The members Fluidomat Ltd.
Your Directors have pleasure in presenting 42ndAnnual Report on the businessand operations of the Company together with the audited financial statements for thefinancial year ended March 31 2018.
The Summarized financial results for the year as under :
(Rs. In Lakhs)
|Particulars ||Year ended on |
| ||31.03.2018 ||31.03.2017 |
|Revenue from Operations ||2405.48 ||2797.87 |
|Other Income ||109.52 ||99.91 |
|Total Income ||2515.00 ||2897.78 |
|Total Expenditure except Interest and Depreciation ||2130.77 ||2415.04 |
|Profit before Interest Depreciation & Tax (EBIDTA) ||384.23 ||482.74 |
|Less: Interest ||0.09 ||0.00 |
|Less: Depreciation ||69.87 ||68.74 |
|Profit before Tax ||314.27 ||414.00 |
|Less: (a) Current Tax ||94.21 ||145.76 |
|(b) Deferred Tax ||(12.62) ||(6.51) |
|Net Profit for the Year ||232.68 ||274.75 |
|Reserves & Surplus ||2606.01 ||2477.11 |
|EPS (Equity Shares of Rs. 10/- each) Basic & Diluted (in Rs.) ||4.72 ||5.58 |
|Paid up Equity Share Capital ||492.70 ||492.70 |
REVIEW OF OPERATIONS /STATE OF AFFAIRS:
The highlights of the Company's performance are as under:
For the year ended on March 31 2018 the Company has posted a total revenue of Rs.2471.92 lakhs (net of Excise duty) as against Rs. 2652.29 lakhs (net of Excise duty) inthe previous year representing a marginal decrease of 6.80%.
For the year ended March 31 2018 the Company has achieved Earnings before InterestDepreciation and Tax (EBIDTA) of Rs. 384.23 lakhs as against the EBIDTA of Rs. 482.74lakhs during the previous year.
The Net Profit of the Company for the year 2017-18 was Rs. 232.68 lakhs compared to Rs.274.75 lakhs during the previous year. The company holds total unexecuted orders about Rs.1988.00 lakhs as on 31.03.2018. earning per share (EPS) for the year 2017-18 stood at Rs.4.72 compared to EPS Rs. 5.58 of previous year.
Your Board of Directors are pleased to recommend a dividend of Rs.1.75(17.50%) onEquity Share of Rs.10/- each for the year ended March 31 2018. (Previous year Rs.1.75(17.50%) per Equity Share of Rs.10/- each).The above dividend would be paid subject toapproval by the Members in the ensuing Annual General Meeting. The proposed dividend willabsorb Rs.103.95 Lakhs including Dividend Distribution Tax of Rs.17.72 Lakhs.
TRANSFER TO RESERVES:
During the year your company has voluntarily transferred Rs 100.00 Lakhs to theGeneral Reserves Previous year Rs. 100.00 Lakhs.
The paid up Equity Share Capital as on 31st March 2018 was Rs. 492.70 Lakhs dividedinto 49.27 Lakhs equity shares of Rs. 10/- each. There is no change in Equity shareCapital of the Company during the year. Your company do not hold any instrumentsconvertible into the equity shares of the Company.
DIRECTORS & KEY MANAGERIAL PERSONNELS: Executive Directors and KMPs
The Company is having adequate Key Managerial Personnel's as per requirements ofsection 203 of the Companies Act 2013 as well as the SEBI (LODR) Regulations 2015. Thereis no change in the key managerial personnel's during the year under review. However atthe Annual General Meeting (AGM) held on September 26 2017 the Members had re-appointedShri Kunal Jain as the whole-time Director(DIN 01475424) w.e.f. May 01 2018 for a furtherterm of Five years.
Declaration for Independency of Independent Directors
The Company have received necessary declaration from all the independent directors asrequired under section 149(6) of the Companies Act 2013 confirming that they meet thecriteria of Independence as per the SEBI (LODR) Regulation 2015 and the Companies Act2013.In the Opinion of the Board all the independent directors fulfills thecriteria of the independency as required under the Companies Act 2013 and the SEBI (LODR)Regulations 2015.
Independent Directors seeking re-appointment:
Pursuant to the provision of section 149(10) of the Companies Act 2013 a term of fiveconsecutive years on the Board of the Company of Shri Khushal Chandra Jain (DIN 00007916)Shri Mahendra Kumar Shah (DIN 00014556) and Shri Praful Turakhia (DIN 00366398) asIndependent Directors will be completed on 31st March 2019.
