Your Directors have pleasure in presenting the Twenty Fourth Annual Report togetherwith the Audited
Balance Sheet & Profit and Loss Account for the year ended 31.03.2017
The operating results for the year 2016-2017 are given below :
| ||(Rs in Lakhs) |
|Profit before Interest and Depreciation || |
|and Other adjustments ||1798.36 |
|Less: Interest ||97.38 |
|Depreciation ||104.95 |
| ||202.33 |
|Net Profit before Tax ||1596.03 |
|Provision for Tax : || |
|Current Tax ||584.61 |
|Deferred Tax (income) / expenses ||(3.03) |
| ||581.58 |
|Net Profit after Tax ||1014.45 |
|Amount brought forward from previous year ||456.63 |
|Amount available for appropriation ||1471.08 |
|Appropriations || |
|General Reserve ||75.00 |
|Interim Dividend on Equity Shares ||166.40 |
|Final Dividend on Equity Shares* || |
|Dividend Distribution Tax ||33.88 |
|Surplus carried over to Balance Sheet ||1195.80 |
* Will be recognised as a liability on approval by the shareholders at the AnnualGeneral Meeting.
The Company's gross income for the financial year ended 31st March 2017 was Rs.6950.22 lacs compared to Rs.5398.72 lacs in the previous year. The profit before tax forthe Company is Rs. 1596.03 lacs as against Rs. 1110.27 lacs in the previous year. Thedepreciation for the year is Rs.104.95 lacs compared to Rs.121.37 lacs in the previousyear.
After providing Taxation the Company's net profit stands at Rs.1014.45 lacs againstRs.738.79 lacs in the previous year.
Your company proposes to transfer Rs. 75 lacs to General Reserve out of the amountavailable for appropriation Rs.1471.08 lacs and an amount of Rs. 1195.80 lacs is to becarried over to Balance Sheet after appropriation of Dividend on Equity Shares includingDividend Tax.
The Net worth of the company is at Rs.2772.60 lacs as on 31.03.2017 as againstRs.1958.44 lacs in the previous year.
The Board of Directors declared an interim dividend of Rs 2/- per Equity Share on 8320000 equity shares of Rs 10/- each aggregating to Rs 166.40 lacs on 09.02.2017 and thedividend had been distributed to the shareholders. The approval of the shareholders hasbeen perused in this Annual General Meeting.
The Board of Directors has recommended a final dividend of Rs. 2/- per Equity share on8320000 equity shares Rs 10/- each aggregating to Rs 166.40 lacs for the financial yearended 31st March 2017 which if approved in the ensuing Annual General Meeting will bepaid to all the equity shareholders whose names appear in the Register of Members as on05th August 2017.
With the approval of the final dividend the total dividend for the financial year ended31st March 2017 has been Rs. 4/- per share (Rs. 332.80 lacs).
The Company continued to manufacture and market high quality castings meetinginternational standards. Sales and margins were increased due to the continuingoutsourcing of castings from reliable outsources and by effective control over costs.
The Company hopes to improve the margins further during the current year unless anychanges In the international scenario affect the Company results.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT TRENDS & DEVELOPMENT
Domestic market has been improving for the products manufactured by our Company. Wehave been able to convince customers like L & T Voltas Wipro etc to specify ourBrand into their buying specification. We are hoping to have the Government to introduce"Made in India" products on most of the infrastructure projects where Governmentfund is involved.
We hope to generate sizable volume of business with the new products developed duringthe second half of the year.
Mr Jayaram Govindarajan was appointed as Additional Director on 12.08.2016 and holdsthe said office till the date of Annual General Meeting. A notice has been received from amember proposing his candidature for his appointment.
Mr A V Palaniswamy Managing Director who retires by rotation and being eligibleoffers himself for reappointment.
KEY MANAGEMENT PERSONNEL
Mr. A.V. Palaniswamy Managing Director Mrs Panath Anitha Whole Time Director Mr. J.Saravanan Chief
Financial Officer and Mr. S. Aravinthan Company Secretary of the Company are the KeyManagement
Personnel as per the provisions of the Companies Act and rules made there under.
