Nitiraj Engineers Ltd.
|BSE: 538407||Sector: Engineering|
|NSE: NITIRAJ||ISIN Code: INE439T01012|
|BSE 05:30 | 01 Jan||Nitiraj Engineers Ltd|
|NSE 05:30 | 01 Jan||Nitiraj Engineers Ltd|
|BSE: 538407||Sector: Engineering|
|NSE: NITIRAJ||ISIN Code: INE439T01012|
|BSE 05:30 | 01 Jan||Nitiraj Engineers Ltd|
|NSE 05:30 | 01 Jan||Nitiraj Engineers Ltd|
NITIRAJ ENGINEERS LIMITED.
306 Babha Building N M. Joshi Marg Near Police Station Mumbai 400011 INDIA
Your Directors have a pleasure in presenting the 20th Annual Report onthe business and operation of the Company together with the Audited Financial Accounts forthe year ended 31st March 2019.
1. FINANCIAL HIGHLIGHTS
Financial results of your Company for the year ended 31st March 2019 aresummarized below. (Standalone)
During the year under review the Company has recorded revenue of Rs. 5507.10 Lakhs ascompared to the previous year amount of Rs.4110.08 Lakhs. The Expenditure incurredincluding depreciation during the year was Rs. 4658.98 Lakhs as against the amount of Rs.3685.74 Lakhs during the previous year.
Hence the Company has earned a Net Profit after tax of Rs. 606.85 Lakhs as compared tothe previous year amount of Rs. 307.42 Lakhs. The Board has taken all necessary steps toexpand its activities by making new technologies and innovations and also by adding newservices and products.
2. CHANGE IN THE NATURE OF BUSINESS IF ANY
There have not been any changes in the nature of business of the Company duringfinancial year 2018-19.
3. SHARE CAPITAL
There is no change in Share Capital of the company during financial year 2018-19.
To retain the profit of the Company and use the funds for expansion of new projectyour Directors has not declared any dividend during the year.
5. CHANGE IN NAME
The company has not changed its name during financial year 2018-19.
The Board of the Company has decided to carry Rs.668.88Lacs to the Reserves of theCompany as on 31st March 2019.
7. THE BOARD AND KMP :
(a) Composition of the Board of Directors :
The Company has following composition of the Board
Director Retiring by Rotation
Pursuant to Section 152 of the Companies Act 2013 and in accordance with the Articleof Association of the Company Mr. Rajesh RaghunathBhatwal Managing Director of theCompany retires by rotation at the ensuing Annual General Meeting and being eligibleoffers herself for re-appointment. The Board of Directors recommends her re-appointment.
Company Secretary & Compliance Officer.
During the year CS Ankush Ashok Patil resigned from the post of Company Secretary andCompliance Officer of the Company and CS PreetiBhala(Membership No.A47959) appointed asCompany Secretary and Compliance Officer of the Company in his place.
8. MEETINGS OF BOARD OF DIRECTOR AND SHAREHOLDERS
Fourteen Board Meetings were held during the Year 2018-19 and Six Audit CommitteeMeetings and Four Nomination and Remuneration Committee Meetings and Six Stakeholders'Relationship Committee.
Meetings and the intervening gap between meetings was within the period prescribedunder Secretarial Standards applicable to the company.
9. BOARD EVALUATION
Pursuant to the provision of the companies Act 2013 Listing regulation along withother rules and regulation applicable if any the company has carried out the annualperformance evaluation of its own performance the director individually as well as theevaluation of the working of its committees A structured questionnaire was prepared aftertaking into consideration inputs received from the Directors covering various aspect ofthe board functioning such as adequacy of the composition of the board and its committeesboard culture execution and performance of specific duties obligation and governance. Aseparate exercise was carried out to evaluate the performance of the individual directorincluding the Chairman of the Board who were evaluated on parameter such as level ofengagement and contribution independence of judgment Safeguarding interest of thecompany and its minority shareholders etc. The performance evolution of IndependentDirector was carried out by entire board. The performance evolution of the chairman andnon-Independent Director was carried out by the Independent Director who also reviewed theperformance of the secretarial Department. The Director expresses their satisfaction withthe evaluation process.
10. COMPANY POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The policy of the company on Director's appointment and remuneration including criteriafor determining qualification positive attributes independence of Director and othermatters provided under Sub section (3) 178 is explained in the corporategovernance report.
11. DETAILS OF REMUNERATION TO DIRECTORS :-
The remuneration paid to the Directors is in accordance with the recommendations ofNomination and Remuneration Committee formulated in accordance with Section 178 of theCompanies Act 2013 and any other re-enactment(s) for the time being in force.
The information relating to remuneration of Directors and details of the ratio of theremuneration of each Director to the median employee's remuneration and other details asrequired pursuant to section 197(12) of the Act read along with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given in Annexure.
