To the Members
Your Directors have pleasure in presenting the THIRTY SIXTH ANNUAL REPORT andaudited accounts for the financial year ended March 31 2018. The performance of theCompany for the financial year ended on March 31 2018 is summarized below.
01.FINANCIAL HIGHLIGHTS :
| || |
(Amount Rs. in Lakhs)
| ||For the year Ended 31/03/2018 ||For the year Ended 31/03/2017 |
|Earnings before interest depreciation and taxation (EBIDTA) ||451.25 ||520.16 |
|Less: Interest & finance charges ||94.47 ||72.50 |
|Profit /(Loss) before depreciation & taxation ||356.78 ||447.66 |
|Less: Depreciation ||211.49 ||224.48 |
|(Loss)/ Profit before tax ||145.29 ||223.18 |
|Less: Provision for income tax || || |
| Current Tax ||63.37 ||83.04 |
| Deferred Tax ||(14.44) ||3.73 |
|Profit / (Loss) for the Year ||96.36 ||136.41 |
|Excess (Short) Provision for || || |
|Tax for earlier year ||14.56 ||(8.64) |
|Add : Other Comprehensive income ||(1.16) ||13.72 |
|Add : Surplus of last year brought forward ||706.09 ||592.35 |
|Surplus available for appropriation ||815.85 ||733.84 |
02. REVIEW OF OPERATIONS:
During the year under review Your Company's revenue increased by 16.02% and profitbefore Tax decreased by 34.90%. This is due to price hike of major raw materials like MSscrap Pig Iron etc. and not compensated by customers in time.
During the year there was steep increase in demand for the first half and later onremained sluggish even though your Company's production increased by 15% on year to yearbasis. Further the Company has increased power demand from 2200 to 2500 KVA and 2500 to2800 KVA to meet the demand increased from customers and hence your Company expects toincrease 25% in sales and production in coming years i.e. 2018-19 and also hope for goodmargin due to higher volume.
03. DIVIDEND :
The Board of Directors recommend dividend of Rs.0.80 per Equity Share (8% on the facevalue of Rs. 10/- each) for the year ended on March 31 2018 (Previous year paid dividendof Rs. 0.80 per equity shares i.e. rate of 8%) subject to the approval of shareholders atthe ensuing Annual General Meeting.
04. TRANSFER TO RESERVES :
Your Company has not transferred any amount to General Reserves. Your Company hasretained amount of Rs. 815.84 Lakhs in the Statement of Profit and Loss.
05. TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND :
The Company has transferred Rs. 0.95 Lakhs to the Investor Education and ProtectionFund established by the Central Government during the financial year 2017-18 as unclaimeddividend after expiry of seven years for the year ended March 31 2010.
06. PUBLIC DEPOSITS :
During the financial year 2017-18 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.
07. SHARE CAPITAL :
The paid up equity share capital as on March 31 2018 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 2017-18 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 312018 in form MGT-9 is annexed herewith as "Annexure A".
10. THE DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE
EARNINGS 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 B".
11. DIRECTORS :
A) Changes in Directors and Key Managerial Personnel
Mr. Vimal R. Ambani (DIN: 00351512) who have appointed as Additional Director of theCompany by the Board with effect from December 12 2017 under section 161 of the CompaniesAct 2013 holds office upto the date of forthcoming Annual General Meeting and who iseligible and confirming that they meet with the criteria of independence as prescribedboth under Section 149(6) of the Companies Act 2013. The Board of directors recommendshis appointment as an Independent Director of the Company.
As per provision of the Companies Act 2013 Ms. Reena P. Bhagwati retires by rotationin the forthcoming Annual General Meeting and being eligible offered herself forre-appointment. The Board of Directors recommends her re-appointment.
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.
An independent director shall hold office for a term up to five consecutive years onthe Board of the Company but shall be eligible for reappointment for next five years onpassing of a special resolution by the Company and disclosure of such appointment in theBoard's report.
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. NUMBER OF MEETINGS OF THE BOARD OF
The Board of Directors has met 4 times and Independent Directors once during the yearended 31st March 2018.
13. AUDIT COMMITTEE :
The Composition of Audit Committee of the Company is as under:
|Sr. No. ||Name of Director ||Designation |
|1. ||Mr. R. J. Shah ||Chairman |
|2. ||Mr. P. H. Buch ||Member |
|3. ||Ms. R. P. Bhagwati ||Member |
|4. ||Mr. V. R. Ambani ||Member |
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 certainarms length transactions under third proviso thereto is disclosed in Form No. AOC -2 isannexed herewith as "Annexure C".
