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G G Dandekar Machine Works Ltd.

BSE: 505250 Sector: Engineering
NSE: N.A. ISIN Code: INE631D01026
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VOLUME 16473
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OPEN 65.00
CLOSE 68.15
VOLUME 16473
52-Week high 77.70
52-Week low 50.00
P/E
Mkt Cap.(Rs cr) 37
Buy Price 76.70
Buy Qty 5.00
Sell Price 77.50
Sell Qty 25.00

G G Dandekar Machine Works Ltd. (GGDANDEKAR) - Director Report

Company director report

To

The Members

G. G. Dandekar Machine Works Limited

Your Directors have pleasure in presenting the 78thAnnual Report with theAudited Annual Accounts of the Company for the financial year ended on 31stMarch 2017.

Financial Performance:

(Amount in Rs.)
Particulars 2016-17 2015-16
Gross Income 128346104 129285471
Profit/(Loss) before interest and Depreciation (9350937) (24748374)
Less Finance Charges 2706853 2413148
Gross Profit/(Loss) (12057789) (27161522)
Less Provision for Depreciation 13265017 15059258
Net Profit/(Loss) before tax (25322806) (42220780)
Add/Less Exceptional Items - -
Profit/(Loss) before Extra-Ordinary Items (25322806) (42220780)
Add/(Less) Extra Ordinary Items - -
Profit/(Loss) before Taxes (25322806) (42220780)
Less Taxes - -
Add/Less Deferred Taxes 425624 286392
Add/Less Provisions for previous year's tax not provided for - (592697)
Profit/(Loss) for the period from continuing operations (25748430) (41914475)
Profit/(Loss) from discontinuing operations - -
Less tax expenses from discontinuing operations - -
Net profit/(Loss) (25748430) (41914475)
Less Provision for Proposed Dividend and Dividend Tax - -
Net Profit/(Loss) carried forward to Balance-Sheet (25748430) (41914475)

DIVIDEND

Your Directors do not recommend any dividend for the financial year 2016-17.

MANAGEMENT DISCUSSION & ANALYSIS

1. This section includes discussion on the following matters within the limits set bythe Company's Competitive position:

(A) INDIAN ECONOMY

Light Engineering Industries:

The capital goods and engineering turnover in India is expected to reach INR 8101billion by FY 2016-17. Cumulative FDI inflows increased to INR 1823 billion in FY 2016-17from INR 575 billion in 2010. The government's increasing focus on attracting foreigninvestors in manufacturing and infrastructure is likely to boost FDI in the sector. With100 per cent Foreign Direct Investment (FDI) allowed through the automatic route andinitiatives like 'Make in India' major international players have entered the Indianengineering sector due to significant growth opportunities available.

Indian capital goods manufacturers have been facing competition from foreign players;particularly European Chinese and South East Asian manufacturers. Currently despiteincreased domestic capacities low cost foreign manufacturers offer tough competition todomestic manufactures in some segments of the industry.

The Indian Meteorological Department has predicted 'el nino' effect on southwestmonsoon for 2017. Quantitatively the monsoon seasonal rainfall is likely to be 90 to 96%of the long-period average (LPA). Anything between 96-104% of the LPA is considered'normal'. Anything under 96% is considered 'below normal' and 104-110% of the LPA is'above normal'. Last year the IMD had made an initial forecast of above-normal rainfallbut the season ended with normal precipitation.

Moreover the southern peninsula had registered less-than-predicted rainfall withseveral parts of Tamil Nadu Karnataka and Kerala reeling under drought-like conditions.

It is likely to have a mixed effect on economy in many ways. Inflation will come downagriculture productivity will improve and rural consumption will increase. A lowerinflation will lead to low interest rates. Overall moderate to normal rainfall will beuseful for rice production and in turn will maintain demand for Rice Milling Machinery.

(B) INDUSTRY STRUCTURE AND DEVELOPMENT

The main business of the company is to manufacture Food Processing Machineriesespecially for Rice Milling. With over a century of experience the company products arebenchmark for the Rice Milling industry. The company also offers consolidated solutionsfor Rice Milling projects from conceptualization of turnkey mill to improving andmodifying existing mills.

