This was mainly due to thedecline in export sale. The Company has also earned revenue to the tune of Rs. 95.08 Lacsas against Rs. 79.11 Lacs in the last year from the Wind Mill Project.

The Company continued to launch a number of new and higher value added products andundertook various cost effective measures to strengthen the Company's competitiveness andprofitability in the future.

DIVIDEND :

In view of inadequacy of profit your Directors regrets to recommend any dividend forfinancial year ended 31st March 2016.

FIXED DEPOSITS :

The Company has not accepted any fixed deposits from the public falling within theambit of Section 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits)Rules 2014. There are no unclaimed deposits as on March 31 2016.

SHARE CAPITAL :

The paid up Equity Share Capital of the Company as on March 31 2016 was Rs34778000/- During the year under review the Company has not issued any shares withdifferential voting rights nor granted stock options nor sweat equity. Directors'shareholding in the Company as on March 31 2016 is given in Extract of Annual Return.

DIRECTORS AND KEY MANAGERIAL PERSONNEL :

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. J. R. Bhogayta a Director retires by rotation atthe forthcoming Annual General Meeting of the Company and being eligible offers himselffor re-appointment. The Board recommends his appointment for your approval.

The following are the Key Managerial Personnel as defined under Section 2(51) ofthe Companies Act 2013:

• Mr. Narottam C Vadgama (Chairman and Executive Director)

• Mr. Rajan R Bambhania (Re-designated as MD and appointed as CEO w.e.f 8thJune 2016)

• Mr. Jeshanker R Bhogayta (Executive Director)

• Mr. Siddik A Kotal (Chief Financial Officer)

• Ms. Nidhi D Parikh (Company Secretary)

NOTING OF CONDOLENCE AND APPRECIATION OF SERVICES :

The Board of Directors of the Company expresses their deep sense of condolences onuntimely and sad demise of Mr. Shashikant M Thanki the Managing Director of the Company.May his soul rest in heaven and pray to almighty to give courage to his family to bearsuch unbearable loss. The Board places on record its appreciation of guidance and valuableservices provided by Mr. Shashikant M Thanki during his long tenure as Managing Directorof the Company.

The Board also places on record the appreciation of valuable services rendered by Ms.Arati Goswami during her tenure as director of the Company. She has resigned from theBoard with effect from 8th June 2016.

BOARD EVALUATION :

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of SEBI (LODR)Regulations 2015 the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsCommittees. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report

COMPOSITION OF VARIOUS COMMITTEES :

Details of various committees constituted by the Board as per the provisions oferstwhile Clause 49 of the Listing Agreement and SEBI (LODR) Regulations 2015 andCompanies Act 2013 are given in the Corporate Governance Report which forms part of thisreport.

MEETINGS :

During the year Six Board Meetings Four Audit Committee Meetings OneNomination and Remuneration Committee Meeting One Stakeholders RelationshipCommittee Meeting One Risk Management Committee Meeting and One separateMeeting of Independent Directors were held. The details of the same are given in theCorporate Governance Report. The intervening gaps between the Board meetings were withinthe period prescribed under the Companies Act 2013.

INDEPENDENT DIRECTORS :

The Independent Directors met on 20th April 2015 without theattendance of Non-Independent Directors and members of the management. The IndependentDirectors reviewed the performance of Non-Independent Directors and Board as a whole andassessed the quality quantity and timeliness of flow of information between the CompanyManagement and the Board that is necessary for the Board to effectively and reasonablyperform their duties.

The Company has received necessary declarations from each Independent Director underSection 149(7) of the Companies Act 2013 that he/ she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI(LODR) Regulations 2015.

DIRECTOR DISCLOSURE :

None of the Directors of your Company is disqualified as per provisions of Section164(2) of the companies Act 2013. Your Directors have made necessary disclosures asrequired under Companies Act 2013.

DIRECTORS RESPONSIBILITY STATEMENT :

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement as enumerated here under:

• In the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;

• The directors have 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 of the profit and loss of the Company for that period;

• The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

• The directors have prepared the annual accounts on a going concern basis; and

• The directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

• The directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

AUDITORS AND AUDITORS' REPORT :

STATUTORY AUDITORS :

M/s. Dhirubhai Dand & Co. Chartered Accountants Statutory Auditors wereappointed for a period of three years at the Annual General Meeting held on 9thSeptember 2014 subject to ratification of their appointment at every year.

The Company has received a letter from them to the effect that their appointment ifmade would be within the prescribed limit under section 141 of the Companies Act 2013read with Rule 4(1) of the Companies (Audit & Auditors) Rules 2014 and that they arenot disqualified for reappointment. You are requested to ratify their appointment pursuantto the provisions of Section 139 of the Companies Act 2013.

