Your Directors have great pleasure in presenting the 22nd Annual Report andthe Company's Audited Financial Statement for the financial year ended March 31 2017.
The financial Summary:-
(Rs. in Lacs)
|Particulars ||2016-17 ||2015-16 |
|Sales & Other Income ||41171.94 ||27222.22 |
|Profit before Finance Cost Depreciation & Tax ||6008.70 ||2949.70 |
|Finance Cost ||1596.00 ||1400.60 |
|Depreciation & Amortisation Expenses ||1279.80 ||1206.25 |
|Profit before Tax ||3132.90 ||342.84 |
|Current Tax ||877.12 ||73.79 |
|Deferred Tax ||147.04 ||71.55 |
|MAT Credit Entitlement ||(23.42) ||- |
|Profit after Tax ||2132.16 ||197.50 |
During the year your Company has registered sales and other income of RS.41171.94lacs as compared to RS.27222.22 lacs of previous year showing an increase in sales by51.21%. The Company was able to register growth in domestic sales by 98.71% i.e.RS.31552.57 lacs in current year as compared to RS.15879.34 lacs in previous year anddecrease in export sales by 12.82% i.e. RS.9795.75 in current year as compared toRS.11236.95 lacs in previous financial year. The Company earned profit beforedepreciation interest and tax of RS.6008.70 lacs as against RS.2949.70 lacs in previousyear.
The Board has also recommended a dividend of RS.2/- (20%) per fully paid-up EquityShare of RS.10/- each of the Company for the year ended March 31 2017 subject to theapproval of the Members at the ensuing Annual General meeting.
Transfer of Reserve
Company has not transferred/utilised any amount from Reserve for distributing dividend.
The Company Shares are listed as follows:
|Name of Stock Exchanges ||Stock Code/ Symbol |
|BSE Limited (BSE) P.J. Towers Dalal Street Mumbai-400001 ||531431 |
|National Stock Exchange of India Limited (NSE) "Exchange Plaza" C - 1 Block - G Bandra-Kurla Complex Bandra (E) Mumbai - 400 051. ||SHAKTIPUMP |
There is no change in the authorised share capital of the Company and the authorisedshare capital of the Company as on 31st March 2017 is RS.40.00 crores.
The paid up share capital of the Company as on 31st March 2017 isRS.18380156/- During the year under review the Company has converted its 1500000Compulsory Convertible Preference share into 1636363 Equity Shares.
Susbsidiaries Joint Ventures and Associates Companies
As on March 312017 your Company is having following Subsidiaries:
1. Shakti Pumps USA LLC
2. Shakti Pumps FZE UAE
3. Shakti Pumps Pty Ltd Australia
There has been no material change in the nature of the business of the Company and itsSubsidiary.
In respect of statements pursuant to Section 129 (3) of the Companies Act 2013 in FormAOC - 1 attached Annexure Tcontaining details of subsidiaries forms part of this AnnualReport.
The Consolidated Financial Statement of the Company prepared as per AS-21 AS-23 andAS-27 Consolidated the Company's account with its Subsidiaries have also been included aspart of this Annual Report.
Directors Responsibility Statement
As required by section 134 (3) (c) of Companies Act 2013.
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct 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 March 31 2017 and of the profit ofthe 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 Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a 'going concern' basis;
e) the Directors 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 have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Management Discussion and Analysis Report
The Management Discussion and Analysis forms an integral part of this Report and givesdetail of the overall industry structure developments performance and state of affairsof the Company's various businesses viz. the international pump business operationsinternal controls and their adequacy risk management systems and other materialdevelopments during the financial year.
Corporate Governance is an ethically driven business process that is committed tovalues aimed at enhancing an organisations brand and reputation. The Companies Act 2013and SEBI (Listing obligation and Disclosure Requirements) Regulation 2015 havestrengthened the governance regime in the country. The Company is in compliance with thegovernance requirements provided under the new law and had proactively adopted manyprovisions of the new law ahead of time. The Company is committed to maintain the higheststandards of corporate governance and adhere to the corporate governance requirements setout by SEBI.