However they are eligible for re-appointment on passing of special resolution for asecond term of five consecutive years. Therefore the Board in their meeting held on 13thAugust2018 upon the recommendation of the Nomination and Remuneration Committee has recommendedtheir re-appointment w.e.f. 1st April 2019 to 31st March 2024.Your Board of directors recommends to pass necessary special resolutions to that effect asset out in the notice of the Annual General Meeting.
Further that Shri Khushal Chandra Jain (DIN 00007916) has attained the age of 75 yearsduring his tenure on 7thJanuary 2018 therefore the Company has proposed topass special resolution as included in the Item No. & resolution No. 5 of the Notice.
Directors liable to retire by rotation seeking re-appointment:
ShriAshok Jain (DIN 00007813) the Chairman and Managing director is liable to retireby rotation at the ensuing annual general meeting and being eligible offers himself forre-appointment. Your directors recommend to pass necessary resolution as proposed in theItem No. 4 of the Notice.
Executive Directors seeking re-appointment:
The tenure of Shri. Ashok Jain as the Managing Director will be completed on 30th June2019 further he shall also attend the age of 70 years on 04/01/2019; therefore the Boardupon the recommendation of the Nomination and Remuneration Committee has re-appointed himfor a further period of five years w.e.f. 1th July 2019. Your Board ofdirectors recommends top as special resolution as per the proviso of section 196(3)(a) ofthe Companies Act 2013 to that effect as set out in the notice of the Annual GeneralMeeting and justification for re-appointing him is being annexed in the explanatorystatement.
BOARD MEETING AND THE BOARD:
A. Number of meetings of the Board:
Total Four (4) meetings of the Board were held during the year. The intervening gapbetween any two meetings was not exceeding 120 days as prescribed by the Companies Act2013 and the SEBI (LODR) Regulations 2015. For further details of the meetings pleaserefer the Corporate Governance Report which forms part of this report.
B. Policy on Directors' appointment and remuneration:
The Board has on the recommendation of the nomination and remuneration committeeframed a nomination remuneration and evaluation policy which lays down the criteria foridentifying the persons who are qualified to be appointed as directors and or seniormanagement personnel of the company along with the criteria for determination ofremuneration of directors KMP's and other employees and their evaluation and includesother matters as prescribed under the provisions of section 178 of Companies Act 2013and Regulation 19 of SEBI (LODR) Regulations 2015. Policy of the Company has been given atthe website of the Company at Link:-http://www.fluidomat.com. The details of the same arealso covered in Corporate Governance Report forming part of this annual report.
C. Board Evaluation:
The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategy.
The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairman. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on report on evaluation received fromrespective Committees. The report on performance evaluation of the Individual Directorswas reviewed by the Chairman of the Board and feedback was given to Directors.
COMMITTEES OF THE BOARD:
In accordance with the Companies Act 2013 and the SEBI (LODR) Regulations 2015 andother purposes the Board has the following Five(5) committees: (a) Audit Committee (b)Nomination and Remuneration Committee (c) Stakeholders' Relationship Committee (d)Corporate Social Responsibility Committee (CSR) (e) Risk Management Committee (Voluntarilyconstituted) Apart from the aforesaid committees under the Companies Act 2013 and theSEBI (LODR) Regulations 2015 the Company has also constituted Internal ComplaintsCommittee (ICC) under the Sexual Harassment of Women at the Workplace (PreventionProhibition &) Act 2013.A detailed note on the Board and its committees is providedunder the Corporate Governance Report section in this report.
DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(3)(c) of the Companies Act 2013 your directors to the bestof their knowledge and belief and according to the information and explanations obtainedby them in the normal course of their work state that in all material respects; a) Inthe preparation of the annual financial statements for the year ended March 31 2018 theapplicable accounting standards have been followed; b) Appropriate accounting policieshave been selected applied consistently and judgment and estimates havebeen made that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at March 31 2018 and of the profit of the company for the year ended on thatdate; c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records inaccordance with the provisions of the Companies Act2013 for safeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; d) The annual financial statements have been prepared on a going concernbasis; e) Proper internal financial controls were in place and the financial controls wereadequate and operating effectively; and f) Proper systems to ensure compliance with theprovisions of all applicable laws were in place and were adequate and operatingeffectively.
