Your Directors have pleasure in presenting 59th annual report of your Company for thefinancial year ended 31 March 2018.
- Financial Results:
(Rs. in Lakhs)
|Particulars || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Income ||35799.50 ||35722.75 ||34046.58 ||35154.45 |
|Profit before depreciation and tax ||24896.08 ||25256.79 ||24612.33 ||25185.28 |
|Depreciation ||1102.73 ||812.97 ||1102.73 ||812.97 |
|Profit Before Taxes ||23793.32 ||24443.81 ||23509.60 ||24372.31 |
|Tax Expenses ||5921.48 ||7448.87 ||5840.33 ||7430.13 |
|Net Profit after Taxes ||17871.87 ||16994.95 ||17669.27 ||16942.18 |
|Balance brought Forward ||4256.45 ||2376.58 ||50.00 ||2388.16 |
|Amount available for appropriations: ||22768.43 ||19371.53 ||18359.38 ||19330.33 |
|Appropriations: || || || || |
|1. Dividend (refer Note) ||1550.12 ||- ||1550.12 ||- |
|2. Tax on Dividend ||315.57 ||- ||315.57 ||- |
|3. Transfer to General Reserve ||20852.74 ||15115.08 ||16443.70 ||19280.33 |
|4. Surplus carried forward to Profit and Loss Account ||50.00 ||4256.45 ||50.00 ||50.00 |
|Earning Per Share (Basic) (in ') ||25.36 ||24.12 ||25.08 ||24.05 |
|Earning Per Share (Diluted) (in ') ||25.36 ||24.12 ||25.08 ||24.05 |
Note - As per Ind AS Dividend is accounted in the financial year in which it isapproved by the shareholders in the Annual General Meeting. Accordingly dividend approvedin the 58th annual general meeting held on 14 August 2017 in respect of F.Y. 2016-17 isdisclosed in F.Y. 2017-18. Dividend approved in respect of F.Y. 2015-16 was paid in March2016 and hence not disclosed under F.Y. 2016-17.
2. Review of Operations:
Your Company achieved a consolidated turnover of ' 35799.50 lakhs as compared toprevious year consolidated turnover of ' 35722.75 lakhs.
Consolidated profit before tax was ' 23793.32 lakhs as compared to ' 24443.81 lakhsin previous year.
Consolidated earnings per share amounted to ' 25.36 (previous year ' 24.12). Company'sreserves were ' 99704.62 lakhs.
Your Directors are pleased to recommend a dividend of 115% per equity share amountingto ' 2.30 per equity share of ' 2 each (previous year dividend of 110% per equity share of'10 each) as dividend for the year ended 31 March 2018 for the approval of shareholders atthe ensuing Annual General Meeting.
Dividend Distribution Policy
As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the top 500 Listed Companies shall formulate a Dividend DistributionPolicy. This policy is available on the Company's website at www.nesco.in
Management Discussion and Analysis:
i) Nesco IT Park:
Income for the year was '14544.33 lakhs (previous year '14191.14 lakhs).
The construction of IT building 4 is expected to be completed by December 2018. So far' 34894.57 lakhs has been spent on IT building 4. The building is pre-certified Platinumrated under the LEED India for Core & Shell rating system from the Indian GreenBuilding Council. IT buildings 2 and 3 are fully occupied by renowned Companies. Hall 3provides Incubation Centre; and a Child Care Centre for children of employees working inNesco IT Park.
ii) Bombay Exhibition Centre:
Income for the year was ' 12970.34 lakhs compared to ' 13276.55 lakhs in the previousyear.
An amount of ' 2863.70 lakhs was spent during the year for additional space addingmore facilities and improving infrastructure.
During the year 127 exhibitions and conventions were held in our Centre out of which14 were new organizers. Some of our new clients include Peppermint Communications Pvt.Ltd. Procyon Exhibition and Events LLP; Quartz Iten Media Stylus Arts and GraminHastkala Vikas Samiti.
Our Centre continues to bring more visitors to Mumbai than any other venue and now hasa total capacity of 59000 sq. mtrs. of exhibition and convention center spread over sixair conditioned halls and has plans of further expansion.
iii) Nesco Hospitality Private Limited:
Nesco Hospitality Private Limited a wholly owned subsidiary of your Company earnedrevenue of ' 2040.22 lakhs as compared to ' 568.31 lakhs during the previous year profitbefore tax was ' 319.13 lakhs as compared to ' 72.97 lakhs. The kitchen facility has nowcommenced and is fully operational. Your Company has started providing 15000 meals perday.
Pursuant to amendment to the object clause of the Memorandum of Association of theCompany effective April 2018 your Company has entered into business segment of NescoFoods.
The Company has commissioned two food courts and started food services within NescoComplex and is targeting to cater to the growing demand of quality food services from theexhibition organizers exhibitors visitors and employees working in Nesco IT Park.
