REPORT OF THE BOARD OF DIRECTORS
For the year ended March 31 2014
Your Directors are pleasedto present the 19thAnnual Report and the audited accounts forthe financial year ended March 31 2014
The financial performance of the Company for the year ended March 31 2014 issummarized below:
|1. Financial Results || || |
| || ||(Rs. In Lakhs) |
| ||F.Y. 2013-14 ||F.Y. 2012-13 |
|Revenue ||30674.17 ||21689.92 |
|Operating Profit Before Interest Depreciation and Tax ||5505.20 ||3838.36 |
|Interest and other Financial Charges (Net) ||1258.61 ||1218.45 |
|Depreciation and Amortization ||676.71 ||500.53 |
|Provision for Taxation || |
|Net Profit || |
|Appropriations || || |
|Proposed Dividend on Equity Shares ||304.87 ||152.43 |
|Tax on Proposed Dividend ||51.81 ||24.72 |
Your Directors have recommended a dividend of 2.00 per Equity Rs. Share for thefinancial year ended March 31 2014 amountingto Rs. 356.68 Lakhs (inclusive of tax ofRs.51.81 Lakhs).
3. Company's Performance
During the year your Company has registered a revenue of Rs.30674.17 Lakhs ascomparedRs.21689.92 Lakhs showing an increase of 41 % over the previous year turnover. Theexport of the Company increased from Rs. 13822.42 Lakhs to Rs.20751.45 Lakhs showing anincrease of 50 % over previous year and the company has registered domestic sales ofRs.8903.78 Lakhs as comparedtoRs.7211.11 Lakhs showing an increase of 23.46 % over theprevious year.
The Company earned profit before depreciation interest and tax ofRs. 5505.20 Lakhs asagainstRs. 3838.36 Lakhs in the previous year showing a growth of 43 % over previousyear.
4. International Business
Complying with the company's policy of extensive global growth The company isassiduously workingtowards achieving a strong presence in BRICS G20 European Union andother growing countries of the world in the coming years. Further efforts are also ontoincrease the Dealer Networkto 100 more in the next 2 years as a wayto complement thegrowth.
The company is having two overseas subsidiaries one in USA and another in UAE. Goingahead the company is also planningto establish its third wholly owned subsidiary inAustraliato expedite the delivering process in Australian continent.
A two trillion dollar economy cateringto a billion-plus population! The statement sumsup adequately the vast opportunities that lie ahead of India. As per various studies theeconomy of India is the tenth-largest in the world by nominal GDP and the third-largest bypurchasing power parity (PPP). The country is one of the G-20 major economies and a memberof BRICS. According to the IMF India is the 19th-largest exporter and the 10th-largestimporter in the world.
More so in the agricultural sector as this happensto be the country's main occupationeventoday! Naturally we at Shakti Pumps are optimistic about leveraging high-sales inagricultural pumps in the coming times. After all it has also been observed that Indiaranks second worldwide infarm output. And despite a steady decline of its share in theGDP agriculture is still the largest economic sector and a significant piece of theoverall socio-economic development of India.
In the international markettoo we are confident of increase in order intakes as alsosales revenue despite modest growth in global economy. Essentially because Shakti Pumpsare in demand across more than 100 countriestoday- a figure that is likelyto grow upfurther in the coming years. And so by 2020-21 we aim at achievingtop line ofRs.5500crore with the net margin of 9-10%
6. Govt. Policies
Ministry of New and Renewable Energy (MNRE) has takento popularize solar pumpingsolutions with the help of various state governments. It is certainly a matter of greatpride that for quite some time now our pumps are being made availableto thefarmers/institutions in Madhya Pradesh Chhattisgarh & Rajasthan at the recommendationof MNRE as also the state government.
7. Other Growth Plans
With strong R&Dt o our side w e are now also focusing on industrial andagricultural pumps in a big way so asto meet the requirements of institutional as alsoGovt. businesses. Expansion of our standard business continued development of productsand concentrated effortsto further improve after- sales service- will also be ourtoppriority.
Innovation and R&D are factors that contribute to long sustainability. Thus wealso have plansto launch many new products like high capacity solar pumps. In the same waywe have plansto enhance the range of booster pumps open well pumps hydro- pneumaticsystems as also updating other products as per customer requirements. We are also inprocess of developing high quality energy conservative sewage pumps slurry pumps wastewater pumps hot water pumps etc.
As per the provisions of the Companies Act 2013 Mr. Ramesh Patidar (DIN: 00931437)will retire in the ensuring Annual General Meeting and being eligible seekre-appointment.
Our non-executive (independent) directors were appointed as directors liableto retirebyrotation under the provisions of the erstwhile Companies Act 1956. The Board ofDirectors has been advised that non-executive (independent) directors so appointed wouldcontinueto serve theterm that was ascertained at the time of appointment therefore itstandsto reason that only those non-executive (independent) directors who will completetheir present term at the ensuing Annual General Meeting of the Company being eligibleand seeking re-appointment be considered by the shareholders for re-appointment for atermas per resolutions.
Ms. Pooja Mahajan appointed as Nominee Director as IFCI Venture's nominee under GreenIndia Venture Fund (GIVF) with effect from December 11 2013.
Ms. Poonam Garg withdrawal as Nominee Director as IFCI Venture's nominee under GreenIndia Venture Fund (GIVF) with effect from December 11 2013.
