To the Members
Your Directors are pleased to present the 39th ANNUAL REPORT for thefinancial year ended March 31 2021. The financial statements are prepared in accordancewith Indian Accounting Standards (Ind AS'). The performance of the Company issummarized as follows:
01. FINANCIAL HIGHLIGHTS :
(Amount Rs. in Lakhs)
| ||For the year Ended 31/03/2021 ||For the year Ended 31/03/2020 |
|Revenue from Operations & Other Income ||10442.50 ||10062.16 |
|Earnings before interest depreciation and taxation (EBIDTA) ||515.78 ||644.68 |
|Less: Interest & finance charges ||44.68 ||99.68 |
|Profit /(Loss) before || || |
|depreciation & taxation ||471.10 ||545.00 |
|Less: Depreciation ||232.67 ||240.55 |
|Profit before tax ||238.43 ||304.45 |
|Less: Provision for income tax || || |
| Current Tax ||86.50 ||82.70 |
| Deferred Tax ||(9.94) ||9.02 |
| Short / (Excess) provision for earlier years ||(10.03) ||(3.48) |
|Profit for the Year ||171.90 ||216.21 |
|Add / (Less) : Other Comprehensive income ||12.44 ||(1.00) |
|Total Comprehensive Income for the year ||184.34 ||215.21 |
|Add : Surplus of last year || || |
|brought forward ||1338.34 ||1157.88 |
|Less : Dividend Paid ||28.81 ||28.81 |
|Less : Corporate Tax on Dividend Paid ||- ||5.92 |
|Surplus available for appropriation ||1493.87 ||1338.34 |
02. REVIEW OF OPERATIONS:
During the year under review Your Company has maintained revenue and profitability inthis tough situation of CoVID-19 pandemic i.e. the revenue has increased by 4% but therewas slight decrease in PBDIT (as loss was incurred during first quarter) as compared toprevious year. During the year India had good monsoons and the Indian agriculturalsector was registered positive growth and hence Company able to maintain revenue andprofitability growth despite the coronavirus pandemic. Due to CoVID-19 pandemic on Indiaand globally forcing governments to enforce lock-downs of all economic activity in thebeginning of FY 2020-21 and hence almost one and half months production remain closed atour foundry. During that period all our employees have approached work from home wascarried out seamlessly. While beginning of second quarter overall tractor industry hasshown positive growth and hence your Company was grown in terms of generating revenue.
During the year the Company has implemented all measures to comply with the CoVID-19guidelines relating to safety health and hygiene social distancing wearing of facemasks regular cleaning of premises and vehicles and other precautionary measuresrequired to be taken in the prevailing situation to ensure the safety of our employeesworkers and staffs at workplace.
03. DIVIDEND :
The Board of Directors have recommend dividend of Rs.1per Equity Share (10% on the facevalue of Rs. 10/- each) for the year ended on March 31 2021(Previous year Rs. 1 perequity share i.e.@10%) subject to the approval of shareholders at the ensuing AnnualGeneral Meeting.
04. TRANSFER TO RESERVES :
During the year under review no amount is appropriated from Profit and Loss Accountand transferred to any reserve account.
05. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND :
Pursuant to the provisions of the Companies Act 2013 read with rules made thereunderthe Company had sent individual notices to the shareholders who have not claimed theirdividends for past seven consecutive years. The Company has also advertised the same inthe Business Standard and Jay Hind Newspapers dated June 20 2020 seeking action from theshareholders who have not claimed their dividends for past seven consecutive years. TheCompany had transferred Rs.120499/- to the Investor Education and Protection Fundestablished by the Central Government during the financial year 2020-21 as unclaimeddividend after expiry of seven years for the year ended March 31 2013. In accordance withSection 124(6) of the Companies Act 2013 read with Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 (amended from time time)the Company had also transferred total 10739 equity shares held by 66 shareholders to theIEPF Authority on December 1 2020 who have not claimed their dividends for past sevenconsecutive years from the date of transfer to the unpaid dividend account. The details ofsuch shares transferred have been uploaded on the Company's website www.bhagwati.com
The Shareholders/ claimants whose shares and unclaimed dividend have been transferredto the IEPF Account may claim the shares or apply for refund by making an application tothe IEPF Authority. A details of Nodal officer of the Company appointed by the Board ofdirectors is available at Company's website www.bhagwati.com
06. PUBLIC DEPOSITS :
During the year under review your Company has not accepted or renewed any deposit fromthe public falling within the ambit of Section 73 of the Companies Act 2013 read togetherwith the Companies (Acceptance of Deposits) Rules 2014 and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
07. SHARE CAPITAL :
During the year under review the paid up capital of the Company has remained the same.During the year under review the Company has not issued shares with differential votingrights nor granted stock options nor sweat equity. The Company has also not purchased ofits own shares by employees or by trustees for the benefit of employees. Also during theyear under review there was no change in the Authorized share capital of the Company.