A separate report on Corporate Governance is provided together with a Certificate fromthe Statutory Auditors of the Company regarding compliance of conditions of CorporateGovernance. A Certificate of the MD and CFO of the Company inter alia confirming thecorrectness of the financial statements and cash flow statements adequacy of the internalcontrol measures and reporting of matters to the Audit Committee is also annexed.
During the financial year 2016-17 the Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read together with the Companies(Acceptance of Deposits) Rules 2014.
Details of Significant and Materials order passed by the Regulators Courts Tribunal
No significant and material order has been passed by the regulator courts tribunalsimpacting the going concern status and Companies operations in future.
Corporate Social Responsibilty
In line with provision of the Companies Act 2013 the Company has framed its CorporateSocial Responsibility (CSR) policy for the development of programs and projects for thebenefit of weaker sections of the Society and the same has been approved by CSR Committeeand the Board of Directors of the Company.
CSR policy has been uploaded on the Company's website at www. shaktipumps.com.
Pursuant to requirements under section 135 and rules made there under a Report on CSRactivities and initiatives taken during the in prescribed format is given in annexure IIwhich is annexed hereto and forms part of Director report.
Risk management is the process of identification assessment and prioritisation ofrisk followed by coordinated efforts to minimise monitor and mitigate/control theprobability and/or impact of unfortunate events or to maximise the realisation ofopportunities. The Company has laid a comprehensive risk assessments and minimisationprocedure which is reviewed by the audit committee and approved by Board.
Internal Financial Control
According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the Company for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
Contracts and Arrangements with Related Parties
All transactions entered with related parties during the financial year 2016-17 wereon an arm's length basis and were in ordinary course of Business and the provisions ofsection 188 of the Companies Act 2013 are not attracted. The disclosure in form AOC-2 isgiven Annexure III. Further there are no materially significant related partytransactions during the year made by the Company with promoter Directors Key Managerialpersonnel or other designated persons which may have potential conflict with the interestof the Company at large.
All related party transactions are placed before the audit committee for approval.Prior omnibus approval of the audit committee is obtained for the transaction which is ofa foreseen and repetitive nature. Transaction entered into pursuant to omnibus approval sogranted along with statements giving details of all related party transaction are placedbefore the audit Committee.
In line with the requirements of the Companies Act 2013 and SEBI (Listing Regulationsaqnd disclosure Requirements) Regulations 2015 the Company has formulated a Policy onRelated Party Transactions which is also available on Company's website at www.shaktipumps.com.
Mr. Sunil Patidar Whole-Time Director (DIN: 002561763) retires from the Board byrotation and being eligible offer himself for reappointment.
The above is subject to approval of the Shareholders in the ensuing Annual GeneralMeeting.
Re-appointment of Mr. Ramesh Patidar (DIN: 00931437)as Wholetime Director on the Boardwith effect from 17th October 2016 to 16th October 2021 for aperiod of five years subject to approval of Members of your Company at the Annual GeneralMeeting.
Re-appointment of Mr. Shyam Sunder Raghuvanshi (DIN: 02285757)as Independent Directoron the Board with effect from 01st August 2017 to 31st July 2020for a period of three years subject to approval of Members of your Company at the AnnualGeneral Meeting.
Confirmation of Mr. Pramod Kumar Bhavsar (DIN:07825119 ) as an Independent Director whohas been appointed in Board Meeting held on 19.05.2017 to hold office till the conclusionof the ensuing Annual General Meeting of the Company subject to approval of Members ofyour Company at the Annual General Meeting.
Mr. Bal Mukund Sharma (DIN: 07018632) has been resigned from the post of IndependentDirector on July 25 2016 and Mr. Raj Kumar Jain (DIN: 01092456) has been resigned fromthe post of Independent Director on February 06 2017.
