Your Directors have pleasure in presenting the Thirty Eighth AnnualReport of the Company along with the Audited Statement of Accounts the for the year ended31st March 2018. The summarized financial results for the year as compared to theprevious year are as under:
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REVIEW OF OPERATIONS
Your Company has prepared the financial statements for the year endedMarch 31 2018 for the first time in accordance with the Indian Accounting Standards (IndAS) notified under Section 133 of the Companies Act 2013 read with relevant rules issuedthereunder. Previous year figures have been re-grouped/re-classified wherever necessaryand have been re-stated as per Ind AS.
The operation of the company during the financial year under reviewimproved with turnover of Rs. 6003.65 Lacs as against Rs 4909.40 Lacs in preceding year.The net profit during the year was higher at Rs. 356.32 Lacs as against Rs 213.57 Lacs inthe preceding year. The improvement in the turnover and profitability had been mainly onaccount of growth in demand improvement in the operational efficiencies and cost cuttingmeasures.
The performance of the company during the current financial year hasfurther improved and barring unforeseen circumstances your Directors expect your companyto turn out even better results during the current year as well.
To conserve resources for the expansion and to consolidate thefinancial position of the company your Directors considered it prudent not to recommendany dividend for the year.
EXPANSION Forging Division
Your company is continuously expanding its product base. Approval ofspindle rod Anti roll bar Anti roll bar bracket & Anti roll bar fork have beenobtained from Rail Coach Factory; Kapurthala The company is further expanding Forging unitat Rania and is in process to install new CNC machines which would increase efficiencyquality and help in cost-cutting. Your Company has installed solar plant of 100 KVApromoting measures of Go-Green Initiative and in turn will also save some money for thecompany.
Your company has already received orders for manufacturing of springsfor Linke-Hofmann Busch(LHB) coaches which were being imported till date by IndianRailways which is reflective in the turnover and profitability of the company. The ordersin the pipeline are high in number; considering that all the springs of the existingcoaches have to be replaced with new ones. Further your company has also received ordersfor Springs of T18 train the first semi high speed train which would run at a speed of160 km/hr. The management is optimistic that in the years to come; the company would reachto new heights. Your company has also got orders for supply of loco-springs for heavy haullocomotives WAG-9WAG-9MWAP-7 &WAP-5 from CLWDLW & DMW. The execution of suchkind of orders are expected to increase the turnover and profitability manifold.
SUBSIDIARY COMPANY / ASSOCIATE / JOINT VENTURE COMPANY
The Company has no Subsidiary Associate and Joint Venture Companiesand as such the requirement of furnishing the information relating to the financialposition of Subsidiary Associate and Joint Venture Companies is not applicable.
Pursuant to the provisions of Section 152 of the Companies Act 2013and the Articles of Association of the Company Mrs. Mamta Bhatia (DIN: 003480368) Director of the Company retires from the Board by rotation at the ensuing Annual GeneralMeeting of the Company and being eligible she has offered herself for reappointment.
KEY MANAGERIAL PERSONNEL
As per the provisions of Section 203 of the Companies Act 2013 thefollowing persons were designated as Key Managerial Personnel and there had been no changein KMP during the year under review
|Name ||Designation |
|1) Mr. Kapil Bhatia ||Managing Director |
|2) Mr. Dhruv Bhasin ||Company Secretary |
|3) Mr. Neeraj Bhatia ||Chief Financial Officer |
DECLARATION FROM INDEPENDENT DIRECTORS
The company had received the declarations u/s 149(7) of the CompaniesAct 2013 from all Independent Directors that they meet the criteria of independence aslaid down under Section 149(6) of the Companies Act 2013 and Regulation 16(i)(b) of theListing Regulations.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors were held during the year thedetails of which are given in the Corporate Governance Report that forms part of thisAnnual Report. The intervening gap between any two meetings was within the periodprescribed by the Companies Act 2013 and the SEBI(Listing Obligations & DisclosureRequirements) 2015.
Pursuant to Section 134(3)(p) and other applicable provisions if anyof the Companies Act2013 and Regulation 17(10) and other applicable regulations if anyof the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015(Listing Regulations') the performance of the Board as a whole and individualdirectors was evaluated by the Board after seeking relevant inputs from all the Directors.The Nomination and Remuneration Committee (NRC) reviewed the performance of the IndividualDirectors.
In a separate meeting of Independent Directors held on 14th February2018 performance of Non-Independent Directors the Chairman of the Company and theperformance of the Board as a whole was evaluated taking into account the views ofExecutive and Non-Executive Directors.
