To The Members
The Directors have pleasure in presenting 30th Annual Report on the businessand operations of the Company along with the audited Balance Sheet and Statement of Profit& Loss for the year ended on 31st March 2016.
(Rs. in Lacs)
|Particulars ||Year Ended 31st March 2016 ||Year Ended 31st March 2015 |
|Gross Sales ||15407.52 ||13829.10 |
|Less: Excise Duty ||1476.78 ||1209.16 |
|Net Sales ||13930.74 ||12619.94 |
|Other Income ||206.02 ||260.38 |
|Total Income ||14136.76 ||12880.32 |
|Profit before Interest Depreciation & Tax ||1165.80 ||1264.18 |
|Less: Interest ||290.74 ||245.33 |
|Depreciation ||354.30 ||358.90 |
|Profit Before Tax ||520.76 ||659.95 |
|Less: Previous Year adjustments ||NIL ||2.86 |
|Provision for Wealth Tax ||NIL ||0.47 |
|Provision for current year income-tax ||200.00 ||244.60 |
|Provision for Deferred Tax ||(15.79) ||(42.86) |
|Net Profit after tax ||336.55 ||454.88 |
|Add : Balance carried from ||2034.20 ||1808.49 |
|Profit & Loss A/c || || |
|Net profit after tax and adjustments ||2370.75 ||2263.37 |
|Dividends || || |
|Less: Interim Dividend ||NIL ||NIL |
|Final Dividend (Proposed) ||NIL ||152.30 |
|Dividend Distribution Tax on ||NIL ||31.87 |
|Proposed Dividend || || |
|Transferred to General Reserve ||34.00 ||45.00 |
|Balance carried to Balance Sheet ||2336.75 ||2034.20 |
|EPS (Basic) ||13.26 ||17.92 |
|EPS (Diluted) ||13.26 ||17.92 |
REVIEW OF OPERATIONS:
The net revenue from operations of the Company stands at Rs. 13930.74 Lacs in thisfinancial year ended on 31st March 2016 at a growth of around 10.39 % asagainst Rs. 12619.94 Lacs for the previous financial year. The net profit after tax forthis year is Rs. 336.55 Lacs as compared to Rs. 454.87 Lacs for the previous financialyear resulting a decline of 26.00%. This decline in profits is due to the higher interestburden due to capex investment and also the increase in input cost not recoverable fromcustomers in a comparative market. The continuous slide downwards of steel prices duringthe course of year resulted in low margins while disposing the higher price inventory.Finally due to extreme pressure from domestic OEMs focus got diluted from the exportsegment. With an increase in capacity coming through financial year 2016-17 we can expecthigher focus on exports.
Reserves & Surplus as on 31st March 2016 will stand at Rs. 3338.07Lacs as against the paid-up capital of Rs. 253.83 Lacs.
Your Directors does not recommend dividend for the financial year 2015-16 keeping inmind the expansions planned for better growth of the Company. Land has been acquired fortwo new plants. Commercial production in one plant is expected to start from December2016.
TRANSFER TO GENERAL RESERVE:
The Company proposes a transfer of Rs. 3400000/- (Rupees Thirty Four Lacs) to thegeneral reserves out of the amount available for appropriation and an amount of Rs. 3.03Crores is proposed to be retained in the profit and loss account.
The paid up equity capital of the Company as on March 312016 was Rs. 253.83 Lacsduring the year under review.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND:
In terms of Section 125 of the Companies Act 2013 no unclaimed dividend in relationto any financial year is due for remittance to the Investor Education and Protection Fundestablished by the Central Government.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has a proper Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has appointed M/s Harshit Bansal &Associates Chartered Accountants as Internal Auditors of the Company for financial year2015-16. To maintain the objectivity and independence the Internal Audit team reports tothe Chairman of the Audit Committee of the Board and to the Managing Director/CEO.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internalcontrol system in the company accounting procedures and policies. Based on the internalaudit report the Company undertake corrective action in their respective areas andthereby strengthen the control.
MARKETING AND EXPORT:
The export sales have been declined to Rs. 2200.92 Lacs in financial year 2015-16 asagainst Rs. 2870.32 Lacs in previous year.