12. DECLARATION BY INDEPENDENT DIRECTORS:-
Every Independent Director at the first meeting of the Board in which he participatesas a Director and hereafter at the first meeting of the Board in every Financial Yeargives a declaration that he meets the criteria of independence as provided under law.
13. COMMITTEES OF THE BOARD
Currently the Board has Six Committees :- the Audit Committee Nomination &Remuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee and Internal Complaints Committee Sexual Harassment Committee. AllCommittees except the Corporate Social Responsibility Committee Internal ComplaintsCommittee and Sexual Harassment Committee consist of Independent Directors.
(a) Audit Committee
The Board has constituted Audit Committee as required under Companies Act 2013. TheComposition of the Committee is as under:
The role of the Audit Committee shall include the following:
1. Oversight of my Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statements are correct sufficient andcredible;
2. Recommending to the Board the appointment re-appointment and if required thereplacement or removal of the statutory auditor and the fixation of audit fees;
3. Approval of payment to statutory auditors for any other services rendered by thestatutory auditors;
4. Reviewing with the management the annual financial statements and auditor'sreport thereon before submission to my Board for approval with particular reference to:
(a) Matters required to be included in the Director's Responsibility Statement to beincluded in my Board's report in terms of clause (c) of sub-section 3 of section 134 ofthe Companies Act;
(b) Changes if any in accounting policies and practices and reasons for the same;
(c) Major accounting entries involving estimates based on the exercise of judgment bymanagement;
(d) Significant adjustments made in the financial statements arising out of auditfindings;
(e) Compliance with listing and other legal requirements relating to financialstatements;
(f) Disclosure of any related party transactions; and (g) Qualifications in the draftaudit report.
- Reviewing with the management the quarterly financial statements before submissionto my Board for approval;
- Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document / prospectus /notice and the report submitted by the monitoring agency monitoring the utilization of -proceeds of a public or rights issue and making appropriate recommendations to my Boardto take up steps in this matter;
- Reviewing and monitoring the auditor's independence and performance andeffectiveness of audit process;
- Approval or any subsequent modification of transactions of the listed entity withrelated parties;
- Scrutiny of inter-corporate loans and investments;
- Valuation of undertakings or assets of the listed entity wherever it is necessary;
- Evaluation of internal financial controls and risk management systems;
- Reviewing with the management performance of statutory and internal auditorsadequacy of the internal control systems;
5. Reviewing with the management performance of statutory and internal auditorsand adequacy of the internal control systems;
6. Reviewing the adequacy of internal audit function if any including thestructure of the internal audit department staffing and seniority of the official headingthe department reporting structure coverage and frequency of internal audit;
7. Discussion with internal auditors any significant findings and follow upthereon;
Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board;
8. Discussion with statutory auditors before the audit commences about the natureand scope of audit as Ill as post-audit discussion to ascertain any area of concern;
9. To look in to the reasons for substantial defaults in the payment to thedepositors debenture-holders shareholders (in case of non-payment of declared dividends)and creditors;
10. To review the functioning of the Whistle Blower mechanism incase the same is existing;
11. Approval of appointment of CFO (i.e. the whole-time Finance Director or anyother person heading the finance function or discharging that function) after assessingthe qualifications experience & background etc. of the candidate.
12. Carrying out any other function as is mentioned in the terms of reference ofthe Audit Committee.
(b) Nomination and Remuneration Committee
The Board has constituted Nomination and Remuneration Committee as required underCompanies Act 2013. The Composition of the Committee is as under:
In terms of the provisions of Section 178(3) of the Companies Act 2013 the Nominationand Remuneration Committee is responsible for formulating the criteria for determining thequalifications attributes and Independence of a Director. The Nomination and RemunerationCommittee is also responsible for recommending to the Board a policy relating to theremuneration of the Directors Key Managerial Personnel and Senior Management. In linewith the requirement the Board has adopted a Nomination and Remuneration Policy forDirectors Key Managerial Personnel and Senior Management which is as follows.
Objectives of the Policy
The objectives of this policy are as detailed below:
To formulate the criteria for determining qualifications competencies positiveattributes and independence for appointment of a Director (Executive / Non-Executive) andrecommend to the Board policies relating to the remuneration of the Directors KeyManagerial Personnel and other employees.
The policy also addresses the following items: Committee member qualifications;Committee member appointment and removal; Committee structure and operations; andCommittee reporting to the Board.
To formulate the criteria for evaluation of performance of all the Directors on theBoard;
To devise a policy on Board diversity; and
Identifying persons who are qualified to become Directors and who may be appointed insenior management in accordance with the criteria laid down and recommend to the board ofDirectors their appointment and removal.
Whether to extend or continue the term of appointment of the independent director onthe basis of the report of performance evaluation of independent Directors.
To lay out remuneration principles for employees linked to their effort performanceand achievement relating to the Company's goals.
