To the Members of
ROTO PUMPS LTD
Your Directors have pleasure in presenting their 41st Annual Report of theCompany together with the Audited Financial Statements for the financial year ended 31stMarch 2016.
The Companys financial performance for the year under review alongwith previousyears figure is given here under:
| || |
Amount Rs. In Lacs
|Particulars ||Financial year ended |
| ||31st March 2016 ||31st March 2015 |
|Revenue from Operations ||9497.94 ||9427.95 |
|Other Income ||31.79 ||6.64 |
|Profit / (loss) before finance costs depreciation and taxation ||1693.87 ||1870.10 |
|Less: Finance Costs ||318.22 ||223.27 |
|Depreciation ||765.43 ||484.14 |
|Profit before Taxation ||610.22 ||1162.69 |
|Less :Taxation ||182.44 ||421.18 |
|Profit after tax ||427.78 ||741.51 |
|Add: Profit brought forward ||3905.99 ||3372.15 |
|Less: Additional depreciation upto 31.03.2015 ||- ||16.06 |
|Profit available for appropriation ||4333.77 ||4097.60 |
|Appropriations: || || |
|Proposed Dividend ||30.90 ||92.72 |
|Dividend Distribution Tax ||6.29 ||18.87 |
|Transfer to General Reserve ||- ||80.00 |
|Surplus carried to Balance Sheet ||4296.57 ||3905.99 |
Your Directors are pleased to recommend a dividend of INR 0.20 per share (i.e.10%) forthe financial year ended 31st March 2016 which if approved by the members at theforthcoming Annual General Meeting would result in a dividend outflow of INR3090761/-and dividend distribution tax of Rs. 629206 /- aggregating a total outflow ofRs. 3719967/-.
The Paid up Equity Share Capital as on 31st March 2016 was Rs. 3.09 Crores. During theyear under review your Company has not issued any shares bonus shares or bought back anyshares. The Company has not issued shares with differential voting rights. It has neitherissued employee stock options nor sweat equity shares and does not have any scheme to fundits employees to purchase the shares of the Company.
Transfer of unclaimed dividend to Investor Education and Protection Fund
In terms of the provisions of Section 205A(5) of the Companies Act 1956 the unclaimeddividend relating to the financial year 2007-08 has been remitted to the InvestorEducation and Protection Fund established by the Central Government. Further theunclaimed dividend relating to the financial year 2008-09 is becoming due for remittanceto the said Investor Education and Protection Fund on 06.11.2016.
Details of unclaimed dividend are available on the Companys website atwww.rotopumps.com.
Year in retrospect
Your Company has achieved income from operations of Rs. 9497.94 lacs against previousyears income of Rs. 9427.95 lacs registering a marginal growth of 3.9%. Domesticsale was Rs. 3307.07 lacs as compared to Rs. 3117.72 lacs registering growth of 6% overlast year. Export sale was Rs. 6190.87 lacs as compared to Rs. 6310.23 lacs which waslower than last year by 1.9%.Export sales include Rs. 4122.95 lacs sales from MarketingOutlets in United Kingdom and Australia. Revenue from total export sales constitutes 65.18% of total revenue from operations. The reason for marginal fall in export sales has beendue to sluggish growth in major economies.
Your companys operations are expected to be better due to marginal rise in Exportsales including to overseas subsidiaries. On Domestic front the outlook is lookingslightly encouraging with projected GDP growth of 7.6% this would auger increased Govt.spending in infrastructure and investments by private sector due to economic reformsincluding Goods and Service Tax. The pressure on margins would however continue as thereis still a wide gap between supply and demand.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company and its subsidiaries and jointventure have been prepared in accordance with Accounting Standard 21 issued by theInstitute of Chartered Accountants of India form part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.
The annual accounts of the subsidiaries andJoint Venture Company and relatedinformation are kept at the Registered Office of the Company as also at the registeredoffices of the respective subsidiary companies and will be available to investors seekinginformation at any time.
Performance of the Subsidiaries and Joint Venture Company
a. Roto Pumpen GmbH - a wholly owned subsidiary company setup in Germanyduring the financial year 2011-12 to carry on the sales and marketing of theCompanys products in German region to service the customers more effectively. Thesubsidiary has commenced its business operations in the last quarter of the previous year.The subsidiary had achieved an Income of Euro 199307 and incurred a loss of Euro 90847during the year under review.