Your Company has been assigned a rating of BBB+ for Long Term Bank Facilities (TermLoans) of Rs. 10.80 Crores and rating of BBB+/A2 for Long / Short Term Bank Facilities(Fund Based Limits) availed from Indusind Bank Limited and DBS Bank Ltd The rating isassigned by CARE (Credit Analysis & Research Limited).
The Company is not having any subsidiary company.
The Board of Directors consists of executive and nonexecutive directors includingindependent directors who have wide and varied experience in different disciplines ofcorporate functioning.
Mr. Sanjay Sharma Executive Director is liable to retire by rotation and beingeligible offers himself for reappointment. Your Directors recommend for his reappointment.
Pursuant to section 203 of the Companies Act 2013 the Key Managerial Personnel of theCompany during the year are Mr. Tarun Talwar Managing Director Mr. Kanwar Pal PawarChief Financial Officer and Mr. Ankush Jindal Company Secretary. There has been no changein the key managerial personnel during the year.
Further Mr. Kartik Talwar Non Executive Non Independent Director has resigned fromthe Directorship effective from 29th April 2016. In order to maintain theproper quorum and in compliance with the Companies Act 2013 and rules made thereunder andSEBI (Listing Regulations) 2015 the Board of Directors has appointed Mrs. Gita TalwarMr. Kuldeep Singh Bhalla and Mr. Nitin Agarwal as Additional Directors of the Companyw.e.f. 29th April 2016.
Afterwards Mrs. Gita Talwar and Mr. Nitin Agarwal have also resigned from the post ofAdditional Directors effective from 06th June 2016 and the Board has acceptedthe same in Board Meeting held on 07th June 2016. Also the Board has decidedto re-designate Mr. Tarun Talwar from Managing Director to Chief Executive Officer (CEO)of the Company effective from 07th June 2016.
Your Directors recommend to pass necessary resolution for appointment of Mr. KuldeepSingh Bhalla as
Independent Director as set out in the item no. 4 of the notice of the annual generalmeeting.
DIRECTORS'. RESPONSIBILITY STATEMENT:
In accordance with the provisions of section 134(5) the Board confirm and submit theDirectors Responsibility Statement:-
(i) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with the proper explanation relating to material departures;
(ii) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 of the company for that period;
(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities;
(iv) the Directors had prepared the annual accounts 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 operatingeffectively; and
(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.
DECLARATION BY INDEPENDENT DIRECTORS:
The Independent directors have submitted their disclosure to the Board that theyfulfill all the requirements as to qualify for their appointment as an IndependentDirector under the provisions of section 149(6) of the Companies Act 2013 and underregulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
NUMBER OF MEETINGS OF THE BOARD:
The Board met 7 (Seven) times during the financial year under review the details ofwhich are given in the Corporate Governance Report that forms part of this Annual Report.The intervening gap between any two meetings was within the period prescribed under theCompanies Act 2013.
Pursuant to the provisions of Companies Act 2013 and Regulation 25(3) of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 Independent Directors attheir meeting without the participation of the NonIndependent Directors and Managementconsidered / evaluated the Boards' performance including the chairman.
The Board subsequently evaluated its own performance the working of its committees(Audit Nomination and Remuneration and Stakeholders Relationship Committee) andIndependent Directors (without participation of the relevant Director).
The criteria for performance evaluation have been detailed in the Corporate GovernanceReport attached to this report.
POLICY OF DIRECTORS' APPOINTMENT AND REMUNERATION:
The Company's policy on director's appointment and remuneration and other matterspursuant to section 178(3) of the Companies Act 2013 has been disclosed in CorporateGovernance Report which forms part of this report.
CODE OF CONDUCT:
The Board of Directors has approved a code of conduct applicable to the members of theBoard principal executive officers principal financial officers principal accountingofficers or controllers and all senior management of the Company. The code has been titledas "Code of Ethics for Designated Persons". The same has been posted on thewebsite of the Company www.talbrosaxles.com.
The code lays down as standard procedure for efficient working of designated employeesand to build a transparency between the management and stakeholders of the Companycompliance with governmental laws rules and regulations.
