Your Directors have pleasure in presenting their 30th Annual Report together with theAudited Financial Statements for the year ended March 312015.
(Rs. in crores)
| ||Year ended 31.03.2015 ||Year ended 31.03.2014 |
|Net Sales and Other Income ||423.45 ||463.90 |
|Profit before tax ||13.96 ||15.72 |
|Less: Tax expense (Deferred tax) ||(2.68) ||1.65 |
|Profit for the year after tax ||16.64 ||14.07 |
|Balance Brought forward from previous year ||197.18 ||183.11 |
|Balance carried to Balance sheet ||213.82 ||197.18 |
The net turnover for the year has been Rs. 417.93 crores as against Rs. 459.33 croresin previous year and net profit after tax Rs. 16.64 crores as against Rs. 14.07 crores inprevious year. Overall turnover for the year has been lower from previous year mainly dueto lower turnover of Yam Division on account of adverse market conditions.
Keeping in view the need to conserve the Company's resources for meeting the enhancedworking capital requirement and balancing the manufacturing equipments your directorsdeemed it prudent not to recommend any dividend for the year.
The division has achieved a net turnover of Rs. 288.68 crores during the year andprofit before interest & depreciation of Rs. 40.19 crores as against Rs. 273.91 croresand Rs. 37.75 crores respectively of previous year. Various factors have contributed forsustained performance of the division interalia balancing of plant & machinerycontinuous efforts for production of better quality product and manufacturing of highervalue-added Insulators. Company's vision to broaden the scope of manufacturing of allkinds of extra high voltage insulators for electrical equipments has borne fruitswitnessed by the performance of the company during the year under review.
Yarn Division .
The turnover of this division has been Rs. 129.25 crores as against Rs. 185.42 croresin previous year and profit before interest & depreciation has been Rs. 1.82 crores asagainst Rs. 8.20 crores in previous year. Turnover and profitability has been lower due toadverse market conditions and low production/sales due to shut down of plant for aboutforty days .
The company is one of the .major exporter of H.T. Porcelain Insulators from India. TheCompany has achieved export turnover of Rs. 55 crores during the year under review ascompared to Rs. 79 crores in previous year. Lower exports were mainly due to stiffcompetition from China as well as lower demands from Russian/European countries becauseof slow down. The company possesses the ability to cater to diverse needs of globalcustomers and is concentrating to strengthen its presence in all comers of global market.This would help the company in getting optimum utilization of its productive resources.Your company is a regular supplier to all the major multinational OEMs for their worldwide requirements of quality porcelain insulators. The company is also focusing to savecost effectively with R&D activities and better process control so that products ofthe insulator division remain competitive in terms of quality and price in theinternational market.
Major focus on approvals in OEMs and utilities worldwide will further enhance exportbusiness. These steps taken by the company will help export turnover to increasesubstantially in 2015-16.
Your Company continues to be a leader in the manufacture of High Voltage Insulators inthe country. Despite stiff competition buyers show interest in your company's product forits quality & timely delivery and hence your directors are confident of achievingbetter working results in the coming years. Your Company has a well equipped R&Dlaboratory recognized by Govt of India Ministry of Science & Technology which takescare of the stringent quality requirements of customers and ensures quality andreliability in each and every product manufactured. In-house R&D activities have athrust on development to replace expensive input raw material & to further bringconsistency in quality of the products under manufacture. The future of the Insulatorindustry looks promising due to major thrust on power sector reforms and speedierimplementation of new power projects. The Government of India has given emphasis toupgrading the transmission system in the country along with plans for construction of newpower transmission lines like the green corridor project connecting renewable powerprojects across various states as well as upgradation of transmission infrastructure inthe North East Region.
Major Railway electrical projects as well as the Dedicated Freight Corridor projectwill increase demand for railway insulators. Further the Imposition of anti dumping dutyon imports from China for a period of 5 years will provide sustainable relief to domesticmanufactures.
In view of this & looking to the present scenario in power sector the businessprospects for Insulator Industry in general and for your Company in particular areencouraging.
The company is diversifying its business by way of expanding capacity of foundry whichat present is fulfilling company's major captive requirement of SGI and Aluminum Castings.This will give further boost to the revenue of the company in coming years.
AMALGAMATION OF MODERN TERRY TOWELS LIMITED WITH THE COMPANY
Modem Terry Towels Limited has filed revised DRS with the Operating Agency for itsamalgamation with your Company by taking deemed date of amalgamation as 01.01.2008 (asenvisaged in original scheme). The same is under consideration for circulation andthereafter for sanction by Honble BIFR.
DEMERGER OF YARN DIVISION OF THE COMPANY
As reported earlier a scheme of Demerger under section 391 to 394 of the CompaniesAct 1956 has been filed before the Honble High Court of Rajasthan at Jaipur todemerge the Yam Division of the Company which is under consideration for approval ofHon'ble High Court. The demerger would result in benefit to the shareholders creditorsemployees and general public.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any guarantees covered under the provisions of Section 186 ofthe Companies Act 2013. The details of the loans and investments made by Company aregiven in the notes to the Financial Statements.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were onami's length basis and were in the ordinary course of business. There were no materiallysignificant related party transactions which may have a potential conflict with theinterests of the Company at large. Particulars of contracts or arrangements with relatedparties under the provisions of section 188(1) of the Companies Act 2013 are annexedherewith in the prescribed form AOC-2 as Annexure-A.
