REPORT OF THE DIRECTORS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016
The Directors of your Company are pleased to present the 28th Annual Reportand Audited Statement of Accounts for the financial year ended 31st March2016.
| ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|Revenue from Operations ||13508 ||12069 |
|Profit before tax ||930 ||582 |
|Tax Expenses ||137 ||168 |
|Profit after tax ||793 ||414 |
|Balance brought forward from previous year ||5807 ||5405 |
|Amount available for appropriation ||6600 ||5807 |
|Less: Appropriations ||319 ||- |
|Balance carried forward to Balance Sheet ||6281 ||5807 |
In view of the improved performance of the Company the Board of Directors recommend aDividend of 20% i.e. Rs. 2.00 per equity share of Face Value of Rs. 10/- for the FinancialYear 2015-16. The dividend pay-out amounts to Rs. 319 Lac including dividend distributiontax.
REVIEW OF OPERATIONS - 2015-16
As you are aware your Company is primarily engaged in designing manufacturing andcommissioning customised equipment/ systems for diverse applications. The Company's salesregistered growth by over 12% during the year. Profit Before Tax (PBT) increased to 7%against 5 % on revenue during the previous year. This was mainly due to the Company'sexecuting orders of value added products.
ORDER BOOK (Process Equipment)
Your Company has succeeded in securing good quality value added / technology basedorders for its specialised/ customised equipment / systems. Additional investment towardsCapex in certain industrial sectors including Oil & Gas is expected to help theCompany to book substantially higher level of orders for its products during the currentyear.
Some of the orders which have been received and are being executed during the yearunder review are :
Rotary Calciner for Soda Ash Industries including 800 Tons capacity.
IUG Systems for offshore platforms.
Fluidised Bed Dryer cum Cooler
Rotary Dryers Coolers Granulators and Lump Crushers from a reputed FertiliserCompany
Conveyor Dryers & Rotary Oven for food industries.
Total unexecuted orders as on 31st March 2016 stood at Rs. 94 Cr. (PreviousYear Rs. 71 Cr.)
Your company operates primarily in two divisions viz. Process Equipment and Tea DryingEquipment. Future outlook for process equipments based on orders under execution andexpected orders under negotiation is encouraging. The tea drying sector has been subduedduring the year but is expected to improve. We expect to maintain the trend of overallimproved performance in the current and following year particularly in view of projectedorder inflow for value added products both from the domestic and export market.
A detailed review of the operations is incorporated in the Management Discussion andAnalysis Report in Annexure A which forms part of this Report.
MATERIAL CHANGES & COMMITMENTS DURING THE YEAR
The Directors at their meeting on 31st March 2016 have decided to amalgamateengineering Companies viz. McNally Bharat Engineering Company Ltd. and EMC Limited alongwith their subsidiaries with your Company.
Based on report of a committee of officials from all amalgamating Companies a schemefor amalgamation was formulated and approved by the Board of Directors of respectiveCompanies. Further based on a valuation report made by an independent CharteredAccountant and fairness report given by an independent merchant banker Share exchangeratio was finalized which will be implemented after obtaining necessary approvals.
The core objective of the merged entity will be to emerge as a total engineeringsolution provider with comprehensive manufacturing Construction and Resource Managementcapability which will not only improve its marketability but will also lead to multipleopportunity creation. Each constituent of the merged entity will bring into the commonpool their list of unique clientele. Thus the common pool will be able to compile acombined list of niche customers who can now be approached with huge expanse of servicerange.
The scheme will facilitate debt consolidation which will improve the debt servicingabilities through improved cash flows. Superior asset backing coupled with healthierliquidity will lead to improved gearing which will be encouraging for banks andinstitutions.
The draft scheme of amalgamation has received approval from the Competition Commissionof India and is currently awaiting approvals from other regulatory bodies. The merger willbe effective from the date of high court approval.
a) Statutory Auditors : M/s Deloitte Haskins & Sells (Firm's Registration No. :117364W) Statutory Auditors of the Company hold the appointment for a term of three yearsupto 2017 and their appointment is subject to ratification by members at the ensuingAnnual General Meeting. They have confirmed their eligibility to the effect that theirre-appointment if made would be within the prescribed limits under the Act and that theyare not disqualified for continuation as Statutory Auditors.
b) Internal Auditors : M/s. SPAN & Associates Chartered Accountants wereappointed as internal auditors by the Board of directors for 2015 - 16 and they haveconducted internal audits periodically and submitted their reports to the Audit Committee.Their reports have been reviewed by the Statutory Auditors and the Audit Committee.
c) Cost Auditors : Your Company appointed M/s. D. Sabyasachi & Co. (FRN :00369) Cost Accountants as Cost Auditors of the Company for the Financial Year 2015-16 andtheir appointment is proposed for 2016 - 17 at the remuneration set out in the notice ofAGM and explanatory statement thereto.
d) Secretarial Auditors : M/s. Dhrumil M. Shah Mumbai were appointed assecretarial auditor of the Company for the Financial Year 2015 - 16 as required undersection 204 of The Companies Act 2013 read with the applicable rules. The SecretarialAudit Report for 2015 - 16 forms part of the Annual Report as Annexure VI.
In respect of the qualification in the Auditors' Report regarding partial provision fordiminution in the value of investment in equity shares of McNally Bharat EngineeringCompany Limited the Company is of the opinion that the diminution in market value ofthese shares is temporary and is a result of general slowdown in the economy.
The Directors of your Company have on a conservative basis made a partial provisionduring the year under review to cover the diminution in the value of the investments.