In the year under review Indabrator income was ' 2638.13 lakhs (previous year '3388.52 lakhs). Indabrator has recently won several large contracts and has completed itsexpansion of machine building division at its Vishnoli Complex Gujarat.
Income from investments and other income were ' 3606.48 lakhs (previous year '4298.21 lakhs).
Your Company had no debt as on 31 March 2018. Company's liquid resources (fixedmaturity plans mutual funds cash & bank balances) increased by 3.85% to ' 50557.22lakhs from ' 48680.57 lakhs.
Your Company has neither accepted any deposits from the public during the year nor areany deposits outstanding for repayment.
5. Corporate Social Responsibility:
Your Company has undertaken various projects in the field of Education Healthcare andSanitation. The Company has completed construction of new English Medium Higher SecondarySchool.
The Company is evaluating and will take up more CSR activities in different areas.Annual report on CSR activities is in "Annexure A" attached to this report.
6. Directors and Key Managerial Personnel:
Mrs. Sudha S. Patel non-executive Director retires by rotation at the ensuing annualgeneral meeting pursuant to the provisions of Section 152 of the Companies Act 2013 readwith the Companies (Appointment and Qualificationof Directors) Rules 2014 and articles ofassociation of your Company and being eligible has offered herself for reappointment. Herbrief resume and other related information has been detailed in the annexure to thenotice.
Mr. Sumant J. Patel has been reappointed as Executive Chairman of the Company witheffect from 01 April 2018 for a further period of five years.
Mr. Krishna S. Patel has been reappointed as Managing Director of the Company witheffect from 01 July 2018 for a further period of five years.
Mr. Krishna S. Patel Managing Director Mr. Dipesh R. Singhania Chief FinancialOfficer and Head Legal and Ms. Jinal J. Shah Company Secretary and Compliance Officer ofthe Company are the Key Managerial Personnel of the Company.
7. Board Evaluation:
Pursuant to the provisions of the Companies Act 2013 read with the rules issuedthereunder and the Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force) the process for evaluation of the annualperformance of the Directors Board and Committees was carried out.
Regulation 17 of the Listing Regulations mandates that the Board shall monitor andreview the Board evaluation framework. The Companies Act 2013 states that a formal annualevaluation needs to be made by the Board of its own performance and that of its Committeesand Individual Directors.
The evaluation of all the directors and the Board and Committees as a whole wasconducted based on the criteria and framework adopted by the Board. The evaluation processhas been explained in the Corporate Governance Report section in this annual report.
8. Training of Independent Directors:
Your Company's Independent Directors are highly qualified and have been associated withcorporate and business organizations. They understand Company's business and activitiesvery well however pursuant to Regulation 4 of the Listing Regulations the Board hasshown all the Independent Directors Company's business and manufacturing activities andwere also introduced to Company's staff.
9. Declaration by Independent Directors:
All Independent Directors have given declarations that they meet the criteria ofindependence as prescribed under the provisions of the Companies Act 2013 and Regulation16(1)(b) of the Listing Regulations.
10. Number of Board and Committee Meetings:
Pursuant to Section 134(3)(b) details of Board Meetings held during the year are givenin the Report on Corporate Governance.
During the year four board meetings and four audit committee meetings were helddetails of which are given in the Corporate Governance Report. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013.
A separate meeting of Independent Directors pursuant to Section 149(7) read withSchedule VI of the Companies Act 2013 and Regulation 25 of the Listing Regulations washeld on 14 August 2017.
11. Policy on Directors appointment and Remuneration and other details:
The Company's policy on Directors appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 has been disclosed in CorporateGovernance Report which forms part of Annual Report.
12. Director's Responsibility Statement:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourDirectors confirm that: -
a) in the preparation of the annual accounts for the financial year ended 31 March2018 the applicable accounting standards and schedule III of the Companies Act 2013 havebeen followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as on 31 March 2018 and of the profitand loss of the Company for the financial year ended 31 March 2018;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) proper systems to ensure compliance with the provisions of all applicable laws werefollowed and that such systems were adequate and operating effectively.
13. A. Auditors and Auditors Report:
The Board of Directors in their meeting held on 23 May 2015 on the basis ofrecommendations of the Audit Committee in accordance with the provisions of Section139(1) of the Companies Act 2013 had appointed M/s Manubhai & Shah LLP to act asthe Statutory Auditors of your Company till the conclusion of the 60th Annual GeneralMeeting. The Company has received certificate from the Auditors to the effect that theappointment is in accordance with the limits specified under Section 139(9) of theCompanies Act 2013.
The Board of Directors in their meeting held on 16 May 2018 ratified the appointmentof Auditors for the financial year 2018-19.
