Your Directors are pleased to present the Company's Twenty
Third Annual Report and the Company's audited financial statements for the financialyear ended 31st March 2017.
1. FINANCIAL HIGHLIGHTS:
| || ||( Rs in Lakhs) |
| ||Current ||Previous |
|Particulars ||Year ||Year |
| ||2016-17 ||2015-16 |
|Sales ( Net ) ||7614.83 ||11668.39 |
|Other Income ||574.20 ||825.82 |
|Total Income : ||8189.03 ||12494.21 |
|Profit before Interest ||273.63 ||647.22 |
|Depreciation & Tax || || |
|Less : Finance Cost ||31.10 ||436.19 |
|Depreciation ||112.98 ||147.40 |
|Exceptional Items ||- ||- |
|Profit/(Loss) before tax ||129.55 ||63.63 |
|Add : Deferred Tax - Asset ||95.89 ||- |
|Net Profit/ (Loss) after Tax ||225.44 ||63.63 |
2. PERFORMANCE 2016-17:
During the year under review the Company achieved a turnover of Rs 7614.83 Lakhs asagainst Rs 11668.39 Lakhs in the previous year. The decrease in the turnover is on accountof industrial slowdown and low investment in Capital Projects during the current financialyear.
The operating EBIDTA for the year is Rs 273.63 Lakhs as against Rs 647.22 Lakhs in theprevious year. The Company has posted a Profit of Rs 129.55 Lakhs during the year asagainst Rs 63.63 Lakhs in the previous year after providing depreciation of Rs 112.98Lakhs (Previous Year Rs 147.40 Lakhs) and has posted a Net Profit of Rs 225.44 Lakhs inthe current year after considering deferred tax asset of Rs 95.89 Lakhs.
3. TRANSFER TO RESERVE:
The Company do not propose to Transfer any amount to any reserve.
In order to conserve the resources the Board of Directors has not recommended anyDividend for the year ended 31st March 2017.
5. MANAGEMENT DISCUSSION AND ANALYSIS:
The core business of the Company is Design engineering manufacturing fabricationsupply erection and commissioning of all types of Mechanical Hydraulic StructuralProcess Plants Metallurgical Chemical Plants Equipments including MarineLoading/Unloading arms Truck/Wagon Loading/Unloading arms Columns Pressure VesselsDryers Boilers Power Plant Steel Plant Equipments Capital Equipments and execution ofTurnkey and EPC projects.
The Company has collaboration agreements with L3 Calzoni s.r.l. Milano Italy for FinStabilizers and Steering Gears with Controls for Indian Naval Ships and Indian Coast GuardShips. The Company has arrangement with Technip FMC France (earlier FMC Technologies SA)for Marine Truck/Wagon Loading Arms and Piggable Systems. The Company has also enteredinto teaming agreement with SPIC Yuanda Environmental Protection Equipment ManufacturingCo Ltd. (Erstwhile Jiangsu Unispendor Jidida Environmental Science and Technology Co.Ltd.) China for implementation of Environmental Projects in India.
During the current financial year the Company has executed orders/jobs by supplyingcritical equipments items and spares carried out erection installation andcommissioning work and provided technical services to various Public and Private SectorCompanies and Government bodies/Agencies in diversified fields broadly covering Refinery& Petroleum Oil & Gas Power Steel Plant equipments Ports and Naval shipyardamongst others and have executed few export orders.
The Company is approved for its engineering skills/works/ services by various premierconsulting Companies and Inspection Agencies such as Engineers India Ltd.(EIL) MECONLRIS BVIS amongst various other agencies. The Company's works has been approved byIndustrial Boiler Regulatory Authority (IBR). The Company has further been approved forISO 9001:2015 by SGS UK for Design Manufacture and Supply of Equipment for IndustrialSector Hydrocarbon Nuclear Power Space Defence Process plantsLoading/Unloading Arms Steel Plant Boiler and Boiler Equipment.