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 SOCIAL RESPONSIBILITY :
The provision of Corporate Social Responsibility is not applicable to your Company.
21. THE NUMBER OF COMPLAINTS RELATING TO
CHILD LABOUR FORCED LABOUR INVOLUNTARY LABOUR SEXUAL HARASSMENT IN THE LASTFINANCIAL YEAR AND THOSE PENDING AS ON THE END OF THE FINANCIAL YEAR :
|Sr. No. ||Category ||No. of Complaints field d urin g th e financial year ||No. of Complainants pending as on end of the financial year |
|1. ||Child labour/forced labour/ Involuntary labour ||NI L ||NI L |
|2. ||Sexual harassment of women at workplace (Prevention Prohibition and Redressal) Act 2013. ||NI L ||NI L |
22. INFORMATION REQUIRED UNDER SECTION
197(12) OF THE COMPANIES ACT 2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014 :
A. The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary or Manager if any during the financial year 2017-18 and ratio ofremuneration of each Director to the median remuneration of the employees of the Companyfor the financial year 2017-18:
|Sr.No. ||Name ||Designation ||Remuneration ||Increase (%) |
|1. ||Dr. P. N. Bhagwati ||Chairman & Managing Director ||16.51 ||- |
|2. ||Ms. R. P. Bhagwati ||Jr. Managing Director ||02.79 ||- |
|3. ||Mr. P. H. Buch ||Independent Director ||0.06 ||- |
|4. ||Mr. R. J. Shah ||Independent Director ||0.06 ||- |
|5. ||Mr. V. R. Ambani ||Additional Non-Executive Director ||0.03 ||- |
|3. ||Mr. D. K. Sheth ||Chief Financial Officer ||Not Applicable ||04.95% |
|5. ||Mr. M. C. Naliyadhara ||Company Secretary ||Not Applicable ||11.00% |
1. The remuneration of Independent/ Additional Non-Executive Directors includes onlysitting fees paid to them for the financial year 2017-18.
2. Median remuneration of the Company for all its employee is Rs. 430458/- forfinancial year 2017-18.
B. Percentage increase in the median remuneration of employees in the financial year :9.75% C. Number of permanent employees on the rolls of the Company : 72 as on 31st March2018 D. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: On anaverage employees received an annual increase of 10%. The individual increments variedfrom 7% to 14% based on individual performance. The increase in remuneration is in linewith the market trends. In order to ensure that remuneration reflects Company performancethe performance pay is also linked to organization performance apart from an individual'sperformance. E. Affirmation that the remuneration is as per the Remuneration policy of theCompany: It is affirmed that the remuneration is as per the Remuneration policy of theCompany.
23. 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 D".
24. AUDITORS :
1) 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 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 disqualified from continuing as Statutory Auditors of the Company within theprescribed limits under Section 141 of the Companies Act 2013.
EXPLANATION OR COMMENTS ON AUDITORS' REPORT :
There are no adverse observations Notes made by the Auditors in their report sothere are no comments by Directors on Auditors Notes.
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 2018-19.
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. Samdani Shah & Kabra Company Secretaries in Practice to undertakethe Secretarial Audit of the Company for the financial year 2017-18. The Report of theSecretarial Audit Report is annexed herewith as "Annexure E".
The Board has appointed M/s. Chirag Shah & Associates Company SecretariesAhmedabad as Secretarial auditor of the Company for the financial year 2018-19.
25. DIRECTORS' RESPONSIBILITY STATEMENT :
In terms of Section 134(3) of the Companies Act 2013 in relation to the FinancialStatements for FY 2017-18 the Board of Directors states that: (a) in preparation of theannual accounts the applicable accounting standards have been followed along with properexplanation relating to material departures; (b) the directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period; (c) the directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; (d) the directors have prepared the annual accounts on a going concernbasis; (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 withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
26. 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.
27. CHANGE IN THE NATURE OF BUSINESS IF ANY :
No change in nature of the business of the Company occurred during the year.
24. 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.
25. 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.
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS ANDCOMPANY'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.
27. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL
FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL 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 function reports to the chairman of the Audit Committee of the Board. The InternalAudit Department monitors and evaluates the efficiency and adequacy of Internal ControlSystem in the Company its compliance with operating system accounting procedures andpolicy 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 thanks to various Central and State Government DepartmentsOrganizations and Agencies for the continued cooperation and support extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.
|Place : Ahmedabad ||By order of the Board of Directors |
|Date : 26/05/2018 ||For Bhagwati Autocast Limited |
| ||Dr. Pravin N. Bhagwati |
| ||Chairman & Managing Director |
| ||DIN : 00096799 |