Your Directors have pleasure in presenting the THIRTY FORTH ANNUAL REPORT and auditedaccounts for the year ended 31st March 2016. The performance of the Company for the yearended on March 312016 is summarized below.
01 .FINANCIAL HIGHLIGHTS :
| ||For the year Ended 31/03/2016 ||For the year Ended 31/03/2015 |
| ||(Rs.) ||(Rs.) |
|Earnings before interest depreciation and taxation (EBIDTA) ||42108637 ||2278031 |
|Less: Interest & finance charges ||6157994 ||7086364 |
|Profit /(Loss) before depreciation & taxation ||35950643 ||(4808333) |
|Less: Depreciation ||23968719 ||30463613 |
|(Loss)/ Profit before tax ||11981924 ||(35271946) |
|Less: Provision for income tax || || |
| Current Tax ||2442976 ||0 |
| Deferred Tax ||4131782 ||(11769063) |
| MAT Entitlement ||(2442976) ||0 |
|Profit / (Loss) for the Year ||7850142 ||(23502883) |
|Short/Excess Provision for || || |
|Tax for earlier year ||(7970) ||(2282338) |
|Carrying amount of fixed assets debited to retained earnings where remaining useful life of assets is Nil as on 01 -04-2014 ||0 ||(1154576) |
|Add : Surplus of last year brought forward ||53820079 ||82493472 |
|appropriation ||61662251 ||55553675 |
|APPROPRIATIONS : || || |
|Proposed equity dividend ||2061479 ||1440342 |
|Tax on dividend ||410555 ||293254 |
|Balance of profit carried || || |
|to balance sheet ||59235217 ||53820079 |
02. REVIEW OF OPERATIONS:
During the year under review your company's sales remained same as compared to lastyear Due to continued low demand from the existing customers. However your company ableto show Good profit due to better raw material prices and better Control over direct &Indirect cost including financial cost. Your Company expect good demand of product due tooverall tractor industries growth in this year.
The Board of Directors recommend dividend at the rate of 7%
i.e. Rs.0.70 per Equity Share of Rs. 10/- each for the year ended on 31st March2016(Previous year at the rate of 5% i.e. Rs. 0.50 per Equity Share) in pursuance to the(Declaration & Payment of Dividend) Rules 2014 subject to the approval ofshareholders at the 34thAGM.
04. PUBLIC DEPOSITS :
During the financial year 2015-1 6 your Company has not accepted or renewed anydeposit from the public falling within the ambit of Section 73 of the Companies Act 2013read together with the Companies (Acceptance of Deposits) Rules 2014 and as such noamount on account of principal orinterest on deposits from public was outstanding as onthe date of the balance sheet.
05. SHARE CAPITAL :
The paid up Equity Share Capital as on March 31 2016 was Rs. 2.88 Crore. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. The Company has also not purchased of its ownshares by employees or by trustees for the benefit of employees.
06. EXTRACT OF THE ANNUAL RETURN :
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure A".
07. THE DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO :
The Information required to be disclosed in the report of the Board of Directors as perthe provisions of Section 134(3)(m) of the Compa-nies Act2013 read with Rule 8 ofCompanies (Accounts) Rule 2014 is annexed herewith as "Annexure B".
08. DIRECTORS :
A) Changes in Directors and Key Managerial Personnel.
At the last AGM held on September 23 2015 the Members had appointed the existingIndependent Directors viz. Mr. Padmin H. Buch and Mr. Rajendraprasad J. Shah asIndependent Directors under the Act each for a term of five years with effect fromSeptember 24 2014.
Mr. M. N. Shah (DIN:00021194) an Independent Director of the Company resigned from theBoard of Directors of the Company w.e.f. 24th May 2016 and the Board record theirwhole-hearted appreciation of the valuable contribution made by him during his tenure asIndependent Director of the Company.
Ms. Akshit Soni has been appointed as Company Secretary (Key Managerial Personnel) ofthe Company in the board meeting held on February 10 2015 he was resigned from theCompany secretary position w.e.f. February 2 2016. Mr. Dharmvijay N. Solanki has beenappointed as Company Secretary (KMP) of the Company w.e.f. June 12016 in the Boardmeeting held on May 24 2016.
As per provision of the Companies Act 2013 Ms. Reenaben P Bhagwati retires byrotation in the forthcoming Annual General Meeting and being eligible offered herself forre-appointment. The Board of Directors recommends her re-appointment.
B) Declaration by an Independent Director(s) and reappointment if any
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013.