The Designated employees have confirmed the compliance with the code of conduct.
The Audit Committee consists of 3 (Three) Directors with Independent Director aschairman. During the year five meetings of the committee were held. The responsibility andduties of Audit Committee have been detailed in the Corporate Governance Report.
The Committee has been reconstituted on 07th June 2016 as detailed inCorporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration committee consists of 3 (three) Non ExecutiveDirectors. During the year 1 (One) meeting has been held. The key areas of Committee havebeen detailed in Corporate Governance Report.
The Committee has been reconstituted on 29th April 2016 and 07thJune 2016 as detailed in Corporate Governance Report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company has not given any loan or guarantees covered under the provisions ofsection 186 of Companies Act 2013. The detail of investments made by the Company is givenin the notes to the financial statements.
RELATED PARTY TRANSACTIONS:
The Company has entered into transactions with a related party for availing job workservices. The said party is covered under the definition of related party as per ListingAgreement. The transactions entered into with the related party during the financial yearwere on arm's length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the company with promotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. Information on transaction withrelated parties pursuant to section 134(3)(h) of Companies Act 2013 read with rule 8(2)of Companies (Accounts) Rules 2014 are given in form AOC-2 and the same forms part ofthis report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The policy on Vigil Mechanism/Whistle Blower is hosted on the website of the Company.
The policy inter alia provided direct access to the Vice Chairman and CFO of theCompany. The Vice Chairman and CFO can approach and discuss the matter with Chairman orAudit Committee as they deem fit.
Your Company affirms that no complaints have been received during the year underreview.
Comments of the Auditors in their report and the notes forming part of the BalanceSheet are self explanatory and need no comments. The Auditors can be appointed for twomore years in term of section 139(2) of the Companies Act 2013.
Your directors request the ratification of M/s Rakesh Raj & Associates as StatutoryAuditors for Financial Year 201617. The Company has received a certificate from theauditors to the effect that their re-appointment if made would be in accordance with theprovisions of section 141 of the Companies Act 2013
You are requested to ratify their appointment as Statutory Auditors form the conclusionof this Annual General Meeting upto the conclusion of 31st Annual GeneralMeeting.
SECRETARIAL AUDIT REPORT AND THE APPOINTMENT OF THE SECRETARIAL AUDITOR:
The Company has appointed M/s Sonal Agarwal & Associates Company Secretaries tohold the office of Secretarial Auditors and to conduct the Secretarial Audit and theSecretarial Audit Report for the financial year ended on 31st March 2016 isbeing attached with the DirectorRs.s Report as Annexure - B which is self explanatory andneeds no comments.
COST AUDITOR'S AND THEIR REPORT:
Cost Audit is not applicable on the product being manufactured by the Company.
INSURANCE AND RISK MANAGEMENT:
The assets of the Company are adequately insured against the loss of fire burglary andother risks which are considered necessary by the management and suggested by the bankersof the Company.
PREVENTION OF INSIDER TRADING:
The SEBI has notified SEBI (Prohibition of insider trading) Regulations 2015 whichcame into effect from May 15 2015. Pursuant thereto the Company has formulated andadopted a new code for prevention of insider trading. The same has also been published onthe website of the Company.
The code inter alia contains the formalities / pre clearance required for dealing incompany's shares and prohibits the sale or purchase by the Directors and designatedemployees while in possession of the unpublished price sensitive information and duringthe closure of trading window. The Board is responsible for implementation of the code.
All the directors and designated employees have confirmed compliance with the code.
The Company has not accepted any deposits from public during the year.
Your Company is committed to good Corporate Governance Practices and following to theguidelines prescribed by the SEBI and Stock Exchanges from time to time. The Company hasimplemented all of its major stipulations as applicable to the Company. The Statutory
Auditor's Certificate dated 05 August 2016 in accordance with SEBI (ListingRegulations) 2015 and report on Corporate Governance is annexed to and forming part ofthe Director's Report.
Mr. Tarun Talwar Chief Executive Officer and Mr. Kanwar Pal Pawar Chief FinancialOfficer have given a certificate to the Board as contemplated in Schedule V of SEBI(Listing Regulations) 2015.
