PATELS AIRTEMP (INDIA) LTD. Ahmedabad.
Your Directors have pleasure in presenting herewith the 28th Annual Report togetherwith the Audited Standalone & Consolidated Financial Statements of the Company for theyear ended 31st March 2020.
FINANCIAL RESULTS (Standalone) (Rs in lakhs except EPS)
|Particulars ||Year ended on 31-03-2020 ||Year ended on 31-03-2019 |
|Revenue from Operations ||23741.90 ||15094.89 |
|Other Income ||187.81 ||79.27 |
|Total Income ||23929.71 ||15174.16 |
|Less: Depreciation & Amortisation Expenses ||289.00 ||259.85 |
|Finance Cost ||723.50 ||502.68 |
|Other Expenses ||21438.33 ||13359.85 |
|Total Expenses ||22450.83 ||14122.38 |
|Profit before Tax ||1478.88 ||1051.78 |
|Less :Tax Expenses ||348.37 ||320.13 |
|Net Profit for the year ||1130.51 ||731.65 |
|Total Comprehensive Income for the year ||1128.52 ||728.51 |
|Balance brought forward from previous year ||6641.23 ||6065.28 |
|Profit available for Appropriation ||7771.74 ||6796.93 |
|Less: Re-measurement benefit of defined Benefit plans ||2.00 ||3.14 |
|Less: Proposed Dividend ||126.76 ||126.76 |
|Less: Tax on Dividend ||26.05 ||25.80 |
|Less Transfer to General Reserve ||- ||- |
|Surplus carried forward to Balance Sheet ||7616.93 ||6641.23 |
|Earning Per Share of Rs. 10/- each (Rs.) ||22.30 ||14.43 |
STATE OF COMPANY'S AFFAIRS (STANDALONE)
The Company has earned total revenue from operations of Rs. 23741.90 lakhs during theyear ended on 31st March 2020 as against Rs. 15094.89 lakhs earned during the previousyear ended on 31st March 2019 a rise of 57.28 %. The Company has also earned otherincome of Rs. 187.81 lakhs during the year under review as against Rs. 79.27 lakhs earnedduring the previous year.
Out of the revenue from operations of Rs. 23741.90 lakhs earned by the Company duringthe year under review Rs. 23227.08 lakhs represents sale of products (Domestic &Export) Rs. 139.11 lakhs represents sale of Services (Processing Charges) and Rs. 375.71lakhs represents other operating revenues.
The Company has incurred total expenses of Rs. 22450.83 lakhs during the year ended on31st March 2020 as compared to Rs. 14122.38 lakhs incurred during the previous year endedon 31st March 2019.
The Company has earned the Profit before Tax of Rs. 1478.88 lakhs during the year endedon 31st March 2020 as compared to Rs. 1051.78 lakhs earned during the previous year endedon 31st March 2019 a rise of 40.60%.
The Company has earned Net Profit of Rs. 1130.51 lakhs for the year ended on 31stMarch 2020 after making Provision for total Tax Expenses of Rs. 348.37 lakhs and otheradjustments as compared to Net Profit of Rs. 731.65 lakhs earned by the Company duringthe previous year ended on 31st March 2019 a rise of 54.51 %.
After adding the Surplus in the Statement of Profit & Loss of Rs. 6641.23 lakhsbrought forward from the previous year to the profit of Rs. 1130.51 lakhs earned by theCompany during the year under review the total amount of Rs. 7771.74 lakhs is availablefor appropriation.
The Audited Standalone Financial Statements of the Company and all other documentsrequired to be attached thereto is put on the Company's website.
OVERALL IMPACT OF COVID-19 PANDEMIC
The operations of the Company were impacted on account of temporary shutdown of itsplant from 24th March 2020 following nationwide lockdown announced by the Government onaccount of Covid-19 global pandemic. However after seeking the required permission fromthe concerned authorities the Company has restarted its plant from 23rd April 2020 in aphased manner. The Company has taken all necessary measures from time to time to complywith the directions issued by the local authorities and state government to prevent andcontain the spread of corona virus including temporary shutdown of Its plant and officesduring the nationwide lockdown. The Company has made initial assessment of likely adverseimpact on business and financial risks and believes that the impact is likely to be shortterm in nature. The Company does not see any medium to long term risks in the Company'sability to continue as a going concern and meeting Its liabilities as and when they falldue. Further the Company has prepared cash flow projections assessed the impact onoperations and also assessed the recoverability of receivables inventories impairment ofits property plant & equipment using various internal and external information. Onthe basis of evaluation and having regard to current indicators of future economicconditions the Company expects to recover the carrying amount of these assets and doesnot anticipate any impairment to any of its financial and non-financial assets on a goingconcern basis.
