Amtek Auto Ltd.
|BSE: 520077||Sector: Auto|
|NSE: AMTEKAUTO||ISIN Code: INE130C01021|
|BSE 00:00 | 01 Apr||Amtek Auto Ltd|
|NSE 05:30 | 01 Jan||Amtek Auto Ltd|
|BSE: 520077||Sector: Auto|
|NSE: AMTEKAUTO||ISIN Code: INE130C01021|
|BSE 00:00 | 01 Apr||Amtek Auto Ltd|
|NSE 05:30 | 01 Jan||Amtek Auto Ltd|
The Board of Directors hereby submits the report of the business and operations of yourCompany (the Company' or Amtek Auto Limited') along with the auditedfinancial statements for the financial year ended March 31 2017. The consolidatedperformance of the Company and its subsidiaries has been referred to wherever required.
As the previous financial year comprises a period of six months from October 1 2015 toMarch 31 2016 therefore numbers pertaining to current financial year 2016-17 are notcomparable with numbers of previous financial year 2015-16. However The Company'sfinancial performance for the year ended 31st March 2017 and period ended 31stMarch2016 is summarized below:
in Rs. lakhs except per equity share data
During the Period under review the revenue of the Company is Rs. 198246 Lakhs. Theloss after tax stood at Rs. 162399 Lakhs. The Reserve & Surplus position at Rs.302669 Lakhs.
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs (MCA) vide its notification dated February 16 2015notified the Indian Accounting Standards (Ind AS) applicable to certain class ofcompanies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 ofthe Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.Pursuant to the aforesaid notification with effect from April 01 2016 the Company hastransitioned to Ind AS. The transition is carried out from accounting principles generallyaccepted in India being the previous GAAP. Accordingly The annexed financial statementscomply in all material aspects with Indian Accounting Standards (Ind AS) notified undersection 133 of the Companies Act 2013 (the Act) [Companies (Indian Accounting Standards)Rules 2015] and other relevant provisions of the Act. These financial statements are thefirst financial statements of the Company under Ind AS. Detailed information on the impactof the transition from previous GAAP to Ind AS is provided in the annexed financialstatements.
MATERIAL CHANGES AND COMMITMENTS
During the year Amtek Auto Limited and its subsidiary and associates Companies i.eMetalyst Forgings Limited ARGL Limited and Castex Technologies Limited met independentlyand each Board approved the infusion of fresh capital by Investor(s) and alsorestructuring of the debt of the Company as proposed by the lenders.
A Joint Board Meeting of all the companies was subsequently held where the approval ofindividual board was adopted. The Joint Board further approved the proposal relating to:
(a) Infusion of fresh capital by new Investor(s).
(b) Restructuring and Reduction of debt subject to the approval of lenders.
(c) The process of Monetisation to support the Restructuring and Debt Reduction of theCompany
Subsequently the Company considered and reaffirmed the process of seeking substantialinvestments by issuance of shares and/or other securities of the Company including to theextent which may result in change in control and management of the Company initiatedunder the supervision of the secured lenders to the Company in furtherance of the decisiontaken by the Board of Directors of the Copany on November 30 2016. Meanwhile the ReserveBank of India (RBI) on the recommendation of its Internal Advisory Committee (IAC)directed to Banks to invoke bankruptcy proceedings against the Company under Insolvencyand Bankruptcy Code 2016. The Board discussed the impact on falling under Insolvency andBankruptcy Code 2016 and discussed the key highlights in details i.e. Application ofDefault Appointment of IRP's/IP's Moratorium Period and Credit Committee.
Further during the period under review The Amtek Global Technologies Pte. Ltd.subsidiary of Amtek Auto Limited has entered into an arrangement to sell its UK basedsubsidiaries' plants to Liberty Group.
SIGNING OF MOU FOR STAKE SALE OF ITS JV COMPANY
During the period under review The Amtek Auto Limited has signed and executedMemorandum of Understanding (MOU) with Nippon Steel and Sumitomo Metal Corporation("NSSMC") to sell all equity shares and preference shares held by AAL in itsJoint Venture Company SMI Amtek Crankshaft Private Limited to NSSMC.
ISSUE OF EQUITY SHARES ON PREFERENTIAL BASIS
During the year under review pursuant to the approval of shareholders in their meetingheld on March 25 2017 the Company converted unsecured loan of Rs. 1175000000 (RupeesOne Hundred Seventeen Crore and Fifty Lakhs only) of Promoter Companies i.e. AisaInternational Pvt. Ltd. and Amtek laboratories Limited into equity shares of the Companythrough issue and allotment of 23500000 (Two Crore and Thirty Five Lakhs) equity sharesof Rs.2/- each fully paid-up at a price of Rs 50/- (Rupees Fifty only) per share includinga premium of Rs. 48/- (Rupees Forty Eight only) to these companies in accordance withapplicable provisions of the SEBI (ICDR) Regulations 2009 and the Companies Act 2013 readwith the applicable rules made there under for the issuance of Equity Shares onPreferential basis.
