To the Members
Your Directors take pleasure in presenting the Eighty-Second Annual Report includingthe Audited Annual Financial Statements of the Company for the Financial Year ended 31stMarch 2018.
Financial Results (Standalone)
| ||2017-18 ||2016-17 |
|Revenue from Operations ||10764 ||10858 |
|Profit before depreciation interest & tax ||561 ||1180 |
|Less: Interest ||397 ||402 |
|Depreciation ||524 ||507 |
| ||921 ||909 |
|Profit/(Loss) before Tax ||(360) ||271 |
|Less: Provision for Income Tax - || || |
|Current Tax ||- ||21 |
|Deferred Tax (reversal)/charge ||(125) ||36 |
| ||(125) ||57 |
|Profit/(Loss) after Tax ||(235) ||214 |
|Other Comprehensive Income/(Loss) for the year (net of tax) ||(14) ||(17) |
|Total Comprehensive Income/(Loss) ||(249) ||197 |
Adoption of Indian Accounting Standards (Ind As)
The Company has adopted Indian Accounting Standards (IND AS) for the first time witheffect from 1st April 2017 the transition date being 1st April 2016. Accordingly thefinancial statements for the Financial Year ended 31st March 2018 have been prepared inaccordance with the IND AS notifi ed vide the Companies (Indian Accounting Standards)Rules 2015 issued by the Central Government in exercise of the powers conferred bySection 133 of the Companies Act 2013 and the financial statements for the previousFinancial Year ended 31st March 2017 have also been restated in accordance with the INDAS as required under law.
In view of the loss suffered by the Company during the Financial Year under review theBoard does not recommend any dividend for the year.
Operations and State of the Company's Affairs
For the year under review the market remained sluggish especially in the steel andmining sectors which are major areas of business for the Heavy Engineering Division ofthe Company. On account of this depressed market the turnover of Heavy EngineeringDivision only increased marginally. It also needs to be mentioned that many of the steelplant projects where the Company had actually received large orders got stalled duringthe year primarily because of unfavorable global price of steel. This has alsosignificantly affected the business of Heavy Engineering Division. The overall performanceof Bauer Division improved appreciably during the year and is also showing strong growthprospects for the future.
The market of Building Material Division was adversely affected during the year becauseof major slowdown in the construction industry. Though these products of the Company areacknowledged to be of high quality standard the performance did not reach the expectedlevel mainly on account of slowdown mentioned earlier. The Company has initiated a majorre-structuring of the division to have a greater market reach.
We would like to mention that for the year under review despite the current diffi cultmarket conditions the revenue from the operations for the year was Rs. 10764 lac and theEBIDTA for the year was Rs. 561 lac. The earning after interest for the year was Rs. 164lac. However on account of high depreciation for the investment made in building materialdivision the net loss for the year was Rs. 360 lac.
We are pleased to inform you that the steel prices have started increasing and thesteel and mining segment is expected to recover in the coming months. Another point ofinterest is the strong and growing demand for the crushers crushing systems andmanufactured sand plant. These equipment and systems are manufactured by your Company withlicense from Omni & Aden Brazil and Milestone of South Africa. These will have apositive effect on the overall business of the Heavy Engineering Division. The business ofBauer Division is steadily improving and is expected to have a growth of over 20% in thecurrent year.
The quality of products of Building Material Division being of high standard theturnaround of the division will start as soon as the demand for the material increases andthe Company has initiated the process of restructuring for a greater market reach.
Joint Venture Company
Mozer Process Technology Pvt. Ltd. (MPTPL) a Joint Venture Company of the Company withAllgaier Werke GmbH Germany offers Mozer Dryers which is a highly specialized productwith sophisticated technology. For the year under review the revenue from operations ofMPTPL was only Rs. 0.90 lac as compared to Rs. 222.95 lac during the previous FinancialYear ended 31st March 2017. However MPTPL has been receiving a number of enquiries oflate some of which are at an advanced stage of negotiations. The market howevercontinues to be highly competitive.