Considering the economic conditions and other factors the Board of Directors hasdecided to suspend the business operations of Roto Pumpen GmbH German Subsidiary Companyfrom 31st August 2016. The related market would be directly served by the MarketingOffice in United Kingdom.
b. Roto Pumps Americas Inc.a wholly owned subsidiary company setup inUSA. during the previous year The subsidiary had further setup a wholly owned subsidiarycompany in the name and style of Roto Pumps North America Inc. to carry on sales andmarketing of Companys products in North American region and also maintain warehousefacility to carry inventory. During the year under review it achieved an Income of USD696756 and incurred a loss of USD 334852.
c. Roto Overseas Pte Ltd - a Joint Venture Company (JVC) setup during theprevious year in Singapore with Mr. Ed Lemke of South Africa. Your Company holds sixtypercent stake in the joint venture company. The JVC had acquired a strategic majorityequity stake in Ecochem Pumps Pty Ltd a South African Company engaged in the sales andmarketing pumps and other related equipment. During the year the JVC has divested itssaid equity stake at par value. Further the JVC has placed sales proceeds of equity stakein another South African Company known as Roto Pumps (Africa) Pty Ltd with intent toacquire majority stake. Proceedings for acquisition of equity stake could not be completedtill 31st March 2016. Roto Pumps (Africa) Pty Ltd has started sales and marketing ofpumps and parts of pumps during the year under review and has achieved a sales turnover ofSouth African Rand (ZAR) 613493 and incurred a loss of ZAR 533702. The process ofacquisition of shares is being completed.
Statements containing the salient features of financial statementsof wholly ownedsubsidiary companies and joint venture company in the prescribed Form AOC-1 is annexed asper Annexure-A.
Particulars of Loans Guarantees or Investments
Your Company has made following investments during the year under review;
a. Rs. 14679751/- to acquire 200000 equity shares of Euro 1 each in the sharecapital of Roto Pumpen GmbH an existing wholly owned subsidiary company in Germany;
b. Rs. 29376500/- to acquire 450000 equity shares of USD 1 each in the sharecapital of Roto Pumps Americas Inc. a new wholly owned subsidiary company in USA;
Your Company has not given any loan or provided any guarantees as on 31st March 2016.
The Company has neither accepted nor renewed any deposits during the year under review.
Related Party Transactions
All Related Party Transactions that were entered into by the Company during the yearunder review were on an arms length basis and in the ordinary course of business andwere in compliance with the applicable provisions of the Companies Act 2013 (theAct) and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015. There were no materially significant Related PartyTransactions made by the Company during the year that would have required Shareholderapproval under Section 188 of the companies Act 2013 and Regulation 23 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
All Related Party Transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee has been obtained for the transactions whichare repetitive in nature. A statement of all Related Party Transactions is placed beforethe Audit Committee for its review on a quarterly basis specifying the nature value andterms and conditions of the transactions and other relevant details as are required interms of the Companies Act 2013 and Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. Details of the transactionswith Related Parties are provided at Note no. 28 of the accompanying standalone financialstatements.
The Company has formulated a risk management policy to put in place a procedure toinform the Board about the risk assessment and minimization procedure. The Company hasalso formed a Risk Management Committee comprising of Directors and Executives of theCompany to assess the risk and minimization procedures and report the same to the Board atthe meetings.
Internal Control System and its adequacy
Your Company has an adequate internal control system commensurate with the size of theCompany and nature of its business.
Further in terms of provisions of Section 138 of the Companies Act 2013 and the rulesmade thereunder your Company has appointed M/s. Kapoor Tandon & Co. CharteredAccountants as itsInternal Auditor to conduct the internal audit of the functions andactivities of the Company. Based on the report of internal audit function the Boardundertakes corrective action in the respective areas and thereby strengthens the controls.
Directors and Key Managerial Personnel
Pursuant to the provisions of the Companies Act 2013 read with the Articles ofAssociation of the Company Mrs. Asha Gupta Director DIN: 00334345 retires from the Boardby rotation and is eligible for re-appointment.