Mr Jayaram Govindarajan was appointed as the Whole Time Director with effect from14.12.2016
suBsidiaries Joint Ventures and associate coMPanies
The company does not have any Subsidiary Joint Venture or Associate Company
COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
The Company is committed to develop manufacture and supply effective products to meetthe customer requirements Striving towards continuous improvement in total quality andkeeping abreast of the latest technologies have been enabling the Company to achieve itsgoal.
The focus on training and development of the employees' skills has well bearing resultsin the goal attainment.
The ultimate benefit of these efforts has been aimed in enrichment of the value to theshareholders.
The environment and Community has been well recognized while moving towards the goal.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors further report that
(i) in the preparation of annual accounts the applicable accounting standards have beenfollowed and there were no material departures;
(ii) the accounting policies selected have been applied consistently prudent judgmentsand estimates have been made 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 and the cash flow statementfor the year ended 31 (iii) they have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
(v) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were Internal financialcontrol means the policies and procedures adopted by the Company for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information.
(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CODE OF CONDUCT
All Directors and senior management of the Company have affirmed Compliance with theCode of Conduct of National Fittings Limited for the financial Year ended 31st March 2017.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the as stipulated in Section 149(6) of the Companies Act 2013 so as toqualify themselves to be appointed as Independent Directors under the provisions of theCompanies Act 2013 and the relevant rules.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMININGQUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR KEY MANAGEMENT PERSONNELAND OTHER EMPLOYEES
The company shall have such person on the Board who complies with the requirements ofthe Companies Act 2013. Directors/KMPs shall be persons of sound integrity and honestyapart from knowledge experience etc in the respective fields.
No person less than the age of 21 years shall be appointed as the director of theBoard. Composition of the Board shall be in compliance with the requirements of theCompanies Act 2013. The Executive Directors are paid with remuneration as approved by themembers but are not paid sitting fees.
Managing Director Whole Time Director Company Secretary and Chief Financial Officershall be the Key Management Personnel (KMPs) of the Company. All persons who areDirectors KMPs members of Senior Management and all the employees shall be abide by thecode of conduct. Independent directors are not entitled for ESOPs
MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWNPERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS
1. Nomination and Remuneration Committee of the Board prepared and sent through itsChairman Draft feedback form for evaluation of the Board and independent directors.
2. Independent Directors at a meeting of themselves considered and evaluated theBoard's performance performance of the Chairman and other non-independent Directors.
3. The Board subsequently evaluated performance of the Board the Committees andIndependent Directors.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All the related party transactions that were entered during the financial year were inthe ordinary course of the business of the Company.
There were no materially significant related party transactions entered by the Companywith its promoters Directors Key Management Personnel and other persons which may have apotential conflict with the interest of the Company.
All the related party transactions are placed before the Audit Committee for approval.For the business transactions with the related parties which are of repetitive nature aswell as for the normal business transactions which cannot be foreseen prior omnibusapproval from the Audit Committee are obtained and accordingly required disclosures aremade to the Committee on quarterly basis in terms of the approval of the Committee.
The Policy on materiality of related party transactions and also on dealing with therelated party transactions as approved by the Audit Committee and Board of Directors isuploaded on the Company's web-site and the link for the same ishttps://www.nationalfitting.com.
The particulars of Contracts or Arrangements with the related parties made underSection 188 of the Companies Act 2013 are furnished in Annexure 1 and are attachedto this report.
LISTING OF SHARES IN EXCHANGE AND DELISTING
The shares are listed in Bombay Stock Exchange and will be continued to be listed inBombay Stock Exchange which has extensive networking and the investors have access toon-line dealings with the company's securities across the country.
The Company duly paid the necessary listing fees with Bombay Stock Exchange.
There was no issue of fresh equity shares during the financial year. No Bonus Shareswere issued.
