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Shivam Autotech Ltd.

BSE: 532776 Sector: Auto
NSE: SHIVAMAUTO ISIN Code: INE637H01024
BSE 00:00 | 20 Sep 25.55 2.70
(11.82%)
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23.40

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26.25

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23.15

NSE 00:00 | 20 Sep 25.65 2.60
(11.28%)
OPEN

23.85

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OPEN 23.40
PREVIOUS CLOSE 22.85
VOLUME 31731
52-Week high 56.70
52-Week low 17.10
P/E
Mkt Cap.(Rs cr) 256
Buy Price 25.55
Buy Qty 20754.00
Sell Price 26.40
Sell Qty 200.00
OPEN 23.40
CLOSE 22.85
VOLUME 31731
52-Week high 56.70
52-Week low 17.10
P/E
Mkt Cap.(Rs cr) 256
Buy Price 25.55
Buy Qty 20754.00
Sell Price 26.40
Sell Qty 200.00

Shivam Autotech Ltd. (SHIVAMAUTO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present before you the 13th Annual Report onthe business and operations of the Company together with the Audited Financial Statementsof the Company for the Financial Year ended March 312018.

Financial Highlights

The Company's financial performance for the year ended March 312018 is summarizedbelow:

Rupees (in Lacs)

Particulars

For the year ended

March 312018 March 312017
Gross Sales & Other Income 56685.15 48565.87
Profit before Depreciation and Interest 7940.33 4798.08
Depreciation 4126.90 3220.16
Interest 4570.45 2903.14
Profit before Taxation (757.03) (1325.22)
Provision for Taxation (Deferred & Current) (633.89) (967.29)
Profit after Taxation (123.13) (357.93)

State of Company's Affairs and Future Outlook

During the financial year 2017-18 revenue from operations was Rs. 56685.15 lacs ascompared to Rs.48565.87 lacs in 2016-17 registering an increase of 17%.

Operating profit of the Company has increased to Rs. 7940.33 lacs from Rs. 4798.08 lacsin 2016-17. The Company has achieved major milestones in setting up of two state of theart manufacturing facilities at Bengaluru and Rohtak though the capex of these facilitieshas impacted the profitability of FY 17-18. However these capex in new plants has widenthe Company's product portfolio and has enhanced further its capability as a niche autocomponents producer.

Your Company has taken measures to enhance operational efficiencies by focusing onimproving yields reducing rejections and enhancing capacity utilisation. The Company istaking necessary steps for improvements at all levels. Critical precise components by verynature call for near zero tolerance/ rejections approach at all stages of operations.Thorough quality check standard operating procedures top class tools usage and detailedtraining and awareness among all - from operator level to the senior manager level ensuresprevalence of sound work culture and high level of productivity. Necessary POKAYOKE arebeing implemented

in the processes to nib the problem in the bud and minimize rejections.

Business Overview

With the impressive technology driven high end machineries installed in all itsfacilities the Company is able to produce high volumes with impeccable quality requiredfor complex wide range of transmission and precision engineering components. With thestate of art manufacturing facilities the Company is functioning successively tostrengthen its Customer Base. The Sales to other Customers like Bosch Denso INELMitsuba Yamaha ZF Hilti Volvo Eicher and Maruti etc. has increased compared to lastyear still Hero MotoCorp Limited (HMCL) being the major customer. Customer Profile forthe financial year 2017-18 is as follows:

With the impressive technology driven high end machineries installed in all itsfacilities the Company is able to produce high volumes with impeccable quality requiredfor complex wide range of transmission and precision engineering components. With thestate of art manufacturing facilities the Company is functioning successively tostrengthen its Customer Base. The Sales to other Customers like Bosch Mando Denso INELMitsuba Yamaha ZF Hilti Volvo Eicher and Maruti etc. has increased compared to lastyear still Hero MotoCorp Limited (HMCL)

With the increase in growth rate of Customers the Company is expecting to maintain ahealthy growth in its scale of operations and widen its geographical reach. It is alsoexpected to add new customers in the upcoming financial years. Cutting edge technology ona sustained basis is the touch stone of the manufacturing excellence of the Company.