MPTPL suffered a Loss Before Tax of Rs. 32.39 lac during the Financial Year ended 31stMarch 2018 as compared to a Loss Before Tax of Rs. 4.75 lac during the previous FinancialYear ended 31st March 2017.
The consolidated financial statements of the Company for the Financial Year ended 31stMarch 2018 prepared after taking into consideration the financial statements of itsaforementioned Joint Venture Company also forms part of the Annual Report for the FY2017-18. The said consolidated financial statements have been prepared adopting the IndianAccounting Standards (IND AS) under equity method of consolidation considering thetransition date as 1st April 2016. The consolidated revenue from operations andconsolidated loss before tax thus arrived at for the Financial Year ended 31st March 2018are Rs. 10764 lac and Rs. 376 lac respectively as compared to a consolidated revenue fromoperations and consolidated Profit before tax for the previous Financial Year ended 31stMarch 2017 of Rs. 10858 lac and Rs. 291 lac respectively.
A Statement in Form AOC-1 relating to the Associate/Joint Venture Company as requiredpursuant to Section 129 (3) of the Companies Act 2013 read with rule 5 of Companies(Accounts) Rules 2014 is also attached to the Financial Statements.
The Company has no subsidiaries.
Building Material Division
The new Building Material Division of the Company located at Ajmer Rajasthan formanufacture of high quality Dry Mix Mortar/ Dry Mix Products and related buildingmaterials had commenced commercial production with effect from 31st March 2016. TheCompany is manufacturing Dry Mix Mortar/Dry Mix products under the brand names ICPreciplast' IC PreciJoint' IC Precigrout' IC Preciseal' &IC Precifi x'.
Currently the Company is marketing these products in Delhi-NCR area Uttar PradeshRajasthan and Madhya Pradesh. The sales turnover of the Division during the Financial Yearended 31st March 2018 was Rs. 341 lac.
The total capital expenditure incurred by the Company during the Financial Year underreview was Rs. 189 lac.
Extract of Annual Return
An extract of the Annual Return as on the Financial Year ended on 31st March 2018 asrequired under Section 134(3) of the Companies Act 2013 read with Section 92(3) of thesaid Act and Rule 12(1) of the Companies (Management and Administration) Rules 2014 areset out in Annexure-I forming part of this Report.
Energy Conservation Technology Absorption and Foreign Exchange Earnings & Outgo
As required under Section 134(3)(m) of the Companies Act 2013 read with the Rule 8(3)of Companies (Accounts) Rules 2014 particulars regarding Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings & Outgo are set out inAnnexure-II forming part of this Report.
Related Party Transactions
Your Board has framed a Related Party Transactions Policy which is available on theCompany's website. During the year the Company had not entered into any contract/arrangement/ transaction with any related party which could be considered material inaccordance with the Related Party Transactions Policy of the Company.
Details of related party transactions (which are not considered material) entered intoon an arm's length basis during the Financial Year ended 31st March 2018 are set out inAnnexure-III forming part of this Report pursuant to Section 134(3)(h) of the CompaniesAct 2013 read with Section 188 of the said Act and Rule 8(2) of the Companies (Accounts)Rules 2014.
Details Relating to Remuneration of Directors & Employees
A statement as required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 relating to details of remuneration of Directors and employees drawn during theFinancial Year ended 31st March 2018 are set out in Annexure-IV forming part of thisReport.
Number of Board Meetings
6 (Six) Board meetings of the Company were held during the Financial Year ended 31stMarch 2018.
For further details please refer to the Report on Corporate Governance forming part ofthis Annual Report.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 read with Section 134(5) ofthe said Act the Directors to the best of their knowledge and belief confi rm that: a)in the preparation of the annual accounts the applicable accounting standards have beenfollowed by the Company along with proper explanation relating to material departures ifany; b) appropriate accounting policies have been selected and applied consistently andsuch judgments and estimates have been made that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company as at 31st March 2018 and ofthe Profit/loss of the Company for the year ended on that date; c) proper and suffi cientcare has been taken for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act 2013 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d) the Annual Accounts havebeen prepared on a going concern basis; e) the Board had laid down internal financialcontrols to be followed by the Company and that such internal financial controls wereadequate and were operating effectively; and f) proper systems to ensure compliance withthe provisions of all applicable laws have been devised and such systems were adequate andoperating effectively.
