To the Members
Your Directors are pleased to present the 37TH ANNUAL REPORT for thefinancial year ended on March 31 2019. The financial statements are prepared inaccordance with Indian Accounting Standards (Ind AS'). The performance of theCompany is summarized as follows:
01.FINANCIAL HIGHLIGHTS :
| || ||(Amount Rs. in Lakhs) |
| ||For the year Ended 31/03/2019 ||For the year Ended 31/03/2018 |
|Total Income ||12000.58 ||9255.37 |
|Earnings before interest depreciation and taxation (EBIDTA) ||836.02 ||451.25 |
|Less: Interest & finance charges ||109.79 ||94.47 |
|Profit /(Loss) before depreciation & taxation ||726.23 ||356.78 |
|Less: Depreciation ||233.20 ||211.49 |
|Profit before tax ||493.03 ||145.29 |
|Less: Provision for income tax || || |
| Current Tax ||144.18 ||63.37 |
| Deferred Tax ||(25.39) ||(14.44) |
| Short / (Excess) provision for earlier years ||5.14 ||(14.56) |
|Profit for the Year ||369.10 ||110.92 |
|Add / (Less) : Other Comprehensive income ||0.71 ||(1.16) |
|Total Comprehensive Income for the year ||369.81 ||109.76 |
|Add : Surplus of last year brought forward ||815.86 ||733.84 |
|Less : Dividend Paid ||23.05 ||23.05 |
|Less : Corporate Tax on Dividend Paid ||4.74 ||4.69 |
|Surplus available for appropriation ||1157.88 ||815.86 |
02. REVIEW OF OPERATIONS:
During the year under review Your Company's revenue increased by 29.90% and profitbefore Taxincreased by 239%. This is due to good demand from our customers who are bigOEM tractor industries and sales price realization. During the year your Company'sproduction increased by 21.04% on year to year basis.The Company increased power demandfrom 2800 KVA to 3100 KVA and added certain balancing equipment to utilize maximumcapacity.
03. DIVIDEND :
The Board of Directors recommend dividend ofRs. 1per Equity Share (10% on the facevalue of Rs. 10/- each) for the year ended on March 31 2019(Previous year Rs. 0.80 perequity share i.e. @ 8%) subject to the approval of shareholders at the ensuing AnnualGeneral Meeting.
04. TRANSFER TO RESERVES :
Your Company has not transferred any amount to General Reserves. Your Company hasretained amount of Rs. 1157.88 Lakhs in the Statement of Profit and Loss.
05. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND :
The Company has transferred Rs. 1.08 Lakh to the Investor Education and Protection Fundestablished by the Central Government during the financial year 2018-19 as unclaimeddividend after expiry of seven years for the year ended March 31 2011.
06. PUBLIC DEPOSITS :
During the financial year 2018-19 your Company has not accepted or renewed any depositfrom the public falling within the ambit of Section 73 of the Companies Act 2013 readtogether with the Companies (Acceptance of Deposits) Rules 2014 and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet.
As per Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposit) Rules 2014 theCompany has accepted money not considered as deposit from Dr. Pravin N. BhagwatiRs. 23.70lakhs and Ms. Reena P. BhagwatiRs. 50.00 lakhs Managing Directors of the Company.
07. SHARE CAPITAL :
The paid up equity share capital as on March 31 2019 was Rs. 2.88 Crores. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. The Company has also not purchased of its ownshares by employees or by trustees for the benefit of employees.
08. LISTING :
The Equity shares of the Company continue to be listed on BSE Limited (Security Code:504646) and required Listing fees for the year 2018-19 has been paid.
09. EXTRACT OF THE ANNUAL RETURN :
Pursuant to the provisions of Section 92(3) of the Companies Act 2013 the detailsforming part of the extract of the Annual Return for the financial year ended March 312019 in form MGT-9 is annexed herewith as (Annexure-1).
10. THE DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO :
The Information required to be disclosed in the report of the Board of Directors as perthe provisions of Section 134(3)(m) of the Companies Act2013 read with Rule 8 ofCompanies (Accounts) Rules 2014 is annexed herewith as (Annexure-2).
11. DIRECTORS :
A) Changes in Directors and Key Managerial Personnel
As per provision of the Companies Act 2013 Dr. Pravin N.Bhagwati retires by rotationin the forthcoming Annual General Meeting and being eligible offeredhimself forre-appointment. The Board of Directors recommends his re-appointment.
Mr. Mahadev B. Shinde has been appointed as Chief Executive Officer (KMP) of theCompany in the Board of directors meeting held on November 13 2018 effective from thesaid date he resigned from the Chief Executive Officer (KMP) position w.e.f. March 82019.
B) Declaration by an Independent Director(s) and reappointment if any
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013.