SUBSIDIARY. JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has one Subsidiary Company i.e. Motile Power Trade Pvt. Ltd. and does nothave any Joint Ventures & Associate Companies during the year. The Statementcontaining salient features of die financial statement of its Subsidiary Company isattached with the Audited Financial Statements in Form AOC-1.
CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company has constituted a CSR Committee which comprises Shri SachinRanka (Chairperson) Shri R. Raniwala and Shri H.L. Sharma (Members). The Committee isresponsible for formulating and monitoring die CSR policy of the Company.
The CSR Committee has formulated and recommended to the Board a Corporate SocialResponsibility Policy (CSR Policy) indicating the activities to be undertaken by thecompany which has been approved by the Board. During the year the Company has spent Rs.39.52 Lacs (around 2% of the average net profits of last three financial years) onapproved CSR Activities. The Company has contributed funds for medical relief health careand educational activities. The Company will also undertake other need based initiativesin compliance with Schedule VII to the Act. The Annual Report on CSR activities is annexedherewith as Annexure-B.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Shri S.B.L. Jain and Shri R. Raniwala were appointed asan Independent Directors of the Company for a period of five consecutive years upto 31 stMarch 2019 and Shri P.K. Rao was appointed as an Independent Director of the Company witheffect from 19th June 2014 for a period of five consecutive years upto 18th June 2019.Smt. Meenu Sacheti was appointed as an Additional Director in die category ofNon-Executive Director ofthe Company with effect from 31st March 2015.
In accordance with the provisions of Companies Act 2013 Shri D.B. DeshpandeExecutive Director retires by rotation and being eligible offers himself forre-appointment. Shri D.B. Deshpande Executive Director of the Company whose term willexpire on 31 st December 2015 and his terms & conditions of the re-appointment anjlpayment of remuneration has been revised by the Board of Directors. Shri H.L. SharmaExecutive Director of the Company whose term expires on 30th June 2015 and reappointed bythe Board of Directors for a period of 2 years with remuneration. The Board of Directorsof the Company has revised the terms & conditions of the payment of remuneration toShri Sachin Ranka Chairman & Managing Director of the Company for his remainingperiod of appointment i.e. from 01.04.2015 to 31.03.2017. Appropriate resolutions for theappointment/re-appointment of the aforesaid Directors and for revised terms &conditions of the payment of remuneration to Shri Sachin Ranka are being moved at theensuing Annual General Meeting which the Board recommends for your approval.
Shri S.D. Gupta was appointed as President (Commercial) & Chief Financial Officerof the Company from 1st July 2014 and has resigned from the post of Chief FinancialOfficer of the Company from 30th June 2015. Shri D.S. Singhvi has been appointed as VicePresident (Finance) & Chief Financial Officer of the Company with effect from 1stJuly 2015.
Shri A.K. Sharma Company Secretary & Compliance Officer of the Company hasresigned from 13th June 2015 and Shri Gaurav Goyal has appointed as Company Secretary& Compliance Officer of the Company from 29th June 2015.
The Company has received declarations from all the Independent directors of the Companythat they meet the criteria of independence as laid down under section 149(6) of dieCompanies Act 2013 and Clause 49 of the Listing Agreement.
Policy on Directors' Appointment and Remunerations
The Board has on die recommendation of the Nomination & Remuneration Committeeframed and adopted a policy for nomination remuneration and evaluation of Directors KeyManagerial Personnel (KMP) and other employees of the Company.
Criteria for Selection/Appointment
The Non-Executive/Whole-time/Managing Director Key Managerial Personnel (KMP) andother employees shall be of requisite qualification high integrity and should haverelevant expertise and experience.
In case of appointment of Independent Directors the Committee shall satisfy itselfwith regard to the independent nature of the Directors and also ensure that the candidateidentified for appointment as an Independent Director is not disqualified for appointmentunder Section 149 and 164 of the Companies Act 2013.
The Whole tune Director/Managing Director/Key Managerial Personnel (KMP) and otheremployees shall be entitled to receive remuneration/ compensation/consession etc. as perthe provisions of the Companies Act 2013 and rules made there under or any otherenactment for the time being in force.
The Non Executive Directors and Independent Directors shall be entitled to receiveremuneration by way of sitting fees reimbursement of expenses for participation in theBoard meetings within the overall limits prescribed under the Companies Act 2013 andrules made there under or any other enactment for the time being in force.
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsAudit Committee Nomination & Remuneration Committee Stakeholders RelationshipCommittee and Corporate Social Responsibility Committee. Standard parameters were preparedafter taking into consideration various aspects of the Board functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Company who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board and the performance evaluation of dieChairman and the Non Independent Directors of the Company was carried out by theIndependent Directors who have expressed their satisfaction with the evaluation process.