There was no change in the composition of the Board of Directors of the Company duringthe Financial Year under review.
Considering the recommendations of the Nomination and Remuneration Committee of theBoard the Board of Directors of the Company at its meeting held on 26th April 2018re-appointed Mr. Indrajit Sen (DIN : 00216190) as the Managing Director of the Company fora further period of three years with effect from 1st May 2018 subject to the approval ofthe shareholders of the Company at their forthcoming 82nd Annual General Meeting.
Mrs. (Prof.) Bharati Ray (DIN 06965340) Mr. Ravi Ranjan Prasad (DIN 00030458) &Mr. Ratan Lal Gaggar (DIN 00066068) all Independent Directors on the Board are notliable to retire by rotation in terms of the provisions of Section 149(13) of theCompanies Act 2013.
However in accordance with Section 149 of the Companies Act 2013. the terms in office of Mr. Ratan Lal Gaggar (DIN 00066068) and Mr. Ravi Ranjan Prasad (DIN 00030458) asIndependent Directors of the Company expire on 31st March 2019 and 24th July 2019respectively on the completion of five years from their respective effective dates ofappointment. They being eligible for a second and final term of five years under the Actand having consented to continue in offi ce for such second term the Board has accordedits approval for such continuance in offi ce which is subject however to the approval ofthe shareholders of the Company by means of a Special Resolution to be placed at theirensuing 82nd Annual General Meeting.
Mr. Indrajit Sen (DIN : 00216190) retires by rotation at the ensuing 82nd AnnualGeneral Meeting and being eligible offers himself for re-appointment.
The Company has received at the first meeting of the Board of Directors held duringthe Financial Year 2018-19 the declarations pursuant to Section 149(7) of the CompaniesAct 2013 from Mr. Ratan Lal Gaggar Mr. Ravi Ranjan Prasad & Mrs. (Prof.) BharatiRay Independent Directors of the Company to the effect that they meet the criteria ofindependence as specifi ed in Section 149(6) of the said Act.
The Nomination & Remuneration Committee of the Board has devised and the Board hasduly adopted a Board Diversity Policy dealing with Board composition and appointmentswhich is available on the Company's website. The Nomination & Remuneration Committeenominates new appointees to the Board and the appointments are made by the Board.
The Nomination & Remuneration Committee of the Board has also formulated thecriteria for determining the qualifi cations positive attributes and independence ofIndependent Directors to be appointed on the Board of the Company.
The Nomination & Remuneration Committee of the Board has devised and the Board hasduly adopted a Remuneration Policy relating to the remuneration for the Directors KeyManagerial Personnel and other employees of the Company.
The Remuneration Policy of the Company ensures that the level and composition ofremuneration is reasonable and suffi cient to attract retain and motivate the employeesin order to run the Company successfully. The Policy sets out the guiding principles fordetermining the remuneration payable to the Directors Key Managerial Personnel and otheremployees of the Company.
The remuneration payable to the Executive Directors is recommended by the Nomination& Remuneration Committee based on the guiding principles as set out in theRemuneration Policy and subject to the approval of the Board the shareholders and theCentral Government wherever applicable.
As regards the Non-Executive Directors the Board from time to time determines thesitting fee payable for attending each meeting of the Board or Committee thereof withinthe overall limits fi xed under the Companies Act 2013 and rules made thereunder. TheNon-Executive Chairman is paid a Commission of upto 2% of the net Profits of the Companysubject to the approval of the Nomination and Remuneration Committee the Board theshareholders and the Central Government.
The employees of the Company are assigned grades according to their qualifi cations andwork experience competencies as well as their roles and responsibilities in the Company.Individual remuneration is determined within the appropriate grade and is based on variousfactors such as job profi le skill sets seniority experience and prevailingremuneration levels for equivalent jobs.