The Board had re-appointed Mr. Harish Chandra Gupta Chairman & Managing DirectorMr. Anurag Gupta Dy Managing Director and Mr. Arvind Veer Gupta Whole-time Director fora further term of three years commencing from 1st April 2016 their re-appointement wereapproved by the members by way of Special resolutions at their Fortieth Annual GeneralMeeting held on 30th September 2015.
The Board has appointed Mr. Pradeep Jain Deputy General Manager Finance andAccounts of the Company as the Chief Financial Officer of the Company at its meeting heldon 10.11.2015.
Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors:
Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardhas carried out an annual evaluation of its own performance performance of the Directorsas well as the evaluation of the working of its Committees. The Nomination andRemuneration Committee has laid down the evaluation criteria procedure and time schedulefor the Performance Evaluation process for the Board its Committees and Directors
Independent Directors and their meetings
The Independent directors were provided an insight about their roles duties rightsand responsibilities. They were given a fair idea and knowledge about the workingstrategy and the organizational structure of the company so that they could adapt to thecompany culture and contribute through active participation and interaction in a bettermanner.
The Nomination and Remuneration Policy adopted by the company deals with the criteriafor selection and determining the Independence of Directors and also the Remunerationpolicy for directors Key Managerial Personnel (KMP) and other employees. Remunerationpolicy is available at http://www.rotopumps.com/investors/ policies.html.
Your Companys Independent Directors meet at least once in a financial yearwithout the presence of Executive Directors or Management Personnel. Such meetings areconducted to enable the Independent Directors to discuss matters pertaining to theCompanys Affairs and put forth their view. During the year under review one meetingof the Independent Directors was held on 10th November 2015.
Board and Committee and their meetings
Five meetings of the Board were convened and held during the year under review. Detailsof the composition of the Board and its Committees and of the Meetings held and attendanceof the Directors at such Meetings are provided in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 the Rules made thereunder and Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.
Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any;
(b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) The directors had prepared the annual accounts on a going concern basis; and
(e) The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls were adequate and were operatingeffectively.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Corporate Social Responsibility
The Company has formulated its Corporate Social Responsibility (CSR) Policy toundertake the CSR activities as specified in the Schedule VII to the Companies Act 2013.CSR Policy is available at http://www.rotopumps.com/ investors/policies.html. The AnnualReport of CSR activity for the financial year 2015-16 is annexed at Annexure B.
Policy on prevention prohibition and redressal of sexual harassment at Workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress any complaint(s) ofsexual harassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee to inquire into complaints of sexualharassment and recommend appropriate action. Your Company has not received any complaintof sexual harassment during the financial year 2015-16.
Vigil Mechanism / Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Companys Code of Conduct or ethics policy. ThePolicy provides for adequate safeguards against victimization of employees who avail ofthe mechanism and also provides for direct access to the Chairman of the Audit Committee.
It is affirmed that no personnel of the Company has been denied access to the AuditCommittee. The policy has been adopted in compliance with the requirements of SEBI andSection 177(9) of the Companies Act 2013 and the Rules thereunder.
Material changes and commitment if any affecting the financial position of theCompany occurred between the end of the financial year to which these financial statementsrelate and the date of the report
No material changes and commitments affecting the financial position of the Companyhaveoccurred between the end of the financial year to which these financial statementsrelate and on the date of this report.
Significant and Material Orders passed by the Courts or Regulators
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
a. Statuary Auditors
M/s A. Kay. Mehra & Co. Chartered Accountants Firm Registration no. 050004C wereappointed as the Statutory Auditors for a period of one year by the members of the Companyat their Annual General Meeting held on 30th September 2015.In terms of the provisions ofSection 139 of the Companies Act 2013 read with Companies (Removal of Difficulties) ThirdOrder 2016 they are eligible for appointment at the ensuing Annual General for a periodof one year.