AUDITORS AND THEIR REPORT: A. Statutory Auditors:
In terms of the provisions of section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. C.P. Rawka & Co. CharteredAccountants (Firm RegistrationNo. 000518C) was appointed as the statutory auditors of theCompany to hold office for one term of 5 years commencing from conclusion of the 41stAnnualGeneral Meeting upto the conclusion of the Annual General Meeting of the Company to beheld in calendar year 2022. The Auditors have confirmed that they eligible to continuingas Auditors of the Company. Further as per amendment made in section 139 of the CompaniesAct 2013 which came in to force w.e.f. 7th May 2018 the company is notrequired to ratify the their appointment.
The Auditors Report and the Notes on financial statement for the year 2017-18 referredto in the Auditor's Report are self-explanatory and does not contain any qualificationreservation or adverse remark therefore do not call for any further comments.
B. Cost Auditors:
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 amended time to time the provision regarding Cost Auditunder this act was not applicable to Company during the year 2017-18.
C. Secretarial Auditors:
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 hasappointed M/s D.K. Jain & Co. Company Secretaries to undertake the Secretarial Auditof the Company for the year 2017-18. The Secretarial Auditors in their report for the year2017-18 has confirmed the compliances by the Company as covered in their report.
The Report of the Secretarial Audit for the year 2017-18 in the Form MR-3 is annexedherewith as "Annexure-1".
D. Disclosure of frauds against the Company:
There were no instances for other than reportable fraud to the Central Governmentcovered under section 134(3)(ca) of the Companies Act 2013. Further that the auditorshave not found any fraud as required to be reported by them under section 143(12) to theCentral Government during the year 2017-18.
TRANSACTIONS WITH RELATED PARTIES:
The Company has not entered into any material contracts with the related partiesduring the year 2017-18 and other contracts or arrangements were in the ordinary course ofbusiness on arms length basis which were approved by the Audit Committee and the Boardfrom time to time. Therefore there is no particulars of contracts or arrangements withrelated parties referred to in section 188(1) of the Companies Act 2013 which needs todisclose in the prescribed form AOC-2 and may be treated as not applicable. However therelated party transactions as covered under Indian Accounting Standards (Ind AS 24) havebeen disclosed in the Note No. 41 of the financial statements for the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators/Courts of law whichwould have impact on the going concern status of the Company and its future operations.
CONSOLIDATED FINANCIAL STATEMENTS:
Since the Company does not have any subsidiary associate or joint venture thereforethe requirement for consolidation of the Financial Statements are not applicable to theCompany.
PERFORMANCE OF SUBSIDIARIES ASSOCIATE COMPANIES AND JOINT VENTURES:
Your company does not have any subsidiary associate or joint venture company at thebeginning or any time during the year 2017-18 therefore the disclosure in the Form AOC-1is not applicable to the Company.
The Company has not accepted any deposits from the general public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe date of the balance sheet.Further that the Company has not accepted any deposits incontravention of the provisions of the Chapter V of the Companies Act 2013 and rules madethereunder.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL RESULTS:
The Board of Directors has devised systemspolicies and procedures / frameworks whichare currently operational within the Company for ensuring the orderly and efficientconduct of its business which includes adherence to Company's policies safeguardingassets of the Company prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation. In line with best practices the Audit Committee and the Board reviews theinternal control systems to ensure they remain effective andare achieving their intendedpurpose. Where weaknesses if any are identified as a result of the reviews newprocedures are put in place to strengthen controls. These controls are inturn reviewed atregular intervals. Nothing has come to the attention of the Directors to indicate that anymaterial breakdown in the function of these controls procedures or systems occurredduring the year under review. There have been no significant changes in the Company'sinternal financial controls during the year that have materially affected or arereasonably likely to materially affect its internal financial controls. There are inherentlimitations to the effectiveness of any system of disclosure controls and proceduresincluding the possibility of human error and the circumvention or overriding of thecontrols and procedures.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
No material changes and commitments affecting the financial position of the Companyoccurred during the Financial Year to which this financial statements relate and the dateof report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company has not provided any loans guarantees and not made any investmentspursuant to section 186 of the Companies Act 2013 except the investments made by thecompany in the quoted Mutual Funds during the year under review. Details of which are asunder:-
|Sr.No. Name of the Mutual Fund ||Investment Amount (in Rs.) |
|1 IDFC Sterling Equity Fund (Growth option) ||2000000.00 |
|2 DSP BR Small & Midcap Fund (Growth option) ||2000000.00 |
|3 L&T Emerging Business Fund (Growth option) ||2000000.00 |
|4 Tata India Cunsumer Fund (Growth option) ||2000000.00 |
|TOTAL ||8000000.00 |
The investment made by the company are within the limit prescribed u/s 186 of theCompanies Act 2013.