The Company has not issued any Sweat Equity Shares and not provided any Employee StockOption Scheme. The Company has not bought back any of its securities during the year underreview.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has implemented adequate procedures and internal controls which providereasonable assurance regarding reliability of financial reporting and preparation offinancial statements.
The Company also assures that internal controls are operating effectively.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year and the date of thereport.
RISK MANAGEMENT POLICY
Potential risk for the business of the Company and steps to be adopted by the Companyto handle the risks has been reviewed regularly. Following are the few risks and themethods to be adopted by the Company to handle them.
1) Market Risk
Due to the continuing low crude oil prices the countries In the Middle East havereduced their spending on infrastructure like high rise residential buildings shoppingmalls hotels and convention halls where our products are being used in Fire Protectionand Air Conditioning systems. Competitive prices from China have made it difficult to getapprovals on new projects.
Backlog of orders for the existing projects will allow us to maintain our sale atreduced margin during the next 10 months. Company is working with the component suppliersto improve productivity and reduce costs. Steps have been taken by replacing the olderequipments with relatively higher production machines to improve productivity in house andreduce costs.
2) Exchange Risk
Indian currency has appreciated 6% during the last 12 months where as the Chinese themajor competitor have benefited by the depreciation of their currency by almost 7% duringthe same period.
Company may experience a reduction of margin during the current financial year but weare hoping to improve the sales volume and quantum of margin to maintain the earning pershare.
Power situation has improved substantially during the year and do not expect any powercut during the current financial year.
4) Manpower Requirement
Company and Component Suppliers are depending on expat labor from the northern statesfor most of the operations. Frequent change of man power in critical operations arepresenting a challenge in training of unskilled new labor.
Company has been increasing the salary and other benefit structure substantially toretain local and expat labor. Also steps have been taken to mechanize more of theoperations to improve productivity and utilizing semi-skilled labor.
5) Product Development
Most of the competitors have developed and started supplying all the items in our lineof production for the fire protection markets at competitive prices.
Company has developed larger size fittings to HVAC market. Also the Company hasdeveloped and will be getting approval from testing agencies for new products to stayahead of competition.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A Board level Committee of CSR has been constituted and the Board has adopted a CSRPolicy as recommended by the Committee.
The Company envisaged a project of constructing a school building at a GovernmentMunicipal School at Madhapur village at a cost of Rs 27 lacs. At present the Company ispursuing the project.
The Annual Report on the Company's CSR activities is furnished in Annexure 2 andattached to this report
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure3 and is attached to this Report.
There were no significant and material orders passed by the regulators or courts or thegoing concern status and company's operations in future.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has unclaimed dividend amounting to Rs. 4232323/-
No amount is required to be transferred to Investor Education and Protection Fund forthis financial year.
The Company has neither accepted nor renewed any deposits during the financial year.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow: (i) & (ii) The ratio of the remuneration of each Director to the median andmean remuneration of the employees of the company for the financial year and thepercentage increase in remuneration of each Officer director Chief FinancialCompany Secretary or Manager if any in the financial year:
|Name of Directors/Key Management Personnel ||Ratio to Median Remuneration (times) ||% Increase / Decrease in Remuneration |
|Mr A V Palaniswamy Managing Director ||13.96 ||10.42 |
|Mr Jayaram Govindarajan ||2.11 || |
|Mr M Loganathan ||0.13 ||NA |
|Mr R Alagar ||0.95 ||8.70 |
|Mrs A PanathAnitha ||1.65 ||20.00 |
|Mr J Saravanan (Chief Financial Officer) ||3.39 ||25.36 |
|Mr S Aravinthan (Company Secretary) ||2.76 ||17.12 |
iii) The percentage increase in the median remuneration of employees in the financialyear: 13%
iv) The number of permanent employees on the rolls of the Company: 85 v) Explanation onthe relationship between average increase in remuneration and company performance:
On an average employees received an increase of 22% during the financial year 2016-17.The remuneration components include a fair proportion of fixed and variable pay. Theincrease in remuneration is in line with the market. In order to ensure that remunerationreflects Company performance the performance pay is also linked to organizationperformance apart from an individual's performance.