(C) OPPORTUNITIES AND THREATS

The company is working to extend its market coverage to access more than 80% ricepockets in India. It has worked on sales network and has resulted in increased enquirylevel for its products. As a result 20% of Business is achieved from new markets fromNorth and Central India. It addresses growing markets and reduces dependency ontraditional markets.

The company continues its focus on Research & Development activities and hasdeveloped several new products. It has given a leading edge over local competitors. It hasalso opened up new markets for full mill business.

The company has noticed a change in buying pattern wherein customers is givingpreference to organized manufacturers over local un-organized machinery suppliers and itgives business opportunity to the company.

Rice miller's business margin has reduced as paddy purchase prices are increased bygovt. (Min Support Price) and market price is down by 20%.

Demonetization has resulted in a significant cash crunch thereby leading to defermentof paddy procurement by millers/traders. Further given that a large part of the riceindustry is unorganised there is a reduction in their buying capacity. Overall there isexpected to be some contraction in paddy demand in the near term which could exertpressure on prices. Also given the temporary reduction in purchasing power of the endusers the rice demand is expected to slacken which would translate into lowerrealisation. The organised Basmati rice players generate approximately 45% of revenuesfrom domestic sales and this segment is likely to witness lower revenues in H2 FY2017. Thelong-term impact of the demonetization exercise is expected to be transformational innature by making more farmers adopt formal banking channels for transactions.

However continuous fall in rice price over last two years coupled with drop in exportshas resulted in drop in investment plans by millers. It has lowered the overall marketsize for rice milling machinery and increased competition amongst incresed number ofmanufacturers.

Such fear of competition has promoted dilution in commercial policies leading tosqueezed margins and inferior business terms which company has to face in the market.

(D) SEGMENT-WISE PERFORMANCE OR PRODUCT-WISE PERFORMANCE

The company has maintained its leadership in traditional flagship products likeDandekar Cone Polishers and Table type Paddy Separator. The company has progressed well onnew product development and has made 20% business through new products. The company hasdone major business in Polishing and Grading section. The company has introduced high endtechnology product "Colour Sorter" machine.

(E) OUTLOOK

Rice is one of the most crucial food crops in the world and a staple diet for nearlyhalf the global population. Over 90% of the global rice output and consumption is centeredin Asia wherein the world's largest rice producers China and India are also the world'slargest rice consumers. High domestic consumption and restrictive trade policies ofseveral countries for rice have restricted the international trade of rice to only 6-7% ofthe production. Food security objectives and the need to provide income support todomestic producers are the main reasons cited by countries to restrict rice imports

Overall Production of Rice is estimated 105 mn ton (Growth of 2%) but Basmati paddyprices have witnessed significant decline in FY2016 thereby rendering cultivation ofbasmati paddy a less attractive option for farmers. The total area under cultivation isexpected to have fallen from around 2.1 million hectares in FY 2016 to 1.6 millionhectares in the FY 2017 resulting in a production decline from around 9.8 to 8.0 milliontonnes during the same period. Similarly Export of Rice decreased from 10.2 mn ton to 9 mnton (Mainly Basmati 4.1 mn ton to 3.4 mn ton).

Overall it will have a mixed effect on Indian rice milling machinery business whereininvestment budgets will be squeezed putting pressure on machinery prices.

(F) RISK AND CONCERNS

Risks of critical importance have been identified over a period of time. These risksare ranked on the basis of their impact on company's business and likelihood of theiroccurrence. A cross functional team takes stock of these risks and calls for necessarymeasures to mitigate the risks from the concerned risk owners. The risk owners thenproduce action plans for risk mitigation which is then evaluated by the team. New risksare added with the changes in economic and market scenarios and undergo the same process.

Identified risks include:

• Stagnating market growth: As domestic rice production lags a rise inconsumption overall stock levels are expected to de-cline.

• A fall in exports earlier due to ban by Iran and lower prices in internationalmarket will largely marginalise India's rice exports. The government is also not expectedto intervene in the export market as its buffer stocks are well above mini-mumrequirements.