- The Company's remuneration policy is driven by the success and performance of theindividual employees and the Company. Compensation philosophy is to align Directors andNitiraj Minds compensation with my business objectives so that compensation is used as astrategic tool that helps us recruit motivate and retain highly talented individuals whoare committed to my core values. I believe that my compensation programs are integral toachieving my goals. Through its compensation program the Company endeavors to attractretain develop and motivate a high performance workforce. The Company follows acompensation mix of fixed pay benefits and performance based variable pay. Individualperformance pay is determined by business performance of the Company. The Company paysremuneration by way of salary benefits perquisites and allowances (fixed component) andperformance incentives commission (variable component) to its Chairman Managing Directorand other Executive Directors. Annual increments are decided by the Nomination &Remuneration Committee within the salary scale approved by the Board and Shareholders.
(b) Stakeholder Relationship Committee:-
The Board has constituted Stakeholder Relationship Committee as required underSecurities Exchange Board of India (Listing obligations and Disclosure Requirements)Regulations 2015 ("Regulations").
The Composition of the Committee is as under:
Set forth below are the terms of reference of my Stakeholders Relationship Committee.
1. Considering and resolving grievances of shareholders debenture holders and othersecurity holders;
2. Redressal of grievances of the security holders of my Company including complaintsin respect of transfer of shares non-receipt of declared dividends balance sheets of myCompany etc.;
3. Allotment of Equity Shares approval of transfer or transmission of equity sharesdebentures or any other securities;
4. Issue of duplicate certificates and new certificates on split/consolidation/renewaletc.
5. Overseeing requests for dematerialization and re-materialization of shares; and
6. Carrying out any other function contained in the equity listing agreements as andwhen amended from time to time.
Investor Grievance Redressal Policy
The Company has adopted an internal policy for Investor Grievance handling reportingand solving.
14. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177(10) of the Companies Act 2013.Employees can raise concerns regarding any discrimination harassment victimization anyother unfair practice being adopted against them or any instances of fraud by or againstyour Company. Any incidents that are reported are investigated and suitable action takenin line with the Whistle Blower Policy.
15. RISK MANAGEMENT POLICY
The Company has formulated a Risk Management Policy for dealing with different kinds ofrisks which it faces in day to day operations of the Company. Risk Management Policy ofthe Company outlines different kinds of risks and risk mitigating measures to be adoptedby the Board.
The Company has adequate internal control systems and procedures to combat the risk.The Risk management procedure will be reviewed by the Audit Committee and Board ofDirectors on time to time basis.
16. POLICY ON PRESERVATION OF THE DOCUMENTS
The Company has formulated a Policy pursuant to Regulation 9 of the Securities ExchangeBoard of India (Listing obligations and Disclosure Requirements) Regulations 2015("Regulations") on Preservation of the Documents to ensure safekeeping of therecords and safeguard the Documents from getting manhandled while at the same timeavoiding superfluous inventory of Documents.
17. POLICY ON CRITERIA FOR DETERMINING MATERIALITY OF EVENTS
The Policy is framed in accordance with the requirements of the Regulation 30 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (Regulations).
The objective of the Policy is to determine materiality of events or information of theCompany and to ensure that such information is adequately disseminated in pursuance withthe Regulations and to provide an overall governance framework for such determination ofmateriality.
18. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment free workplace forevery individual working in premises and always endeavours to create and provide anenvironment that is free from discrimination and harassment including sexual harassmentDuring the year ended 31st March 2019 the Company has not received anycomplaint pertaining to sexual harassment. In order to prevent Sexual Harassment of Womenat Workplace a new act "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" has been notified on 09th December2013. Under the said Act every Company is required to set up an Internal ComplaintsCommittee to look into complaints relating to sexual harassment at work place of any womenemployee.
The Company has adopted "Anti-Sexual Harassment Policy" constituted"Redressed Committee" as required under section 4 (1) of Sexual harassment ofwomen at work place (prevention prohibition and redressal) Act 2013.During the yearunder review no complaint of harassment at the workplace was received by the Committee.
19. AUDITORS :
a. Statutory Auditors:-
M/s. P. D. Dalal& Co Chartered Accountants Mumbai Firm Registration Number102047W were reappointed as Statutory Auditors of the Company in the Annual GeneralMeeting held on 26th September 2018 to hold office until the conclusion of theupcoming Annual General Meeting. It has been recommended to re-appoint M/s. P. D. Dalal& Co. Chartered Accountants as Statutory Auditors of the Company until theconclusion of the forthcoming next Annual General Meeting of the Company
In this regard the Company has received certificate from the Auditors to the effectthat if they are appointed it would be in accordance with the provisions of section 141 ofthe Companies Act 2013.