The Company has given advance against salary or otherwise to employees of the Companyas per the Company's policy.
EXTRACT OF ANNUAL RETURN:
The Extract of the Annual Return in form MGT-9 for the year ended 31stMarch2018 is annexed herewith as "Annexure-2". The same is available atwww.fluidomat.com
CORPORATE SOCIAL RESPONSIBILITY (CSR):
In view of the requirement under section 135 of the Companies Act 2013 and the rulesmade their under the company is having CSR Committee and policy for CSR indicating theactivities to be undertaken by the Company. Report on CSR as per Rule 8 of the Companies(CSR Policy) Rules 2014 is enclosed as "Annexure-3" of this Report.
Your Company firmly believes and adopts the highest standard of practice underCorporate Governance. A separate section on Corporate Governance and a certificateobtained from Auditors of the Company that effect form part of this Annual Report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "Annexure-4".
INTERNAL COMMITTEE ON PREVENTION OF SEXUAL HARASSMENT:
The Company has framed AntiSexual Harassment Policy' at workplace and hasconstituted Internal Complaints Committee (ICC) as per the requirement of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andRules made thereunder. No complaints with allegations of sexual harassment were reportedduring the year under review.
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.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your company has a Vigil Mechanism in place which also includes a whistle blower policyin terms of the listing regulation for Directors and employees of the Company to provide amechanism which ensures adequate safeguards to employees and Directors from anyvictimization on raising of concerns of any violations of legal or regulatoryrequirements incorrect or misrepresentation of any financial statements and reportsetc.The Vigil Mechanism/Whistle Blower Policy of the Company can be accessed on theCompany's website at the link:(http://www.fluidomat.com/investor-relation/) and the sameis being attached with this Report as "Annexure-5".
All the employees have the right/option to report their concern/grievance to theChairman of the Audit Committee. During the year under review no protected disclosure fromany Whistle Blower was received by the designated officer under the Vigil Mechanism.
PARTICULARS OF EMPLOYEES:
The information required under section 197(12) of the Companies Act 2013 read withRule 5(1) and 5(2) of the Companies (Appointment & remuneration of ManagementPersonnel) Rules 2014 as amended are given below:
A. Ratio of the remuneration of each director to the median employee'sremuneration and the percentage increase in remuneration of each Director & KeyManagerial Personnel:
|Name ||Designation ||Remuneration for the year 2017-18(Rs.) ||Remuneration for the year 2016-17(Rs.) ||Increse In Remuneration (Rs.) ||Percentage of Increase In Remunera tion ||Ratio Between Director's Remuneration and Median Remuneration |
|1 Shri Ashok Jain ||CMD ||4444389 ||4421784 ||22605 ||0.51% ||21.46 |
|2 Shri Kunal Jain ||WTD ||3500948 ||3212102 ||288846 ||9.00% ||17.44 |
|3 Radhica Sharma ||WTD ||2736600 ||2402186 ||334414 ||13.92% ||13.66 |
|4 *Shri Khushal Chandra Jain ||Independent Director ||Nil ||Nil ||NA ||NA ||NA |
|5 *CA Mahendra Kumar Shah ||Independent Director ||Nil ||Nil ||NA ||NA ||NA |
|6 *Shri Praful R Turakhia ||Independent Director ||Nil ||Nil ||NA ||NA ||NA |
|7 Mrs. Monica Jain ||CFO ||1160364 ||1098250 ||62114 ||5.66% ||5.77 |
|8 CS Devendra Kumar Sahu ||CS ||434906 ||357904 ||77002 ||21.51% ||2.26 |
*Shri Khushal Chandra Jain CA Mahendra Kumar Shah and Shri Praful R. TurakhiaIndependent Directors were paid sitting fees for attending the Meetings of the Board.
B. The percentage increase in the Median remuneration of employees in the financialyear:18.13%. C. The number of permanent employees on the Roll of the Company as on31stMarch 2018: 198.