The Company continues to participate in the tenders of various public and privatesector Companies government organisations Navy Ports and actively looking forobtaining orders/execution of works in India and abroad.
a. Engineering Industry and Business Overview: The Indian Engineering Industryis expected to witness growth in a steady manner for a decade. This is due to the largereforms being undertaken by Government of India in various sectors under the drive of"MAKE IN INDIA" particularly in the Hydro Carbon Sector and InfrastructureSector which is bound to witness higher investment required for making compliance withenvironmental norms to produce diesel petrol oil and other fuels so as to follow thenorms of BIS IV and VI. This programme will require investment in Refinery to the extentof around Rs 80000 Crores over the next 2 3 years. Infrastructure Logistic andPort Sectors is expected to grow due to higher volume and lesser restriction withintroduction of GST.
Thermal Fuel Power Plant will require adhering to new environmental MOEF Normsrequiring new system of FGD and better efficiency ESP.
Our Company is working to secure technology partnership in these systems to widen ourclient base. Infrastructure Logistic and Port development is expected to increase ourshare in Marine Loading Arms business.
b. Risk & Concerns:
The present scenario of the banking system which is over burdened with large NonPerforming Assets (NPA) is restricting the investment by Public and Private CorporateSectors. However new avenues are being opened with the large Foreign Direct Investment(FDI) inflow which is expected to boost the development of engineering industry. Presentlydue to high competition and limited capital projects margins are under pressure withlarge number of bidders in Engineering Industry. We are considering the skill upgradation modernization and cost saving to the extent possible. Risk and concerns isbeing addressed on a continuous basis.
c. Internal Control System and Audit:
The Company believes in systematic working and placing of proper internal controlsystems and checks. Proper checks and systems are in place and regular reviews are held bythe Head of Department and Senior Management to check that the systems and controls areadhered. The reviews also prescribe changes wherever required.
Further the efficiency of Internal Control Systems is ensured as a combined result ofthe following activities:
1. Operational performance is reviewed each month by the Senior Management.
2. Performance of each function is closely monitored by the Head of Department andSenior Management through daily/ weekly/monthly review meetings. Reviews of allindependent functions are regularly undertaken. Cross functional activities are alsosubjected to periodic review.
3. Various policies are introduced from time to time to ensure effective functioning ofvarious departments such as Business development Projects Procurement CommercialFinance HR etc.
4. The Internal Auditors of the Company conducts financial operational and managementaudit of various functions and areas. Their reports are placed before the Audit Committeeand appropriate actions as deemed fitare initiated based on the reports.
5. The Audit Committee also oversees financial systems procedures and internalcontrols and competent to call for any information/ document from any department/function.
d. Human Resources and Industrial Relations:
The Industrial Relations in the Company's units located at Murbad during the year underreview was cordial. Human Resources Department ("HRD") works continuously formaintaining healthy working relationship with the workers and other staff members. Theunderlying principle is that workers and staff at all levels are equally instrumental forattaining the Company's goals. Training programmes are regularly conducted to update theirskills and apprise them of latest techniques. Senior Management is easily accessible forcounseling and redressal of grievances if any. The HR Department strives to maintain andpromote harmony and co-ordination amongst workers staff and members of the seniormanagement.
e. Cautionary Statement:
The Management Discussion and Analysis describe Company's projections expectations orpredictions and are forward looking statements' within the meaning of applicable laws andregulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to the Company's operations includeeconomic conditions affecting demand and supply and price conditions in domestic andinternational market changes in Government regulations tax regimes economicdevelopments and other related and incidental factors.
6. SUBSIDIARY & CONSOLIDATED FINANCIAL STATEMENTS:
The Company is not required to consolidate its financial statements for the year ended31st March 2017 as the Company does not have any subsidiary.
7. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
There have been no material changes and commitments affecting the financialposition ofthe Company which has occurred between the end of the financial year of the Company towhich the financial statements relate and date of this report.