An independent director shall hold office for a term up to five consecutive years onthe Board of the Company but shall be eligible for reappointment for next five years onpassing of a special resolution by the Company and disclosure of such appointment in theBoard's report.
C) Annual evaluation by the board of its own performance its committees and individualdirectors
The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The result of the evaluation issatisfactory and adequate and meets the requirement of the Company.
(D) Policy on Directors' appointment and remuneration
(Including criteria for determining qualification positive attributes independence ofa Director policy relating to remuneration for Directors Key Managerial Personnel andother employees)
Policy on Directors' appointment
Policy on Directors' appointment is to follow the criteria as laid down under theCompanies Act 2013 and the Listing Agreement with Stock Exchanges and good corporatepractices. Emphasis is given to persons from diverse fields or professions.
Policy on Remuneration
Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that -
Remuneration to unionised workmen is based on the periodical settlement with theworkmen union.
Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen (non Unionised) is industry driven in which it is operating taking into accountthe performance leverage and factors such as to attract and retain quality talent.
For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein circulars and guidelines issued by CentralGovernment and other authorities from time to time.
09. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
The Board of Directors have met 4 times and Independent Directors once during the yearended 31st March 2016.
10. AUDIT COMMITTEE:
The Composition of Audit Committee of the Company is as under
|Sr. No. ||Name of Director ||Designation |
|1. ||Mr. Rajendraprasad J. Shah ||Chairman |
|2. ||Mr. Padmin Buch ||Member |
|3. ||Ms. Reena Bhagwati ||Member |
11. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES :
The Company has formulated Vigil Mechanism named Whistle Blower Policy with a view toreport concern about unethical behavior actual or suspected fraud. This policy providemechanism for employee of the Company of any violation and to approach the chairman of theAudit Committee of the Company who shall investigate into the same and recommend suitableaction to the management.
12. NOMINATION AND REMUNERATION COMMITTEE :
The Board has on recommendation of nomination and remuneration committee framed apolicy for section and appointment of Director senior management and their remuneration.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
There is no loan given investment made guarantee given or security provided by theCompany to any entity under Section 186 of the Companies Act 2013.
14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013including certain arms length transactions under third proviso thereto isdisclosed in FormNo. AOC -2 is annexed herewith as "Annexure C".
15. PARTICULAR OF SUBSIDIARY/JOINT VENTURE / ASSOCIATE COMPANY :
The Company does not have any subsidiary Joint Venture and Associate Company.
16. RISK MANAGEMNET :
Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Your Company periodically assessesrisks in the internal and external environment along with the cost of treating risks andincorporates risk treatment plans in its strategy business and operational plans.
Your Company through its risk management process strives to contain impact andlikelihood of the risks within the risk appetite as agreed from time to time with theBoard of Directors.
There are no risks which in the opinion of the Board threaten the existence of yourCompany.
17. CORPORATE SOCIAL RESPONSIBILITY:
The provision of Corporate Social Responsibility is not applicable to your Company.
18. THE NUMBER OF COMPLAINTS RELATING TO CHILD LABOUR FORCED LABOUR INVOLUNTARYLABOUR SEXUAL HARASSMENT IN THE LAST FINANCIAL YEAR AND THOSE PENDING AS ON THE END OFTHE FINANCIAL YEAR.
|Sr. No. ||Category ||No. of Complaints field during the financial year ||No. of Complainants pending as on end of the financial year |
|1. ||Child labour/forced labour/ Involuntary labour ||NIL ||NIL |
|2. ||Sexual harassment of women at workplace (Prevention Prohibition and Redressal) Act 201 3. ||NIL ||NIL |
19. INFORMATION REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:
A. Ratio of remuneration of each Director to the median remuneration of all theemployees of your Company for the financial year 2015-16 is as follows:
|Sr. No. ||Name of Directors ||Total remuneration (Rs.) ||Ratio of remuneration of Directors to the medium remuneration |