The Company is working meticulously towards mitigating its concentration risk bydiluting the percentage of the concentration by increasing sales to other customers orentering new markets which is principally the focus area. The Company is successivelyclearing the major audits of its Customers in all plants and working towards entering intonew verticals with the set-up of world class facilities at Bengaluru and Rohtak plant.

Awards & Accolades

The Company is proud recipient of the following Awards as shown in Awards &Accolades Section:

1. Certificate of Appreciation from Maruti Suzuki for recognition of superiorperformance in the field of 2 Wheeler Cost Down in the year 2017-18.

2. Certificate of Excellence from SEG Automotive for recognition in Ramp up Support foryear 2017-18

3. Awarded for Ramp Up Support Award by SEG Automotive in Business Partner Meet 2018

4. Green Merit Award for recognition in Green Initiative of Waste Paper Recyclingthrough Green-O-Tech India in year 2017

Transfer to General Reserve

During the year under review the Company has not transferred any amount to GeneralReserves. The closing balance amount of Reserves and Surplus of Rs. 17094.78 Lacs(Previous year Rs. 17201.72 lacs) will be retained as surplus in the Statement of Profitand Loss.

Dividend

The Board of Directors have not recommended any dividend for the financial year2017-18.

The Register of Members and Share Transfer Books shall remain closed from SaturdaySeptember 22 2018 to Saturday September 29 2018 (both days inclusive).

Holding Company

The promoters of the Company i.e. Dayanand Munjal Investments Private Limited (DMIPL)hold 74795950 equity shares of Rs. 2/- each which represents 74.80% of the paid upequity capital of the Company.

Your company continues to be a subsidiary company of DMIPL.

Subsidiary Companies Joint Ventures Or Associate Companies

The Company neither has any Subsidiaries joint ventures or associate companies nor anycompany have become or ceased to be its Subsidiaries joint ventures or associatecompanies during the year under review.

Management Discussion and Analysis report

A detailed discussion on the business performance and future outlook forms part ofManagement Discussion and Analysis Report which is separately attached as Annexure A tothis Board's Report.

Board of Directors

a) Meeting of Board of Directors

A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe Financial Year 2017-18 4 (four) meetings of the Board of Directors of the Companywere held on May 30 2017 August 10 2017 November 13 2017 and February 14 2018. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as "SEBI LODR 2015").For details of the meetings of the board please refer to the Corporate Governance reportwhich forms part of this Annual Report.

b) Details of Directors and Key Managerial Personnel

Mrs. Charu Munjal and Dr. Anil Kumar Gupta Whole Time Directors of the Company retireby rotation at the ensuing Annual General Meeting and being eligible offer themselves forre-appointment. Brief profile of the Director(s) as required by the SEBI LODR 2015 isgiven in the Notice / Corporate Governance Report forming part of this Annual Report.

The appointment/re-appointments form part of the Notice of the Thirteenth AnnualGeneral Meeting and the relevant Resolutions are recommended for your approval.

c) Declaration by Independent Director

The Company has received necessary declaration from each Independent Director underSection 149 (7) of the Companies Act 2013 that he/she meets the criteria of Independencelaid down in Section 149(6) of Companies Act 2013 and SEBI LODR 2015.

d) Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and the Corporate Governancerequirements as prescribed by Securities and Exchange Board of India ("SEBI")under the SEBI LODR 2015 the Board is required to carry out an Annual Evaluation of itsown performance Board's committees and Individual Directors.

The performance of the Board as a whole it's Committee(s) and Individual Directorsincluding the Chairman of the Board was evaluated by a questionnaire formulated by theCompany.