EXPANSION UNDER NEW GREENFIELD PROJECT
During the year under review the Company has set up a new Greenfield project atVillage : Dudhai Taluka : Kadi Dist. Mehsana Gujarat with total capital outlay ofaround Rs.19.10 crores for dedicated manufacturing of Air Cooled Heat Exchanger / Air FinCooler in total land area of 44500 Sq. Mtr. New unit will be completely operational bythe end of the year 2020.
The Company is witnessing a steady flow of new orders and given the voluminous natureof the jobs handled by the Company as the major portion of the company's manufacturingprocess involves assembly of own manufactured / bought out components the existing spaceavailable at the Company's Rakanpur factory Dist. Gandhinagar Gujarat is proving to beinsufficient and hence the Company is constrained to take on lease/leave and licence basiscertain factory sheds for carrying out the assembly operations. By establishing a newGreenfield project the Company will create additional infrastructure required for thepurpose of taking care of a part of the production process and will primarily remove thespace constraints and the company will be in a position to carry out the assemblyoperations in a cost effective and efficient manner.
WHOLLY-OWNED SUBSIDIARY (WOS) (OVERSEAS SUBSIDIARY)
During the year under review Patels Airtemp (USA) Inc. became Wholly Owned Subsidiary(WOS) of the Company on 13th January 2020 by acquiring 100% Shares of Patels Airtemp(USA) Inc.
As on March 31 2020 the Company did not have any material unlisted subsidiary asdefined in Regulation 16 of SEBI Listing Regulations. Accordingly the requirement ofappointment of Independent Director of the Company on the Board of Directors of thematerial unlisted subsidiary companies as per Regulation 24 of SEBI Listing Regulationsdoes not apply.
The Company monitors performance of its Wholly Owned Subsidiary inter alia by theMinutes of Board Meetings of the said Wholly Owned Subsidiary are placed before theCompany's Board.
The Company has formulated a Policy for determining Material Subsidiaries. The Policyis put up on the Company's website and can be accessed at http://www.patelairtemp.com.
During the year under review there are no significant transactions and arrangementsentered into by the Wholly Owned Subsidiary of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the requirements of Section 129(3) read with Schedule III of the CompaniesAct 2013 and Rules made there under and applicable Indian Accounting Standards theConsolidated Financial Statements of the Company and its Wholly Owned Subsidiary namelyPatels Airtemp (USA) Inc. for the year ended on 31st March 2020 have been attached withthe Financial Statements of the Company. The Audited Consolidated Financial Statementsform part of the Annual Report.
The Audited Consolidated Financial Statements of the Company and all other documentsrequired to be attached thereto is put up on the Company's website. The FinancialStatements of the Wholly Owned Subsidiary as required are also put up on the Company'swebsite and can be accessed at http://www.patelairtemp.com.
These documents will also be available for inspection on all working days exceptSaturdays during business hours at the Company's Factory (Works) Registered Office ofthe Company.
A statement containing the salient features of the financial statements of theCompany's Wholly-Owned Subsidiary for the year ended 31st December 2019 and for theperiod from 1st January 2020 up to 31st March 2020 in the prescribed Form AOC-1 as perfirst proviso to sub-section (3) of Section 129 of the Companies Act 2013 and Rule 5 ofthe Companies (Accounts) Rules 2014 is attached herewith as per Annexure - A andforms an integral part of this Report.
As you aware that the Company is in engineering industry and is engaged inmanufacturing/fabricating tailor made machines and therefore the order book position ofsuch type of company can play pivotal role in the growth of the Company. Your Directorsare pleased to state that continuing the past trend the Company is having confirmedorders of about Rs. 360 Crores on hand as on 1st August 2020. Thus yourDirectors are quite bullish on repeating similar performance in future. Your Directors arecautious and making untiring efforts so as not to compromise on growth quality andprofitability of the Company.