8. CHANGE IN THE NATURE OF BUSINESS:
During the year under review there are no changes in the nature of business of theCompany.
9. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that:
i. in the preparation of the annual accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures if any.
ii. appropriate Accounting Policies have been selected and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on 31st March 2017 and of theProfit and Loss Account for the Financial Year 2016-17.
iii. proper and sufficient care has been taken in maintenance of adequate accountingrecords in accordance with the provisions of Companies Act 2013 for safeguarding theAssets of the Company and for preventing and detecting fraud and other irregularities.
iv. the Annual Accounts have been prepared on a going concern basis.
v. internal financial controls to be followed by the Company have been laid and thesame are adequate and operating effectively and
vi. proper systems have been devised to ensure compliance with provisions of allapplicable laws and that such systems are adequate and operating effectively.
10. CONSERVATION OF ENERGY TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The Information on conservationof energy technology absorption foreign exchange earnings and out go which is requiredto be given pursuant to the provisions of section 134(3)(m) of the Companies Act 2013read with Rule 8 of Companies (Account) Rules 2014 is annexed hereto marked as "Annexure- A" and forms part of this report.
11. INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operations were observed.
12. INVESTOR SERVICES:
The Company and its Registrar M/s. Bigshare Services Private Limited who is lookingafter the physical as well as Demat work and also shareholders correspondence in terms ofSEBI direction for having a common Registrar and Share Transfer Agent endeavored theirbest to service the Investors satisfactorily. Your Company has constituted a Committeecomprising of 3 Independent Directors of the Company to redress the Investor grievances.
13. BOARD MEETINGS:
Five meetings of the Board of Directors were held during the year viz. on 6thMay 2016 19th May 2016 10th August 2016 10thNovember 2016 and 10th February 2017. In respect of such meetingsproper notices were given and the proceedings were properly recorded and signed in theMinutes book maintained for the purpose. No circular resolutions were passed by the
Company during the financial year under review
14. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Mr. Ashok Satyanarayan Tandon (DIN:00028301)
In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. Ashok Satyanarayan Tandon (DIN: 00028301) was appointed asManaging Director of the Company with effect from 20.01.2016 for a period of three years.
Mrs. Bela Sundar Rajan (DIN: 00548367):
Mrs. Bela Sundar Rajan (DIN: 00548367) was appointed as an Additional and IndependentWoman Director of the Company with effect from 28.01.2016 duly approved by theshareholders in the Annual General Meeting held on 31st August 2016.
Mr. Vishal Agarwal (DIN: 00168370):
Mr. Vishal Agarwal (DIN: 00168370) was appointed as an Additional and IndependentDirector of the Company with effect from 28.01.2016 duly approved by the shareholders inthe Annual General Meeting held on 31st August 2016.
Mr. Satyendra Narain Singh (DIN: 0398484):
Mr. Satyendra Narain Singh (DIN: 00398484) was appointed as an Additional andIndependent Director of the Company with effect from 06.05.2016 duly approved by theshareholders in the Annual General Meeting held on 31st August 2016.
Mr. P.R. Ravi Ganesan:
Mr. P.R. Ravi Ganesan was appointed as Chief Financial Officer and Company Secretary ofthe Company with effect from 20.01.2016.
15. DECLARATION BY INDEPENDENT DIRECTORS:
The Independent Directors have submitted the Declaration of Independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section 149(6) of the Companies Act 2013.
16. PERFORMANCE EVALUATION OF DIRECTORS:
The Nomination and Remuneration Committee has laid down the criteria for performanceevaluation of the individual Directors and the Board.
The framework of performance evaluation of the Independent Directors captures thefollowing points:
A. Key attributes of the Independent Directors that justify his/her extension /continuation on the Board of the Company;
B. Participation of the Directors in the Board proceedings and his/her effectiveness;The evaluation was carried out by means of the replies given / observations made by allthe Directors on the set of questions developed by them which brought out the keyattributes of the Directors quality of interactions amongst them and its effectiveness.
