Your Directors have pleasure in presenting the THIRTY FIFTH ANNUAL REPORT andaudited accounts for the financial year ended March 31 2017. The performance of theCompany for the financial year ended on March 31 2017 is summarized below.
01.FINANCIAL HIGHLIGHTS :
| ||For the year Ended 31/03/2017 ||For the year Ended 31/03/2016 |
| ||(Rs.) ||(Rs.) |
|Earnings before interest depreciation and taxation (EBIDTA) ||54064045 ||42108637 |
|Less: Interest & finance charges ||7249578 ||6157994 |
|Profit /(Loss) before depreciation & taxation ||46814467 ||35950643 |
|Less: Depreciation ||22448304 ||23968719 |
|(Loss)/ Profit before tax ||24366163 ||11981924 |
|Less: Provision for income tax || || |
| Current Tax ||8304334 ||2442976 |
| Deferred Tax ||1050371 ||4131782 |
| MAT Entitlement ||0 ||(2442976) |
|Profit / (Loss) for the Year ||15011458 ||7850142 |
|Short/Excess Provision for Tax for earlier year ||(864102) ||(7970) |
|Add : Surplus of last year brought forward ||59235217 ||53820079 |
|Surplus available for appropriation ||73382573 ||61662251 |
|APPROPRIATIONS : || || |
|Proposed equity dividend ||2304547 ||2061479 |
|Tax on dividend ||469206 ||410555 |
|Balance of profit carried to balance sheet ||70608820 ||59235217 |
02. REVIEW OF OPERATIONS:
During the year under review Your Company's sales increased by 9.43 % and profitbefore Tax increased by 103.36 %. This is due to good demand from our customers and bettersales realization.
During the year there was steep increase in demand for the first half and later on itremained sluggish and hence your Company's production increased by 15% on year to yearbasis. However comfortable material policies and good sales rate margin has improved forthe year. Your Company further expects increase of 20% in sales and production in comingyears i.e. 2017-18.
The Board of Directors recommend dividend of Rs.0.80 per Equity Share (8% on the facevalue of Rs. 10/- each) for the year ended on March 31 2017(Previous year paid dividendof Rs. 0.70 per equity shares i.e. rate of 7%)subject to the approval of shareholders atthe ensuing Annual General Meeting.
04. PUBLIC DEPOSITS :
During the financial year 2016-17 your Company has not accepted or renewed any depositfrom the public falling within the ambit of Section 73 of the Companies Act 2013 readtogether with the Companies (Acceptance of Deposits) Rules 2014 and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet.
05. SHARE CAPITAL :
The paid up Equity Share Capital as on March 31 2017 was Rs. 2.88 Crores. 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 :
Pursuant to the provisions of Section 92(3) of the Companies Act 2013 the detailsforming part of the extract of the Annual Return in form MGT-9 is annexed herewith 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 Companies Act2013 read with Rule 8 ofCompanies (Accounts) Rules 2014 is annexed herewith as "Annexure B".
08. DIRECTORS :
A) Changes in Directors and Key Managerial Personnel.
Mr. M. N. Shah (DIN:00021194) an Independent Director of the Company resigned from theBoard of Directors of the Company due to old age and health related issue w.e.f. 24th May2016 and the Board record their whole-hearted appreciation of the valuable contributionmade by him during his tenure as Independent Director of the Company.
Mr. Dharmvijay N. Splanki has been appointed as Company Secretary (KMP) of the Companyw.e.f. June 1 2016 in the Board meeting held on May 24 2016 he was resigned from thecompany secretary position w.e.f. June 30 2016. Mr. Mehul Naliyadhara has been appointedas Company Secretary (KMP) of the Company in the Board meeting held on August 6 2016.
As per provision of the Companies Act 2013 Dr. Pravin N. Bhagwati retires by rotationin the forthcoming Annual General Meeting and being eligible offered himself forre-appointment. The Board of Directors recommends his 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
The Board of Directors have met 4 times and Independent Directors once during the yearended 31st March 2017.
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 selection and appointment of Director senior management and theirremuneration.