Number of Board Meetings
The Board of Directors duly met four times during the financial year from 1 st April2014 to 31 st March 2015 i.e. 19th June 201427th September 201426th December 2014and 20th March 2015. The intervening gap between the meetings was within the periodprescribed under the Companies Act 2013.
The Board of Directors of the Company has constituted the Audit Committee of Directorsto act in accordance with the terms of reference specified by the Board as stipulated inSection 177 of the Companies Act 2013. The details of Committee members are as follows:-
|S.No. ||Name of Director ||Designation ||Category |
|1. ||Shri R. Raniwala ||Chairman ||Independent Director |
|2. ||Shri S.B.L. Jain ||Member ||Independent Director |
|3. ||Shri H.L. Sharma ||Member ||Executive Director |
D1RECTORS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
(a) In the- preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
(b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) The directors have prepared the annual accounts on a going concern basis;
(e) The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such system were adequate and operating effectively.
AUDITORS AND AUDITORS' REPORT
M/s B.L. Verma & Co. (Firm Registration No. 001064C) Chartered Accountants wereappointed as Statutory Auditors of tile Company at the last Annual General Meeting held on27th September 2014 for a period of three years subject to ratification by members atevery consequent Annual General Meeting. Accordingly the appointment of M/s B.L. Verma& Co. Chartered Accountants as statutory auditors of the Company is placed forratifications by the shareholders. In this regard the Company has received a certificatefrom the auditors to the effect that if they are reappointed it would be in accordancewith the provisions of Section 141 of the Companies Act 2013.
The observations made in the Auditors' Report read together with relevant notes thereonare self explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s JAKS & Associates Company Secretaries Jaipur to undertake theSecretarial Audit of the Company. The Secretarial Audit report is annexed herewith asAnnexure-C.
The observations in Secretarial Audit Report which pertains mainly to listing agreementrequirements stock exchange compliances etc. it is clarified that the company will takenecessary action after approval of amalgamation of Modem Terry Towels Limited with theCompany and ensures that all the provisions will be complied to the fullest extent.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format (MGT-9) is annexed herewith as Annexure-D to theBoard's Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office of the company during business hours on working days of theCompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the Company Secretary in advance.
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 Annextire-E.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations to safeguard and protect from loss unauthorized use ordisposition of its assets. The Internal Auditor ensure and evaluates the efficacy andadequacy of internal control system of the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company. The Company isfollowing all the applicable Accounting Standards in respect of maintenance of books ofaccounts and reporting financial statements. All the transactions are properly authorizedrecorded and reported to the Management of the Company. Significant audit observations andrecommendations along with corrective actions taken by the management thereon arepresented to the Audit Committee meetings and thereafter Board Meetings.
BUSINESS RISK MANAGEMENT
In accordance with Clause 49 of the Listing Agreement the Board of Directors of theCompany formally adopted a policy i.e. Risk Management Policy for framing implementingand monitoring the risk management plan of the Company. The main objective of this policyis to ensure sustainable business growth with stability and to promote a pro-activeapproach in reporting evaluating and resolving risks associated with the business. Thepolicy establishes a structured and disciplined approach to Risk Management. In thechallenging and competitive environment strategies for mitigating inherent risks inaccomplishing the growth plans of the Company are imperative. The common risks of theCompany inter alia are competition technology obsolescence raw material availabilityretention of talent and statutory and regulatory compliances etc. As a matter of policythese risks are assessed and appropriate steps are taken to mitigate the same.
CODE OF CONDUCT
The Company has a Code of Conduct which is applicable to the Board of Directors KeyManagerial Personnel and all other employees in the course of day to day businessoperations of the Company. The Code lays down the standard procedure of business conductwhich is expected to be followed by the Directors Key Managerial Personnel and all otherdesignated employees of the Company in their business dealings and in particular onmatters relating to integrity in the work place business practices and dealing withstakeholders. The Code gives guidance through examples on the expected behavior from anemployee in a given situation and the reporting structure.
Pursuant to the provision of Section 177 (9) and (10) of the Companies Act 2013 theCompany has adopted Vigil Mechanism which also incorporates a whistle blower policy forDirectors and employees to report genuine concerns about unethical behavior actual orsuspected fraud and violation of the Company's code of conduct and ethics. The Company hasalso provided adequate safeguards against victimization of employees and Directors whoexpress their concerns.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under the Provisions of Companies Act 2013.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statement relateand the date of this report.
. 4. No significant or material orders were passed by the regulators or Courts orTribunals which impact the going concern status and Company's Operations in future.
Your Directors wish to extend their sincerest thanks to die Members of the CompanyBankers State Government Local Bodies Customers Suppliers Executives Staff andWorkers at all levels for their continuous cooperation and assistance.
| ||ON BEHALF OF THE BOARD |
|Place: Mumbai ||(Sachin Ranka) |
|Date : 29th June 2015 ||Chairman & Managing Director |