SECRETARIAL AUDITOR :

The Board has appointed Mr. K J SHAH of K J Shah & Company Practicing CompanySecretary to conduct the Secretarial Audit for the financial year 2015-16. TheSecretarial Audit Report for the financial year ended March 31 2016 is annexed herewithmarked as Annexure "B "to this Report.

INTERNAL FINANCIAL CONTROLS :

The Company has a proper and adequate system of Internal Control commensurate with itssize and the nature of its operations to ensure that all assets are safeguarded andprotected against loss from un-authorized use or disposition and those transactions areauthorized recorded and reported correctly

The Board of Directors at the recommendations of the Audit Committee appointed M/s GK MODI & COMPANY Chartered Accountants Ahmedabad as Internal Auditors of theCompany for the Financial Year 2015-16.

Internal Auditors monitors and evaluates the efficacy and adequacy of Internal ControlSystem in the Company its compliance with operating systems accounting procedurespolicies.

The Company has adequate internal financial controls with reference to financialstatements. During the year such controls were tested and no reportable material weaknessin the design or operation was observed

DISCLOSURES :

AUDIT COMMITTEE :

Pursuant to Section 177 of the Companies Act 2013 read with Rule 6 and 7 of theCompanies (Meetings of the Board and its Powers) Rules 2013 the Audit committee consistsof the following directors:

Mr. B. D. Joshi [Chairman of committee]

Mr. K. J. Mehta [Member of committee]

Mr. D. B. Nakum [Member of committee]

All the members of Audit Committee are independent directors.

WHISTLE BLOWER POLICY :

The Company has a WHISTLE BLOWER POLICY to deal with instances of unethicalbehaviour actual or suspected fraud or violation of the company's code of conduct ifany. The details of the whistle blower policy is explained in the CorporateGovernance Report and also posted on the website of the Company.

DIRECTORS APPOINTMENT AND REMUNERATIONS POLICY :

The Company's policy relating to appointment of directors payment of managerialremuneration directors' qualifications positive attributes independence of directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in Corporate Governance Report and the same is also posted on website.

RELATED PARTY TRANSACTIONS :

All contracts or arrangements with related parties entered during the financial yearwere at arm's length basis and in the ordinary course of the Company's business. Allrelated party transactions were placed before the Audit Committee and also the Board fortheir approval. The Company

had also taken members' approval at its Annual General Meeting held on 9thSeptember 2014 and 22nd September 2015 for entering into thetransactions with "Related parties". No material contract or arrangement withrelated parties was entered into during the year under review. Therefore there is norequirement to report any transaction in Form No. AOC-2 in terms of Section 134 of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014. The policyon Related Party Transactions as approved by the Board is uploaded on the Company'swebsite at www.aec.com .

RISK MANAGEMENT POLICY :

The Board of Directors is overall responsible for identifying evaluating and managingall significant risks faced by the Company. The Board approved Risk Management policywhich acts as an overarching statement of intent and establishes the guiding principles bywhich key risks are managed across the organization.

The Company follows well established and detailed risk assessment and minimizationprocedures which are periodically reviewed by the top management. The Company has inplace a business risk management framework for identifying risks and opportunities thatmay have a bearing on the organization's objectives assessing them in terms of likelihoodand magnitude of impact and determining a response strategy. In the opinion of the Boardnone of the risks faced by the Company threaten its existence. The Company has also postedthe policy in respect of transactions with "Related Parties" on its website.

In view of non-applicability of Risk Management Committee to our Company the Boarddecided to dissolve the same.

MATERIAL CHANGES AND COMMITMENTS :

No material changes and commitments affecting the financial position of the Companyoccurred between the end of financial year to which this financial statement relate andthe date of this report.

ANNUAL RETURN :

The Extract of Annual Return pursuant to the provisions of Section 92 (3) of theCompanies Act 2013 read with Rule 12 (1) of the Company (Management and Administration)Rules 2014 is furnished in Annexure "A" " in form MGT-9 as perCompanies Act 2013 and it forms the part of this report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :

The particulars of Loans guarantees or investments made under Section 186 and itsapplicability have been furnished in notes annexed to our financial statements.

QUALIFICATIONS AND RESERVATIONS ON AUDIT REPORT :

The Auditor's Report and Secretarial Auditor's Report are self explanatory andtherefore do not require further comments and explanations.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure"C" attached to this report and it forms the part of this report.

PARTICULARS OF EMPLOYEES AND REMUNERATIONS :

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company is annexed to this Report as Annexure"D" forming part of this Report. As per Section 136(1) of the CompaniesAct 2013 the report and accounts are being sent to the shareholders of the Companyexcluding the statement of particulars of employees under the said proviso. Anyshareholder interested in obtaining a copy of the said statement may write to theSecretarial department at the Registered Office of the Company.