CHANGE IN SHARE CAPITAL
There is no change in the Share Capital of the Company during the year under review.During the year under review the Company has not issued any shares.
The Directors have recommended dividend of Rs. 2.50 per share (@ 25 %) on 5070240Equity Shares of Rs. 10/- each of the Company for the Financial Year ended on 31st March2020 (2019-2020) as compared to Dividend of Rs. 2.50 per share (@ 25 %) declared for theprevious Financial Year ended on 31st March 2019. This will absorb Rs. 126.76 lakhs.
Pursuant to Finance Act 2020 dividend income will be taxable in the hands of theshareholders w.e.f. 1st April 2020 and the Company is required to deduct tax at source("TDS") from dividend paid to the Members at prescribed rates in the Income TaxAct 1961. In this regard more details have been included in the Notice of AGM includedin this Annual Report.
A resolution to that effect has been placed for the approval of the members at thisAnnual General Meeting of the Company and that the same when declared shall be paid tothe Members.
TRANSFER TO RESERVE
In view of above the Company has not transferred any amount to the General Reserve forthe year ended on 31st March 2020 and retain the entire amount of profits in the Profit& Loss Account.
MATERIAL CHANGES AND COMMITMENTS
In terms of Section 134(3)(l) of the Companies Act 2013 no material changes orcommitments affecting the financial position of the Company have occurred between the endof the financial year and the date of this Report except the overall impact of covid-19pandemic as referred to above. There has been no change in the nature of business of theCompany.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Company has not received any significant and material orders passed by theRegulators or Courts or Tribunals impacting the going concern status and Company'soperations in future.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company as on 31st March 2020 as requiredunder Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 and Rule 12 ofthe Companies (Management and Administration) Rules 2014 in the prescribed Form MGT-9is annexed herewith as Annexure - B to this Report.
As required under Section 134(3)(a) of the Act the extract of Annual Return in FormMGT-9 is put up on the Company's website and can be accessed athttp://www.patelairtemp.com.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
In terms of provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report has beenenclosed herewith as per Annexure C and forming part of the Directors'Report.
RECOGNITION OR AWARDS
Along with development of product design and product manufacturing application theCompany in its tenure of 45+ years continuously upgraded quality and product system byacquiring world's most recognized system like ISO 9001-2015 ASME (N - NPT U2 US-Stamps).
The Company's products have ASME (American Society of Mechanical Engineers-USA)"U" "U2" and "S" Stamp authorization. The Company is alsohaving "NB" and "R" Stamp. The Company is also a member of HTRI (HeatTransfer Research Inc U.S.A.) since 1992 for updating Heat Transfer Technology.
The Company is one of the very few organizations in world and one of only 3organizations in India to acquire ASME N - NPT Stamp for manufacturing of stringentnuclear application. The Company is having ISO 9001-2015 certification from TUV-SUD. Dueto "U"/ "U2"/ "S" and "N & NPT" Stampauthorization it is expected to improve the Quality of the products/equipment of theCompany and to achieve higher growth and profitability of the Company in future.
During the year under review Bank of Baroda and Axis Bank Ltd. have enhanced workingcapital facilities availing by the Company from Rs. 112 Crores to Rs. 169 Crores(increased by Rs. 57 Crores) under consortium arrangement.
The Company is also availing Bill Discounting facility to the extent of Rs. 7 Croresfrom HDFC Bank Ltd.
ACCEPTANCE OF DEPOSITS
During the year under review the Company has not accepted any deposits from the Publicand Members of the Company and therefore not required to comply with the requirement underthe Companies Act 2013 and the Rules made there under. As such no amount of principal orinterest was outstanding to the Public and Members of the Company as on March 31 2020 andthe Company is not required to furnish information in respect of outstanding depositsunder Non-banking Non-financial Companies (Reserve Bank) Directions 1966 and Companies(Accounts) Rules 2014.
During the year under review the Company has accepted deposits from the Directors ofthe Company which are exempted deposits under Rule 2(1)(c)(viii) of Companies (Acceptanceof Deposits) Rules 2014 subject to compliance of the provisions of the Companies Act2013 and the Rules made there under.