The Company has also filed Form B with the stock exchanges as required by theregulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provision of Section 134 (5) of the Companies Act 2013 the Board ofDirectors of your Company hereby confirms :
1) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departure;
2) that 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 as at the end of thefinancial year and of the Profit and Loss of the Company for the period;
3) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4) that the Directors have prepared the annual accounts on a going concern basis.
5) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Pursuant to the provisions of Regulation 34(3) and 53(f) read with schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 Management Discussion& Analysis Report (Annexure - I) Report on Corporate Governance and ComplianceCertificate on Corporate Governance (Annexure VIII) are annexed to this Report.
Employees' relations were cordial throughout the year. Several HR IR initiatives toimprove employee relations have been initiated during the year and have been wellaccepted.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required to be disclosed pursuant to Section 134 (3) (m) ofthe Companies Act 2013 read with The Companies (Accounts) Rules 2014 as amended isappended to this Annual Report as Annexure "II" and forms part of thisDirectors' Report.
ADEQUACY OF INTERNAL CONTROL SYSTEM WITH RESPECT TO THE FINANCIAL STATEMENTS
The Company has a comprehensive system of internal control which is being strengthened.The internal control system is also subject to review by auditors.
The Company has appointed a firm of auditors for conducting internal audit on a halfyearly basis and the report is considered by the Audit Committee of the Board headed by aNon-executive Independent Director.
Mr. Supriya Mukherjee continued as Managing Director of the Company during the year asper terms of appointment approved by members. Company also received approval of theCentral Government pursuant to provisions of Section 197 of The Companies Act 2013 forwaiver of recovery of excess remuneration paid to the Managing Director during 2015 - 16and for payment of remuneration payable to the Managing Director for his 2 years tenure of2015 - 16 & 2016 -17; as per terms of remuneration approved by the members with somereduction. It may be noted the same level of remuneration that Mr. Mukherjee had been paidsince 01.04.2010 has been maintained while seeking approval of the Central Government asaforesaid.
Members appointed Mr. Aditya Khaitan and Mrs. Priya Saran Chaudhri as directors of thecompany at previous AGM of the Company held on 28th September 2015.
Mrs. Priya Saran Chaudhri director retires by rotation pursuant to Section 152 of TheCompanies Act 2013 and Article 86 of Articles of Association of the Company at theensuing Annual General Meeting of the Company and being eligible offers herself forre-appointment.
DECLARATIONS BY INDEPENDENT DIRECTORS
Necessary declarations from all the Independent Directors of the Company confirmingthat they meet the criteria of independence as prescribed have been received.
KEY MANAGERIAL PERSONNEL
During the year 2015 - 16 following officials continued as Key Managerial Personnelpursuant to Section 203 of The Companies Act 2013 :
i. Mr. Supriya Mukherjee Managing Director
ii. Mr. A. Suresh Chief Financial Officer
iii. Mr. Arvind Bajoria Company Secretary HOLDING SUBSIDIARY AND ASSOCIATECOMPANIES
Your Company has no holding or subsidiary company. Williamson Magor & CompanyLimited is holding 4319043 equity shares constituting 32.58% of total shareholding of theCompany so it is an associate company within the meaning of Section 2 (6) of TheCompanies Act 2013.
RELATED PARTY TRANSACTIONS
Your Board has developed and approved a Related Party Transactions Policy for purposesof identification and monitoring of related party transactions and the same is uploaded onthe Company's website.
Your Company has not entered into any contracts/arrangements with related parties asrequired under Section 188(1) of the Companies Act 2013 during the year under review.However there are contracts/arrangements
with related parties as defined by the said Act executed prior to April 1 2014 andthe Statement in Form AOC -2 containing the details of the Related Party Transactionspertaining to such ongoing contracts forms a part of this Report as Annexure III .
Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are as per annexure V.
Mr. Supriya Mukherjee Managing Director is the only executive director in receipt ofremuneration the details of which are available in the corporate governance reportattached to the directors' report.
The Company has formulated a Whistle Blower Policy to establish a vigil mechanism forDirectors and employees of the Company to report concerns about unethical behaviouractual or suspected fraud or violation of the company's code of conduct or ethics policy.The VIGIL MECHANISM is available on the website of Company.
The Company has formulated a Remuneration Policy for Directors Key ManagerialPersonnel and employees of the Company to ensure that adequate remuneration paid toattract retain and motivate the senior management employees to run the companysuccessfully. The Policy is available on the website of the Company and also annexedherewith.
Directors have adopted risk management policy to identify the risks involved in allactivities of the Company. The main objective of this policy is to ensure sustainablebusiness growth and to promote a pro-active approach in identifying reporting evaluatingand mitigating risks associated with the business. The policy guides the board inidentification of various business risks and to take appropriate steps to mitigate thesame.
CORPORATE SOCIAL RESPONSIBILITY
The Company will constitute Corporate Social Responsibility (CSR) Committee in 2016-17in compliance of provisions of Section 135 of the Companies Act 2013 and SEBI ListingRegulations.
EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in Form No. MGT - 9 as per annexure VII forms part ofthe Board's report. OTHER DISCLOSURES During the year under review:
a. There were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
b. Your Company has not accepted any deposit from the public falling within the ambitof Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014.
c. There were no significant or material orders passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
The Directors place on record their sincere appreciation to all its Collaborators forextending their valuable support and co-operation.
The Directors wish to convey their appreciation to their Customers Bankers DealersSuppliers Stock Exchanges Government and all other Stakeholders for the excellentassistance and cooperation. The Directors also thank all the employees of the Company fortheir valuable service and support during the year.
| ||For and on behalf of the Board |
|Place : Kolkata ||Aditya Khaitan |
|Date : Aug 9 2016 ||Chairman |