D. Average percentile increase already made in the salaries of employees other than themanagerial 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:
Based on Remuneration Policy of the Company salary of the employees was increased ataverage 10% and managerial remuneration was increased at 7.81% this is based onRemuneration Policy of the Company that rewards people based on their contribution to thesuccess of the company and also ensures that external market competitiveness and internalrelativities are taken care of.
E. Affirmation that the remuneration is as per the Remuneration Policy of the Company:
The Company affirms that remuneration is as per the remuneration policy of the Company:
F. Name of the top 10 employees in terms of remuneration drawn in the financial year2017-18:
A statement of top-10 employees in terms of remuneration drawn as per rule 5(2) readwith rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended is annexed with the report as "Annexure-6".
G. Details of employees who received remuneration in excess of Rs. One crore and Twolakh or more per annum: i. During the year none of the employees receivedremuneration in excess of Rs. 102.00 Lakh or more per annum or Rs.8.50 per month for partof the year. In accordance with the provisions of section 197 of the Companies Act 2013read with Rule 5(2)of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 therefore there is no information is available to disclose. ii. During theyear none of the employees received remuneration in excess of that drawn by the ManagingDirector or Whole-time director and none of the employees hold two percent of the equityshares of the Company.
TRANSFER OF SHARES AND DIVIDEND AMOUNT TO IEPF:
Pursuant to the provisions of the Companies Act 2013 read with the IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 ("the Rules") notified bythe Ministry of Corporate Affairs the unclaimed and unpaid dividends amount for the year2010-11 is required to be transferred to IEPF in the due date as specified in the Noticeof the AGM and shares of the respective shares on which no dividend is claimed for aconsecutive 7 years will also be transferred to IEPF Authority as per the requirement ofthe IEPF rules on due date. The details related to dividend remains unpaid-unclaimed inthe Company has been given in the Corporate Governance Report attached with the annualreport of the Company.
PROVISION OF VOTING BY ELECTRONIC MEANS:
Your Company is providing E-voting facility under section 108 of the Companies Act2013 read with Rule 20 of the Companies (Management and Administration) Amendment Rules2015. The details regarding e-voting facility is being given with the notice of theMeeting.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT: A. Economic Scenario and Outlook:
India has emerged as the fastest growing major economy in the world and it is expectedto be one of the strong economic powers in the world over the next 10-15 years. Howeverthe GDP growth reduced to 6.6% in the year 2017-18 as against the growth of 7% during lastthree years.
Though the year 2017-18 began on a positive note with demand showing signs of revival& with the impact of demonetization fading however implementation of the Goods andService Tax (GST) from 1st July 2017 again led to uncertainty and loss ofmomentum which had an impact on the economic growth.
The company turnover declined marginally during the year 17-18 inspite of pendingorders. The market situation and sentiments were affected adversely owing to uncertaintiesarising out of initial difficulties and confusions in implementation of GST and at thesame time insolvency and liquidity crunch in some large companies. The result wasdeferment of lifting goods already ordered and also deferment of implementation ofexpansion or new addition plans in almost all sectors of industries. These factors ofshort term nature were responsible in decline of our turnover.
GST has been the biggest tax reform in history of independent India and will have verypositive long term effect on India's economy and growth. GST and other reforms will havepositive effect on ease of doing business removal of multiple taxes and complex taxationstructure and will enable highly efficient logistic and supply chain mechanism.
Having recorded a Gross Domestic Product (GDP) of US $ 2.6 trillion for 2017 Indiabecame the world's sixth largest economy. This will bring India amongst one of strongeconomies in the world and with increased GDP growth above 7.4% India may become fastestgrowing economy in the world.
The Government of India under the Make in India initiative with other initiatives& demand arising out of high pace of infrastructure growth will give boost to thecontribution made by the manufacturing sector and aims to take it up to 25 per cent of theGDP from the current 17 per cent.
These Government initiatives will have positive outcome in years to come.
The above improvements and changes of long term nature will have a positive turnaroundeffect in country's economy and Fluidomat business will also be benefitted. The orderbooking during April to July 2018 has already shown growth. With improved credibility andpositive image of our country number of enquiries from international market for scoopcontrol couplings for critical applications of Boiler Feed Pump and Fan are flowing in.These applications have large business potential associated with positive growth inrevenue.