• El nino effect on rainfall and unfavorable weather conditions: Output offood-grain is reduced and will hampered the overall growth in this sector.

• Steady growth of Chinese Thai and Korean products contributed by both organizedand un-organized Rice Mill Manufacturers

• Change in the govt. policies (State and Central) FCI is stopped in states likeAP Telangana etc

(G) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems to ensure operational efficiencyaccuracy and promptness in financial reporting and compliance of various laws andregulations.

The internal control system is supported by the internal audit process. An InternalAuditor has been appointed for this purpose. The Audit Committee of the Board reviews theInternal Audit Report and the adequacy and effectiveness of internal controlsperiodically.

(H) COMPANY'S FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year under review your company has achieved turnover ofRs.1216.03 Lacs (previous year Rs.1051.12 Lacs). The net loss is Rs.257.48 Lacs (asagainst net loss after taxes '419.14 Lacs during FY 2015-16).

(I) MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FORMAT INCLUDINGNUMBER OF PEOPLE EMPLOYED

The Company seeks to recruit and retain quality industry professionals and provide themwith a high performance environment.

During the financial year total workforce of the Company was 98.

(J) ENVIRONMENT

The Company has obtained certification of ISO 9001:2008 for the purpose ofstandardization. The Company takes due care in the selection and usage of appropriatematerial and methods in order to avoid violation of norms formulated to safeguard theenvironment.

(K) CAUTIONARY STATEMENT

Statements in this Report particularly those which relate to Management Discussion andAnalysis describing the Company's objectives projections estimates and expectations mayconstitute "forward looking statements" within the meaning of applicable lawsand regulations. Actual results might differ materially from those either expressed orimplied.

(L) LISTING FEES

The annual listing fees for the year under review have been paid to BSE Limited whereyour Company's shares are listed.

(M) COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

As on 31st March 2017 the Company has no subsidiary company.

The Board presents Standalone Audited Financial Statements as prepared in compliancewith the Accounting Standards Companies Act and the Listing Regulations.

2. Disclosure of Accounting Treatment:

There is no deviation in accounting treatment since the Financial Statement has beenprepared in line with Accounting Standards.

PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO SECTION 134OF THE COMPANIES ACT 2013 RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014 AND RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT - 9 is annexedherewith as 'Annexure I' to this Report.

NUMBER OF MEETINGS OF THE BOARD:

During the year under review Four Board Meetings were convened and held. The detailsof which are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Act.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Act in respect of Directors'Responsibility Statement your Directors state that:

a) in the preparation of the annual financial statements for the year ended 31stMarch 2017 the applicable accounting standards have been followed along with the properexplanation relating to material departures;

b) accounting policies as mentioned in Part-B to the Financial Statements have beenselected and applied consistently. Further judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2017 and of the profit of the Company for the yearended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual financial statements have been prepared on a going concern basis;

e) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.

DECLARATION BY THE INDEPENDENT DIRECTORS

The Company has received necessary declaration from all Independent Directors underSection 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure requirements) Regulations 2015 that they meet the criteria of independence aslaid down.

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Board had on the recommendation of the Nomination and Remuneration Committee frameda policy for selection and appointment of Directors Key Managerial Personnel and SeniorManagement Personnel and their remuneration. The policy is appended as 'Annexure II' tothis Report.

AUDITORS

a. Statutory Auditors

At the Annual General Meeting held on September 112014 M/s Joshi & KulkarniChartered Accountants Pune (Firm Reg. No. 115751W) were appointed as statutory auditorsof the Company to hold office till the conclusion of the 80th Annual GeneralMeeting to be held in the calendar year 2019. In terms of the first proviso to Section 139of the

Companies Act 2013 the appointment of the auditors shall be placed for ratificationat every Annual General Meeting. Accordingly the appointment of M/s Joshi & KulkarniChartered Accountants Pune (Firm Reg. No. 115751W) as statutory auditors of the Companyis placed for ratification by the shareholders. In this regard the Company has received acertificate from the auditors to the effect that if they are reappointed it would be inaccordance with the provisions of Section 141 ofthe Companies Act 2013.

b. 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 Mr. Mahesh Athavale Practicing Company Secretary (Membership No. FCS 2412 CPNo. 1488) to undertake the Secretarial Audit of the Company.

c. Cost Auditor

Being the manufacturers of Engineering Machinery pursuant to Chapter 85 of the CentralExcise Tariff Act 1985 the Company has appointed Harshad S. Deshpande Cost Accountant(Membership No. 25054) Pune as Cost Auditors for maintenance of Cost records.