vi) Comparison of the remuneration of the key managerial personnel against theperformance of the Company:
|Aggregate remuneration of key managerial personnel (KMP) in FY 2016-17 ||4531142 |
|Revenue ||670654122 |
|Remuneration of KMPs (as % of revenue) ||0.68 |
|Profit before Tax (PBT) ||159603357 |
|Remuneration of KMP (as % of PBT) ||2.84 |
vii) Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:
| || || ||(In Lacs) |
|Particulars ||As at 31.03.2017 ||As at 31.03.2016 ||% Increase |
|Closing price of share at BSE (Rs.) ||240 ||72.45 ||231.263 |
|Market Capitalisation (Rs.) ||19968.00 ||6027.84 ||231.263 |
|Price Earnings ratio ||19.68 ||8.159 ||141.31 |
|Net worth ||2572.33 ||1958.43 ||31.35 |
viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: The averageincrease in salaries of employees other than managerial personnel in 2016-17 was 23%.Percentage increase in the managerial remuneration for the year was 19%.
ix) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company:
| ||Mr. a V Palaniswamy Managing Director ||Mr.Jayaram Govindarajan Whole Time Director ||Mrs. a Panath anitha Woman Director ||Mr. J saravanan Chief Financial Officer ||Mr. s aravinthan Company Secretary |
|Remuneration in FY2016-17 ||2650000 ||400000 ||313642 ||643000 ||524500 |
|Revenue ||670654122 ||670654122 ||670654122 ||670654122 ||670654122 |
|Remuneration as % of Revenue ||0.40 ||0.06 ||0.05 ||0.10 ||0.08 |
|Profit before Tax (PBT) ||159603357 ||159603357 ||159603357 ||159603357 ||159603357 |
|Remuneration (as % of PBT) ||1.66 ||0.25 ||0.20 ||0.40 ||0.33 |
x) The key parameters for any variable component of remuneration availed by thedirectors: Not applicable. xi) The ratio of the remuneration of the highest paid directorto that of the employees who are not directors but receive remuneration in excess of thehighest paid director during the year: Not applicable. the remuneration policy of thecompany. xii) Affirmation The Company affirms that remuneration is as per the remunerationpolicy of the Company
The information required under Section 197 of the Act read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2015 are givenbelow:
During the period under review there was no employee drawing remuneration in excess ofthe limits prescribed under Section 197 of the Companies Act 2013 and Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The term of the Statutory Auditor M/s Krishaan & Co has expired due to thestipulation of rotation of Auditors in the Companies Act 2013 and M/s V Krish &Associates Chartered Accountants Chennai (Firm Registration No: 001452S) will beappointed as the Statutory Auditor until the conclusion of the 25th Annual GeneralMeeting. the Auditors for the appointment of them as statutory The Company has received acertificate auditors and to the effect that if they are appointed it would be inaccordance with the provisions of Section 141 of the Companies Act 2013.
Their appointment and payment of remuneration are to be confirmed and approved in theensuing Annual General Meeting.
SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act 2013 the Company has appointed Mr MR L Narasimha B.Com FCS Practicing Company Secretary (Cop No: 799) as the SecretarialAuditor for the financial year 2017 whose report on 27th May 2017 is attached separatelyto this report. Annexure 4.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There were no qualifications reservations or adverse remarks made either by theAuditors or by the
Practicing Company Secretary in their respective reports.