Independent directors (IDs) shall hold office for a term up to five consecutive yearson the Board of the Company but shall be eligible for reappointment for next five yearson passing of a special resolution by the Company and disclosure of such appointment inthe Directors report.As per the provisions of the Companies Act 2013 Mr. Padmin H. Buchand Mr. Rajendraprasad J. Shah will retire at the ensuing AGM and being eligible seekreappointment. The Board recommends their re-appointment.
The Companies Act 2013 provides for the appointment of IDs. Sub-section (10) ofSection 149 of the Companies Act 2013 provides that IDs shall hold office for a term ofup to five consecutive years on the board of a Company and shall be eligible forreappointment on passing of a special resolution by the shareholders of the Company.Accordingly Mr. Padmin H. Buch and Mr. Rajendraprasad J. Shah IDs were appointed by theshareholders at the general meeting held on 24th September 2014. Further sub-section(13) of Section 149 provides that the provisions of retirement by rotation as defined insub-sections (6) and (7) of Section 152 of the Companies Act 2013 shall not apply to suchIDs.
C) Annual evaluation by the board of its own performance its committees and individualdirectors
The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The result of the evaluation issatisfactory and adequate and meets the requirement of the Company.
D) Policy on Directors' appointment and remuneration
(Including criteria for determining qualification positive attributes independence ofa Director policy relating to remuneration for Directors Key Managerial Personnel andother employees)
Policy on Directors' appointment
Policy on Directors' appointment is to follow the criteria as laid down under theCompanies Act 2013 the Listing Agreement with Stock Exchanges and good corporatepractices. Emphasis is given to persons from diverse fields or professions.
Policy on Remuneration
Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that
Remuneration to unionised workmen is based on the periodical settlement with theworkmen union.
Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen (non Unionised) is industry driven in which it is operating taking into accountthe performance leverage and factors such as to attract and retain quality talent.
For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein circulars and guidelines issued by CentralGovernment and other authorities from time to time.
12. MEETINGS OF THE BOARD OF DIRECTORS:
Four meetings of the Board of directors of the Company held during the year underreview. Your Company has complied with the Secretarial Standard as applicable to theCompany pursuant to the provisions of the Companies Act 2013.
13. AUDIT COMMITTEE :
The Committee comprises Mr. R. J. Shah Chairman and Ms. R. P. Bhagwati Mr. P. H.Buch Mr. V. R. Ambani Members. In accordance with provisions of Section 177(8) of theCompanies Act 2013 and Listing Regulations the Board has accepted all therecommendations of the Audit Committee during the financial year 2018-19.
14. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES :
The Company has formulated Vigil Mechanism named Whistle Blower Policy with a view toreport concern about unethical behavior actual or suspected fraud. This policy providesmechanism for employee of the Company of any violation and to approach the chairman of theAudit Committee of the Company who shall investigate into the same and recommend suitableaction to the management.
15. NOMINATION AND REMUNERATION COMMITTEE :
The Board has on recommendation of nomination and remuneration committee framed apolicy for selection and appointment of Director senior management and theirremuneration.
16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
There is no loan given investment made guarantee given or security provided by theCompany to any entity under Section 186 of the Companies Act 2013.
17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in section 188(1) of the Companies Act 2013 including certainarm's length transactions under third proviso thereto aredisclosed in Form No. AOC -2 isannexed herewith as (Annexure-3).
18. PARTICULAR OF SUBSIDIARY/JOINT VENTURE/ ASSOCIATE COMPANY :
The Company does not have any subsidiary Joint Venture and Associate Company.
19. RISK MANAGEMNET :
Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Your Company periodically assessesrisks in the internal and external environment along with the cost of treating risks andincorporates risk treatment plans in its strategy business and operational plans.
Your Company through its risk management process strives to contain impact andlikelihood of the risks within the risk appetite as agreed from time to time with theBoard of Directors.
There are no risks which in the opinion of the Board threaten the existence of yourCompany.
20. CORPORATE GOVERNANCE :
As per the provisions of Regulation 15(2) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Corporate Governance requirements are notapplicable to your Company as the Company has not attained the prescribed limit asmentioned hereunder:
The Regulations 17 to 27 (including both regulations) and clauses (b) to (i) ofsub-regulation (2) of regulation 46 and Para C D and E of Schedule V shall not bemandatory in respect of the companies having paid-up share capital not exceeding rupeesten crores and net worth not exceeding rupees twenty five crores as on the last day of theprevious financial year.
21. INFORMATION REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITHCOMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:
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 are annexed to this report as (Annexure-4).
22. MANAGEMENT DISCUSSION AND ANALYSIS:
Pursuant to the Regulation 34(2) of the SEBI (LODR) Regulations 2015 the reportrelevant to Management discussion and analysis forming part of the Annual report for theyear under review is annexed herewith as (Annexure-5).
1. STATUTORY AUDITORS:
M/s. Mahendra N. Shah& Co. Char tered Accountants(FRN: 105775W) Ahmedabad wereappointed as Statutory Auditor of the Company for a term of 5 (five) consecutive years atthe 34th Annual General Meeting held on September 21 2016upto the conclusion of the 39thAnnual General Meeting at a remuneration as may be mutually agreed between the Board ofdirectors of the Company and the Auditors.