The questionnaire was formulated based on the following criteria:

• The Board composition and structure

• Effectiveness of board processes

• Information and functioning

• The composition of committees

• Effectiveness of committee meetings

• The contribution of the individual director to the Board and committee meetings

• Preparedness of Directors on the issues to be discussed

• Meaningful and constructive contribution of Directors and their inputs inmeetings

e) Separate Meeting of Independent Directors

In terms of requirements under Schedule IV of the Companies Act 2013 and SEBI LODR2015 a separate meeting of Independent Directors was held on February 14 2018. In aseparate meeting of independent Directors performance of nonindependent directorsperformance of the board as a whole and performance of the Chairman was evaluated takinginto account the views of executive directors and non-executive directors. The same wasdiscussed in the board meeting that followed the meeting of the independent Directors atwhich the performance of the Board its committees and individual directors was alsodiscussed.

f) Policy on Directors' remuneration and other details

The Company's policy on Directors' remuneration and other matters provided in Section178(3) of the Act has been disclosed in the corporate governance report which forms partof the Board's report.

Statutory Auditors

NSBP & Co. Chartered Accountants New Delhi (Firm Registration No. 001075N) wereappointed as the Statutory Auditors of the Company for a term of five years as per theprovisions of Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014who will hold the office upto the conclusion of the 17th Annual GeneralMeeting. They have confirmed that they are not disqualified from continuing as Auditors ofthe Company.

The Report given by the Auditors NSBP & Co. Chartered Accountants New Delhi onthe financial statements of the Company for the financial year 2017-18 is part of theAnnual Report. There are no qualifications reservation adverse remark observationscomments or disclaimer given by the Auditors in their Report.

Further with regard to Section 134(3)(ca) of the Companies Act 2013 no frauds havebeen reported by the auditors under Section 143(12) of the said Act.

Explanation to Auditors' Remarks

The comments on statement of accounts referred to in the report of the auditors areself-explanatory.

Share Capital

During the year under review the Issued Subscribed and Paid-up Equity Share Capitalas on March 31 2018 was 10 Crores equity shares of Rs. 2/- each amounting to Rs. 20Crore.

a) Your Company has not issued shares with differential voting rights nor grantedemployee stock options nor sweat equity. And also the Company has not accepted or repaidany Debentures Preference Share Capital and any Bond & Security during the financialyear and none of the Directors of the Company hold any shares or security of the Company.The Company does not have any Debentures Preferential Shares as on March 31 2018.

b) Your company has not made any provisions of money for purchase of its own shares byemployees or by trustees for the benefit of employees during the year under review.

Deposits

During the year the Company has not accepted any fixed deposit.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and

Remuneration of Managerial Personnel) Rules 2014 the Company has appointed SatyenderKumar & Associates a proprietorship firm of Company Secretaries to undertake theSecretarial Audit of the Company. Secretarial Audit Report in prescribed format MR-3 isannexed as Annexure- D to this Board's Report.

Explanation to Secretarial Audit Report

Due to technical issues faced by the Registrar and Transfer Agents of the Company withDepository the shares were transferred beyond the prescribed date.

The Company is taking effective steps that all statutory forms are filed within theprescribed time limit.

Audit Committee

The Audit Committee comprises mainly of Independent Directors and the composition is asunder:

Mr. Surrinder Lal Kapur - Chairman
Mr. Bhagwan Dass Narang - Member
Dr. Vinayshil Gautam - Member
Mr. Sunil Kant Munjal - Member
Dr. Anil Kumar Gupta - Member

The terms of reference of the Audit Committee are wide enough to cover the mattersspecified for the Audit Committee under SEBI LODR 2015 as well as Section 177 of theCompanies Act 2013; the detailed terms of reference are as mentioned in the Annexure B tothis Board's Report. During the year the Board has accepted all recommendation of AuditCommittee and accordingly no disclosure is required to be made in respect ofnon-acceptance of the recommendation of the Audit Committee by the Board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee (NRC) has been constituted according toSection 178(5) of the Companies Act 2013 and the composition is as under:

Dr. Vinayshil Gautam - Chairman
Mr. Bhagwan Dass Narang - Member
Mr. Surrinder Lal Kapur - Member
Mr. Sunil Kant Munjal - Member

The detailed terms of reference are as mentioned in the Annexure B to this Board'sReport.