Fluidomat has intrinsic strength of indigenous design & production technologyalongwith accreditation of ISO 9001-2008 ISO 14001-2004 OHSAS 18001-2007 which alsocontribute strongly to earn Global Business.
Program for modernization of plant & machinery will continue from its internalresources and committed to continual quality improvements R & D & innovations.
B. Industry structure and developments:
Your Company deals only in the one segment i.e. manufacturing and sale of the hi-techproducts "Fluid Couplings" which are mainly used in various sector of industriesincluding Thermal Power Plants Steel Metal Cement Paper Chemical Fertilizers Coaland Ore-mining and Port handling facilities etc. New projects in these sectors haveimportant contribution towards growth and profitability of the Company.
C. Quality Management System:
The company continued to be certified under ISO:9001:2008 by British StandardInstitution BSI Management system for the Company's quality system. The QualityManagement System in the Company is well defined and is well in place.
D. Internal Control System:
The Company has adequate internal control systems and procedures in place for effectiveand smooth conduct of business and to meet exigencies of operation and growth.Thetransactions are recorded and reported in conformity with generally accepted accountingpractices. The internal control systems and procedures ensure reliability of financialreporting compliance with the Company's policies and practices governmental regulationsand statutes. Internal Audit is conducted by independent firm of auditors. InternalAuditors regularly check the adequacy of the system their observations are reviewed bythe management and remedial measures as necessary are taken. Internal Auditors reportdirectly to the Chairman of the Audit Committee to maintain its objectivity andindependence.
E. Opportunities and Threats:
Since your company is catering the needs of almost all sectors of Industries thereforeit has a good business cushion against recession in one or other sector as the othersector may improve concurrently.
The Indian Government focus on infrastructure growth will offer more opportunities tocapital goods sector.
The Banking system in the domestic market is facing an unprecedented situation ofuncertainty and economic challenge due to non- performing assets (NPAs). Though theGovernment and the central Bank are seized of the gravity of the situation and are movingahead with initiative to contain and resolve the problem global macro-economic factorsbeyond the control of the domestic economy can disrupt the equilibrium. In such a scenariothe entire capital goods sector itself will face difficulties due to lack of new projectsand liquidity crisis.
Apart from the normal risk demand-supply conditions raw material prices competitorstrategies changes in government regulations tax regimes economic developments withinthe country and globally no major risks are foreseen.
F. Human Resources:
We are committed to providing our employees with a work environment that is based onfairness openness and mutual respect. Our on-ground work force and our employees togetherare the key to successes of our Company.
The Company emphasizes on the highest level of professional ethics personal decorumadherence to deadliness compliance to standards and customer service.
The Company continues with its dedicated efforts to identify talent and has beenrecognized for its exemplary people-related parties in the Industry.
G. Health Safety and environment measures:
Company is committed to meet the highest international standards of health safety andenvironmental performance. It continues to accord highest priority to conducting safeoperations while being responsible towards the environment and ecology.
The Company focused on safe operations in line with its commitments to improve itshealth safety and environment performance. As a part of our drive to standardize ourhealth safety & environment management company has certified under occupationalhealth & safety management system (OHSAS 18001: 2007) for the manufacture of FluidCouplings and Flexible Couplings and environment management system (ISO 14001: 2004) byBSI.
Internal and external safety audits and inspections were carried out regularly.Emergency management plans have been developed to deal with any emergency within thefactory premises.
H. Segment Reporting & Finance performance of the Product:
Company has only one segment i.e. manufacturing of fluid couplings and the financialperformance of the product is being incorporated in the Director's Report section.
I. Cautionary statement:
Statement made in the management discussion and analysis report as regards theexpectations or predictions are forward looking statements within the meaning ofapplicable laws and Regulations. Actual performance may deviate from the explicit orimplicit expectations.
Company's Industrial relations continued to be healthy cordial and harmonious duringthe period under review.
Your directors place on record their appreciation of the continued support extendedduring the year by the company's customers business associates suppliersbankersinvestors and Government authorities. They also place on record their appreciation of thededication and contributions made by all the employees for their commitment hard work andsupport.
Your directors would also like to thank all the shareholders for their continued faithin the company and expect the same in future.
| ||For and on behalf of the Board |
|Place: Indore ||Ashok Jain |
|Date 13thAugust 2018 ||Chairman & Managing Director |
| ||DIN 00007813 |