SUBSIDIARY COMPANY :

In accordance with the General Circular issued by the Ministry of Corporate AffairsGovernment of India the Balance Sheet Profit and Loss account and other documents of M/sAccurate Engineering Inc. the subsidiary company are not being attached with theBalance Sheet of the Company. The Company will make available the Annual Accounts of thesaid subsidiary company and its related detailed information to any member of the Companywho may be interested in obtaining the same and also on Company's website.

The Annual Accounts of the subsidiary company will also be kept open for inspection atthe registered office of the Company and the subsidiary company. A statement as requiredin the prescribed form AOC-1 pursuant to section 129(3) of the Companies Act 2013 isgiven in the Annexure "E" and it forms the part of this report.

CONSOLIDATED FINANCIAL STATEMENTS :

In accordance with the Accounting Standard AS-21 the audited consolidated financialstatements are annexed to this Annual Report.

CORPORTAE GOVERNANCE :

As per Chapter IV of SEBI (LODR) Regulations 2015 separate reports on CorporateGovernance Management Discussion & Analysis and a certificate from the Company'sAuditors form part of this Report. Your Company is committed to maintain the higheststandards of Corporate Governance reinforcing the valuable relationship between theCompany and its Stakeholders.

INSURANCE :

The Company takes a very pragmatic approach towards insurance. Adequate cover has beentaken for all movable and immovable assets for various types of risks.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS :

There are no significant material orders passed by the Regulators /Courts/ Tribunalswhich would impact the going concern status of the Company and its future operations.

FRAUDS REPORTING :

There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee Board and /or Central Governmentunder Section 143(12) of the Companies Act 2013 and Rules framed there under.

INDUSTRIAL RELATIONS :

The industrial relation with workmen and staff continued to be extremely cordial duringthe year under review.

ACKNOWLEDGMENT :

Your Directors wish to place on record their gratitude for the continued co-operationand patronage extended by their esteemed customers both in OEM and after market segments.The Directors would also like to place on record their sincere appreciation for thecontinued co-operation guidance support and assistance during the year under report byour Bankers all the customers suppliers of the Company including Government agencies.The Board of Directors also wishes to express its appreciation for the efforts andcontribution made by the employees at all levels during the year under report.

By Order of the Board of Directors
SD/-
Place : Patla Junagadh N C Vadgama
Date : 30th May 2016 Chairman

FORM A

(i) CONSERVATION OF ENERGY :

1. Energy Conservation measures taken:

Regular preventive measures for the maintenance of Machinery & Electric equipments

2. Additional investments and proposals if any being implemented for reduction ofconsumption of energy:

None

3. Impact of measures in (a) and (b) for reduction of energy consumption and consequentimpact on the cost of production of goods. The aforesaid measures have resulted in asaving in the consumption of electricity & Fuel.

4. Total Energy Consumption and Energy Consumption per unit of production as perprescribed Form A is not applicable as the Company is not covered under the list ofspecified industries and hence not given.

FORM B

1. RESEARCH & DEVELOPMENT :

Specific areas in which R & D is carried out by the Company :

The R & D efforts of the Company are directed towards quality assuranceimprovement/ up-gradation of existing product lines minimizing dependence on scarce andimported raw materials development of new products and subjecting them to stringentendurance tests.

Benefits derived as a result of the above R & D :

The benefits are improvement in the quality of the existing range of products costreduction development of new products energy saving export promotion and importsubstitution.

Future plans of action :

R & D efforts are being planned as a continuous exercise to improve quality reducecosts and try for import substitution as far as possible.

Expenditure on R & D :

Expenditure on R & D is not quantifiable at present since it is a continuousexercise forming part of our Technical Department.

2. TECHNOLOGY ADOPTION & ABSORPTION & INNOVATION :

The Company is making continuous efforts towards modernization and technologyup-gradation and innovations.

Quality of earnings has improved substantially and is well accepted by OEM as importsubstitute.

Technology imported during last five years: Nil.

3. FOREIGN EXCHANGE EARNING AND OUTGO :

S.N. FOREIGN EXCHANGE EARNINGS : 2015-16 2014-15
1 Exports of goods on FOB basis 2040.71 4789.75
Total Foreign Exchange Earned 2040.71 4789.75
FOREIGN EXCHANGE OUTGO:
1 Import of CIF value of Raw Materials Capital goods & Spares. 47.73 12.01
2 Traveling 28.87 19.08
3 Sales Commission 3.11 2.07
4 Foreign Marketing & Sales Promotion Expanses 2.65 14.62
5 Dividend 1.20 1.20
Total Foreign Exchange Used 83.56 48.98

 

By Order of the Board of Directors
SD/-
N. C. Vadgama
Chairman
Place : Patla Junagadh
Date : 30th May 2016