|1. ||Dr. Pravin N. Bhagwati ||7826144 ||21:19:1 |
|2. ||Ms. Reena P. Bhagwati ||1200000 ||3.25:1 |
1. Median remuneration of the Company for all its employee is Rs. 369414/- forFinancial Year 2015-16.
2. The remuneration to directors does not include sitting fees paid to them.
B. Details of percentage increase in the remuneration of each Director and CFO &Company Secretary in the financial year 2015-16 are as follows:
|Sr. No. ||Name ||Designation || |
|Increase (%) |
| || || ||2015-16 ||2014-15 || |
|1. ||Dr. P. N. Bhagwati ||Chairman & Managing Director ||7826144 ||7832238 ||0.08 (Descresed) |
|2. ||Ms. Reena P Bhagwati ||Jr. Managing Director ||1200000 ||1200000 ||0 |
|3. ||Mr. Dinesh K. Sheth ||CFO (w.e.f. 23.05.2014) ||3197283 ||2994000 ||6.79 Incresed |
|4. ||Mr. Akshit Soni ||CS (w.e.f. 10.02.2015 to 06.02.2016 ||258178 ||N.A. ||N.A. |
C. Percentage increase in the median remuneration of all employees in the financialyear 2015-16:
|Median Remuneration of all employees per annum. ||2015-16 (Rs.) ||2014-15 (Rs.) ||Increase (%) |
| ||369414 ||335040 ||10.26 |
D. Number of permanent employees on the rolls of the company as on 31.03.2016was 72Nos.
E. There is no variable component of remuneration to the Directors.
F. No employee has received remuneration in excess of highest paid Director of theCompany during the Financial Year 2015-16.
G. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:
|Particular ||March 312016 ||March 312015 ||% Charge |
|Market Capitalisation (In Crores) ||14.98 ||12.68 ||18.14 |
|Price Earning Ratio ||2.72 ||(8.95) ||130.39% |
H. The explanation on the relationship between average increase in remuneration andCompany performance:
On an average employees received an annual increase of 10%. The individual incrementsvaried from 7% to 14% based on individual performance.
The increase in remuneration isin line with the market trends. In order to ensure thatremuneration reflectsCompany performance the performance pay is also linked toorganization performance apart from anindividual's performance.
1) STATUTORY AUDITORS
M/s. Milin J Jani & Co. Chartered Accountants Ahmedabad (Firm RegistrationNo.106396W) Statutory Auditor of the Company hold office until the conclusion of theensuing Annual General Meeting and they express their unwillingness to reappointment forthe year 2016-17 therefore Board proposed on the basis recommendation of Audit CommitteeM/s. Mahendra N. Shah & Co. as Statutory Auditors of the Company to hold office fromthe conclusion of the ensuing AGM till the conclusion of Thirty-Ninth AGM (Subject toratification by Members at every AGM)
The Company has received letters/certificates from them to the effect that theireligibility for appointment if made would be within the prescribed limits under Section141(3)of the Companies Act 2013 and that they are not disqualified for appointment.EXPLANATION OR COMMENTS ON AUDITOR'S REPORT
There are no adverse observations Notes made by the Auditors in their report so thereare no comments by Directors on Auditors Notes.
2) INTERNAL AUDITORS
Pursuant to the provisions of Section 138 of the Companies Act 2013 the Board ofdirectors of the Company has appointed M/s. Mehta Sheth & Associates CharteredAccountants (FRN: 106238W) as an Internal auditor of the Company for the financial year2016-17.
3) SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Samdani Shah & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed herewith as "Annexure D".
21. DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(3) of the Companies Act 2013 in relation to the FinancialStatements for FY 2015-16 theBoard of Directors states that:
(a) in preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand madejudgments 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 and loss 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 and 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 and were operatingeffectively;and
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
22. HUMAN RESOURCES :
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
23. CHANGE IN THE NATURE OF BUSINESS IF ANY :
No change in the nature of the business of the Company done during the year.
24. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No other material changes have taken place after completion of the financial period upto the date of this report which may have substantial effect on business and finances ofthe company and which are required to be disclosed in this Report.
25. 25. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE :
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
26. 26. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOTHE FINANCIAL STATEMENTS:
The Company has an internal control system commensurate with the size scale andcomplexity of its operations. To maintain its objectives and independence the internalAudit function reports to the chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficiency and adequacy ofInternal Control System in the Company its compliance with operating system accountingprocedures and policy of the Company. Based on the report of internal audit functionprocess owners undertake corrective action and thereby strengthen the controls.Significant audit observation and corrective actions thereon are presented to the auditcommittee of the board.
1. Insurance :
The assets of the company including Plant and Machineries Factory Building StocksStores Vehicles etc. have been adequately insured.
2. Industrial Relations :
During the year under review your Company enjoyed cordial relationship with theworkers and employees at all the levels.
3. Acknowledgement :
Your Directors thanks to various Central and State Government DepartmentsOrganizations and Agencies for the continued cooperation and support extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.
| ||For and on behalf of the |
| ||Board of Directors |
|Place : Ahmedabad ||Dr. Pravin N. Bhagwati |
|Date : 24/05/ 2016 ||Chairman |