During the year under review the Relatives of the Directors also brought in unsecuredloan/deposits by way of contribution to bring additional long term funds as a part ofconditions imposed by Bank of Baroda on the Directors and their relatives while reviewingworking capital facilities to the Company vide its Letter No. NAVRAN/2018/05/92 dated 12thMarch 2018 which are exempted deposits under Rule 2(1)(c)(xiii) of Companies (Acceptanceof Deposits) Rules 2014.
Details of exempted deposits accepted and repaid by the Company including interest tothe Directors & their Relatives during the financial year 2019-2020 are mentioned inNote No. 31 (Relate Party information) of the Notes to the Standalone Financial Statementsattached with this Annual Report.
The Company has duly filed the required Form DPT-3 (Initial & Annual) regardingexempted deposits under MCA portal.
TRANSFER OF UNCLAIMED DIVIDEND TO IEPF
In terms of the provisions of Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 as amended during the year underreview the Company has transferred the amount of unclaimed/unpaid Dividend of Rs.184330 for the financial year 2011-2012 to IEPF established by the Central Governmentunder Section 124 & 125 of the Companies Act 2013 and Rules made there under.
Pursuant to provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason 28th September 2019 (date of the previous Annual General Meeting) on theCompany's website: http://www.patelairtemp.com.
TRANSFER OF SHARES TO IEPF DEMAT AUTHORITY ACCOUNT
Pursuant to the provisions of Section 124 and 125 of the Companies Act 2013 andInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 as amended the Company has during financial year 2019-2020 transferred tothe IEPF Authority 5062 Equity Shares of the face value of Rs. 10/- each belonging to 50Shareholders in respect of which dividend had remained unpaid or unclaimed for sevenconsecutive years or more from 2011-12 to 2017-18. Details of shares transferred to theIEPF Authority are available on the website of the Company. The said details have alsobeen uploaded on the website of the IEPF Authority and the same can be accessed throughthe link: www.iepf.gov.in. In accordance with the said IEPF Rules and its amendments theCompany had sent notices to all the Shareholders whose shares were due to be transferredto the IEPF Authority and simultaneously published newspaper advertisement. The votingrights on the shares transferred to IEPF Authority shall remain frozen till the rightfulowner claims the shares.
Members may note that the dividend and shares transferred to the IEPF can be claimedback by the concerned shareholders from the IEPF Authority after complying with theprocedure prescribed under the Rules.
The Company has duly appointed Company Secretary of the Company as Nodal Officer forthe purposes of verification of claims and coordination with Investor Education andProtection Fund Authority. The Company has duly filed all the required IEPF Forms with theauthorities.
Being a Listed Company the Company has taken necessary measures to comply with theprovisions of Listing Regulations regarding Corporate Governance as amended from time totime. A separate report on Corporate Governance for the year ended on 31st March 2020 isattached herewith as a part of this Annual Report viz Annexure - D. A certificatefrom Statutory Auditors of the Company regarding compliance of the aforesaid provisions ofCorporate Governance is obtained by the Company and annexed to the Corporate GovernanceReport. The Auditors' Certificate on Corporate Governance for the financial year 2019-2020does not contain any qualification reservation or adverse remark in respect of CorporateGovernance Report.
The Company has furnished to BSE Ltd. where the Shares of the Company are listedCorporate Governance Report for the Quarter/Half-year/Whole year during the financial year2019-2020 as placed before the Board as per various provisions of SEBI LODR.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the confirmation andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(C) and 134(5) of the Companies Act 2013 and confirm that :
(a) in the preparation of the annual accounts for the year ended 31st March2020 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been 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 the Company as at 31st March 2020 and of the profitof the Company for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors have prepared the annual accounts for the year ended on 31st March2020 on a going concern basis ;
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOAN GIVEN AND INVESTMENT MADE
Particulars of loan given and investment made by the Company in its Wholly OwnedSubsidiary (WOS) are provided in the Standalone Financial Statements of the Company(Please refer Note No. 41 to the Standalone Financial Statements).
RELATED PARTY TRANSACTIONS
Information on transaction with related party referred to under sub-section (1) ofSection 188 of the Companies Act 2013 in the prescribed Form AOC-2 is attached herewithviz Annexure - E and forming part of the Directors' Report pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014.