.i Board of directors
a) Composition of Board of Directors:
|Executive Promoter Director ||1 |
|Executive Non-Promoter Director ||2 |
|Non-Executive Independent Director ||2 |
b) Non-Executive Directors Compensation
There are no pecuniary relationship/transactions with the Non-Executive Directorsvis--vis the Company.
c) Board Meetings
Dates of Board meetings are fixed in advance and agenda papers are circulated todirectors seven days before the meeting
d) Number of Board meetings conducted on the year under review
The Company had five Board meetings during the financial year under review as on28.12.08.2016 24.10.2016 14.12.2016 and 09.02.2017. The AGM was held on 12.08.2016.
e) Attendance of Board of Directors at Board Meetings and AGM are:
|S No ||Name of the LDirectors ||No of Board Meetings attended ||Last AGM Present/Absent |
|1 ||Mr. A. V. Palaniswamy ||5 ||Present |
|2 ||Mr. M. Loganathan ||5 ||Present |
|3 ||Mr. R. Alagar ||5 ||Present |
|4 ||Mrs. A. Panath Anitha ||5 ||Present |
|5 ||Mr. Jayaram Govindarajan ||3 ||Present |
COMMITTEES OF THE BOARD
(A) AUDIT COMMITTEE:
The Audit Committee of the Board comprises three directors namely M.R. AlagarChairman Mr. A.V. Palaniswamy and Mr. M. Loganathan are members. The composition ofAudit Committee meets the requirement of Section 177 of the Companies Act 2013
Members of the Audit Committee have requisite financial and management expertise
(ii) Terms of reference
Recommendation for appointment remuneration and term of appointment of theauditors of the Company.
Discussion and review of periodic audit reports and discussion with externalAuditors about the scope of audit including the observations of Auditors.
Review and monitor the auditor's independence and performance
Approving Internal Audit Plans and reviewing efficacy of the function.
Overseeing Financial Reporting Process
Reviewing periodic financial results financial statements and auditors' reportthereon.
Approval or modification of transaction of the company with related parties
Scrutiny of inter-corporate loans and investments
Evaluation of internal financial controls and risk management systems.
Valuation of undertakings or assets of the Company.
The committee met 4 times during the period on the following dates: 28.05.201612.08.2016 24.10.2016 and 09.02.2017
The Statutory Auditors Internal Auditor and the Chief Financial Officer are invited toattend and participate at meetings of the Committee.
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.
(B) SHAREHOLDERS RELATIONSHIP COMMITTEE
The Shareholders / Investors Grievances Committee have been reconstituted asShareholders Relationship Committee in line with Section 178 (5) of the Companies Act2013 and are headed by Mr M Loganathan Non-Executive Director.
The Committee monitors re-dressal of complaints received from shareholders/investorswith respect to transfer of shares non-receipt of dividend non-receipt of Annual Reportetc. The Committee also take note on number of transfers processed issue of fresh sharecertificates dematerialization of share certificates report about top shareholdersshare holding pattern etc.
There were no complaints received for this financial year. No instrument of transferswas pending on 31st March 2017.
All the communication received from shareholders was satisfactorily complied withwithin the stipulated time.
During the year the Committee met 7 times.
S Aravinthan Company Secretary is the Compliance Officer.
The Company has appointed M/s. SKDC Consultants Limited Coimbatore as Share TransferAgent.
Transfer/transmissions issue of duplicate certificates etc as well as requests forde-materialization are approved/ confirmed as the case may be within the prescribedperiod through the above Share Transfer
Agent. No valid transfer request remained pending for transfer to the transferees as on31.03.2017.
(C) NOMINATION AND REMUNERATION COMMITTEE
The Company has a Remuneration Committee consists of Mr R Alagar Independent DirectorM Loganathan Independent Director and Mr A V Palaniswamy Non-Independent Director asmembers. Functions of the remuneration committee are
1) Level and composition of remuneration which is reasonable and attractive to retainand motivate quality directors
2) Monitoring the performance and remuneration of the directors key managerialpersonnel and other employees of the Company.
The Remuneration of Whole Time Director is determined by the Remuneration Committeeconsists of only Non-Executive Directors. The recommendation of the remuneration committeeare considered and approved by the Board subject to the approval of the Shareholders.