It is proposed to appoint the exiting Auditors M/s A. Kay Mehra & CompanyChartered Accountants to hold office till the concluding of next Annual General Meeting.The Company has received a certificate from the above Auditors to the effect that if theyare reappointed it would be in accordance with the provisions of Section 141 of theCompanies Act 2013. The observations of the Auditors in their report read with the notesto accounts are self-explanatory and do not call for any further action or information.
b. Branch Auditors
The term of the Branch Auditors of the Warehouse and Marketing Offices of the Companyin Australia and U. K. M/s G C Perry & Co. Certified Practicing AccountantAustralia and M/s Layton Lee Chartered Accountants U.K. respectively will expire atthe conclusion of the ensuing Annual General Meeting. Board of Directors of your Companyis seeking authority to appoint Branch Auditors for the financial year 2016-17.
c. Cost Auditor
In terms of the provisions of Companies (Cost Records and Audit) Rules 2014 as amendedby Companies (Cost Records and Audit) Amendment Rules 2016 dated 14.07.2016 your Companywas not required to appoint a Cost Auditor to carry out audit of the cost records for theyear under review.
d. Secretarial Auditors
M/s Dayal & Maur Company Secretaries have been appointed as the SecretarialAuditors to carry out the secretarial audit for the year under review. The SecretarialAudit Report for the financial year ended 31st March 2016 is annexed at Annexure-C.
Regarding audit observation for corporate social responsibility spending the Companyhas decided as a part of CSR to support research & development of energy basedtreatments for preventive health care. The Company has committed a sum of Rs. 35.00 lacsas its contribution for this purpose. This will be released as soon as substantialprogress has been made on this project.
Conservation of energy Technology absorption Foreign Exchange earnings and outgo
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished at Annexure-D.
Declaration of Independent Directors
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
Your Companys definition of Independence of Directors is derived fromRegulation 16(1) (b) of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and Section 149(6) of the Companies Act 2013.Based on the confirmation / disclosures received from the Directors and on evaluation ofthe relationships disclosed the following Non-Executive Directors are Independent interms of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and Section 149(6) of the Companies Act 2013 :
a) Mr. B. S. Ramaswamy
Mr. B. S. Ramaswamy aged about 87 years is a retired IA & AS Officer. He is aScience and Commerce Graduate Graduate Engineer and the Senior Most Cost and ManagementAccountant in the Country. He has an experience of over 61 years in the key functions ofFinance & Accounts in the Government and various other organizations in the field ofFinance Accounts Cost Accounting and other allied management functions.
b) Dr. Ramesh Chandra Vaish
Dr. Ramesh Chandra Vaish aged about 75 years holds a degree in M. A. M. Com LLB Ph.D. in Economics from University of Florida USA and is a Fellow Member of the Institute ofChartered Accountants of India. Dr. Vaish is an eminent practicing Chartered Accountanthaving over 45 years of rich and varied experience with specialization in internationaltaxation and finance tax planning and off-shore investment. Dr. Vaish has an outstandingacademic record and after teaching at University of Florida USA has worked with Coopersand Lybrand in New York Singapore London and New Delhi. Dr. Vaish has been a SeniorCounsel Tax and Business Advisory Services at Price Waterhouse Coopers New Delhibesides being a member of the Company Law Advisory Committee Regional Tax AdvisoryCommittee and various fiscal committees of FICCI and ASSOCHAM.
c) Mr. Anand Bordia
Mr. Anand Bordiaaged 72 years is a retired IRS Officer holds degree in M.A. Mr.Bordia has 36 years of professional experience most of which have been at a senior levelin the Government of India and International Organizations. Mr. Bordia has worked inMinistry of Finance and Ministry of Social Justice and Empowerment in the Government ofIndia. Mr. Bordia has been Member Finance in National Highway Authority of India. Mr.Bordia has also worked in Indian Customs and Central Excise Department and held variousfield positions such as Commissioner of Customs and Director Audit. Mr. Bordia has alsoworked in the Secretariat of Custom Cooperation Council Brussels.
d) Mr. Vijoy Kumar
Mr. Vijoy Kumar aged 73 years is retired Chairman of U. P. Electricity RegulatoryCommission holds degree in B. Sc. Engineering (Electrical) from BIT Sindri Bihar. Mr.Vijoy Kumar has worked in Central Electricity Authority from 1965 to 2003 and heldprestigious positions such as Secretary Central Electricity Authority Member SecretaryWestern Regional Electricity Board Member Secretary Northern Regional Electricity BoardMember Secretary North Eastern Electricity Board Advisor Power North Eastern CouncilDirector North Eastern Electric Power Company.
e) Mrs. Annapurna Dixit
Mrs. Annapurna Dixit aged about 68 years a retired Information Commissioner CentralInformation Commission is a Graduate in Physics (Hons) and Masters and M. Phil inEducation. Mrs. Dixit has worked for over two decades as an Officer in the India CountryOffice of the United Nations Childrens Fund. Mrs. Dixit closely worked with therelevant Ministries of Government of India State Governments NCW NHRC IMA NIPCCD andwith NGOs for ensuring protection of rights of women and children.