In view of losses incurred during the period under review the Board of Director doesnot recommend any dividend on the equity shares for the financial year ended March 312017
During the period under review your Company has not accepted any Deposits within themeaning of Section 73 of the Companies Act 2013 from the Shareholders/Public.
SUBSIDIARY AND ASSOCIATES
During the year the Board of Directors (the Board') reviewed the affairs of thesubsidiaries. In accordance with Section 129(3) of the Companies Act 2013 we haveprepared consolidated financial statements of the Company which forms part of this AnnualReport. Further a statement containing the salient features of the financial statementsof our subsidiaries associates joint ventures in the prescribed Form AOC-1 isannexed to the consolidated financial statements and forms part of the Annual Report whichcovers the financial position of subsidiaries and associate Company and hence not repeatedhere for the sake of brevity.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websiteThese documents will also be available for inspection during business hours at ourregistered office in Haryana India.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with Section 152 of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Arvind Dham retires by rotation at the ensuing AnnualGeneral Meeting of the Company and being eligible offer himself for reappointment.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.
Further the approval of shareholders pursuant to Section 203 read with Schedule Vthereof is sought for the appointment of Mr. Gautam Malhotra as Whole-time Director ofthe Company on such terms & conditions as may be decided by the Board for period offive years w.e.f 22nd July 2017.
Brief disclosure of the Directors proposed to be appointed or re-appointed highlighting their industry expertise in specific functional areas names of companies inwhich they hold directorships is provided in the notice forming part of Annual Report.Further the name of the Companies in which they hold the memberships/chairmanships ofBoard Committees as stipulated under SEBI LODR Regulations is provided in the CorporateGovernance Section of this Annual Report. Further Company has received resignation of Mr.D.S. Malik Mr. R.N. Bharadwaj Mr. John Ernest Flintham and Mr. Sanjiv Bhasin from thepost of Directorship of the Company.
Pursuant to the provisions of Section 203 of the Act which came into effect from April1 2014 the appointments of Mr. John Ernest Flintham as Chief Executive Officer Mr.Vinod Kumar Uppal Chief Financial Officer and Mr. Rajeev Raj Kumar Company Secretary askey managerial personnel of the Company were formalized. Mr. John Ernest Flintham resignedfrom the post of Vice Chairman & Managing Director & Mr. D.S. Malik resigned fromthe post of Managing Director. Mr. Gautam Malhotra has been appointed as a Whole-timedirector of the Company.
NUMBER OF BOARD MEETING
The Board met 7 (seven) times during the financial year the details of which are givenin the Corporate Governance Report. The maximum interval between any two meetingsdid not exceed 120 days as prescribed in the Companies Act 2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's current policy is to have an appropriate mix of executive and independentdirectors to maintain the independence of the Board and separate its functions ofgovernance and management. On March 31 2017 the Board consists of Nine members one ofwhom is executive or Managing Director two are non-executive Directors one is nomineeDirector and five are independent directors.
The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website i.e. www.amtek.com and also in the Corporate GovernanceReport. There has been no change in the policy since the last fiscal year. We affirm thatthe remuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The framework includesthe evaluation of directors on various parameters.
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard of its own performance and that of its committees and individual directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation of independentdirectors shall be done by the entire Board of Directors excluding the director beingevaluated.
The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe corporate governance report. The Board approved the evaluation results ascollated by the nomination and remuneration committee.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
All new independent directors inducted into the Board attend an orientation program.The details of training and familiarization program are provided in the Corporategovernance report and is also available on our website (www.amtek.com).
Further at the time of the appointment of an independent director the Company issuesa formal letter of appointment outlining his / her role function duties andresponsibilities. The format of the letter of appointment is available on our website(www.amtek.com)
COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority.
Details of composition terms of reference and number of meetings held for respectivecommittees are given in the Report on Corporate Governance.
The Board has laid down separate Codes of Conduct for Non-Executive Directors andSenior Management personnel of the Company and the same are posted on the Company'swebsite. All Board Members and Senior Management personnel have affirmed compliance withthe Code of Conduct. The Managing Director has also confirmed and certified the same. Thecertification is enclosed at the end of the Report on Corporate Governance All therecomendations made by the Audit Committtee were accepted by the Board during thefinancial year 2016-17.
DIRECTORS' RESPONSIBILTY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Directorshereby confirm that:
i. in the preparation of Annual Accounts the applicable Accounting Standards have beenfollowed and there has been no material departure.
ii. they have selected accounting policies were applied consistently and the directorsmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2017 and of theprofits/losses for the year ended on that date.
iii. they have made 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.
iv. they have prepared the annual accounts on a going concern basis.
v. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively.
vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
M/s Raj Gupta & Co. Chartered Accountants New Delhi has been appointed as anStatutory Auditors in place of M/s Manoj Mohan & Associates Chartered Accountants bythe board of directors in its meeting held on 22nd July 2017.
