Your Directors have pleasure in presenting the 24th Annual Report along withthe audited statements of accounts of your Company for the financial year ended 31stMarch 2017.
The following table shows the operational results of the Company for the year 2016-17as compared to that of the previous year.
( Rs. in lakhs)
| || |
| ||31/03/17 ||31/03/16 |
|Revenue from Operations ||9336 ||8759 |
|Other Income ||87 ||12 |
|Total Revenue ||9423 ||8771 |
|Expenditure ||8820 ||8003 |
|Profit before Interest Depreciation and Tax ||603 ||768 |
|Financial Cost ||225 ||138 |
|Depreciation and Amortization ||178 ||116 |
|Profit before Tax ||200 ||514 |
|Profit after Tax ||133 ||341 |
Considering the turmoil in the industry in general your Company reported satisfactoryperformance during the financial year. The revenue has been improved by 7.4% whencompared to the previous year. Due to the uncertainties and turbulences in the marketPBIDT has declined by 21%. The profit before tax and Net Profit after Tax have alsodropped by 61%.
The Company was able to manage its growth in revenue but the margin has shrunk due therise in input costs. This fall in profit was on account of factors like volatility in rawmaterial prices increased debt higher finance cost depreciation charges demonetizationand other economic restrictions etc.
During the year key raw material prices were volatile in nature and thisunpredictability impacted margins. Even though the Company has fought hard to mitigate theincrease in input cost and passed some of this cost on to its customers it could notincrease the price in line with the extensive escalation of costs due to resistance inaccepting the hike as the retreaders were under high pressure to transmit the increase toend customers due to the pricing strategies of tyre manufacturers. Further as tyreretreading industry is cash driven in nature the industry faced strong adverse impact ofdemonetization. However better operating efficiencies saving in cost to the possibleextent launch of new products and franchise operations helped the Company to manage theprofitability. The operations are exhaustively discussed in Management Discussionand Analysis' forming part of the annual report.
The Board has recommended a dividend @ 5% (Re. 0.50 per equity share of Rs. 10/- each)for the financial year 2016-17. Subject to the approval of shareholders the dividend willbe paid on or after 15th July 2017 to the shareholders whose name appears onthe Register of Members / Beneficial Owners at the close of business hours on Friday 30thJune 2017.
The Company has not accepted any fixed deposits during the year to which the provisionsof Section 73 of the Companies Act 2013 are applicable.
Board of Directors and Key Managerial Personnel
Mr. M.E. Mohamed Managing Director Mr. Rajesh S. Chief Financial Officer and CS.Baiju T. Company Secretary are the Whole-time Key Managerial Personnel of the Company.Mr. Naiju Joseph Director retires by rotation at the ensuing Annual General Meeting andbeing eligible offer himself for re-appointment. The Board recommends his appointment.
Mr. M.E. Mohamed Managing Director has vacated his office as the Managing Director andWhole-time KMP on 25th August 2016 and continued as a director. Consideringhis rich and varied experience in the industry and his involvement in the operations ofthe Company over a long period of time as recommended by the Nomination and RemunerationCommittee the Board reappointed him as the Managing Director for a period oRs. 5 yearswith effect from 9th February 2017. Being the Managing Director he has alsodesignated as Whole-time KMP. Mr. M.E. Mohamed seeks the approval of shareholders to holdthe office of Managing Director for a period oRs. 5 years with effect from 9thFebruary 2017.
The Board has considered the declarations given by independent directors under Section149 (6) and the Company's policy on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes and independence of adirector. The Board has further evaluated its own performance and that of its committeesand individual directors. None of the Directors is disqualified under Section 164 of theCompanies Act 2013.
Directors' Responsibility Statement
Pursuant to the requirement of Section 134 (3) and (5) of the Companies Act 2013 yourDirectors confirm that:-
(a) In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed and that there are no material departures.
(b) Selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of your Company at the end of the financial year and of the profit of theCompany for that year.
(c) Taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof your Company and for preventing and detecting fraud and other irregularities.
(d) Prepared the Annual Accounts on a going concern basis.
(e) Had laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively.
(f) Devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
Auditors & Audit Observations
The period of appointment of M/s. JVR & Associates Chartered Accountants as theauditors of the Company expires at this Annual General meeting. Pursuant to the provisionsof Section 139(2) of the Companies Act 2013 the existing auditors cannot be reappointedat the ensuing Annual General Meeting and the Board recommends the appointment of M/s.Walker Chandiok & Co LLP Chartered Accountants Kochi as Statutory Auditors to holdoffice for a period of five consecutive financial years from the conclusion the 24thAnnual General Meeting subject to ratification of the appointment at every Annual GeneralMeeting. Necessary certificate has been obtained from the Auditors as per Section 139(1)of the Companies Act 2013. The Auditor's observations are suitably explained in notes tothe Accounts and are self-explanatory.
Cost Audit Report
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 the Cost Audit Report is not mandatorily applicable to ourCompany for the financial year 2016-17; hence no such audit has been carried out duringthe year.
Secretarial Audit Report
The secretarial audit report on the compliance of the applicable Acts Laws RulesRegulations Guidelines Listing Agreement Standards etc. as stipulated by the provisionsof Section 204 of the Companies Act 2013 read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this report as Annexure- A. The findings of the audit have been satisfactory.
About 34.50% of the paid up equity share capital of the Company are held by a largenumber of public shareholders. The category-wise shareholdings are reported in the"Extract of Annual Return" forming part of the annual report.