The performance of the Board as whole and of directors individually wasfound to be satisfactory.
COMPANYS' POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of Executive andIndependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. The Company has duly constituted the Nominationand Remuneration Committee of the Board and the committee interalia periodicallyevaluates:
1. The need for change in composition and size of the Board;
2. Recommend/review remuneration of the Managing Director(s) andWhole-time Director(s) based on their performance.
3. Recommend the policy for remuneration of Directors KMPs & othersenior level employees of the Company and review the same in accordance with theperformance of the Company and industry trend.
The Remuneration Policy is annexed herewith as Annexure F which formspart of this report.
AUDITORS AND AUDITORS REPORT
I. STATUTORY AUDITORS
M/s. Sanjeevani Raizada & Co. Chartered Accountants wereappointed as Statutory Auditors of the Company at the 37th Annual General Meeting of theCompany held on 28.09.2017 who shall hold office till conclusion of the 42nd AnnualGeneral Meeting in accordance with the provisions of Companies Act2013. However theirappointment was subject to ratification by the members at every Annual General Meeting tobe held thereafter during their tenure of office. The Auditors have confirmed theireligibility and qualification under Section 141 of the Companies Act 2013 and thereforetheir ratification for appointment as Statutory Auditors for the year 2018-19 is beingsought from the Members of the Company at the ensuing Annual General Meeting.
The Auditor's Report for the financial year 2017-18 does not containany qualification reservation or adverse remark.
II. COST AUDITORS
As per the Companies (Cost Records and Audit) Rules 2014 Cost Auditis not applicable to the Company.
III. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard had appointed M/s P. Manghwani & Associates Practicing Company Secretary asSecretarial Auditor of the Company for the year 2017-18. The Secretarial Audit Report forthe year ended 31st March 2018 is annexed herewith as Annexure-D to this report.
The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
IV. INTERNAL AUDITORS
Pursuant to provisions of Section 138 read with Rule
13 of Companies (Accounts) Rules 2014 your Company engaged theservices of M/s J Chandra & Associates Chartered Accountants Kanpur to conduct theInternal Audit of the functions and activities of the Company for the Financial Year2017-18.The Internal Audit Report is placed before the Audit Committee of the Company atregular intervals.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to Regulation 34(2) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015(ListingRegulations) a Management Discussion & Analysis Report is annexed and forms part ofthis Annual Report.
The new Companies Act 2013 have strengthened the governance regime inthe country.Corporate Governance is all about maintaining a valuable relationship andtrust with all stakeholders. We consider stakeholders as partners in our success and weremain committed to maximizing stakeholders' value be it shareholders employeessuppliers customers investors communities or policy makers. The business conduct can beethical only when it rests on the six core values of Customer Value Ownership MindsetRespect Integrity One Team and Excellence. In line with the requirements of these corevalues and new law the Company through its Board and Committees endeavors to strike anddeliver the highest governing standards for the benefits of its stakeholders.
As required under Schedule V to the Listing Regulations a separatesection on Corporate Governance together with certificate from M/s P.Manghwani &Associates Practicing Company Secretaries confirming compliance of the conditions ofCorporate Governance forms an integral part of this report.
STATUTORY INFORMATION PARTICULARS OF EMPLOYEES
None of the employees of the Company was in receipt of remuneration inexcess of the limits prescribed under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules2014.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Information as per Section 134(3)(m) of the Companies Act 2013 readwith the Rule 8(3) of the Companies (Accounts) Rules 2014 relating to conservation ofenergy technology absorption and foreign exchange earnings and outgo for the financialyear 2017-18 is annexed as Annexure B' which forms part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability in respect of the financial yearended on 31st March2018 confirm that:
i) in the preparation of the Annual Accounts the applicable AccountingStandards had been followed along with proper explanation relating to material departures;
ii) the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
iii) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) the directors had prepared the Annual Accounts of the Company on agoing concern basis.
v) the directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
vi) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
During the year under review the Company has neither accepted norrenewed any deposits from public in terms of provisions of Section 73 and 76 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
However in terms of Rule 2(1)(c)(viii) of the Companies (Acceptance ofDeposits) Rules2014 the outstanding amount of unsecured loan from directors was Rs133.69 lacs which was taken in the preceding years. The Company did not accept anyunsecured loans from Directors during the year.
LOANS GUARANTEES AND INVESTMENTS
The Company has not given any loans directly or indirectly to anyperson or other body corporate or given any guarantee or provided any security inconnection with a loan to any other body corporate or person.