Accordingly proposal for their re-appointment as Statutory Auditors is being placedbefore the shareholders for approval at the 19th Annual General Meeting.
b. Secretarial Auditors:
M/s. Piyush Wani and Associates Nandurbar Firm of Practicing Company Secretarieshaving Membership No. 46049 and Certificate Practice Number 19225 were appointed asSecretarial Auditors of the Company as per provisions of Section 204 of the Companies Act2013 and Rules made there under for the Financial Year 2019-20. The Secretarial AuditReport for the Financial Year 2018 - 19 form part of the Annual Report as Annexure to theBoard Report. As the Board is satisfied with the performance of these SecretarialAuditors the Board proposes to appoint them as Secretarial Auditors for the FinancialYear 2019-20 also.
20. AUDITORS' REPORT
Statutory Audit Report:-
M/s. P. D. Dalal and Co. Chartered Accountants Mumbai Firm Registration Number102047W have issued their Report for the Financial Year ended 31st March 2019.
There is one qualification reservation adverse remark or disclaimer by the StatutoryAuditors in their report.
According to Note 2A(g) on the Significant Accounting Policies the accounting ofprovision of Gratuity Liability and Leave Encashment Liability is not recorded fully andthus is not in accordance with Accounting Standard 15 on "Employee Benefits"issued by the Institute of Chartered Accountants of India.
Clarification: - The Company has started making provision from current year inthe books of accounts as reported to board by the company official.
Disclosure about Cost Audit
The Central Government has not prescribed the maintenance of Cost records under section148(1) of the Companies Act 2013 for any of the services rendered by the Company.
MANAGEMENT DISCUSSION ANALYSIS:-
Forward looking statement
Statements in this Management Discussion and Analysis of Financial Condition andResults of Operations of the Company describing the Company's objectives expectations orpredictions may be forward looking within the meaning of applicable securities laws andregulations. Forward looking statements are based on certain assumptions and expectationsof future events.
The Company cannot guarantee that these assumptions and expectations are accurate orwill be realized. The Company assumes no responsibility to publicly amend modify orrevise forward looking statements on the basis of any subsequent developmentsinformation or events. Actual results may differ materially from those expressed in thestatement. Important factors that could influence the Company's operations include changesin government regulations tax laws economic developments within the country and suchother factors globally.
The following discussions on our financial condition and result of operations should beread together with our audited consolidated financial statements and the notes to thesestatements included in the annual report. Unless otherwise specified or the contextotherwise requires all references herein to "we" "us""our" "the Company" "Nitiraj" are to Nitiraj EngineersLtd.
At the global level world gross product (WGP) is forecast to expand at a steady paceof 3.0 per cent in 2018 and 2019. Developing economies remain the main drivers of globalgrowth. In 2017 East and South Asia accounted for nearly half of global growth as bothregions continue to expand at a rapid pace. The Chinese economy alone contributed aboutone-third of global growth during the year. The recent acceleration in WGP growth from apost-crisis low of 2.4 per cent in 2016 stems predominantly from firmer growth in severaldeveloped economies. However per capita incomes will stagnate or grow only marginally in2019 in several parts of Africa Western Asia and Latin America and the Caribbean. Evenwhere per capita growth is strong economic activity is often driven by core industrialand urban regions leaving peripheral and rural areas behind.
Measurement techniques have been of great significance since the start of humancivilization. In the 19th century industrial revolution brought a rapid development innew measurement techniques and instruments to meet the needs of industrialized productiontechniques. The market for electronic weighing scales likely to witness a substantialgrowth owing to the constant need for determining exact weight. The global electronicweighing scales market was valued at US$ 4.85 Bn in 2017 and expected to expand at a CAGRof 4.8% during the forecast period from 2018 to 2026.
According to recently published research conducted by a leading international marketresearch company Global Research & Data Services the expansion of the globalweighing machine industry is forecast to reach 3.3% p.a. in the coming years. Between 2008and 2014 the market increased with an average annual growth of 6.7%. Currently personalweighing machines and household scales account for 26.0% of the global demand while theremaining market share is divided between scales for continuous weighing of goods onconveyors (3.8%) constant weight scales (12.0%) other weighing machines (capacity lessthan 30 kg) (17.9%) other weighing machines (capacity 30 - 5000 kg) (14.2%) otherweighing machines (5.0%) and parts for weighing machines (21.1%).
China Germany Japan the United Kingdom and the United States represent the largestweighing machine markets while the strongest annual growth is forecast to occur inPhilippines (10.4%) Bolivia (9.9%) Ecuador (7.9%) the United States (6.5%) andAzerbaijan (6.1%).
The Economic Survey 2017-18 forecasts a growth rate of 7 to 7.5 per cent for FY19 ascompared to the expected growth rate of 6.75 per cent in FY18. Focus on privateinvestments and exports two truly sustainable engines of economic growth will be crucialin improving the climate for rapid economic growth.