The Auditors Report for the financial year 2017-18 does not contain any qualificationreservation or adverse remark. B. Secretarial Audit and Secretarial Audit Report:
In terms of Section 204 of the Companies Act 2013 the Board of Directors at itsmeeting held on 16 May 2018 appointed Ms. Neeta H. Desai of M/s. ND & AssociatesPractising Company Secretary as the Secretarial Auditor to conduct an audit of theSecretarial records for the financial year 2018-19.
The Secretarial Audit Report for the financial year 2017-18 is annexed herewith as"Annexure B". The Secretarial Auditors Report does not contain anyqualification reservation or adverse remark.
14. Particulars of Loans Guarantees and Investments:
The particulars of loans guarantees and investments made by the Company pursuant toSection 186 of the Companies Act 2013 have been disclosed in the financial statementsforming part of Annual Report.
15. Internal Financial Control Systems:
Your Company has well laid out policies on financial reporting asset managementadherence to Management policies and also on promoting compliance of ethical and welldefined standards. The Company follows an exhaustive budgetary control and standardcosting system. Moreover the management team regularly meets to monitor goals and resultsand scrutinizes reasons for deviations in order to take necessary corrective steps. TheAudit Committee which meets at regular intervals also reviews the internal control systemswith the Management and the internal auditors. The internal audit is conducted at variouslocations of Company and covers all key areas. All audit observations and follow upactions are discussed with the Management as also the Statutory Auditors and the AuditCommittee reviews them regularly.
16. Vigil Mechanism/Whistle Blower Policy:
The Board of Directors has formulated a Whistle Blower Policy which is in compliancewith the provisions of Section 177(10) of the Companies Act 2013 and Regulation 22 of theListing Regulations. The Company has a vigil mechanism to deal with fraud andmismanagement if any. The policy is on the website of the Company.
17. Safety Health and Environment:
Your Company recognizes its role in health and safety as well as its responsibilitytowards environment and society.
In fact your Company's goals are: no accidents no injuries to people and no damage toenvironment. Safety and security of personnel assets and environmental protection arealso on top of the agenda of the Company at its manufacturing facilities.
Clean environment and sustainable development integrated with the business objective isthe focus of the Company. The projects and activities are planned and designed withenvironment protection as an integral part to ensure a safe and clean environment forsustainable development.
18. Corporate Governance:
In compliance with Regulation 34 of the Listing Regulations a separate report onCorporate Governance along with a certificate from M/s. Manubhai & Shah LLP CharteredAccountants confirming compliance with requirement of corporate governance forms anintegral part of this report.
19. Prevention of Sexual Harassment at Workplace:
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made thereunder your Company hasconstituted Internal Complaints Committee which is responsible for redressal of complaintsrelated to sexual harassment. During the year under review there were no complaintspertaining to sexual harassment.
20. Extract of Annual Return:
Pursuant to Section 134(3)(a) extract of Annual Return in Form MGT- 9 has been annexedherewith as "Annexure C".
21. Particulars of Employees:
The information required under Section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company has been annexed herewith as "Annexure D".
22. Conversion of energy technology absorption foreign exchange earnings and outgo:
The information on conservation of energy and foreign exchange earnings and outgoactivities in accordance with the provisions of Section 134(3)(m) of the Companies Act2013 read with Companies (Accounts) Rules 2014 forms part of the notes to accounts.
23. Subsidiary Company:
Nesco Hospitality Private Limited a wholly owned subsidiary of your Company operatedFood Courts Day Care Centre and Gymnasium in Bombay Exhibition Centre and Nesco IT Park.
During the year it started operations of the new world class kitchen which catered tothe needs of employees working in Nesco IT Park and visitors to exhibitions andconventions.
A separate statement containing the salient features of financial statements ofsubsidiary of your Company forms part of consolidated financial statements in compliancewith Section 129 and other applicable provisions if any of the Companies Act 2013.
24. Related Party Transactions:
During the financial year 2017-18 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013. Alltransactions with related parties were reviewed and approved by the Audit Committee. Allrelated party transactions that were entered were on an arm's length basis and were in theordinary course of business.
There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large.
The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is set out as "Annexure E" to thisReport.
25. Deposits from Public:
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
26. Business Responsibility Report:
A Business Responsibility Report as per Regulation 34 of the Listing Regulations formspart of this Annual Report.
27. Indian Accounting Standards:
Your Company has adopted Indian Accounting standard (Ind AS) notified by MCA and therelevant provision of the Companies Act 2013 and the general circulars issued by theMinistry of Corporate Affairs from time to time. The significant accounting policies whichare consistently applied have been set out in the notes to the Financial Statements.
28. Consolidated Financial Statements:
The consolidated financial statements of the Company are prepared in accordance withapplicable Ind AS notified by Ministry of Corporate Affairs and form part of this annualreport.
Your Directors wish to convey their appreciation for the support extended by theshareholders clients and the employees of the Company.
For and on behalf of the Board of Directors
Sumant J. Patel
Mumbai 16 May 2018