Transaction with related parties pursuant to the provisions of Listing Regulations aredisclosed in Note No. 31 of the Notes to the Standalone Financial Statements for the yearended on 31st March 2020 in the Annual Report as required by the Accounting Standard(AS) 18 and applicable Indian Accounting Standards issued by ICAI.
However there are no materially significant related party transactions made/enteredinto by the Company with its related parties including promoters directors or themanagement etc. that may have potential conflict with the interests of the Company atlarge.
During the year under review the Company has amended "Policy on Materiality ofRelated Party Transactions and Dealing with Related Party Transactions" related toentering into Related Party Transactions by the Company with Related Parties and uploadedthe same on the Company's website viz. http://www.patelairtemp.com.
All Related Party Transactions are placed before the Audit Committee as also to theBoard for approval. However the Company has not entered into any contract/ arrangement /transaction with related parties which could be considered material in accordance with theprovisions of Section 188 of the Companies Act 2013 and the Rules made there under andListing Regulations and as such no approval of the Shareholders require.
The Company has duly filed with BSE half-yearly on consolidated basis details ofRelated Party Transactions entered into by the Company and uploaded the said details onits web-site.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of the Companies Act 2013 and Rules made thereunder andArticles of Association Mr. Narayanbhai G. Patel (DIN: 00023107) Chairman &Whole-time Director and Mr. Narendra G. Patel (DIN: 00023205) Whole-time Director of theCompany shall retire by rotation as Directors of the Company at this Annual GeneralMeeting and being eligible offer themselves for reappointment for which necessaryresolutions have been incorporated in the notice of the meeting. The Board of Directorsrecommends re-appointment of Mr. Narayanbhai G. Patel and Mr. Narendra G. Patel asDirectors of the Company. The brief resume/details relating to the said Directors who areto be reappointed are furnished in the Notes to the Notice of the Annual General Meeting.
Smt. Veenaben B. Patel (DIN : 07131341) who was appointed as Independent Director ofthe Company holds office up to the conclusion of the ensuing 28th Annual General Meetingof the Company ("first term" in terms of Sections 149(10) of the Companies Act2013). The Company has received notice under Section 160 of the Companies Act 2013 from ashareholder of the Company proposing the reappointment of Smt. Veenaben
B. Patel as an Independent Woman Director of the Company not liable to retire byrotation for a second term of five years up to the conclusion of the 33rd Annual GeneralMeeting of the Company in the calendar year 2025. A brief profile of Smt. Veenaben B.Patel is given in the notice convening the 28th AGM for the reference of theShareholders. The Board of Directors taking into account the recommendation of theNomination and Remuneration Committee and on the basis of performance evaluation ofIndependent Directors has recommended the re-appointment of Smt. Veenaben B. Patel asIndependent Woman Director of the Company for the aforesaid term.
Mr. Narayanbhai G. Patel (DIN: 00023107) has been re-appointed as Whole-time Directorof the Company designated as "Chairman & Whole-time Director" for a furtherperiod of 3 years w.e.f. 20th May 2020 up to 19th May 2023 with payment of remunerationof Rs. 300000/- per month with perquisites and allowances as recommended and approved byNomination & Remuneration Committee and Board of Directors subject to the approval ofthe Shareholders at this Annual General Meeting for which necessary resolution has beenincorporated in the Notice of the Meeting seeking Members approval for the same.
Mr. Sanjiv N. Patel (DIN:02794095) has been re-appointed as Managing Director of theCompany for a further period of 3 years w.e.f. 20th May 2020 up to 19th May 2023 withpayment of remuneration of Rs. 300000/- per month with perquisites and allowances asrecommended and approved by Nomination & Remuneration Committee and Board ofDirectors subject to the approval of the Shareholders at this Annual General Meeting forwhich necessary resolution has been incorporated in the Notice of the Meeting seekingMembers approval for the same.
COMMITTEES OF DIRECTORS
The Board of Directors has the following Committees:
|1. Audit Committee (AC) |
|2. Nomination and Remuneration Committee (NRC) |
|3. Stakeholders' Relationship Committee (SRC) |
|4. Corporate Social Responsibility Committee (CSR) |
The details of various Committees of Directors constituted by the Board of Directorsunder various provisions of Companies Act 2013 and Rules made there under and ListingRegulations Meetings & Attendance terms of reference and other details are providedin the Corporate Governance Report annexed with the Directors' Report.