The Gross Value Added (GVA) at basic current prices from the manufacturing sector inIndia grew at a CAGR of 4.34 per cent during FY12 and FY18 as per the second advanceestimates of annual national income published by the Government of India. DuringApril-September 2018 GVA from manufacturing at current prices grew 14.8 per centyear-on-year to Rs 138.99 trillion (US$ 198.05 billion). Under the Make in Indiainitiative the Government of India aims to increase the share of the manufacturing sectorto the gross domestic product (GDP) to 25 per cent by 2022 from 16 per cent and tocreate 100 million new jobs by 2022. Business conditions in the Indian manufacturingsector continue to remain positive. India is expected to become the fifth largestmanufacturing country in the world by the end of year 2020.
The total production in industrial electronic and control instrumentation is showinggrowth rate every year. This product requires a good marketing set up duly backed by aftersales service facilities. If the price of the weighing scales is brought down and goodaftersales facility made available there will be enough demand for this item.
About Nitiraj Engineers Ltd
Established in 1989 Nitiraj Engineers Ltd. is one of the leading manufacturers of widerange of Electronic Weighing Scales and Systems Currency Counting Machines and ElectronicFare Meters catering to both industrial and domestic consumption. These products areclassified according to their applications and utilities in the categories of IndustrialCommercial Jewellery Healthcare Household and Automobile. The Company supplies machinesto various state governments under Child Growth Monitoring Systems (CGMS) program. Thesemachines have advanced technology support in form of data collection plotting MIS anddissemination.
The Company has a sophisticated state-of-the-art facility located at Parwanoo inHimachal Pradesh for continuous research stringent quality control and consistentproduction with a capacity to produce more than one lakh scales per annum. The productsare supplied under brand name PHOENIX' through a well-connected sales and servicenetwork of 15 branches in the states of Chhattisgarh Maharashtra and Odisha and over 450dealers across India as well as abroad. The Company is ISO 9001:2015 certified and hasmore than one million customers. The Company caters to customers' evolving needseffectively with a team of qualified and experienced engineers equipped with modernfacilities are engaged in designing and developing electronic hardware and software. TheCompany has a well-equipped Research & Development Department and Corporate Officesituated at Dhule Maharashtra.
The consolidated performance of the Company for the financial year ended March 31st2019 is as follows:
Total revenue from operations at Rs. 53.88 crore for the year ended March 31 2019 asagainst Rs. 38.83 crore for the corresponding previous period an increase of 39% mainlydriven by increase in sale of number of machines during the year from 109215 in FY18 to24615 in FY19.
The EBIDTA (earnings before interest depreciation and tax excluding other income) wasRs. 8.66 crore for the year ended March 31 2019 as against Rs. 3.77 crore for thecorresponding previous period an increase of 130%.
EBITDA margins increased by 637 basis points to 16.08% in FY19 from 9.71% in FY18mainly on account of higher capacity utilization and operational efficiencies.
Net Profit was at Rs. 6.02 crore in FY19 as against Rs. 3.04 crore in FY 18 YoY growthof 98%
Net Profit margin increased by 333 basis points to 11.17% in FY19 from 7.84% in FY18
EPS grew by 98% to Rs. 7.34 in FY19 from Rs. 3.71 in FY18
RESOURCES AND LIQUIDITY
As on March 31 2019 the consolidated net worth stood at Rs. 66.83 crore.
The cash and cash equivalents at the end of March 31 2019 were Rs. 1.60 crore.
Segment wise Business Performance
The Company is operating in five broad segments i.e. Electronic Weighing Scales andSystems Electronic Currency Counting Machines and Digital Fare Meters Home & HotelAutomation and Mechanical Scales. The diverse product portfolio caters to various sectors- industrial range commercial range jewellery range healthcare range household rangeautomobile range and home and hotel.
Revenue share of five broad segments are stated below:
ACHIEVEMENTS IN BUSINESSES DURING THE YEAR:
RISKS AND CONCERNS
Like every business the company faces risks both internal and external in theundertaking of its day-to-day operations and in pursuit of its longer-term objectives. Adetailed policy drawn up and dedicated risk workshops are conducted for each businessvertical and key support functions wherein risks are identified assessed analyzed andaccepted / mitigated to an acceptable level within the risk appetite of the organization.The risk registers are also reviewed from time to time.
The Company faces the following Risks and Concerns:
To manage its credit exposure Nitiraj has determined a credit policy with credit limitrequests and approval procedures. Company does its own research of client's financialhealth and project prospects before bidding for a project. Timely and rigorous process isfollowed up with clients for payments as per schedule. The company has suitablystreamlined the process to develop a focused and aggressive receivables management systemto ensure timely collections.
Interest Rate Risk
The Company has judiciously managed the debt-equity ratio. It has been using a mix ofloans and internal cash accruals. The Company has well managed the working capital toreduce the overall interest cost.