17. COMMITTEES AND POLICIES:
Audit Committee: The Audit Committee comprises of Mr. Vishal Agarwal Chairman Mr.S.N. Singh and Mrs. Bela Sundar Rajan as Members. Four meetings were held during the yearviz. 19th May 2016 10th August 2016 10th November 2016and 10th February 2017. All the recommendations made by the Audit Committeehave been accepted and implemented by the Board of Directors. More details on thecommittee are given in the Corporate Governance Report.
Nomination and Remuneration Committee: The Nomination and Remuneration Committeecomprises of Mr. S.N. Singh Chairman Mr. Vishal Agarwal and Mrs. Bela Sundar Rajan asMembers. No meetings were held during the year.
Stakeholders Relationship Committee: The Stakeholders Relationship Committee isentrusted with the responsibility of redressing the shareholders'/ investors' complaintswith respect to transfer of shares non-receipt of Annual Report non-receipt of dividendetc. The committee comprises of Mrs. Bela Sundar Rajan as Chairman and Mr. Vishal Agarwaland Mr. S.N. Singh as the Members. No meetings were held during the year.
Remuneration Policy: The Remuneration policy provides guidelines to the Nomination& Remuneration Committee relating to the Appointment Removal & Remuneration ofDirectors and KMP. It also provides criteria for determining qualifications positiveattributes and Independence of a Directors.
The Nomination and Remuneration policy as approved by the Board is uploaded on theCompany's website at the web link: http://www.lloydsengg.in/policies.html.
Whistle Blower Policy & Vigil Mechanism: The Company has formulated WhistleBlower Policy & established Vigil Mechanism for the directors and employees of theCompany to report serious and genuine unethical behavior actual or suspected fraud andviolation of the Company's code of conduct or ethics policy. It also provides adequatesafeguards against victimization of persons who use such mechanism and makes provisionfor direct access to the chairperson of the Audit Committee in appropriate or exceptionalcases. None of the employees of the Company has been denied access to the Audit Committee.
Mr. P.R. Ravi Ganesan CFO and Company Secretary and Compliance Officer of the Companyhas been designated as Vigilance and Ethics Officer for various matters related to VigilMechanism.
The Policy on Vigil Mechanism and Whistle Blower Policy as approved by the Board isuploaded on the Company's website at the web link: http://www.lloydsengg.in/policies.html.
18. OTHER POLICIES:
The Company has formulated other policies as required under various Rules andRegulations duly approved by the Board and the same have been uploaded on the Company'swebsite at the web link: http://www.lloydsengg.in/policies.html.
19. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEE GIVEN AND SECURITIESPROVIDED:
There are no Investments made pursuant to Section 186 of the Companies Act 2013. TheCompany has not given any loan or guarantee or provided security during the year underreview. The land and buildings and plant and machinery of the demerged EngineeringDivision works at A-6/3 and A-5/5 MIDC Murbad of Uttam Value Steels Ltd. which has beentransferred and vested with our Company have pari-passu charge created in favour of thelenders of Uttam Value Steels Limited before the demerger.
20. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTY:
The Company has not entered into any transactions or arrangement with any related partyduring the financial year ended 31st March 2017 pursuant to section 188(2) ofthe Companies Act 2013.
21. AUDITORS AND AUDITORS' REPORT:
Pursuant to Section 139 of the Companies Act 2013 rules made thereunder and subjectto approval of the members of the Company at the Annual General Meeting the Board ofDirectors on the recommendation of Audit Committee appointed M/s Todarwal & TodarwalChartered Accountants (Firm Registration No.111009W) as the Statutory Auditors of theCompany for a period of Five financial years commencing from 1st April 2014 to31st March 2019 subject to ratification of the members in each of the AnnualGeneral Meeting to be held in the Five Financial years.
The Board based on the recommendation of the Audit Committee recommends theratification of the appointment of M/s Todarwal & Todarwal Chartered Accountants(Firm Registration No.111009W) as the statutory auditors. The members are thus requestedto ratify the appointment of aforesaid Statutory Auditors for the financial year 2017-2018at the ensuing Annual General Meeting.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review.