Listing and Dematerialisation
The equity shares of the Company are listed on the Bombay Stock Exchange Ltd.Shareholders are requested to convert their holdings to dematerialized form to derive itsbenefits by availing the demat facility provided by NSDL and CDSL.
Extract of Annual Return
The details regarding extract of Annual Return in Form No: MGT-9 pursuant to Section 92of Companies Act 2013 and Rule 12(1) of the Companies (Management and Administration)Rules 2014 is annexed herewith as
Annexure - B.
Related Party Transactions
There were no materially significant related party transactions which could have had apotential conflict with the interests of the Company. Transactions with related partiesare in the ordinary course of business on arm's length and are periodically placed beforethe Audit Committee and Board for its approvals and the particulars of contracts enteredduring the year in Form AOC-2 is enclosed as Annexure - C.
The Board of Directors as recommended by the Audit Committee adopted a policy toregulate transactions between the Company and its Related Parties in compliance with theapplicable provisions of the Companies Act 2013 the Rules thereunder and the ListingAgreement. This Policy was has been uploaded on the website of the Company. There has beenno change in the policy since the last fiscal year.
Conservation of Energy Technology Absorption Foreign Exchange Inflow & Outflow
Your Company continues its efforts to improve energy conservation and utilization mostefficiently to nurture and preserve the environment and to exploit all its avenues toadopt latest technology in its operations. The information required under Section134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014 regarding Conservation of Energy Technology Absorption Foreign Exchange Inflow andOutflow are given in Annexure - D to this report.
Your Company has been complying with the principles of good Corporate Governance overthe years and is committed to the highest standards of compliance. Pursuant to the ListingAgreement read with Regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliancewith the corporate governance provisions as specified in regulations 17 to 27 and clauses(b) to (i) of Regulation 46(2) and para C D and E of Schedule V shall not apply theCompany. However as a good Corporate Governance Practice the Company has generallycomplied with the Corporate Governance requirements and a report on Corporate Governanceis annexed as Annexure - E and forms part of this Report. As required under SEBI(LODR) Regulations 2015 the Management Discussion and Analysis Report is annexed as Annexure- F and forms part of this Report.
None of the employees is in receipt of remuneration in excess of the limit laid downunder Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014. The information required pursuant to Section 197 of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of the Company and Directors are annexed as Annexure- G and forms part of this Report.
Corporate Social Responsibility
Company has generally taken corporate social responsibility (CSR) initiatives. Howeverthe present financial position of the Company does not mandate the implementation of CSRactivities pursuant to the provisions of Section 135 and Schedule VII of the CompaniesAct 2013. The Company will constitute CSR Committee develop CSR policy and implement theCSR initiatives whenever it is applicable to the Company.
A Vigil Mechanism for directors and employees to report genuine concerns has beenestablished as required under the provisions of Section 177 of the Companies Act 2013.The Vigil Mechanism Policy has been uploaded on the website of the Company.
Particulars of Loans Guarantees or Investments
Particulars of loans guarantees or investments under Section 186 of the Companies Act2013 are given in the notes to the Financial Statement. Company has availed Line of Creditfacility offered by IDBI Bank Ltd to the extent of Rs. 750 Lakhs in the form of Billdiscounting facility to the Company's approved vendors supplying raw materials to theCompany and has guaranteed for its repayment.
Development and Implementation of Risk Management Policy
Company has developed and implemented a risk management policy and formed a RiskManagement Committee to address and evaluate various risks impacting the Company and areport on risk management is provided in this Annual Report in Management Discussion andAnalysis.
Adequacy of Internal Financial Controls with reference to the Financial Statements
The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records. The CompanySecretary has been appointed as the Internal Auditor with a dedicated internal audit team.The internal audit reports were reviewed periodically by Audit Committee as well as by theBoard. Further the Board annually reviews the effectiveness of the Company's internalcontrol system. The Directors and Management confirm that the Internal Financial Controls(IFC) are adequate with respect to the operations of the Company. A report of Auditorspursuant to Section 143(3) (i) of the Companies Act 2013 certifying the adequacy ofInternal Financial Controls is annexed with the Auditors report.
Material Changes and Commitments
No material changes and commitments affecting the financial position of the Companyhas been occurred between the end of the financial year 2016-17 and till the date of thisreport.
No significant and material orders were passed by Courts Tribunals and otherRegulatory Authorities affecting the going concern status of the Company's operations.
Employee Wellbeing and Safety
Your Company has implemented policies and procedures with the objective of ensuringemployee safety security and wellbeing at the workplace. As stated in our Code of Conductwe are committed to provide a gender friendly workplace equal opportunities for men andwomen prevent/redress sexual harassment and institute good employment practices. TheCompany has adopted policy on prevention of sexual harassment in line with therequirements of the Sexual Harassment of Women at the work place (Prevention Prohibitionand Redressal) Act 2013. Internal Complaints Committee has been set up to redresscomplaints. The Company has not received any complaint under this policy during the year2016-17.
Your Directors wish to place on record their gratitude to Bankers Share TransferAgents Auditor Customers Suppliers and Regulatory Authorities for their timely andvaluable assistance and support. The Board values and appreciates the professionalismcommitment and dedication displayed by employees at all levels. Your Directors arethankful to the shareholders for their continued support and confidence.
For and on behalf of the Board
|Kochi ||Navas M Meeran |
|04/05/2017 ||Chairman |