During the year under review the Company's quality management system has been reviewedand confirmed as per the standard ISO 9001:2015 certification through external agency.
09. BANK/ FINANCIAL INSTITUTIONS:
Your Company is prompt in making the payment of interest and repayment of loans apartfrom payment of interest on working capital to the bank. During the Covid-19 pandemicperiod it has not availed any moratorium on any of its payments to the bank and the Bankcontinues their unstinted support in all aspects and the Board records its appreciationfor the same.
10. CHANGE IN THE NATURE OF BUSINESS IF ANY:
No change in nature of the business of the Company occurred during the year.
11. ANNUAL RETURN:
Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act 2013 acopy of the annual return for the year ended March 31 2021 is placed on the website ofthe Company at www.bhagwati.com with information available up to the date of this reportand shall be further updated as soon as possible but no later than sixty days or suchextended days by concerned authority if any from the date of the ensuing Annual GeneralMeeting.
12. 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 Act 2013 read with Rule 8 ofCompanies (Accounts) Rules 2014 is annexed herewith as (Annexure-1).
A) Changes in Directors and Key Managerial Personnel
As per provision of the Companies Act 2013 Dr. Pravin N. Bhagwati (DIN: 00096799)retires by rotation in the forthcoming Annual General Meeting and being eligible offeredhimself for reappointment. The Board of Directors recommends his reappointment.
During the year under review Ms. Reena P. Bhagwati (DIN: 00096280) has beenreappointed as Jt. Managing Director of the Company for a period of five years effectivefrom October 1 2020. Further on recommendation of Nomination and Remuneration Committeeand the Board of directors the Members of the Company have approved the terms ofappointment of Ms. Reena P. Bhagwati (DIN: 00096280) as Managing Director of the Companyeffective from November 1 2020 to September 30 2025 and Dr. Pravin N. Bhagwati (DIN:00096799) as Jt. Managing Director of the Company effective from November 1 2020 toSeptember 30 2021.
Also on recommendation of Nomination and Remuneration Committee the Board of directorshas appointed Mr. Shantanu C. Mehta (DIN: 08930872) as an Additional Director(NonExecutive & Independent) of the Company through circular resolution dated October22 2020 subject to approval of the members at ensuing Annual General Meeting (AGM) forappointment as an Independent director to hold office for a term upto five consecutiveyears from the date of ensuing AGM.
Further the Board of directors has appointed Mr. Abhijeet V. Ratolikar as ChiefExecutive Officer (KMP) of the Company in its meeting held on June 18 2020 effective fromthe said date and the resigned as Chief Executive Officer (KMP) on August 31 2020.
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 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Also all the Independentdirectors of the Company have confirmed under Rule 6(3) of the Companies (Appointment andQualification of Directors) Rules 2014 and have been registered and members ofIndependent Directors Databank maintained by Indian Institute of Corporate Affairs.
C) Statement regarding to Integrity Expertise and Experience (including theproficiency) of the Independent directors:
The Board has opined that all the Independent directors of the Company has possessedrelevant Integrity Expertise and Experience in commensurate with the business of theCompany.
All Independent Directors of the Company are registered with the Independent DirectorsDatabank as maintained and managed by the Indian Institute of Corporate Affairs. Also asper Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules 2014there is provided two years period from registration for passing of online proficiencyself-assessment test by all Independent directors to be conducted by such institute asauthorized by Ministry of Corporate Affairs except exempted as per said rules.
During the year under review all Independent Directors of the Company like Mr.Rajendraprasad J. Shah (DIN: 01982424) and Mr. Padmin H. Buch (DIN: 03411816) havesuccessfully cleared online proficiency self-assessment test and Mr. Vimal R. Ambani (DIN:00351512) is exempted from such test under the said rules.