The composition of various Committees and their terms of references may be accessed onthe Company's website viz. http://www.patelairtemp.com.
The Board has carried out an evaluation of its own performance and that of itsCommittees and Directors and also Chairperson in terms of Section 134(3)(p) of theCompanies Act 2013 and Rules made there under and Listing Regulations. The Board hasapproved a policy (NRC Policy) for criteria of determining qualifications selectionappointment and remuneration of Directors KMP and Senior Management and the same has beenuploaded on the Company's web-site http:// www.patelairtemp.com.
A separate meeting of independent Directors for evaluation of the performance ofnon-independent directors performance of the Board as a whole and performance of theChairman is required to be held every year.
In view of above a separate meeting of Independent Directors was supposed to be heldon 30th March 2020 for which Agenda and Notes on Agenda were circulated toall Independent Directors of the Company vide Notice dated 17th March 2020.However due to out break of Novel Covid-19 Corona Virus the said meeting of IndependentDirectors could not be held on 30th March 2020.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy on appointment and remuneration of Directors KMP and other employees andother matters as required under Section 178(3) of the Companies Act 2013 is available onthe web-site of the Company viz. http://www.patelairtemp.com.
NUMBER OF BOARD MEETINGS
During the financial year 2019-2020 6 (Six) Board Meetings of the Company were held on22-5-2019 10-8-2019 30-8-2019 9-11-2019 28-11-2019 & 8-2-2020. The gap between twoBoard Meetings did not exceed 120 days as prescribed in the Companies Act 2013 andRegulation 17 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The Board Meetings were generally held at theFactory (Works) of the Company situated at Rakanpur Dist. Gandhinagar Gujarat.
The particulars of number of meetings held and attended by each Director are detailedin the Corporate Governance Report which forms part of this Report. Agenda of themeetings were prepared and all necessary papers were circulated to Members of the Board inadvance. Necessary disclosures were made by the Directors in the Board and CommitteeMeetings whenever required. The Company has complied with Secretarial Standards 1 (SS-1)related to Board and Committee Meetings of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134(3)(m) of the Companies Act 2013 read with the Rule 8(3)of the Companies (Accounts) Rules 2014 details relating to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure F attached herewith and forming part of the Directors' Report.
Business risk evaluation and management covering the business operations of theCompany is an ongoing process within the Company and the management reviewed frequentlyrisk assessment and to minimize them. The ultimate goal of risk management is thepreservation of physical and human assets of the organization for successful continuationof its operations. Pursuant to the provisions of Regulation 21 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 at present the Company is not required to constitute Risk Management Committee ofthe Directors of the Company.
CORPORATE SOCIAL RESPONSIBILITY
In terms of provisions of Section 135 of the Companies Act 2013 and Rules made thereunder a Committee of the Directors of the Company has been constituted as CorporateSocial Responsibility (CSR) Committee. CSR Committee has formulated a policy on theCorporate Social Responsibility measures to be undertaken by the Company as specified inSchedule VII to the Companies Act 2013 as amended from time to time. The Corporate SocialResponsibility Policy is available on the Company's web-site viz.http://www.patelsairtemp.com.
The Company has duly spent the required amount during the financial year ended on 31stMarch 2020 towards CSR activities. The Annual Report on CSR activities includingResponsibility Statement of the CSR Committee in terms of Section 135 of the CompaniesAct 2013 and the Rules framed there under is annexed herewith marked as Annexure - G.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed. The Company's internal controlsystem is commensurate with its size scale and complexities of its operations.