Corporate Social Responsibility (CSR) Policy

The Corporate Social Responsibility Committee has been constituted as per theprovisions of Section 135 of the

Companies Act 2013 and the composition is as under:

Mr. Bhagwan Dass Narang - Chairman

Dr. Anil Kumar Gupta - Member

Mrs. Charu Munjal - Member

The details about the policy indicating the activities to be undertaken by the Companyactivities implemented by the company and the amount spent on CSR activities as per theprovisions of Companies (Corporate Social Responsibility Policy) Rules 2014 is annexedas Annexure - E to this Board's Report.

Risk Management Policy

In order to mitigate the risks the Company has adopted the implementation of the riskmanagement policy focusing on the elements of risks which in the opinion of the Board maythreaten the existence of the company.

The Company has constituted a risk management committee the constitution and the termsof reference of the same are mentioned in the Annexure B to this Board's Report.

Disclosure on Establishment of a Vigil Mechanism

The Company has adopted a policy on vigil mechanism for directors and employees toreport their genuine concerns or grievance to be the Vigilance and Ethics Officer. Thepolicy is available on the company's website www.shivamautotech. com.

Material Changes Affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and on the date of this report.

Your Company was able to raise the short-term/long term funds needed for its workingcapital related requirements & term loans for new capital expenditure at reasonablerates. By efficient management of working capital the Company has been able to reducesome interest cost. The Company continues to focus on judicious management of its workingcapital. During the year under review the financial position of the Company wassatisfactory.

Significant or Material Orders passed by the Regulators

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.

Changes in the Nature of Business

There is no change in the nature of the business of the Company during the FinancialYear 2017-18.

Extract of Annual Return

The weblink for extract of Annual Return in format MGT-9 for the Financial Year2017-18 is as follows: http://www. shivamautotech.com/cpage.aspx?mpgid=15&pgidtrail=40

Particulars of Loan Guarantees and Investments under Section 186 of the Companies Act2013

The Company has neither given any loans/guarantees / provided security and nor anyinvestments have been made by the Company.

Particulars of Contracts or Arrangements with Related Parties

All contracts /arrangements/transactions entered by the Company during the financialyear with the related parties were in the ordinary course of business and on arm's lengthbasis and do not attract the provisions of Section 188 of the Companies Act 2013. Duringthe year the Company had not entered into any contracts /arrangements/transactions withrelated parties which could be considered material in accordance with the policy of theCompany on materiality of related party transactions. Suitable disclosure as required bythe IND AS 24 has been made in the notes to the Financial Statements.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The Company continues to use the latest technologies for improving the productivity andquality of its products and components. The details of Energy Technology AbsorptionForeign Exchange Earnings and Outgo are attached as Annexure - C to this Board's Report.

Statement in Respect of Adequacy of Internal Financial Control with Reference to theFinancial Statements

Your company has adequate internal control for its business processes acrossdepartments to ensure efficient operations compliance with internal policies applicablelaws and regulations. The internal controls are complemented on an on-going basis by anextensive program of internal audits being implemented throughout the year. The internalcontrols are designed to ensure that the financial and other records of the company arereliable for preparing financial statement and other data for maintaining theaccountability of assets in conformity with established accounting principles and that theassets of the company are adequately safe-guarded against any significant misuse or loss.

The Company also has an internal audit system which is conducted by an independent firmof Chartered Accountants. A summary of Internal audit report and observations thereon arereviewed by the Audit Committee on regular basis and have been found to be adequate.

Listing

The shares of your Company are listed at The National Stock Exchange of India Limitedand The BSE Limited and pursuant to the SEBI LODR 2015 the Annual Listing fees for theyear 2018-19 have been paid to them well before the due date i.e. April 30 2018. TheCompany has also paid the annual custodian fees for the year 2018-19 in respect of Sharesheld in dematerialized mode to National Securities Depository Limited (NSDL) & CentralDepository Services Limited (CDSL).

The Company has complied with the requirements of Corporate Governance as stipulatedunder the SEBI (LODR) Regulations 2015 as applicable.