EXPLANATION ON COMMENTS ON STATUTORY AUDITORS' AND SECRETARIAL AUDIT REPORT:

There are no qualifications reservations or adverse remarks or disclaimers made by M/sJoshi & Kulkarni Statutory Auditors in their Audit report and by Mr. MaheshAthavale Secretarial Auditor in his Secretarial Audit Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENT UNDER SECTION 186:

Your Company has not given any loan or guarantee or security or made any investment ascontemplated by Section 186 of the Companies Act 2013 during the financial year underreview.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188:

During the Financial Year under review the Company has acquired 1000 equity shares ofS. L. Kirloskar CSR Foundation at the face value Rs.10 each in tranches of 200 equityshares each from the following Companies:

A. Kirloskar Industries Limited

B. Kirloskar Oil Engines Limited

C. Kirloskar Ferrous Industries Limited

D. Kirloskar Chillers Private Limited

E. Kirloskar Pneumatic Company Limited

The above transaction was executed with approval granted by the Audit Committee and theboard of directors at their respective meetings.

All contracts/ arrangements/transactions entered by the Company during the financialyear with the related parties as detailed in Note no.C-3 of the Standalone FinancialStatements were in ordinary course of business and at an arm's length basis

There was no materially significant related party transaction made by the Company asdefined in Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 that may have potential conflict with the interest of the Company atlarge.

All Related Party Transactions are placed before the Audit Committee for theirapproval. Omnibus approvals are taken for the transactions which are repetitive in nature.In compliance with Listing Regulations the necessary statements/disclosures with respectto the Related Party Transactions are tabled before the Audit Committee and the Board ofDirectors on quarterly basis. The details of the transactions with Related Parties areprovided in the accompanying financial statements as required under Ind AS 24. In linewith requirement of the Companies Act 2013 and Regulation 23 of the Listing Regulationsyour Company has adopted a Policy on Related Party Transactions which is available atCompany's website www.ggdandekar.com.

STATE OF COMPANY'S AFFAIRS

Discussion on state of Company's affairs has been covered in the Management Discussionand Analysis.

AMOUNTS PROPOSED TO BE CARRIED TO RESERVES

Particulars of the amounts proposed to be carried to reserves have been covered as partof the financial performance of the Company.

MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OFREPORT:

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the financial year of the Company to which thefinancial statements relate and the date of the report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of energy and Technology Absorption :

Pursuant to Section 134(3)(m) of the Act read with Rules thereunder the reportregarding conservation of energy technology absorption is annexed herewith as 'AnnexureIV'

B. Foreign exchange earnings and Outgo

Sr. No. Particulars Amount in Rs.
i) Foreign Exchange earned in terms of actual inflows during the year Nil
ii) Foreign Exchange outgo during the year in terms of actual outflows 2732429

RISK MANAGEMENT POLICY:

The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified are systematically addressedthrough mitigating actions on a continuing basis. These are discussed at the meetings ofthe Audit Committee and the Board of Directors of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Net worth of the company is not more than Rs.500 crore its turnover is not more thanRs.1000 crores and its net profit is not more than Rs.5 crores Consequently theprovisions of section 135 of the Companies Act 2013 are not applicable to the Company.The Company is not required to constitute the Corporate Social Responsibility (CSR)Committee frame the CSR policy or spend the amount on CSR.

PERFORMANCE EVALUATION

Pursuant to provisions of section 134(3)(p) 149(8) and Schedule IV of the CompaniesAct 2013 and Regulation 17 of SEBI Listing Regulations annual performance evaluation ofDirectors as well as of the Audit Committee Nomination & Remuneration Committee andShare Transfers Cum Shareholders'/Investors' Grievance and Stake Holders RelationshipCommittee of the Board has been carried out.