CORPORATE SOCIAL RESPONSIBILITY:
The Company is committed to discharging its social responsibility as a good corporatecitizen. As part of its social responsibility the Company has contributed to various NGOsfor promoting good education building schools for under privileged childrenscontribution for softwares and hardwares required for providing good knowledge andeducation to the childrens.
Further the Company has also contributed to a NGO namely Shree Sardar Vallabhai PatelRotary General Hospital Trust for promoting health in rural areas where people lack theright guidance for regular health checkups and proper treatment.
The Company has contributed a major portion of its CSR expenditure in construction ofOrphange house in Dehradun.
Also the Company has taken an initiative to maintain the flora around its RegisteredOffice.
The Board provide a brief outline of the Company's CSR Policy including the statementof intent reflecting the ethos of the Company broad areas of CSR interest and an overviewof activities proposed to be undertaken. The CSR policy has been hosted on the website ofthe Company.
The present Composition of the CSR committee is:
1. Mr. Sanjay Sharma Executive Director
2. Mr. Vijay Kumar Sharma Executive Director
3. Mr. Sunil Kumar Independent Director
The average net profit of the company for last three (3) financial years is Rs. 6.70Crores (approx). The threshold limit (2%) is Rs. 13.40 Lacs (approx). The total proposedspending on CSR for year 2015-16 was Rs. 14.77 Lacs (approx.) including unspent amount ofRs. 1.37 Lacs for year 2014-15.
The total amount spent by the Company in year 2015-16 is Rs. 14.80 Lakhs.
The details of CSR activities / projects undertaken during the financial year underreview are as follows:
|S. No. ||CSR Project/activity identified ||Sector in which the project is covered ||Projects/ Programs Local area/others ||Amount outlay (budget) project or programs wise (Rs. In Lakhs) ||Amount spent on the project/ Program (Rs. In Lakhs) ||Cumulative expenditure upto the date of reporting period (Rs. In Lakhs) ||Amount Spent: Director or through implementing agency (Rs. In Lakhs) |
|1 ||Promoting Preventive Health Care ||Healthcare ||Ankleshwar (Gujarat) ||2.00 ||2.00 ||2.00 ||2.00 |
|2 ||Promoting Education ||Education ||New Delhi ||3.00 ||3.00 ||3.00 ||3.00 |
|3 ||Building Construction for Orphans ||Construction ||Dehradun ||5.00 ||5.00 ||5.00 ||5.00 |
|4 ||Promoting Education and Health Care ||Education & Healthcare ||New Delhi ||1.00 ||1.00 ||1.00 ||1.00 |
|5 ||Protection of Flora & Fauna ||Flora & Fauna ||Faridabad ||3.80 ||3.80 ||3.80 ||3.80 |
| || || || ||14.80 ||14.80 ||14.80 ||14.80 |
* Details of Implementing Agency: Shree Sardar Vallabhai Patel Rotary General HospitalTrust RBTH Singh Memorial Charitable Hospital Society Shri Shradhanand Bal Vanita Ashramand Savera Association.
MANAGEMENT DISCUSSION AND ANALYSIS:
A Management discussion and Analysis as required under the Schedule V of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 is annexed and forming partof the Directors' Report.
CONSERVATION OF ENERGY REASEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGO:
The particulars prescribed under section 134(3)(m) of Companies Act 2013 read withrule 8 of Companies (Accounts) Rules 2014 are enclosed as Annexure - A to the Board'sReport.
INFORMATION PURSUANT TO SECTION 197(12) READ WITH RULE 5 OF THE COMPANIES (APPOINTMENTAND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 none of the employee of the company has received the remuneration in excessto the limits set out in the rules.