In terms of provisions of Section 148 of the Companies Act 2013 and in accordance withnotification issued by the Ministry Of Corporate Affairs F.No.52 /26/ CAB 2010dated 24th January 2012 M/s Manisha & Associates Cost AccountantsNagpur were appointed as Cost Auditor of the Company for the financial year 2016-17 bythe Board as recommended by the Audit Committee and they have offered themselves forre-appointment for the financial year 2017-18. The Company has filed Cost Audit Report forthe financial year ended 31st March 2016 with the Central Government within thetime limit prescribed under the Companies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsbased on the recommendations of Audit Committee have appointed M/s AKM & Associates afirm of Company Secretaries in Practice based in Mumbai to undertake the Secretarial Auditof the Company for the financial year ended 31st March 2017 and further theSecretarial Auditor has offered themselves for reappointment for the financial year2017-18. The Secretarial Audit Report for the financial year 2016-17 does not contain anyqualification reservation or adverse remark. The Secretarial Audit Report is annexedhereto as "Annexure-B" and forms part of this Report.
22. EXTRACT OF THE ANNUAL RETURN:
The Extract of the Annual Return for the Financial Year 2016-17 is enclosed with thisreport pursuant to section 92 (3) of the Companies Act 2013 as "Annexure-C"and forms part of this report.
23. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required under Section 197(12) read with Rule 5(2) & (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is givenhereunder in respect to the Remuneration to Mr. Ashok Tandon Managing Director:
|Sl. No. Particulars of Remuneration ||Amount( Rs ) |
|1. Gross Salary || |
|(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act1961 ||5211276 |
|(b) Value of Perquisites u/s 17(2) of the Income Tax Act1961 ||3163368 |
|(c) Profits inlieu of Salary u/s 7(3) of the Income Tax Act 1961 ||- |
|2. Commission ||- |
|3. Contribution to Provident Fund ||625356 |
|4. Performance Bonus ||- |
|Total ||9000000 |
|Ceiling as per the Companies Act 2013 (other than contribution to Provident Fund) ||8400000 |
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed hereto marked as "Annexure-D"and forms part of this report.
24. CORPORATE GOVERNANCE:
The Company has taken adequate steps to ensure that all mandatory provisions ofCorporate Governance as prescribed under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are complied with. The report on Corporate Governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms an from integral part of this Report. The requisite certificate the Auditors of theCompany confirming compliance with the conditions of corporate governance is annexedhereto marked as "Annexure-E" and forms part of this report.
25. GENERAL DISCLOSURE:
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. Details relating to deposits covered under Chapter V of the Act.
b. Issue of equity shares with differential rights as to dividend voting or otherwise.
c. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save or ESOS.
d. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
26. GREEN INITIATIVES:
Electronic copies of the Annual Report and Notice of the Annual General Meeting aresent to all members whose email addresses are registered with the Company/ Depositoryparticipant(s). For members who have not registered their email addresses physical copiesof the Annual Report and the Notice of the Annual General Meeting under Section 101 of theCompanies Act 2013 are sent in the permitted mode. Members requiring physical copies cansend a request to the Company. Your Company provides e-voting facility to all its membersto enable them to cast their votes electronically on all resolutions set forth in theNotice. This is pursuant to the Section 108 of the Companies Act 2013 and Rule 20 of theCompanies (Management and Administration) Amendment Rules 2015.
Your Directors place on record their sincere appreciation and gratitude for theassistance and generous support extended by all Government authorities FinancialInstitutions Banks Customers and Vendors during the year under review. Your Directorswish to express their immense appreciation for the devotion commitment and contributionshown by the employees of the Company while discharging their duties.
| ||For and on behalf of the Board |
|Date : 20th April 2017 ||Ashok Tandon |
|Place: Mumbai ||Managing Director |