The performance evaluation of the Independent Directors was carried out by the entireBoard and the Performance Evaluation of Chairman and Non-Independent Directors was carriedout by the Independent Directors.

The manner in which the evaluation has been carried out has been provided in theCorporate Governance Report.

DETAILS OF SUBSIDIARIES JOINT VENTURES (JV) OR ASSOCIATE COMPANIES (AC):

The company does not have any subsidiary joint venture or associate company thereforeit is not required to give details as required under Rule 8(5)(iv) of Companies (Accounts)Rules 2014.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES:

Company does not have any subsidiary joint venture or associate company therefore itis not required to give details as required under Rule 8(1) of Companies (Accounts) Rules2014 during the financial year under review.

CHANGE IN THE NATURE OF BUSINESS IF ANY:

There has been no change in the nature of business during the financial year underreview.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THEYEAR

During the year under review none of the Directors or Key Managerial Personnel wereappointed or have resigned.

DIRECTOR(S) PROPOSED TO BE APPOINTED/RE-APPOINTED AT THE ENSUING ANNUAL GENERAL MEETING

The brief resumes and other details relating to Director(s) who is/are proposed to beappointed/re-appointed as required to be disclosed under Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 form part of theExplanatory Statement to the Notice of the Annual General Meeting.

DETAILS OF DEPOSITS AS PER CHAPTER V (ACCEPTANCE OF DEPOSITS) OF COMPANIES ACT 2013:

Your Company has not accepted any deposits under the provisions of Section 73 of theCompanies Act 2013 read with Companies (Acceptance of Deposit) Rules 2014 as amendedfrom the public or its employees etc. during the year under review.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

To the best of our knowledge the Company has neither received nor is aware of any suchorder from Regulators Courts or T ribunals during the year which may impact the GoingConcern Status or the Company's operations in future.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

The Company has in place adequate internal financial controls with reference tofinancial statements.

Regular management oversight and rigorous periodic testing of internal controls makesthe internal controls environment strong at the Company. The Audit Committee along withManagement overseas results of the internal audit and reviews implementation on a regularbasis.

BOARD COMMITTEES:

Your Company has in place the Committee(s) as mandated under the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. There are currently three committees of the Board namely:

• Audit Committee

• Nomination & Remuneration Committee

• Share Transfers Cum Shareholders'/Investors' Grievance and Stake HoldersRelationship Committee

Details of the Committees along with their charter composition and meetings heldduring the year are provided in the Corporate Governance Report which forms part of thisreport

INFORMATION FORMING PART OF THE DIRECTORS' REPORT PURSUANT TO RULE 5 OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

The relevant information pursuant to Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as 'Annexure V' tothis report

VIGIL MECHANISM

The Company has formulated and implemented the Whistle Blower Policy/Vigil Mechanism('the Policy'). This has provided a mechanism for directors and employees of the Companyand other persons dealing with the Company to report to the Chairman of the AuditCommittee any instance of unethical behavior actual or suspected fraud or violation ofthe Company's code of conduct. The policy has also been uploaded on the Company's website.

CASH FLOW

A cash flow statement for the year ended 31st March 2017 is attached to theBalance Sheet.

CORPORATE GOVERNANCE CERTIFICATE:

Your Company is committed to maintain the highest standards of Corporate Governance.Your Company continues to be compliant with the requirements of Corporate Governance asenshrined in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015('Listing Regulations')

In terms of Regulation 34 of the SEBI Listing Regulations a report on the CorporateGovernance along with the certificate of compliance from the Auditors forms part of theAnnual Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.

There were no complaints received for sexual harassment during the FY 2016-17.

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 READ WITH RULE 5 OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

Particulars of employees pursuant to section 197 of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are provided in the Annual Report.

The information as required under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 will be provided upon request by anymember of the Company. In terms of Section 136(1) of the Companies Act 2013 the Reportand the Accounts are being sent to the members excluding the said Annexure. Any memberinterested in obtaining copy of the same may write to the Company Secretary at theRegistered Office of the Company.