Policy on Directors' Appointment and Remuneration and Other Details
The Remuneration Policy of the Company is designed to attract motivate and retainmanpower in a competitive and international market. The policy reflects the Company'sobjectives for good corporate governance as well as sustained long-term value creation forshareholders. The Remuneration Policy applies to the Company's senior managementincluding its Key Managerial Person and Board of Directors. The Nomination andRemuneration Policy for the members of Board and Executive Management is available on theCompany's website www.shaktipumps.com
Annual Evaluation of Board's Performance
In accordance with the provisions of Schedule IV of the Companies Act 2013 a separatemeeting of the Independent Directors was held on February 06 2017. Without the attendanceof Non-Independent Directors and Members of the Management. The Committee has reviewed theperformance and effectiveness of the Board in this meeting as a whole for the FinancialYear 2016-17.
Finance & Accounts
The agenda for the Finance and Accounts function of your Company is to assist indriving superior performance of the business pioneer- thought leadership and developfuture-ready talent in finance.
Risk and Internal Adequacy:
Your Company has an elaborate Risk Management procedure which is based on threepillars: Business Risk Assessment Operational Control Assessment and Policy Complianceprocesses. Major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis. The Company's internal controlsystems are commensurate with the nature of its business and the size and complexity ofits operations. These are routinely tested and certified by Statutory as well as InternalAuditors and cover all offices factories and key business areas. Significant auditobservations and follow up actions thereon are reported to the Audit Committee. The AuditCommittee reviews adequacy and effectiveness of the Company's internal control environmentand monitors the implementation of audit recommendations including those relating tostrengthening of the Company's risk management policies and systems.
Goods and Service Tax
Goods and Service Tax (GST) is a landmark reform which will have a lasting impact onthe economy and on businesses. Implementation of a well-designed GST model that applies tothe widest possible base at a low rate can provide significant growth stimulus to thebusiness and contribution to the Prime Minister's mission of "Make in India".Your Company has been preparing for migrating to GST for the past year; changes across ITsystems. Supply Chain and operations have been made keeping in mind the sweeping changesthat GST would bring in. While there are few areas that need to be addressed theGovernment has announced an intention to go live on GST on 1st July 2017 andyour Company will be ready for this transformative reform.
Key Managerial Personnel
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:-
Mr. Dinesh Patidar: - Managing Director (DIN: 00549552)
Mr. Sunil Manoharlal Patidar: - Whole Time Director (DIN: 02561763)
Mr. Ramesh Patidar: - Whole Time Director (DIN: 00931437)
Mr. Akhilesh Maru: - Chief Financial Officer
Mr. Ravi Patidar: - Company Secretary & Compliance Officer
Number of Meetings of the Board
The details of the number of Board and Audit Committee meetings of the Company are setout in the Corporate Governance Report which forms part of this Report.
Disclosure Relating to Remuneration of Directors Key Managerial Personnel andParticulars of Employees
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules is given in annexure IV .
Disclosure by Independent Directors
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Disclosure Under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has a policy and it provides for protection against sexual harassment ofwoman at work place and for prevention and redressal of such complaints.
The Company has zero tolerance on Sexual Harassment at workplace. During the year underreview no complaints were received against the sexual harassment at workplace.
M/s Modi Manoj & Co. Chartered Accountants having Firm Registration No. 030165NNew Delhi were appointed as Statutory Auditors of your Company at the Annual GeneralMeeting held on 27th September 2016 for a term of five consecutive years. Asper the provisions of Section 139 of the Companies Act 2013 the appointment of Auditorsis required to be ratified by Members at every Annual General Meeting. The Report given bythe Auditors on the financial statements of the Company is part of the annual report.There has been no qualification reservation adverse remark or disclaimer given by theAuditors in their Report.
The board has appointed M/s M. Maheshwari & Associates Practising CompanySecretary to conduct the Secretarial Audit of the Company for the financial year 2017-18.The Secretarial Audit Report for the financial year 2016-17 is annexed herewith as"Annexure V" to this report. The Secretarial Audit Report contains adverseremark regarding late filling of Form CRA-4 for Report of Cost Auditor.