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 is disclosed inForm No. 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 INVOLUNTARY LABOUR SEXUAL HARASSMENTIN THE LAST FINANCIALYEAR AND THOSE PENDING AS ON THE END OF THE FINANCIAL YEAR.
|Sr. No. ||Category ||No. of Complaints field d urin g th e financial year ||No. of Complainants pending as on end of the financial year |
|1. ||Child labour/forced labour/ Involuntary labour ||NI L ||NI L |
|2. ||Sexual harassment of women at workplace (Prevention Prohibition and Redressal) Act 2013. ||NI L ||NI L |
19. INFORMATION REQUIRED UNDER SECTION
197(12) OF THE COMPANIES ACT 2013 READ WITH (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014:
A. Ratio of remuneration of each Director to the median remuneration of all theemployees of your Company for the financial year 2016-17 is as follows:
|Sr. No. ||Name of Directors ||Total remuneration (Rs.) ||Ratio of remuneration of Directo rs to the medium remuneration |
|1. ||Dr. Pravin N. Bhagwati ||7107649 ||18:12:1 |
|2. ||Ms. Reena P. Bhagwati ||1200000 ||3.06:1 |
1. Median remuneration of the Company for all its employee is Rs. 392220/- forFinancial Year 2016-17.
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 2016-17 are as follows:
| || || ||Remuneration || |
|Sr. No. ||Name ||Designation ||2016-17 ||2015-16 ||Increase (%) |
|1. ||Dr. P. N. Bhagwati ||Chairman & Managing Director ||7107649 ||7826144 ||9.18 (Descresed) |
|2. ||Ms. Reena P. Bhagwati ||Jr. Managing Director ||1200000 ||1200000 ||0 |
|3. ||Mr. Dinesh K. Sheth ||CFO ||3539290 ||3197283 ||10.69 (Incresed) |
|4. ||Mr. Dharmvijay Solanki ||CS (w.e.f. 01.06.2016 to || || || |
| || ||30.06.2016 ||32000 ||N.A. ||N.A. |
|5. ||Mr. Mehul Naliyadhara ||CS (w.e.f. 06.08.2016) ||195968 ||N.A. ||N.A. |
C. Percentage increase in the median remuneration of all employees in the financialyear 2016-17:
|Median Remuneration of all employees per annum. ||2016-17 (Rs.) ||2015-16 (Rs.) ||Increase (%) |
| ||392220 ||369414 ||6.17 |
D. Number of permanent employees on the rolls of the company as on 31.03.2017was 68Nos.
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 2016-17.
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 312017 ||March 312016 ||% Charge |
|Market Capitalisation (In Crores) ||23.42 ||14.98 ||56.35 |
|Price Earning Ratio ||4.91 ||2.72 ||80.51 |
H. The explanation on the relationship between average increase in remuneration andCompany performance: On an average employees received an annual increase of 10%. Theindividual increments varied from 7% to 14% based on individual performance.
The increase in remuneration isin line with the market trends. In order to ensure thatremuneration reflects Company performance the performance pay is also linked toorganization performance apart from an individual's performance.
1) STATUTORY AUDITORS
M/s. Mahendra N. Shah& Co. Chartered Accountants Ahmedabad (Firm RegistrationNo.105775W) Statutory Auditor of the Company hold office until the conclusion of theensuing Annual General Meeting and being eligible for re-appointment. The Company hasreceived letters/ certificates from them to the effect that their eligibility forre-appointment if made would be within the prescribed limits under Section 141(3) of theCompanies Act 2013 and that they are not disqualified for reappointment.
EXPLANATION OR COMMENTS ON AUDITORS' 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 year2017-18.
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 & Kabra (Formally known as Samdani Shah&Associates)Company Secretaries in Practice to undertake the Secretarial Audit of theCompany for the financial year 2016-2017. The Report of the Secretarial Audit Report isannexed herewith as "Annexure D".
The Board has appointed M/s.Samdani Shah & Kabra (Formally known as Samdani Shah&Associates) Company Secretaries in Practice as secretarial auditor of the Companyfor the financial year 2017-2018.
21. DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(3) of the Companies Act 2013 in relation to the FinancialStatements for FY 2016-17 the Board of Directors states that: (a) in preparation of theannual accounts the applicable accounting standards have been followed along with properexplanation relating to material departures; (b) the directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period; (c) the directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; (d) the directors have prepared the annual accounts on a going concernbasis; (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 withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
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 THE
COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TOWHICH THE 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. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS ANDCOMPANY'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. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL
FINANCIAL CONTROLS WITH REFERENCE TO THE 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 InternalAudit Department monitors and evaluates the efficiency and adequacy of Internal ControlSystem in the Company its compliance with operating system accounting procedures andpolicy of the Company. Based on the report of internal audit function process ownersundertake corrective action and thereby strengthen the controls. Significant auditobservation and corrective actions thereon are presented to the audit committee of theboard.
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/ 2017 ||Chairman |
| ||DIN : 00096799 |