The Company has received relevant letters/ certificates from them to the effect thatthey have not been disqualifiedfrom continuing as Statutory Auditors of the Company withinthe prescribed limits under Section 141 of the Companies Act 2013.
EXPLANATION OR COMMENTS ON AUDITORS' REPORT :
The report given by the Auditor is part of the Annual Report. There has been no adversequalification observations adverse remark or disclaimer given by the Auditor in theirreport.
2. INTERNAL AUDITORS:
Pursuant to the provisions of Section 138 of the Companies Act 2013 the Board ofdirectors of the Company has appointed M/s. Mehta Sheth&Associates CharteredAccountants (FRN:106238W) Ahmedabad as an Internal auditor of the Company for thefinancial year 2019-20.
3. SECRETARIAL AUDITOR:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of directorshas appointed M/s. Chirag Shah & Associates Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the financial year 2018-19. The Reportof the Secretarial Audit Report is annexed herewith as (Annexure-6).
The Board has appointed M/s. Chirag Shah &Associates Company SecretariesAhmedabad as Secretarial auditor of the Company for the financial year 2019-20.
4. COST AUDITOR :
As per Section 148 of the Companies Act 2013 the Company is required to have theaudit of its cost records conducted by a Cost Accountant in practice. In this connectionthe Board of Directors of the Company has on the recommendation of the Audit Committeeapproved the appointment of M/s. Kiran J. Mehta & Co. (FRN: 000025) Cost AccountantsAhmedabad as the cost auditor of the Company for the year ending March 31 2020.
24. DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(3) of the Companies Act 2013 in relation to the FinancialStatements for FY 2018-19 the Board of Directors states that:
(a) in preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the directors have 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 have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis;
(e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
25. HUMAN RESOURCES:
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
26. CHANGE IN THE NATURE OF BUSINESS IF ANY:
No change in nature of the business of the Company occurred during the year.
27. PROHIBITION OF INSIDER TRADING :
The Company has adopted a Code of Conduct for Prohibition of Insider Trading withregulate trading in securities by the Directors and designated employee of the Company.The Board is responsible for implementation of the Code. The code requires preclearancefor dealing in the Company's shares and prohibits the purchase or sale of Company sharesby the Directors and the designated employee while in possession of unpublished pricesensitive information in relation to the Company and during the period when the Tradingwindow is closed. The relevant policy is available on the Company's website.
28. DEMATERIALISATION OF SHARES:
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system members are requested to avail thefacility of dematerialization of shares with either of the Depositories as aforesaid.
29. THE NUMBER OF COMPLAINTS RELATING TO CHILD LABOUR FORCED LABOUR INVOLUNTARYLABOUR SEXUAL HARASSMENT IN THE LAST FINANCIAL YEAR AND THOSE PENDING AS ON THE END OFTHE FINANCIAL YEAR :
|Sr. No. ||Category ||No. of Complaints field during the financial year ||No. of Complainants pending as on end of the financial year |
|1. ||Child labour/forced labour/ Involuntary labour ||NIL ||NIL |
|2. ||Sexual harassment of women at workplace (Prevention Prohibition and Redressal) Act 2013. ||NIL ||NIL |
30. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No other material changes have taken place after completion of the financial period upto the date of this report which may have substantial effect on business and finances ofthe company and which are required to be disclosed in this Report.
31. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
32. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Company has an internal control system commensurate with the size scale andcomplexity of its operations. To maintain its objectives and independence the internalAudit reports to the chairman of the Audit Committee of the Board.
The Internal Auditor monitors and evaluates the efficiency and adequacy of InternalControl System of the Company its compliance with operating system accounting proceduresand policy of the Company. Based on the report of internal audit function process ownersundertake corrective action and thereby strengthen the controls. Significant auditobservation and corrective actions thereon are presented to the audit committee of theboard.
(i). Insurance :
The assets of the company including Plant and Machineries Factory Building StocksStores Vehicles etc. have been adequately insured.
(ii). Industrial Relations :
During the year under review your Company enjoyed cordial relationship with theworkers and employees at all the levels.
(iii). Acknowledgement :
Your Directors expresses sincere thanks to various Central and State GovernmentDepartments Organizations and Agencies for the continued co-operation and supportextended by them. The Directors also gratefully acknowledge all stakeholders of theCompany viz. customers members dealers vendors banks and other business partners forthe excellent support received from them during the year. The Directors place on recordtheir sincere appreciation to all employees of the Company for their unstinted commitmentand continued contribution to the Company.
|Place : Ahmedabad ||By order of the Board of Directors |
|Date : 29/05/2019 ||For Bhagwati Autocast Limited |
| ||Dr. Pravin N. Bhagwati |
| ||Chairman & Managing Director |
| ||DIN : 00096799 |