Further Mr. Shantanu C. Mehta (DIN: 08930872) Additional Director (Non-Executive& Independent) of the Company has also been registered with such IndependentDirectors Databank.
D) Annual evaluation by the board of its own performance its committees and individualdirectors
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard of Directors of the Company has initiated and put in place evaluation of its ownperformance its committees and individual directors. The Nomination and RemunerationCommittee has also reviewed the performance of the Board Committee and all the directorsof the Company. The board of directors expressed their satisfaction with the evaluationprocess.
E) Policy on appointment and remuneration of Directors KMPs and Senior Management
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andSenior Management and their remuneration. The said policy is available on the website ofthe Company at www.bhagwati.com.
F) Familiarization Programme for Independent Directors
The Independent directors are regularly informed during meeting of the Board andCommittees on the business strategy business activities manufacturing operations andissues faced by the foundry. Also the independent directors have been updated with theirroles rights and responsibilities in the Company by specifying it in their appointmentletter along with necessary documents reports and internal policies to enable them tofamiliarize with the Company's procedures and practices. The details of familiarizationprograms are available on the website of the Company at www.bhagwati.com.
14. MEETINGS OF THE BOARD OF DIRECTORS:
Four meetings of the Board of directors of the Company were held during the year underreview. The intervening gap between two consecutive meetings was within the periodprescribed under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and as per the extended/ relaxation in time limit given byMinistry of Corporate Affairs and SEBI due to CoVID-19 pandemic.
The details of composition meetings attendance and other details of the Board arereported under Corporate Governance Report which is annexed to this Directors report.YourCompany has complied with the Secretarial Standard as applicable to the Company pursuantto the provisions of the Companies Act 2013.
15. AUDIT COMMITTEE:
The Audit Committee comprises Mr. R. J. Shah Chairman and Ms. R. P Bhagwati Mr. P H.Buch Mr. V. R. Ambani and Mr. S. C. Mehta as Members. In accordance with provisions ofSection 177(8) of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has accepted all the recommendations of theAudit Committee during the financial year 2020-21.
The details of composition meetings attendance and other details of the AuditCommittee and other committees are reported under Corporate Governance Report which isannexed to this Directors report.
16. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
The Company has Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The details of the Whistle Blower Policy are explained in theCorporate Governance Report and also posted on the website of the Company atwww.bhagwati.com.
17. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Your Company has not given any loan investment made guarantee given or securityprovided by the Company to any entity under Section 186 of the Companies Act 2013.
18. 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-2).
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business and the same were placed before theAudit Committee and also to the Board for their review and approval on a quarterly basis.The Company has also formulated related party transaction policy and the same is availableon the website of the Company at www.bhagwati.com.
19. PARTICULAR OF SUBSIDIARY/JOINT VENTURE/^ ASSOCIATE COMPANY:
During the year under review Your Company does not have any subsidiary/Joint Venture/Associate Company.
20. DISCLOSURES ON MANAGERIAL REMUNERATION AND PARTICULAR OF EMPLOYEES:
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed herewith as (Annexure-3).
During the year under review there were no employees drawing remuneration which is inexcess of the limit as prescribed under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (amended from time to time) and holdstwo percent of the equity share capital of the Company.
21. MANAGEMENT DISCUSSION AND ANALYSIS:
Pursuant to the Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Management discussion and analysis report for thefinancial year ended March 312021 is forming part of this Annual report is annexedherewith as (Annexure-4).
22. CORPORATE GOVERNANCE:
As required under Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Report on Corporate Governance for the financial yearended March 31 2021 along with requisite certificate confirming compliance with theconditions of Corporate Governanceare annexed herewith as (Annexure-5).
23. BUSINESS RESPONSIBILITY REPORT:
A provision relevant to submission of Business Responsibility Report as per Regulation34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 wasnot applicable to your Company during the year under review.
24. AUDITORS :
A) STATUTORY AUDITORS:
M/s. Mahendra N. Shah & Co. Chartered 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 2016 upto the conclusion of the 39thAnnual General Meeting (AGM) at a remuneration as may be mutually agreed between the Boardof directors of the Company and the Auditors.