Explanation to Adverse Remark
The filling of Form CRA-4 was overlooked due to other occupancies and the same is inprocess of filling.
As per the requirement of Central Government and pursuant to the provisions of Section148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules2014 as amended from time to time the Company has been carrying out audit of CostRecords.
The Board of Directors on the recommendation of Audit Committee has appointed M/s.M.P. Turakhia & Associates Cost Accountant as Cost Auditor to audit the costaccounts of the Company for the Financial Year 2017-18 at a remuneration of RS.55000 Asrequired under the Companies Act 2013. A resolution seeking members' approval for theremuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting.
Extract of Annual Return
The extract of Annual Return as on March 312016 in the prescribed Form No. MGT-9pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 (1) of theCompanies(Management and Administration) Rules 2014 is attached herewith as 'Annexure VI'and forms part of this Report.
The Company has framed a vigil mechanism/whistle blower policy to deal with unethicalbehavior actual or suspected fraud or violation of the Companies Code of Conducts orethics policy if any. The Vigil Mechanism/ whistle blower policy has been uploaded on thewebsite of the Company.
Particulars of Loans Given Investments Made Guarantees Given and Securities Provided
The Details of loans guarantees or investments covered under the provision of underSection 186 of the Companied Act 2013 are given in the Note to the Financial Statement.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out herewith as "Annexure VII" tothis Report.
The Directors of the Company wish to convey their gratitude and place on record theirappreciation for all the employees at all levels for their hard work solidaritycooperation and dedication during the year.
The Directors sincerely convey their appreciation to customers shareholders vendorsbankers business associates regulatory and government authorities for their continuedsupport.
Appreciation and Acknowledgments
Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The enthusiasm and unstinting efforts of theemployees have enabled the Company to remain as industry leaders.
The board places on record its appreciation for the support and co-operation yourCompany has been receiving from its suppliers retailers dealers and other associatedwith the Company. Your Company looks upon them as partners in its progress and has sharedwith them the rewards of growth. It will be your Company's endeavour to build and nurturestrong links on mutuality of benefits respect for and co-operation with each otherconsistent with consumer interests.
The Directors also take the opportunity to thank all shareholders clients vendorsBanks Government and Regulatory authorities and stock exchanges for their continuedsupport.
| ||For and on behalf of the Board of Directors |
| ||SHAKTI PUMPS (INDIA) LIMITED |
| ||Dinesh Patidar |
|Place:-Pithampur ||Chairman & Managing Director |
|Dated:-28.07.2017 ||DIN:-00549552 |
Annexure - VII
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
[Section 134 (3) (M) of The Companies Act 2013 read with Rule 8(3) of the CompaniesAccounts) Rules 2014]
|Particulars || |
|Conservation of Energy:- || |
|1 the steps taken or impact on conservation of energy; ||Company has installed energy efficient LED lights in place of conventional lights. We achieved annual savings of 214047 KWH. Also the Company has installed VRF AC in place of conventional AC. We achieved annual savings of 131580 KWH. |
|2 the steps taken by the Company for utilising alternate sources of energy; ||Solar Photovoltaic System installed for internal consumption and installation of DG set. |
|3 the capital investment on energy conservation equipments ||Rs.0.30 cr. |
|Technology absorption:- || |
|(i) the efforts made towards technology absorption ||The Company has invested in cutting-edge manufacturing technologies and equipment from tech leaders like Mazak. |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution ||Effective cost management labour productivity and time-efficiency. |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year ||No technology imported. |
|(a) the details of technology imported ||- |
|(b) the year of import ||- |
|(c) whether the technology been fully absorbed ||- |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and ||- |
|(iv) The expenditure incurred on Research and Development ||Rs.32296278.00 |
|Foreign exchange earnings and Outgo:- || |
|(i) The Foreign Exchange earned in terms of actual inflows during the year; ||RS.930278389.25 |
|(ii) The Foreign Exchange outgo during the year in terms of actual outflows. ||RS.258751968.00 |