This risk arises from more players wanting a share in the same pie. Like in most otherindustries opportunity brings with itself competition. We face different levels ofcompetition in each segment from domestic as well as multinational companies. The Companyhas created strong differentiators in project execution quality and delivery which makeit resilient to competition. Furthermore the Company continues to invest in technologyand its people to remain ahead of the curve. A strong stable client base consisting oflarge and mid-sized corporations further helps to insulate the Company from this risk. Wecounter this risk with the quality of our infrastructure our customer-centric approachand our ability to innovate customer specific solutions focusing on pricing andaggressive marketing strategy disciplined project executions coupled with prudentfinancial and human resources management and better control over costs. Thus we do notexpect to be significantly affected by this risk.
Input Cost Risk
Our profitability and cost effectiveness may be affected due to change in the prices ofraw materials power and other input costs. Some of the risks that are potentiallysignificant in nature and need careful monitoring are Raw Materials prices availabilityof Power etc.
This risk refers to our liability arising from any damage to equipment life and thirdparties which may adversely affect our business. The Company attempts to mitigate thisrisk through contractual obligations and insurance policies.
Huge potential in marketing of specialised weighing scales for Infant and Child carerun by Aanganwadis and other Government establishments.
Demand of weighing scale systems spurred by high growth in retail and logistics sector.
Growth in financial sector and preference for automated currency counting and detectionmachines
Competition from local and multinational players Execution risk Regulatory changesInput Cost risk Attraction and retention of human capital Technological Advancements
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The Company implemented proper and adequate systems of internal control to ensure thatall assets are safeguarded and protected against loss from any unauthorized use ordisposition and all transactions are authorized recorded and reported correctly. TheCompany also implemented effective systems for achieving highest level of efficiency inoperations to achieve optimum and effective utilization of resources monitoring thereofand the compliance with provisions all laws including the Companies Act 2013 ListingAgreement directions issued by the Securities and Exchange Board of India labour lawstax laws etc. It also aimed at improvement in financial management and investment policy.The System ensures appropriate information flow to facilitate effective monitoring.
The internal audit system also ensures formation and implementation of corporatepolicies for financial reporting accounting information security project appraisal andcorporate governance. A qualified and independent Audit Committee of the Board ofDirectors also reviews the internal control system and its impacts on improvement ofoverall performance of the Company.
The Company's HR philosophy is to establish and build a high performing organizationwhere each individual is motivated to perform to the fullest capacity: to contribute todeveloping and achieving individual excellence and departmental objectives andcontinuously improve performance to realize the full potential of our personnel. As onMarch 31 2019 Company is giving direct employment to 297 employees. Industrial relationsare cordial and satisfactory.
The Company is a leading manufacturer of wide range of Electronic Weighing Scales andSystems Currency Counting Machines and Electronic Fare Meters under the brand namePHOENIX' that adhere to high quality and precision. The Company is in process ofsetting up a new eight-acre facility in Dhule Maharashtra with robotic assembly lines andutilizes maximum 3% of imported raw materials for production supporting government'sinitiative of Make in India.
Success of any business depends upon quality of the products and Nitiraj with itscontinual focus on high quality product development timely execution & delivery hasgained trust and confidence of its customers as the Company motto "Quality product atreasonable price" also emphasizes on the same. The Company conducts regular qualitychecks for raw materials as well as finished products. The R & D team carries outregular research and analysis along with client studies as to understand any rapid changein the customers' expectations on account of changes in technology or introduction of newproduct enabling the Company to be at par with international players so that there is anongoing innovation which is reflected in all the products.
Electronic weighing scales have an important application in the government programsconcerning child development and welfare generally administered by Ministry of Women andChild Development (MoWCD). At the central level out of budgetary allocation to theMinistry a major amount is spent on ICDS program. ICDS Integrated Child DevelopmentServices (ICDS) is a welfare programmed by Government of India which provides foodpre-school education and primary healthcare to children under 6 years of age and theirmothers. The Company is already supplying machines to various state governments under CGMSprogram. These machines have advanced technology support in form of data collectionplotting MIS and dissemination. With the help of technology the task of record keepingplotting data management and reporting can be handled by the weighing machine systemsitself. This provides the field staff and supervisory staff to focus on actual actionpoints to achieve objectives of CGMS and ICDS rather than spending time on datamanagement. We expect the demand of this segment for the Company to sustain and grow inthe coming years.
Existing marketing setup consists of Branches and Dealers which cater to direct salesInstitutional sales including Government supplies Exports and good after-sales service.The Sales & Marketing department estimates the sales of various products and reviewsthe performances through MIS Reports.
The Company intends to focus on following marketing strategies: Increasing ourGeographical reach by entering new States
Appointment of additional Dealers & Agents in developing markets
Increasing our participation in local trade fairs exhibitions and other such events
Enhancing Brand Image through increased expenditure on advertisements and otherpromotional activities.
Based on the strengths and dedicated management team the Company believes that it iswell positioned to take advantage of the immense opportunities available for growth of theCompany.