STATUTORY AUDITORS & AUDIT REPORT
M/s. Shah & Shah Associates Chartered Accountants Ahmedabad having FirmRegistration No. 113742W were appointed as Statutory Auditors of your Company at the 25thAnnual General Meeting held on 19th September 2017 for a term of five consecutive yearswhich is valid till 30th AGM of the Company. In accordance with the Companies AmendmentAct 2017 enforced on 7th May 2018 by the Ministry of Corporate Affairs the appointmentof Statutory Auditors is not required to be ratified at every Annual General Meeting.Accordingly no resolution has been proposed for ratification of appointment of Auditorsof the Company
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act2013 requiring disclosure in the Board's Report therefore no detail is required to bedisclosed under Section 134(3)(ca) of the Act.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
During the Financial Year 2019-20 the company has paid total fees of Rs. 299500/-including statutory audit fees taxation matters and for other services to M/s. Shah &Shah Associates Chartered Accountants Ahmedabad the Statutory Auditors of the Company.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Section 204 of the Companies Act 2013 and Rules made there under inter alia requiresevery Listed Company to annex with its Board Report a Secretarial Audit Report given by aCompany Secretary in Practice in the prescribed form. The Board appointed Mr. Punit LathPracticing Company Secretary Ahmedabad (Membership No. 26238 and COP No. 11139) as theSecretarial Auditor to conduct Secretarial Audit of the records of the Company for thefinancial year 2019-2020 and to submit his report to the Company. The Secretarial AuditReport for the financial year ended March 31 2020 is annexed herewith marked as Annexure H to this Report.
The Board at its meeting held on 8th February 2020 has re-appointed Mr. Punit Lathas Secretarial Auditor for conducting Secretarial Audit of the Company for the financialyear 2020-2021. The Company has received his written consent that the appointment is inaccordance with the applicable provisions of the Act and rules framed there under.
The Secretarial Audit Report for the financial year 2019-2020 does not contain anyqualification reservation or adverse remark. During the year under review theSecretarial Auditors had not reported any matter under Section 143(12) of the Acttherefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
The Company has also received Secretarial Compliance Report for the year ended 31stMarch 2020 from Mr. Punit Lath (Membership No. 26238 and COP No. 11139) PracticingCompany Secretary and duly filed with BSE Ltd. in respect of compliance with theprovisions of :
(a) the Securities and Exchange Board of India Act 1992 ("SEBI Act") and theRegulations circulars guidelines issued there under; and
(b) the Securities Contracts (Regulation) Act 1956 ("SCRA") rules madethere under and the Regulations circulars guidelines issued there under by theSecurities and Exchange Board of India ("SEBI").
Pursuant to Section 148(2) of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 your Company is required to get its costaccounting records audited by a Cost Auditor.
Accordingly the Board at its meeting held on 20th June 2020 has on therecommendation of the Audit Committee appointed M/s. Rajendra Patel & AssociatesCost Accountant Ahmedabad (Firm Registration No. FRN101163 and Membership No. 29021) toconduct the audit of the cost accounting records of the Company for FY 2020-2021 on aremuneration of Rs. 80000/- plus taxes as applicable and reimbursement of actual traveland out of pocket expenses. The remuneration is subject to the ratification of the Membersin terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules2014 and is accordingly placed for your ratification. The Company has received theirwritten consent that the appointment is in accordance with the applicable provisions ofthe Act and rules framed there under and confirmed that their appointment is within thelimits of the Section 139 of the Companies Act 2013. They have also certified that theyare free from any disqualifications specified under Section 141 of the Companies Act2013.
The Cost Audit Report for the Financial Year ended 31st March 2019 has been duly filedin XBRL mode. The cost audit report of the Company for financial year ended March 31 2020will be filed with Central Government on or before the due date as prescribed underCompanies Act 2013 read with Companies (Cost Records and Audit) Rules 2014.
Pursuant to the provisions of Listing Regulations the Company declares that the EquityShares of the Company are listed on the BSE Limited (BSE). The Company confirms that ithas paid Annual Listing Fees to BSE up to the Financial Year 2020-2021.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The Disclosures relating to remuneration and other details required under Section197(12) of the Companies Act 2013 read with the Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended is annexed as Annexure- I and forms an integral part of this Report.
A statement showing the names of top 10 employees in terms of remuneration drawn as perRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended is annexed as Annexure - I and forms an integral part of thisReport.