Further pursuant to the provisions of Section 197(12) of Companies Act 2013 and rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the disclosures and details as required to be annexed to the Board's Report are providedhereunder:
(a) Ratio of remuneration of each director to the median remuneration of employees ofthe Company
Amount (In Rs.)
|Name of the Director ||Designation ||Remuneration paid ||Ratio to median remuneration |
|Mr. Tarun Talwar ||Managing Director ||52.56 ||37.75 |
|Mr. Sanjay Sharma ||Executive Director ||9.26 ||6.65 |
|Mr. Vijay Kumar Sharma ||Executive Director ||9.18 ||6.59 |
|Mr. Kartik Talwar ||Director ||0.00 ||Not Applicable |
|Mr. Sunil Kumar ||Independent Director ||0.05 ||Only sitting fees paid |
|Ms. Priyanka Khattar ||Independent Director ||0.05 ||Only sitting fees paid |
(b) Percentage increase in remuneration of Directors and KMPs
Amount (In Rs.)
|Name of the Director/KMP ||Designation ||Remuneration for the year ended 2015-16 ||Remuneration for the year ended 2015-16 ||% change during the year |
|Mr. Tarun Talwar ||Managing Director ||52.56 ||32.30 ||62.72 |
|Mr. Sanjay Sharma ||Executive Director ||9.26 ||8.80 ||5.23 |
|Mr. Vijay Kumar Sharma ||Executive Director ||9.18 ||8.72 ||5.28 |
|Mr. Kartik Talwar ||Director ||0.00 ||0.00 ||0.00 |
|Mr. Sunil Kumar ||Independent Director ||0.05 ||0.05 ||0.00 |
|Ms. Priyanka Khattar ||Independent Director ||0.05 ||0.05 ||0.00 |
|Mr. Ankush Jindal ||Company Secretary ||5.35 ||4.20* ||27.38 |
|Mr. Kanwar Pal Pawar ||CFO ||3.28 ||3.09 ||6.15 |
* Remuneration paid for the period 01st June 2014 to 31st March2015.
(c) The median remuneration of the employees has increased by 6.76 % in 2015-16 ascompared to 2014-15
(d) Number of permanent employees on the rolls of the Company.
|Financial Year ||No. of Employees |
|2014-15 ||192 |
|2015-16 ||217 |
These numbers are exclusive of Directors and President of the Company.
(e) The Company's overall turnover has been increased by 10.39% and keeping in mind theperformance of company viz a viz Directors and KMPs the company has incremented theirsalaries based on the position and responsibilities allocated to them. The Company haspaid remuneration in line with the policy adopted for payment of remuneration.
(f) Comparison of the remuneration of the key managerial personnel against theperformance of the Company:
|Particulars ||Amount (In Crores) |
|Aggregate Remuneration of key managerial personnel in FY 2015-16 ||0.80 |
|Revenue for the year 2015-16 ||141.37 |
|Remuneration of KMPs (as a % of revenue) ||0.57 |
|Profit Before Tax (PBT) ||5.21 |
|Remuneration of KMPs (as a % of PBT) ||15.36 |
(g) Market Capitalization and Price Earning Ratio
|Particlulars ||As on 31st March 2016 ||As on 31st March 2015 |
|Price Earning Ratio ||11.92 ||3.56 |
|Market Capitalization (Rs. In Crores) ||40.10 ||16.19 |
|Particlulars ||As on 31st March 2016 ||As on 31st March 2015 |
|Net worth of the Company ( Rs. In Crores) ||35.92 ||32.56 |
(h) There is no variable component availed by the directors during the year.
(i) No employee has received remuneration in excess to the remuneration paid to Mr.Tarun Talwar Managing Director of the Company during the year.
(j) We affirm that the remuneration paid to Directors Key Managerial Personnel's andemployees is as per the remuneration policy of the Company.
CORPORATE GOVERNANCE CERTIFICATE:
The Compliance Certificate from the auditors regarding compliance of conditions ofcorporate governance as stipulated in SEBI (Listing Regulations) 2015 has been annexed tothis report.
EXTRACTS OF THE ANNUAL RETURN:
The Extracts of the Annual Return for the year 2015-16 being attached with theDirectors Report as Annexure - C
Your Directors wish to place on record their appreciation for the overwhelmingco-operating and assistance received from the investors customers business associatesbankers vendors as well as regulatory and governmental authorities. Your Directors alsothank the employees at all levels who through their dedication co-operation supportand smart work have enabled the Company to achieve rapid growth.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place:Faridabad ||Sanjay Sharma |
|Date : 05 August 2016 ||Chairman |