Particulars of Employees and related disclosures
The 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 is annexed at Annexure- E.
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules is annexed at in "Annexure F".
Listing of Shares
The Equity Shares of your Company are listed at the BSE Ltd Phiroze Jeejeebhoy TowersDalal Street Mumbai 400001. The Annual Listing fee for the year 2016-17 has beenpaid.
Extract of Annual Return
Pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Managementand Administration) Rules 2014 the extract of Annual Return in Form MGT- 9 annexed at Annexure-G.
The Management Discussion and Analysis Report and the Report on Corporate Governanceas required under Regulation 34 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 read with Schedule V thereofforms a part of the Annual Report.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companys activities during the year under review. Your Directors alsoacknowledge gratefully the shareholders for their support and confidence reposed intheCompany.
|For and on behalf of the Board of Directors || |
|Place: Noida ||Harish Chandra Gupta |
|Dated : 12.08.2016 ||Chairman & Managing Director |
| ||DIN: 00334405 |
Annexure A to the Boards Report
Statement containing salient features of the financial statements ofsubsidiaries/associates/joint Venture (Pursuant to the first proviso to sub-section (3) ofSection-129 read with Rule 5 of Companies (Accounts) Rules 2014
|Sl No. Particulars ||Name of the Subsidiaries |
| ||Roto Pumpen GmbH ||Roto Pumps Americas Inc. ||Roto Pumps North Americas Inc. ||Roto Overseas Pte Ltd |
|1 Reporting period of the subsidiary on if different from the holding companys reporting period ||NA ||NA ||NA ||28th February |
|2 Reporting currency and Exchange rate as on year end date ||Euro ||USD ||USD ||SGD |
|3 Share Capital ||225000 ||525000 ||508000 ||800001 |
|4 Reserve & Surplus ||-172842 ||-209 ||-426613 ||-151456 |
|5 Total Assets ||74467 ||524790 ||626239 ||653645 |
|6 Total Liabilities ||22310 ||- ||544852 ||51000 |
|7 Investment ||- ||508000 ||- ||- |
|8 Turnover ||199308 ||- ||696756 ||- |
|9 Profit/(Loss) before taxation ||(90847) ||(209) ||(334642) ||(151456) |
|10 Provision for taxation ||- ||- ||- ||- |
|11 Profit/(Loss) after taxation ||(90847) ||(209) ||(334642) ||(151456)* |
|12 Proposed Dividend ||- ||- ||- ||- |
|13 % of shareholding ||100% ||100% ||100% ||60% |
No subsidiary has been liquidated or sold during the year.
* This includes exchange loss of SGD 135797.
Part "B": Associates and Joint Ventures
The Joint Venture Company in Singapore - Roto Overseas Pte Ltd has divested its equitystake in the associate South African company - Ecochem Pumps Africa (Pty) Ltd at par valueduring the year and placed the sales proceeds with another South African Company known asRoto Pumps Africa (Pty) Ltd with intent to acquire majority stake. The process ofacquisition of equity could not be completed as on 31st March 2016. Roto Pumps (Africa)Pty Ltd has started sales and marketing of pumps and parts of pumps during the year underreview and has achieved a sales turnover of South African Rand (ZAR) 613493 and incurreda loss of ZAR 533702.
|As per our Report of even date. || || |
|For A. Kay. Mehra & Co. ||For and on behalf of the Board || |
|Chartered Accountants || || |
|(Registration No. 050004C) || || |
|(A. KAY. MEHRA) ||(HARISH CHANDRA GUPTA) ||(ANURAG GUPTA) |
|Partner ||Chairman & Managing Director ||Dy. Managing Director |
|Membership No. 009963 ||(DIN: 00334405) ||(DIN: 00334160) |
| ||(PRADEEP JAIN) ||(ASHWANI K VERMA) |
|Place: Noida ||Chief Financial Officer ||Company Secretary |
|Date : 12.08.2016 || ||(M.No.: A15482) |