The Nomination & Remuneration Committee of the Board has formulated the criteriafor evaluating the performance of the Board and the individual Directors and the same hasbeen adopted by the Board. The Independent Directors in their separate meeting evaluatethe non-independent Directors and the Board as a whole once a year. The IndependentDirectors are evaluated individually once a year by the entire Board sans the IndependentDirector being evaluated. The various Committees of the Board are evaluated by the Board.
Other Key Managerial Personnel
Mr. Suhas Chandra Saha is the Company Secretary of the Company and Mr. Asish KumarNeogi is the Chief Financial Offi cer of the Company.
There are no reservations qualifi cations or adverse remarks in the Auditors' Reporton the Annual Financial Statements either Standalone or Consolidated for the FinancialYear ended 31st March 2018.
In accordance with Section 139 of the Companies Act 2013 M/s. Lodha & Co.Chartered Accountants were appointed as the Statutory Auditors of the Company at the 78thAnnual General Meeting (AGM) of the shareholders of the Company held on 12th September2014 for a period of three years with effect from the conclusion of the said 78th AGMtill the conclusion of the 81st AGM. The term of M/s. Lodha & Co. having expired andthey being ineligible for re-appointment in terms of Section 139(2) of the Companies Act2013 M/s. Ray & Ray (Firm Registration No. 301072E) Chartered Accountants of WebelBhawan Ground Floor Block EP & GP Bidhan Nagar Sector V Salt Lake Kolkata 700 091 having expressed their willingness to act as the Statutory Auditors of theCompany and having further confi rmed that their appointment if made shall be within thelimits specifi ed in Section 141(3)(g) of the Companies Act 2013 and their appointmenthaving been recommended by the Audit Committee of the Board and by the Board of Directorswere appointed by the shareholders as the Statutory Auditors of the Company at their 81stAGM held on 20th September 2017 for the period commencing with the conclusion of the saidAGM till the conclusion of the 86th AGM of the shareholders of the Company subject toratifi cation by the shareholders at each AGM in between. The said M/s. Ray & Rayhaving expressed their willingness to continue in offi ce and having further confi rmedthat their appointment if ratifi ed shall be within the limits specifi ed in Section141(3)(g) of the Companies Act 2013 the Board recommends to the shareholders the ratification of their appointment as the Statutory Auditors of the Company at the ensuing 82ndAnnual General Meeting of the shareholders of the Company.
In terms of the Companies Act 2013 and the rules made thereunder audit of the costaccounting records maintained by the Company relating to the products manufactured by theCompany is not applicable for the Financial Year 2017-18.
The Audit Committee of the Board as on date consists of Mr. Ravi Ranjan PrasadChairman of the Committee & Independent Director Mr. Ratan Lal Gaggar IndependentDirector and Mr. Indrajit Sen Managing Director. For further details please refer to theReport on Corporate Governance forming part of this Annual Report.
Secretarial Audit Report
The Secretarial Audit Report for the Financial Year ended 31st March 2018 issued byMr. Arup Kumar Roy Company Secretary in Practice Secretarial Auditor of the Company isannexed to this Report and marked as Annexure VI as required under Section 204 of theCompanies Act 2013.
There are no reservations qualifi cations or adverse remarks in the said SecretarialAudit Report.
Loans Guarantees or Investments U/S 186
The Company has not granted any loans to other bodies corporate nor has the Companygiven any guarantees or provided any security for loans by other bodies corporate underSection 186 of the Companies Act 2013.
The Company invests its surplus fund in Fixed Deposits with banks or in Fixed MaturityPlans with Mutual Fund Houses which are fi xed income bearing debt funds. The Company hasinvested Rs. 50 lac in the equity shares of its Joint Venture Company Mozer ProcessTechnology Pvt. Ltd.
The Company has a Risk Management Plan in place approved by the Board of Directors. TheRisk Management Committee is responsible for the implementation of the plan and reportingthereon to the Board.
Internal Financial Controls
In the opinion of the Board the internal financial controls with reference to theFinancial Statements established by the Board are adequate. During the year such controlswere tested and no material weakness in the design operation or implementation thereofwas observed.