The company has not paid any remuneration to any of its Non Executive Directors exceptthe Sitting Fees for attending the meetings of the Board of Directors and Audit Committee
SEBI relaxed the applicability of Corporate Governance for certain companies (companieshaving paid up equity share capital not exceeding 10 crores and net worth not exceeding 25crores as on the last day
Obligations and Disclosure Requirements) Regulations of the previous financial 2015.The equity share capital of the company is 8.32 crores and net worth is 19.58 crores andas such Corporate Governance Report has not been submitted along with the Board Report.
The Board of Directors assuring that the Corporate Governance as stipulated in theCompanies Act 2013 have been fully complied with.
CONSERVATION OF ENERGY
Machines with newer and less power consuming
a) Company has replaced most of the less efficient equipments in all the areas ofmanufacturing.
b) Long term contract has been executed with wind energy suppliers there by reducingcosts and less dependency on fossil fuel energy. Nearly 80% of the energy requirement willbe from wind energy.
c) Company is also exploring the economic viability of installing its own wind mills toreduce cost of power.
TECHNOLOGY ABSORPTION INDUSTRIAL RELATIONS
Company has taken steps to introduce newer technology machines in production andinspection areas to increase productivity and reduce rejection levels.
Computer generated models for tooling data collection and manufacturing processes havebeen introduced to improve productivity.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign exchange inflow (actual) : Rs. 577549322/-
Foreign exchange used (actual) : Rs. 16381365/-
Relationship with the employees/labor was cordial during the year under review.
Your Directors take this opportunity to thank M/s. Bank of India for the supportextended during the period. Your Directors also wish to thank all the suppliersemployees Government Departments/Agencies and others for their valuable contribution andassistance during the year.
| || ||FOR AND ON BEHALF OF THE BOARD |
|Place : Coimbatore ||Sd/- a.V. PaLanisWaMy ||Sd/- JayaraM GoVindaraJan |
|Date : 27.05.2017 ||DIN No. 01817391 ||DIN No. 02178416 |
| ||Managing Director ||Whole-Time Director |
Form No. AOC 2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2015)
DISCLOSURE OF PARTICULARS CONTRACTS / ARRANGEMENTS ENTERED INTO BY THE COMPANY WITHRELATED PARTIES REFERRED TO IN 188 (1) OF THE COMPANIES ACT 2013 INCLUDING certain arMsLenGth transaction under third ProVision thereto
1) Name of the related Party and Nature of relationship : a) Interfit IndiaLimited the Holding Company of National Fittings Limited b) Merit Industries Limited anEnterprise in which director has significant influence.
2) Nature of Contracts/arrangements/transactions a) Contracts for the purchase of roughiron castings (Interfit India
Merit Industries Limited - Rs 129750290/-) b) Leasing of land and factory building(from Interfit India Limited Rs 6120000/-)
3) Duration of Contracts/arrangements/transactions
Contracts of purchase of rough iron castings are made regularly and these aretransactions entered in the ordinary course of business.
Lease of land and factory buildings by Interfit India Limited has been extended for atenure of two years from 01.04.2017
4) Salient terms of the contracts or arrangements or transactions including the valueif any:
Based on the requirement the orders have been placed on regular basis. The supplies areas per quality standard stipulated for which the invoices have been raised at arm's lengthrates complying with local and state laws.
5) Date(s) of approval by the Board if any
Based on the agreement for procurement approved by the Board regular approval is notrequired as the contracts have been entered in arms length price. However the Register ofcontracts or arrangements in which directors are interested is noted in Board meetings atregular intervals.
6) Amount Paid as advances if any:
Advances have been made (InterfitIndia Limited -Nil- and Merit IndustriesLimitedongoing basis Rs 9950261/-) for the supply of rough iron castings and have beenadjusted with regular supplies.
| || ||FOR AND ON BEHALF OF THE BOARD |
|Place : Coimbatore ||Sd/- a.V. PaLanisWaMy ||Sd/- JayaraM GoVindaraJan |
|Date : 27.05.2017 ||DIN No. 01817391 ||DIN No. 02178416 |
| ||Managing Director ||Whole-Time Director |