9. Directors' Responsibility Statement
Pursuant to requirement under Section 217 (2AA) of the Companies Act 1956 withrespect to Directors' Responsibility Statement the Directors confirm:
a. That in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanations relating to material departures; b. Thatthe Directors selected such accounting policies and applied them consistently and madejudgments and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as March 31 2014 and of the profit of theCompany for the year ended on that date;
c. That the Directors took proper and sufficient care to maintain adequate accountingrecords in accordance with provisions of the Companies Act 1956 for safeguarding theCompany's assets and for preventing and detecting fraud and other irregularities;
d. That the Directors prepared the Annual Accounts on a going concern basis;
e. That the Company has adequate internal systems and controls in place to ensurecompliance of laws applicable to the Company.
10. Human Resource Development
At Shakti Pumps our inherent strength is determined by our highly skilled andmotivated workforce. It is their collective passion and commitment that has helped theorganisationto scale great heights.
All in all we sincerely believe that our employees are the most valuable assets of theCompany. Which is why we constantly focus on encouraging innovation meritocracy andattaining excellence.
11. Corporate Social Responsibility
In accordance with the company's ethos SEVA - a Shakti Foundation was started inNov.2012. Established as a non-profit trust the initiative aims at contributingtowardsthe welfare of the destitute rural poor and economically disadvantaged section of thesociety. In this regard we express our gratitudeto the honorary members of the Trust fortheir unfathomable supportto the cause.
12. Internal Control System
The Company has a well placed proper and adequate internal control system whichensures that the efficiency and profitability of operations the reliability ofinformation adhering to rules regulations that all assets are safeguarded and protectedand that the transactions are authorized recorded and reported correctly.
13. Fixed Deposits
The Company did not accept any public deposit and as such no amount on account orprincipal or interest on public deposits was outstanding as on the date of the balancesheet.
14. Transfer to investor education & protection fund
During the year the Company has transferred a sum of Rs.59168/-to Investor Education& Protection Fund the amount which was due & payable and remained unclaimed andunpaid for a period of seven years as provided in Section 205C (2) of the Companies Act1956.
15. Particulars of employees
No employee was in receipt of remuneration exceeding the limits set out under Section217 (2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules1975.
All insurable interests of the Company including inventory building plant andmachinery and others are adequately insured.
M/s Vinay Gandhi & Associates Chartered Accountants who are the StatutoryAuditors of the Company hold office in accordance with the provisions of the Act tillthe conclusion of the forthcoming Annual General Meeting and are eligible forre-appointment.
18. Cost Audit
M/s Mihir Turkhia & Associate Cost Accountant who is the Cost Auditor relatingtoPumps and Motors for the year ended March 31 2014. The Cost Audit Report for theFinancial Year 2012-13 was filed by the Company within the prescribed due date. The CostAudit Report for the Financial Year 2013-14 is expected to be filed within the prescribedtime.
19. Secretarial Audit Report
As a measure of good Corporate Governance practice the Board of Directors appointedMr. Manish Maheshwari Practicing Company Secretary to conduct the Secretarial Audit. TheSecretarial Audit Report for the financial year ended March 31 2014 is provided in theAnnual Report.
20. Corporate Governance Report and Management Discussion and Analysis Statement.
The Company is committedto maintaining the highest standards of Corporate Governanceand adhere to the Corporate Governance requirements set out by SEBI.
A report on Corporate Governance is attachedto this Report as also a ManagementDiscussion and Analysis Statement.
21. Conservation of energytechnology absorption foreign exchange earnings and outgo
Details of energy conservations as also research and development activities undertakenby the Company along with the information in accordance with the provisions of Section 217(1) (e) of the Companies Act 1956 read with the Companies (Disclosure of particulars inthe Report of Board of Directors) Rules are given as an Annexure-Ito the Directors'Report.
The Directors wishto convey their appreciationsto all of the Company's employees fortheir enormous personnel efforts as well as their collective contributions to theCompany's performance.
The Directors thank shareholders customers dealers suppliers bankers Government ofIndia the Government of various countries the concerned State Governments Governmentdepartments and Government agencies for the continuous support given by themto the Companyand their confidence in its management.
For and on behalf of the Board of Directors
Chairman and Managing Director
Date: May 14 2014
Research & Development
|1. Specific areas in which R & D carried out by the Company. ||The in-house Research & Development activities resulted in the development of new products of the Company during the previous year. This also helps in improvement in existing models. |
|2. Benefits derived as a result ||Better market coverage and new market development cost reduction and energy saving. |
|3. Future plan on R & D ||To develop new models and products |
|4. Expenditure on R & D ||Rs. 1.61 Crores |
Technology absorption adaptation and innovation
|1. Efforts in brief made towards technology absorption for ||Technology developed by R & D department is fully absorbed development in the existing product and new models. |
|2. Benefits derived as a result of the efforts e.g. product improvement cost reduction product development and import substitution among others. ||Increased efficiency better performance and wider product range. |
|(a) Technology imported ||Nil |
|(b) Year of import ||Not applicable |
|(c) Has technology been fully absorbed ||Not applicable |
Conservation of energy
|(a) Energy conservation measures taken ||Maintained the powerfactor 0.97to 0.99 by installing automatic capacitors operating system. Using inverter based welding transformer and condenser based projection welding machine and installation of energy meter. |
|(b) Additional measures proposedto be taken ||Replacing conventional machines by CNC and automatic machines. Designing of latest model fixturesto increase productivity. |
|(c) Impact of measures (a) and (b) above for reduction of energy consumption consequent impact on the cost of production of goods. ||Reduction in the cost of production |