To the Members of ROTO PUMPS LTD
Your Directors have pleasure in presenting their 42nd Annual Report of the Companytogether with the Audited Financial Statements for the financial year ended 31st March2017.
Your Company's financial performance for the year under review along with the previousyear's figure is given here under:
| || |
Financial year ended
|Particulars ||31st March 2017 ||31st March 2016 |
|Revenue from Operations ||9493.70 ||9497.94 |
|Other Income ||22.08 ||31.79 |
|Profit / (loss) before finance costs depreciation and taxation ||2090.22 ||1693.89 |
|Less: Finance Costs ||317.08 ||318.23 |
|Depreciation ||719.25 ||765.43 |
|Profit before Taxation ||1053.89 ||610.23 |
|Less Taxation ||395.00 ||182.45 |
|Profit after tax ||658.89 ||427.78 |
|Add: Profit brought forward ||4296.57 ||3905.99 |
|Profit available for appropriation ||4955.46 ||4333.77 |
Your Directors are pleased to recommend a dividend of ' 0.40 (i.e. 20%) per share forthe financial year ended 31st March 2017 which if approved by the Members at theforthcoming Annual General Meeting would result in a dividend outflow of ' 6181522/- anddividend distribution tax of ' 1258409/- aggregating a total outflow of ' 7439931/-.
The Paid-up Equity Share Capital as on 31st March 2017 was ' 309.08 Lacs. 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 un-claimed dividend to Investor Education and Protection Fund
In terms of the provisions of Section 124(5) of the Companies Act 2013 the un-claimeddividend relating to the financial year 2008-09 has been remitted to the InvestorEducation and Protection Fund established by the Central Government. Further theun-claimed dividend relating to the financial year 2009-10 is becoming due for remittanceto the said Investor Education and Protection Fund on 04.11.2017.
Details of un-claimed dividend are available for on the Company's website atwww.rotopumps.com.
Year in retrospect
Your Company has achieved an income from Operations of ' 9493.71 lacs against previousyear's income of ' 9497.95 lacs. Domestic sales were ' 3749.95 lacs as compared to '3307.07 lacs registering a growth of 13.39 % over last year. Export sale was ' 5743.75lacs as compared to ' 6190.87 lacs which was lower than last year by 7.22%. Export salesinclude ' 4122.95 lacs sales from Marketing Outlets in United Kingdom and Australia.Revenue from total export sales constitutes 60.50 % of total revenue from operations.
Your company's operations are expected to be better as export sales are expected torise. On Domestic front the outlook is looking encouraging backed by healthy order book.Projected GDP growth of 7.2% would result in increased spending by Government and PrivateSector. The effect of demonetisation and GST implementation is also positive for growth ofbusiness.
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 and form part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.
The annual accounts of the subsidiaries and Joint 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 Germany during thefinancial year 2011-12 to carry on the sales and marketing of the Company's products inGerman region to service the customers more effectively. The subsidiary had had incurred aloss of Euro 42238 during the year under review. The operations of the subsidiary arecurrently under suspension. Effective steps are being taken to make the Subsidiaryoperational in near future.
b. Roto Pumps Americas Inc. - a wholly owned subsidiary company setup in USA duringthe previous year. The subsidiary had further setup a wholly owned subsidiary company inthe name and style of Roto Pumps North America Inc. to carry on sales and marketing ofCompany's products in North American region and also maintain warehouse facility to carryinventory. During the year under review the subsidiary earned a profit of USD 18158.
c. Roto Overseas Pte Ltd - a Joint Venture Company (JVC) setup during financial year2014-15 in Singapore with Mr.
Ed Lemke of South Africa. Your Company holds sixty percent stake in the joint venturecompany. The JVC holds almost 100% stake in Roto Pumps (Africa) Pty Ltd South Africa aCompany engaged in the business of sales and marketing of pumps and parts of pumps inAfrican Region. During the year under review the subsidiary has achieved a sales turnoverof South African Rand ZAR 6996044 and incurred a loss of ZAR 280419.
Statements containing the salient features of financial statements of 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 neither made any investments during the year under review nor has itgiven any loan or provided any guarantees during the current financial year ended on 31stMarch 2017.
Your Company has neither accepted nor renewed any deposits during the year underreview.
Related Party Transactions
All Related Party Transactions that were entered into by the Company during the yearunder review were on an arm's length basis and in the ordinary course of business and werein compliance with the applicable provisions of the Companies Act 2013 ('the Act') andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. There were no materially significant Related Party Transactions made byyour Company during the year that would have required Shareholder approval underRegulation 23 of securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
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.
Your 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 yourCompany 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 its Internal 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 their respective areas and thereby strengthens thecontrols.
Directors and Key Managerial Personnel
Pursuant to the provisions of the Companies Act 2013 read with the Articles ofAssociation of the Company Mr. Anurag Gupta Dy Managing Director (DIN: 00334160) retiresfrom the Board by rotation and is eligible for re-appointment.
Mr. Vijoy Kumar Independent Director of the Company had resigned from the directorshipof the Company with effect from 9th February 2017. The Board at its meeting held on 12thMay 2017 has appointed Mr. Basant Seth (DIN: 02798529) as an Independent Director in thecasual vacancy caused by to the resignation of Mr. Vijoy Kumar and Mr. Basant Seth willhold office till 28th September 2019 i.e. the remaining tenure of Mr. Vijoy Kumar.