21. CREDIT & GUARANTEE FACILITIES :-
The Company has been availing secured loans overdraft facilities and bank guaranteefacilities from HDFC Bank Limited from time to time for the business requirements.
22. INTERNAL AUDIT CONTROLS AND THEIR ADEQUACY
The Company has a proper and adequate system of internal controls commensurate withthe size scale and complexity of its operations. This ensures that all transactions areauthorized recorded and reported correctly and assets are safeguarded and protectedagainst loss from unauthorized use or disposition. In addition there are operationalcontrols and fraud risk controls covering the entire spectrum of internal financialcontrols.
To maintain its objectivity and independence the Internal Audit function reports to theChairman of the audit committee of the Board and to the Chairman and Managing Director.
The internal Audit department monitors and evaluate the efficiency and adequacy of theinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit functions process owner undertake corrective actions in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the audit committee of the Board.
Adequacy of internal financial controls with reference to the financial statements
The Company has internal Auditors and the Audit Committee constituted are in place totake care of the same. During the year the Company continued to implement theirsuggestions and recommendations to improve the control environment. Their scope of workincludes review of processes for safeguarding the assets of the Company review ofoperational efficiency effectiveness of systems and processes and assessing the internalcontrol strengths in all areas. Internal Auditors findings are discussed with the processowners and suitable corrective actions taken as per the directions of Audit Committee onan ongoing basis to improve efficiency in operations.
23. SETTING UP OF NEW FACTORY UNIT
The Company has started new manufacturing set-up at Companies Corporate Office at CITYSURVEY No. 496 A/3 4 BEHIND GURUDWARA DHULE 424001 during financial year 2018-19.
Also company is going to set up new manufacturing unit at Plot No. J25 J26 MIDCAwadhan Dhule-424006 in 8 Acre Land construction work is already started total area ofplaned construction will be 129000 sq. ft. approx.
24. CORPORATE GOVERNANCE
Your Company has been complying with the principles of good Corporate Governance overthe years. In compliance with Regulation 34 of the SEBI (LODR) Regulations 2015 aseparate report on Corporate Governance forms an integral part of this report asAnnexures.
The Company recognizes and embraces the importance of a diverse board in its success.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity race and gender which will help us retain our competitive advantage.
25. DETAILS OF ASSOCIATES
The Company has following associated Company as per accounting standard 23 of ICAI. HYPERDRIVE INFORMATION TECHNOLOGIES PRIVATE LIMITED (CIN U72200KA2005PTC036535) as theholding of the company directly by way if holding is exceeding 25% of the Share Holdingand also the same is disclosed in Part B of Annexure and also in related party as per AS18 of the ICAI Act.
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE :.
There were no significant and material Orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
27. DEPOSITS FROM PUBLIC
The Company has not accepted any Deposits within the ambit of Section 73 of theCompanies Act 2013 and The Companies (Acceptance of Deposits) Rules 2014.
28. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
29. CONSOLIDATED FINANCIAL STATEMENTS:
In accordance with Accounting Standard AS-21 the Consolidated Financial Statements arefurnished herewith and form part of this Report and Accounts. The same is separatelyattached with Audit Report.
All the assets of the Company wherever necessary and to the extent required have beenadequately insured.
31. EMPLOYEE RELATIONS:
The relationship with the staff and workers continued to be cordial during the entireyear. The Directors wish to place on record their appreciation of the valuable work doneand co-operation extended by them at all levels. Further the Company is taking necessarysteps to recruit the required personnel from time to time.
32. STATUS OF UTILIZATION OF PROCEEDS RAISED FROM IPO :
The Company has raised an amount of Rs.2200.80 Lacs through Initial Public Offer bygetting itself listed on the Emerge Platform of National Stock Exchange of India Limited.The table below depicts the status of the utilization of the proceeds raised by theCompany from IPO:
Pursuant to the provisions of clause 43 of the listing agreement with the exchange thedisclosure is as follows:
The utilization of the issue proceeds as on 31st March 2019 is as under:
Utilization of money raised through Initial Public Offer. The utilization of the issueproceeds as on 31st March 2019 is as under: Utilization planned as perprospectus [Amt. Rs .Lacs]
33. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered into with the related parties as defined under the CompaniesAct 2013 during the financial year were in the ordinary course of business and on arm'slength pricing basis as per the management representation certificate provided to auditorof the company and do not attract the provisions of Section 188 of the Companies Act2013. There are no materially significant transactions with the related parties during thefinancial year which were in conflict with the interest of the Company and henceenclosing of form AOC- 2 is required Suitable disclosure as required by the AccountingStandards (AS 18) has been made in the notes to the Financial Statements.
Company has obtained ISO 9001:2015.
35. PARTICULARS OF EMPLOYEES
There are no employees drawing remuneration in excess of the limits prescribed underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
Information as required under the provisions of Rules 5(2) & 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are set out in Annexuresto the Directors' Report.
36. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
There are no material changes and commitments affecting the financial position of theCompany from the financial year ended 31st March 2019 to the date of signingof the Director's Report except that CS Preeti Bhala appointed as Company Secretary inplace of CS Ankush Patil.
37. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there are no funds which Ire required to be transferred to InvestorEducation and Protection Fund (IEPF).
38. CORPORATE SOCIAL RESPONSIBILITY
The key philosophy of all CSR initiatives of the Company is guided by three corecommitments of Scale Impact and Sustainability. Your Company's CSR Policy Statement andAnnual Report on the CSR Activities undertaken during the Financial Year ended 31stMarch 2018 in accordance with Section 135 of the Companies Act 2013 and Companies(Corporate Social Responsibility Policy) Rules 2014 is annexed to this report asAnnexures. As Your Company is not exceeding a limit for CSR for FY 2018-2019 No SuchProvision is required and made during the Current Year.
INSIDER TRADING REGULATIONS
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations 1992read with SEBI (Prohibition of Insider Trading) Regulations 2015 as amended from time totime the code of conduct for prevention of insider trading and the Code for CorporateDisclosures ("Code") as approved by the Board from time to time are in forceby the Company. The objective of this Code is to protect the interest of shareholders atlarge to prevent misuse of any price sensitive information and to prevent any insidertrading activity by dealing in shares of the Company by its Directors designatedemployees and other employees. The Company also adopts the concept of Trading WindowClosure to prevent its Directors Officers designated employees and other employees fromtrading in the securities of NITIRAJ ENGINEERS LIMITED at the time when there isunpublished price sensitive information.
39. ENHANCING SHAREHOLDERS VALUE :
Your Company believes that its Members are among its most important stakeholders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building orgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions Positively impact the socioeconomic and environmentaldimensions and contribute to sustainable growth and development.
40. OUR VISION
To be a most adorable global partner to all the stake holders in every aspects ofweighing manufacturing.
41. OUR MISSION :
By offering quality bales & premium weighing machines and timely service embeddedwith value driven culture resulting in finding new avenues to surpass global standards inevery activity that needs to nurture the society to the better tomorrow.
42. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 an Extract of theAnnual Return as per Section 92 (3) of the Companies Act 2013 and Rule 12(1) of theCompanies(Management and Administration) Rules 2014 in the prescribed Format MGT-9 isappended as Annexure - 7 to the Board's Report.
43. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 Board of Directors of theCompany
(a) In preparation of the Annual Accounts for the financial year ended 31st March 2019the applicable Accounting Standards have been followed along with proper explanation tomaterial departures;
(b) The Directors have selected Accounting Policies consulted the Statutory Auditorsand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atend of the financial year and of the profit or loss of the Company for that period.
(c) The Directors have taken proper and sufficient care to the best of their knowledgeand ability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities and
(d) The Directors have prepared the Annual Accounts of the company on a going concernbasis;
(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; and
(f) There is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.
44. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO :-
The particulars as prescribed under Sub Section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014.
A. Conservation of Energy:
The Company's core activity is Production of Weighing Scales and related which is coreconsuming sector. The Company is making every effort to conserve the usage of electricity.Also in the year April 2016 Company has installed solar Electricity Plant in its CorporateOffice Dhule by which Company is trying to save electricity
B Technology Absorption (R&D Adaptation and Innovation) :
1. Efforts in brief made towards technology absorption adaptation andinnovation:
(i) Continuous research to upgrade existing products and to develop new products andservices.
(ii) To enhance its capability and customer service the Company continues to carry outR & D activities in house.
2. Benefits derived as a result of the above efforts :
(i) Introduction of new and qualitative products.
(ii) Upgrade of existing products.
3. Future plan of action:
Nitiraj will continue to invest in and adopt the best processes and methodologiessuited to its line of business and long-term strategy. Training employees in the latestappropriate technologies will remain a focus area. The Company will continue to leveragenew technologies and also on the expertise available.
B. Foreign Exchange Earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual Outflows
Your Directors express their sincere gratitude for the assistance and co-operationextended by Banks Government Authorities Shareholders Suppliers and Customers. YourDirectors also wish to place on record their appreciation of the contribution made by theemployees at their levels towards achievements of the Company's goals.
PARTICULARS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5 OFTHE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
I. The ratio of the remuneration of each director to the median employee'sremuneration for the financial year and such other details as prescribed is as givenbelow:
II. The percentage increase in remuneration of each director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear :
III. The number of permanent employees on the rolls of company: 292
IV. If remuneration is as per the remuneration policy of the company: Yes
(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement of
Subsidiaries/Associate Companies/Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures.
FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arm's length transaction under third provisothereto.
1. Details of contracts or arrangements or transactions not at Arm's length basis.