DISCLOSURE OF REMUNERATION OR COMMISSION RECEIVED BY A MANAGING OR WHOLE-TIME DIRECTORFROM THE COMPANY'S HOLDING OR SUBSIDIARY COMPANY:

There were no instances of receiving remuneration or commission by a Managing or Wholetime Director of the company from its holding or subsidiary company during the FY 2016-17requiring the disclosure under section 197(14) of the Companies Act

2013.

EVENT BASED DISCLOSURES IN DIRECTORS REPORT:

The Company has not issued any shares with differential voting rights or Sweat Equityshares or shares under ESOP. The Company has not provided any money to its employees forpurchase of its own shares hence the company has nothing to report in respect of Rule4(4) Rule (13) Rule 12(9) and Rule 16 of the Companies (Share Capital & Debentures)Rules 2014.

SECRETARIAL AUDIT REPORT:

The Secretarial Audit Report submitted by Company Secretary in Practice According tothe provision of section 204 of the Companies Act 2013 read with Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed as a partof this report as Annexure III'.

ACKNOWLEDGMENTS

Your Directors wish to place on record their appreciation for the contribution madeand support provided to the Company by the shareholders employees and bankers during theyear under the report.

For and on behalf of the Board of Directors
Sd/-
Place: Pune NIHAL G. KULKARNI
Date: 9th May 2017 (DIN: 01139147)
CHAIRMAN

ANNEXURE IV TO THE DIRECTORS' REPORT

A. CONSERVATION OF ENERGY

• Steps taken or impact on conservation of energy.

LED Street lighting we have switched over from existing Sodium vapor to LED lightsresulting in saving of 6625 units of electricity per year valued approximately Rs.65000/-annually.

Changed Seating arrangement of employee in resulting in saving of electricity worthapproximately Rs.28000/- per year.

Total saving is approximately Rs.93000/- annually through energy conservation.

Steps taken by the company for utilizing alternate sources of energy.

Company has installed turbo Air ventilator to utilize natural air draft to for properventilation & optimize room temperature in summer season.

Capital investment on energy conservation equipment.

Company has taken a trial for solar lamp installation at factory premises &proposal is under consideration.

B. TECHNOLOGY ABSORPTION

• Efforts made towards technology absorption.

Conventional manufacturing process is being gradually changed to latest LASERcutting CNC punching CNC bending Water Jet cutting & powder coating technology forsheet metal parts of machineries to improve product aesthetics and quality.

• Design software upgraded to latest software (Pro-E Creo) in R&D to designmachineries in 3D modeling with verification of integration.

• Traditional Cast Iron body polisher is redesigned with fabricated constructionand vitrified bonded long lasting cone.

• Environment friendly design for paddy separator wherein Teakwood is replacedwith metal.

• Enhancement in house trial & testing capacity a new test bed set up forcolour sorter to test product before dispatch.

Benefits derived like product improvement cost reduction new productdevelopment.

• Product Improvement: Product manufacturing is improved by changing 1. Paintingto Powder coating

2. Gas cutting/Shearing to LASER cutting/Water jet cutting 3. Conventional welding tobolted assembly. It has also resulted in reduction of assembly time. It has improvedproduct aesthetics.

• Cost Reduction: Changing source of supplier and better negotiations upgradingmaterial of construction Redesigning components to reduce weight of castings & sheetmetal components has resulted in getting cost benefits. Further initiatives likerationalizing security guards by installing CCTV cameras installing LED street lightsoptimizing air conditioned office spaces has contributing towards reduction in operatingcost.

• New Product development: New products were developed & introduced in themarket e.g. Rice Silk with humidifier Sheller with Vibro feeder multiple deck graderHusk Box with sieve polisher with top bearing support colour sorter etc.

• In case of imported technology (imported during the last 3 years reckoned fromthe beginning of the financial year)

The company has not imported any technology in last financial year.

Details of technology imported.

Not applicable since it has not imported any technology in the last three financialyears.

• Year of import.

Not applicable

Whether the technology has been fully absorbed.

Not applicable

• If not fully absorbed areas where absorption has not taken place and thereasons thereof; and Not applicable

• Expenditure incurred on research &development Approx. Rs.30 Lakhs.