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 your 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. The Remunerationpolicy is available at the website of the Company athttp://www.rotopumps.com/investors/policies. html.
Your Company's Independent Directors meet at least once in a financial year without thepresence of Executive Directors or Management Personnel. Such meetings are conducted toenable the Independent Directors to discuss matters pertaining to the Company's Affairsand put forth their views. During the year under review one meeting of the IndependentDirectors was held on 5th November 2016 where all the independent directors were present.
Board Committees and their meetings
Four (4) meetings of the Board were convened and held during the year under review.Details of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Companies Act 2013 the Rules made thereunder and Securities and Exchange Board ofIndia (Listing Obligations 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 your Company at the end of the financial year and ofthe profit and loss of your 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 your 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 yourCompany 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
Your 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 2016-17 is annexed at Annexure -B.
Policy on prevention prohibition and redressal of sexual harassment at Workplace
Your 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. Your 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 2016-17.
Vigil Mechanism / Whistle Blower Policy
Your 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 Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee.
It is affirmed that no personnel of your 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 including anyamendment(s) thereto as may be made from time to time.
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 your Companyhave occurred 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 your 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 28th September 2016. The term of the Auditors isexpiring at the ensuing Annual General Meeting and in terms of the provisions Section 139(2) of the Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014 yourCompany is required to appoint the new Auditors for a period of five years from theconclusion of the ensuing Annual General Meeting.
On recommendation of the Audit Committee of the Board of Directors of the Company yourDirectors propose the appointment of M/s R N Marwah & Co. LLP Chartered
Accountants New Delhi as the Statutory Auditors for a period of five years from theconclusion of the ensuing Annual General Meeting subject to ratification of the same atthe intervening Annual General Meetings. They have consented to act as the StatutoryAuditors of the Company and have also certified that their appointment if made shall bein accordance with the provisions of Section 141 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014.
The observations of the Auditors in their report read with the notes to accounts areself-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 2017-18.
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 New Delhi have been appointed as theSecretarial Auditors to carry out the secretarial audit for the year under review. TheSecretarial Audit Report for the financial year ended 31st March 2017 is annexed atAnnexure- C.
There is no qualification or observation in the report of the Secretarial Auditors.
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 the requirements as stipulated in Section 149(6) of the Companies Act 2013 so asto qualify themselves to be appointed as Independent Directors under the provisions of theCompanies Act 2013 and the relevant rules made thereunder
Your Company's definition of 'Independence' of Directors is derived from Regulation16(1) (b) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and Section 149(6) of the Companies Act 2013. Based onthe confirmation / disclosures received from the Directors and on evaluation of therelationships disclosed the following Non-Executive Directors are Independent in terms ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 and Section 149(6) of the Companies Act 2013.
a) Mr. B. S. Ramaswamy
Mr. B. S. Ramaswamy aged about 88 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 62 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 76 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 46 years of rich and varied experience with specialization in Internationaltaxation and finance tax planning and offshore 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 Bordia aged 73 years is a retired IRS Officer holds degree in M.A. Mr.Bordia has 37 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 & 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) Mrs. Annapurna Dixit
Mrs. Annapurna Dixit aged about 69 years a retired Information Commissioner CentralInformation Commission is a Graduate in Physics (Hons) Masters and M. Phil in Education.Mrs. Dixit has worked for over two decades as an Officer in the India Country Office ofthe United Nations Children's Fund. Mrs. Dixit closely worked with the relevant Ministriesof Government of India State Governments NCW NHRC IMA NIPCCD and with NGOs forensuring protection of rights of women and children.
e) Mr. Basant Seth
Mr. Seth aged 65 years is a Science graduate from Banaras Hindu University a qualifiedChartered Accountant and also has Post Graduate Diploma in Bank Management from NationalInstitute of Bank Management Pune. Mr. Seth has recently retired as Central InformationCommissioner after successfully completing his tenure of five years. Before joining theCentral Information Commission he was a banker. He has served Bank of India for a verylong period and later SIDBI. He has also served the Syndicate Bank as its Chairman andManaging Director.
Mr. Seth has extensive Board level experience having served as Bank of India's nomineeon the Board of Indo-Zambian Bank Zambia and Commonwealth Finance Corporation Ltd HongKong besides holding the post of Whole Time Director in SIDBI and CMD of Syndicate Bank.He has long experience and expertise in Bank Management Corporate Governance Financial& Administrative matters.
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 2017-18 has been fullypaid.
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 is annexed atAnnexure-G.
The Management Discussion and Analysis and the Report on Corporate Governance asrequired 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 the Bankers BusinessAssociates Consultants and various Government Authorities for their continued supportextended to your Company's activities during the year under review. Your Directors alsoacknowledge gratefully the shareholders for their valuable support and confidence reposedin the Company.
| ||For and on behalf of the Board of Directors |
| ||Harish Chandra Gupta |
|Place: Noida ||Chairman& Managing Director |
|Dated:19.08.2017 ||DIN: 00334405 |