As recommended by Audit Committee the Board of directors has proposed M/s. Mahendra N.Shah & Co. Chartered Accountants firm (FRN: 105775W) Ahmedabad for reappointment ofsecond term of five years effective from 39th AGM to 44th AGM (i.e. FY 2021-22 to 2025-26)for approval of the members at ensuing 39th AGM.
The Company has received consent letters along with certificate from the Auditor underthe provisions of the Companies Act 2013 stating that they are not disqualified fromcontinuing as Statutory Auditors of the Company.
The report given by the Statutory Auditors is part of the Annual Report. There has beenno adverse qualification observationsadverse remark or disclaimer given by the Auditorin their report.
B) 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 2021-22.
C) 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 2020-21. SecretarialAudit Report for financial year 2020-21 is annexed herewith as (Annexure-6) and theSecretarial auditor has not made any adverse comments or given qualification reservationor adverse remarks or disclaimer in their report.
The Board has appointed M/s. Chirag Shah & Associates Company SecretariesAhmedabad as Secretarial auditor of the Company for the financial year 2021-22.
D) 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 financial year ending March 31 2022.The remuneration payable to the Cost Auditors is required to be placed before the Membersin a general meeting for their ratification. Accordingly a resolution seeking member'sratification for the remuneration payable to M/s. Kiran J. Mehta & Co. CostAccountants placed in the notice convening the ensuing Annual General Meeting.
During the year under review your Company has maintained cost accounts and records asprescribed under Section 148 of the Companies Act 2013 and rules made thereunder. Costaudit report for the financial year ended 31st March 2020 was filed with the CentralGovernment within the stipulated time on 16th July 2020.
E) REPORTING OF FRAUD BY AUDITORS:
During the year under review the auditors have not reported any instances of fraudscommitted in the Company by its officers or employees to the Audit Committee under section143(12) of the Companies Act 2013.
25. DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(3) of the Companies Act 2013 in relation to the FinancialStatements for FY 2020-21 your Directors to the best of their knowledge and beliefconfirm 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.
26. 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.
27. HUMAN RESOURCES:
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization to 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.
28. PROHIBITION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prohibition of Insider Trading withregulates 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.
29. 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.
30. CORPORATE SOCIAL RESPONSIBILITY:
A provision relevant to Corporate Social Responsibility (CSR) as provided under Section135 of the Companies Act 2013 was not applicable to your Company during the year underreview and hence the Board has not constituted CSR Committee and relevant Policy thereof.
31.THE NUMBER OF COMPLAINTS RELATING TO CHILD LABOUR FORCED LABOUR INVOLUNTARYLABOUR SEXUAL HARASSMENT CASES TO INTERNAL COMPLAINTS COMMITTEE IN THE LAST FINANCIALYEAR AND THOSE PENDING AS ON THE END OF THE FINANCIAL YEAR:
|No. Category ||No. of Complaints field during the financial ||No. of Complaints disposed of during the financial year ||No. of Complainants pending as on end of the financial year |
|1. Child labour/ forced labour/ Involuntary labour ||NIL ||None ||NIL |
|2. Sexual harassment of women at workplace (Prevention Prohibition and Redressal) Act 2013. ||NIL ||None ||NIL |
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 Auditormonitors and evaluates the efficiency and adequacy of Internal Control System of theCompany its compliance with operating system accounting procedures and policy of theCompany. Based on the report of internal audit function process owners undertakecorrective action and thereby strengthen the controls. Significant audit observation andcorrective actions thereon are presented to the audit committee of the board.
Your Directors state that no disclosure or reporting isrequired in respect of thefollowing items as there were no transactions on these items during the year under review:
(i) No significant or material orders were passed by any regulator or court or tribunalwhich impacts the going concern status and Company's operations in future.
(ii) No material changes and commitments if any affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
(iii) the details of application made or any proceeding pending under the Insolvencyand Bankruptcy Code 2016 (31 of 2016) during the year alongwith the ir status as at theend of the financial year.
(iv) the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the banks government authorities customers vendors andmembers during the year under review. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services by the Company's executives staffand workers.
|Place : Ahmedabad ||By order of the Board of Directors |
|Date : 26/05/2021 ||For Bhagwati Autocast Limited |
| ||Dr. Pravin N. Bhagwati |
| ||Chairman & Jt. Managing Director DIN :00096799 |