Pursuant to provisions of Section 139 & Sec. 142 of the Companies Act 2013 andrules framed there under it is proposed to appoint M/s Raj Gupta & Co. CharteredAccountants as Statutory Auditors of the Company from the conclusion of this AnnualGeneral Meeting (AGM) till the conclusion of Annual General Meeting to be held forfinancial year 2021-2022 of the Company and on such remuneration as will be fixed by theBoard of Directors of the Company.
The Company has received letters from the auditors to the effect that theirre-appointment if made would be within the prescribed limits under Section 141 of theCompanies Act 2013 and that they are not disqualified for appointment.
The Auditor Report of the auditor is given as an annexure which forms part of theAnnual Report.
The Board has appointed Mr. Yash Pal Sardana (Membership No. 17996) practicing CostAccountant as Cost Auditor for conducting the audit of the cost records of the Companyfor the financial year 2017-18.
SECRETARIAL AUDIT REPORT
The Board has appointed M/s Nitika & Associates Company Secretaries to conductSecretarial Audit for the financial year 2016-17. The Secretarial Audit Report for thefinancial year ended March 31 2017 is annexed herewith marked as Annexure -I tothis Report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
RECONCILIATION OF SHARE CAPITAL AUDIT REPORT
As per the directive of Securities and Exchange Board of India M/s S. Khurana& Associates Company Secretaries New Delhi undertook the Reconciliation of ShareCapital Audit on a quarterly basis. The purpose of the audit is to reconcile the totalnumber of shares held in National Securities Depository Limited (NSDL) Central DepositoryServices (India) Limited (CDSL) and in physical form with the respect to admitted issuedand paid up capital of the Company.
The Company is committed to maintain high standards of Corporate Governance and adhereto the Corporate Governance requirements set out by SEBI. The Report on CorporateGovernance as stipulated under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms an Integral part of the Annual Report. Requisite Certificate fromthe Auditors of the Company confirming compliance with the conditions of CorporateGovernance is attached to this Report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Particulars of Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 form part of the notes to the financial statements provided in thisAnnual Report. These loans /guarantees are primarily granted for the furtherance ofbusiness of the borrowing companies.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Information on transactions with related parties pursuant to section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure -II in Form AOC-2 and the same forms part of this report.
ANNUAL RETURN EXTRACT
As provided under Section 92(3) of the Act the extract of annual return is given as Annexure-IIIin the prescribed Form MGT-9 which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the corporate social responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure-IV of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. For other details regarding the CSRCommittee please refer to the corporate governance report which forms part of thisreport. The policy is available on the website of the Company www.amtek.com
The board of directors of the Company has formed a risk management committee to frameimplement and monitor the risk management plan for the Company. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in themanagement discussion and analysis which forms part of this report.
PARTICULARS OF EMPLOYEES AND REMUNERATION
(a) The ratio of remuneration of each director to the median of employees' remunerationas per Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of the Board'sreport Annexure - V(a).
(b) The statement containing particulars of employees as required under section 197(12)of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is forms part of the Board's report Annexure V(b).
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
The Energy conservation continues to be an area of focus for Amtek. Initiatives tointegrate energy efficiency into overall operations are undertaken through designconsiderations and operational practices. The key initiatives towards conservation ofenergy were:
improved monitoring of energy consumption through smart metering and integrationwith building management systems;
setting internal targets for energy performance improvement and institution ofrigorous operational controls toward achieving these targets;
creating awareness amongst associates on energy conservation through campaignsand events;
focussing on enhancing the component of renewable power in our power sourcingstrategy (through on-site solar power generation and third party purchase as feasible);
increased focus on procurement of energy efficient equipment.
The relevant data regarding the above is given in the Annexure-VI hereto andforms part of this report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A detailed review of operations performance and future outlook of the Company is givenseparately under the head "Management Discussion and Analysis Report" and formsa part of this report.
Details of the Familiarization Programme of the independent directors are available onthe website of the Company (www.amtek.com)
Policy on dealing related party transaction is available on the website of the Company(www.amtek.com)
The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concerns. Theprovisions of this policy are in line with the provisions of the Section 177(9) of theCompanies Act 2013 and SEBI (Listing obligations and Disclosure Requirements)Regulations 2015. (URL: www.amtek.com/investors).
The Directors wish to place on record their appreciation for the sincere servicesrendered by employees of the Company at all levels. Your Directors also wish to place onrecord their appreciation for the valuable co-operation and support received from theGovernment of India various state governments the Banks/ financial institutions andother stakeholders such as shareholders customers and suppliers among others. TheDirectors also commend the continuing commitment and dedication of the employees at alllevels which has been critical for the Company's success. The Directors look forward totheir continued support in future.