In compliance with the provisions of the Securities & Exchange Board of India(Listing Obligations & Disclosure Requirements) Regulations 2015 relating toCorporate Governance the following Reports/ Certifi cates are attached which form part ofthis Annual Report :
i) Management Discussions and Analysis Report.
ii) Report on Corporate Governance.
iii) Compliance Certifi cate by CEO/CFO.
iv) Declaration from the Managing Director on compliance of Code of Conduct by theDirectors and Senior Management Personnel.
v) Certifi cate by a Practicing Company Secretary regarding compliance of conditions ofCorporate Governance.
Corporate Social Responsibility
In accordance with Section 135 of the Companies Act 2013 a Corporate SocialResponsibility (CSR) Committee of the Board of Directors of the Company has beenconstituted which as on date consists of Mr. Sanjay Bagaria Chairman of the CommitteeMrs. (Prof.) Bharati Ray Independent Director & Mr. Ratan Lal Gaggar IndependentDirector. The CSR Committee has developed a CSR Policy which has been duly approved by theBoard and is available on the website of the Company. The CSR Committee is responsible forimplementing the CSR Policy of the Company and reporting thereon to the Board. An AnnualReport on CSR Activities including the Responsibility Statement of the CSR Committee forthe Financial Year ended 31st March 2018 as required under Section 135 of the CompaniesAct 2013 read with Rule 8 of the Companies (Corporate Social Responsibility) Rules 2014are set out in Annexure-V forming part of this Report.
Pursuant to Section 177 of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the Securities &Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 the Board of Directors of the Company have established a Vigil Mechanism (WhistleBlower Policy) of the Company for the purpose of enabling the Directors and Employees toreport unethical behaviour actual or suspected fraud and violation of the Company's Codeof Conduct or ethics policy and the same has been posted on the website of the Company.The Audit Committee of the Board is responsible for overseeing/ monitoring the functioningand implementation of the Vigil Mechanism.
Human Resource Management
The human resource development programmes in various areas are undertaken on an ongoingbasis.
Industrial relations during the year under review at all units remained largelycordial. However the operations at one of the plants of the Heavy Engineering Division ofthe Company located at Baidyabati District Hooghly West Bengal remained suspended for abrief period due to certain labour-related issues.
The Company did not have any outstanding fi xed deposits as on 31st March 2018 or ason 31st March 2017. The Company did not accept any fi xed deposits during the year.
In February 2018 credit rating agency ICRA Limited had revised the long-term scalerating on the working capital credit facilities enjoyed by the Company from its bankers onconsortium basis to [ICRA] BBB- (pronounced as ICRA triple B minus) [signifying a moderatedegree of safety regarding timely servicing of financial obligations and carrying moderatecredit risk]. The outlook on the long term scale rating is Stable. ICRA had also revisedthe short-term scale rating on the aforementioned facilities to [ICRA]A3 (pronounced asICRA A three) [signifying a moderate degree of safety regarding timely servicing offinancial obligations and carrying higher credit risk as compared to instruments/facilities rated in the higher categories]. However the credit ratings are due for areview in June 2018.
Quality Certifi cations
The Quality Management Systems of the Company with respect to its plants at BaidyabatiNagpur & Aurangabad and also its Corporate Offi ce at Kolkata have been certifi ed bythe Indian Register Quality Systems (Accreditation by RvA the Netherlands) to conform tothe requirements of the Standard ISO 9001:2008.
No signifi cant or material orders have been passed by the regulators or courts ortribunals impacting the going concern status of the Company or the Company's operations infuture.
An Internal Complaints Committee as required under The Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013 has been formed. Nocomplaints of sexual harassment were received by the Committee during the year underreview.
Your Directors take this opportunity to thank all government authorities bankscustomers suppliers and shareholders for the continuous support extended by them to theCompany. Your Directors place on record their appreciation for the dedication andcommitments of the employees at all levels in achieving and sustaining excellence in allareas of the operation of the Company.
| ||For & on behalf of the Board |
|Kolkata ||Sanjay Bagaria |
|23rd May 2018 ||Chairman |