The Statement of particulars of employees under Section 197(12) read with Rule 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is not provided with as during the financial year under review no employee of theCompany including Whole-time Directors and Managing Directors were in receipt ofremuneration in excess of the limits set out in the said rules.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company has a Vigil mechanism and Whistle blower policy under which the employeesare free to report any act of serious misconduct or wrongful activity being occurred orsuspected to occur within the organization to his immediate HOD or the HR Head ordirectly to the concern Whole-time Directors or Managing Directors of the Company as hemay desire. No employee of the Company is denied access to the Audit Committee. The vigilmechanism/whisle blower policy is also available on the web-site of the Company viz.http://www.patelairtemp.com.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has zero tolerance towards sexual harassment at the workplace. The Companyhas adopted a Policy on Prevention Prohibition and Redressal of Sexual Harassment atWorkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules there under. The Policyaims to provide protection to employees at the workplace and prevent and redresscomplaints of sexual harassment and for matters connected or incidental thereto with theobjective of providing a safe working environment where employees feel secure.
All employees (permanent contractual temporary trainees) are covered under thispolicy. No complaints pertaining to sexual harassment were received during the financialyear 2018-2019.
During the year under review there was no change in the nature of business of theCompany except as under and there is no material change and/or commitments affecting thefinancial position of the Company during the period from 31st March 2020 till the dateof this report :-
During the year under review Patels Airtemp (USA) Inc. became Wholly Owned Subsidiary(WOS) of the Company on 13th January 2020 by acquiring 100% Shares of Patels Airtemp(USA) Inc. and
During the year under review the Company has set up a new Greenfield project at KadiDist. Mehsana Gujarat with total capital outlay of around Rs.19.10 crores for dedicatedmanufacturing of Air Cooled Heat Exchanger / Air Fin Cooler in total land area of 44500sq. mtrs.
The Company does not provide any loan or other financial arrangement to its employeesor Directors or Key Managerial Personnel for purchase of its own shares and hence thedisclosure under Section 67(3)(c) of the Companies Act 2013 does not require.
The disclosure in terms of Rule 4 of Companies (Share Capital and Debenture) Rules2014 is not provided as the Company does not have any equity shares with differentialvoting rights. No fraud has been reported by the Auditors to the Audit Committee or theBoard.
The Directors place on record the appreciation and gratitude for the co-operation andassistance extended by various departments of the Union Government State GovernmentBankers and Financial Institutions.
The Directors also place on record their appreciation of dedicated and sincere servicesof the employees of the Company at all levels.
The Company will make every effort to meet the aspirations of its Shareholders and wishto sincerely thank them for their whole hearted co-operation and support at all times.
By order of the Board of Directors
NARAYANBHAI G. PATEL Chairman & Whole-time Director
|Dated : 14th August 2020 |
|Place : Rakanpur Dist. Gandhinagar |
ANNEXURE-A to Directors' Report
(Pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act 2013read with Rule 5 of the Companies (Accounts) Rules 2014) Statement containing salientfeatures of the financial statement of Subsidiary
Part A: Wholly Owned Subsidiary (WOS)
|Sr. || |
|No. Particulars || |
|1 Name of the wholly owned Subsidiary ||Patels Airtemp (USA) Inc. |
|2 The date since when Subsidiary was acquired ||13th January 2020 |
|3 Reporting period for the subsidiary concerned if different from the holding company's reporting period ||Upto 31st March 2020 |
|4 Reporting Currency and Exchange Rate as on the last date of the relevant financial year in case of foreign subsidiaries ||US Dollar 1 = Rs. 75.3859 |
|5 Share Capital ||753859 |
|6 Other Equity ||37693 |
|7 Total Assets ||1552950 |
|8 Total Liabilities ||1552950 |
|9 Investments ||- |
|10 Turnover ||- |
|11 Profit before Taxation ||35440 |
|12 Provision for Taxation ||- |
|13 Profit after Taxation ||35440 |
|14 Proposed Dividend ||- |
|15 % of Shareholding ||100.00% |
Part B: Associates and Joint Ventures
The Company does not have any Associates or Joint Ventures
For and on behalf of Board of Directors
|Narayanbhai G. Patel ||- Chairman & Whole-time Director |
|Sanjiv N. Patel ||- Managing Director |
|Kamlesh R. Shah ||- Chief Financial Officer |
|Nikhil M. Patel ||- Company Secretary |
|Place : Rakanpur Dist. Gandhinagar |
|Dated : 20th June 2020 |