EXTRACT OF ANNUAL RETURN
The extracts of the Annual Return in Form MGT-9 as required underSection 92(3) of the Companies Act2013 read with Rule 12(1) of the Companies (Management& Administration) Rules 2014 is included in this report as "Annexure-C" andforms an integral part of this Report.
The Equity Shares of Company continued to be listed at BSE Limited andthe Annual Listing has been paid up-to date.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
The Company has in place internal financial control systemscommensurate with the size and complexity of its operations to ensure proper recording offinancial and monitoring of operational effectiveness and compliance of various regulatoryand statutory requirements. The internal auditor monitors and evaluates the efficacy andadequacy of internal control systems in the company. Based on the report of the internalauditor respective departments undertake corrective actions in their respective areas andthereby strengthen the controls. Significant audit observations if any and correctiveactions thereon are presented to the Audit Committee of the Board.
COMPLIANCE WITH SECRETERIAL STANDARDS
During the year under review the Company has duly complied with theapplicable provisions of the Secretarial Standards on Meetings of the Board of Directors(SS-1) and General Meetings(SS-2) issued by The Institute of Company Secretaries of India.
AUDIT COMMITTEE VIGIL MECHANISM & RISK MANAGEMENT
The composition of Audit Committee is in line with the provisions ofSection 177 of the Act read with Regulation 18 of the SEBI( Listing Obligations andDisclosure Requirements) 2015. The Audit Committee comprises of five members and allmembers are Independent Directors. The Company Secretary is the Secretary of theCommittee. All transactions with related parties are on arms' length basis. During theyear there are no instances where the Board had not accepted the recommendations of theAudit Committee. The Company has in place a vigil mechanism for Directors and Employeesto report genuine concerns about any wrongful conduct with respect to the Company or itsbusiness or affairs. This policy covers malpractices misuse or abuse of authority fraudviolation of the Company's policies or rules manipulations negligence causing danger topublic health and safety and other matters or activity on account of which the interest ofthe company is affected or likely to be affected and formally reported by whistle blowers.If an investigation leads the Chairman of the Audit Committee shall recommend to themanagement of the Company to take such disciplinary or corrective action as he may deemfit.
Risk is a inherent factor in business cycle and cannot be avoided.However proper planning and checks lead to risk mitigation. The Audit Committee has alsobeen delegated the responsibility for monitoring and reviewing risk management assessmentand minimization procedures developing implementing and monitoring the risk managementplan and identifying reviewing and mitigating all elements of risks which the Company maybe exposed to. The Board also reviews the risk management assessment and minimizationprocedures. Further in accordance with SEBI Regulations a Risk Management Committee hasalso been formed which also oversees the risk management of the company.
In compliance with the provisions of the SEBI (Prohibition of InsiderTrading) Regulations 2015 and to preserve the confidentiality and prevent misuse ofunpublished price sensitive information the Company has adopted a Code of Conduct toRegulate Monitor and Report Trading by Insiders (Insider Trading Code') and a Codeof Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information(Code of Fair Disclosure').
The Insider Trading Code is intended to prevent misuse of unpublishedprice sensitive information by insiders and connected persons and ensures that theDirectors and specified persons of the Company and their dependants shall not derive anybenefit or assist others to derive any benefit from access to and possession of pricesensitive information about the company which is not in the public domain that is to sayinsider information.
The Code of Fair Disclosure ensures that the affairs of the Company aremanaged in a fair transparent and ethical manner keeping in view the needs and interestof all the stakeholders.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position ofthe Company occurred from the end of the financial year 2017-18 till the date of thisReport. Further there was no change in the nature of business of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review there were no significant and materialorders passed by the Regulators or Courts or Tribunals which would impact the goingconcern status of the Company and its future operations.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Companyduring the financial year with related parties were in the ordinary course of business andon arm's length basis.
The details of material contracts / arrangements / transactions atarm's length basis for the year ended 31st March 2018 is annexed hereto and form part ofthis Report as Annexure E.
Your Directors draw attention of the Members to Note No.33 to theFinancial Statement which sets out all related party disclosures.
Your Directors take this opportunity to place on record appreciationfor overwhelming co-operation and assistance received from Company's Bankers GovernmentAuthorities and esteemed customers and their continued patronage and support during theyear.
Your Directors also place on record their appreciation for thecontribution made by all the Officers Staff and Workmen. The consistent growth of yourCompany was made possible by their hard work cooperation and support. Your Directors alsotake this opportunity to place on record their gratitude to the Members for theircontinued support and confidence with the company.
For and on behalf of the Board
|KUNDAN LAL BHATIA || |
|Chairman Cum Managing Director || |
|DIN No. 00581799 || |
DIN No. 00582337