Corporate Governance

Your Company is committed to follow the highest standards and principles of CorporateGovernance with all integrity and fairness. The Company always places major thrust onmanaging its affairs with diligence transparency responsibility and accountabilitythereby upholding the important dictum that an organisation's corporate governancephilosophy is directly linked to high performance.

A certificate from the Practising Company Secretary regarding the compliance of theconditions of Corporate Governance by the Company stipulated under SEBI LODR 2015 is alsoattached to this Report.

Separate detailed chapters on Corporate Governance Additional Shareholder informationand Management Discussion and Analysis are attached herewith and form part of this Report.Declaration by CEO/CFO that the Board Members and Senior Management Personnel havecomplied with the Code of Conduct for the Financial Year 2017-18 is annexed with thisreport.

Disclosures for Maintenance of Cost Records

Your company is not covered under subsection (1) of Section 148 of Companies Act 2013for maintenance of Cost records and accordingly such accounts and records are not requiredto be made and maintained.

Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013

Your Company is committed to provide work environment that ensures every employee istreated with dignity

and respect and afforded equitable treatment. The Company has complied with theprovisions relating to the Constitution of Internal complaints Committee under the Sexualharassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

The Company has adopted the policy for prevention of sexual harassment at workplace. NoComplaints has been received for the year 2017-18. The annual report has been dulysubmitted to the District Officer of Department of Women and Child Development statingthat no complaints have been received by the Company.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134 (5) of the Companies Act 2013 as amendedwith respect to the directors' responsibility statement it is hereby confirmed:

(i) That in preparation of annual accounts for the financial year ended March 312018the applicable accounting standards have been followed along with proper explanationrelating to the material departures;

(ii) That the directors' of the company have selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2018 and of the losses of the Company for the financial year ended March 312018;

(iii) That the directors' of the company have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; and

(iv) That the directors' of the company have prepared the annual accounts on a goingconcern basis.

(v) That the directors in the case of a listed company had laid down internalfinancial controls to be followed by the company and that such internal financial controlsare adequate and were operating effectively.

(vi) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Managerial Remuneration

The details required pursuant to Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in Corporate GovernanceReport attached as Annexure - B to this Board's Report.

Particulars of Employees

The information required under Section 197 of the Act read with Rule 5(2) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached asAnnexure - F to this Board's Report.

Environment Health & Safety

TheCompany has taken aninitiative topreserveenvironment by indulging in paper recyclingactivity. The paper recycling pertains to the processes of reprocessing waste paper forreuse. Recycling paper preserves trees and forests. Every ton of recycled paper savesabout 17 trees. Recycled paper serves as an environmental friendly resource for papermanufacturers saving costs and energy. The Company has recycled approx. 7320 kgs of wastepaper till March 31 2017 contributing in saving 124 nos. of trees.

During the year the Company focused on incident reporting. Use of mobile phones wasidentified as one of the major distractions especially while working inside manufacturingplants. The Company took proactive steps to address this risk by limiting smartphone usageduring working hours.

The Company is committed to adhere to the highest standards of health and safety. Itstrives to provide its employees with a safe and healthy workplace. The Company continuousto focus on deploying behaviour based safety programmes and global safety standards acrossits locations. The Company regularly conducts counselling and safety review meetings forthe employees to appraise and educate them on the adoption of safety measures andavoidance of unsafe practices. Safe operating procedures standards and systems have beenlaid down at all manufacturing locations. Prompt medical assistance are provided to itsemployees.

Human Resource Development

Your Directors place on record their appreciation for the significant contribution madeby all employees who through their competence dedication hard work cooperation andsupport have enabled the Company to cross new milestones on a continual basis.

The Company strives to provide a work environment that attracts develops and retainsthe best talent promotes a values-driven high-performance culture embedding diversityand transformation.

Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invests in attraction retention and development oftalent on an ongoing basis. The Company's thrust is on the promotion of talent internallythrough job rotation and job enlargement.

Policies

The SEBI LODR 2015 mandated the formulation of certain policies for all listedcompanies. All our corporate governance policies are available on our website www.shivamautotech.com .

Following are the policies adopted by the company with their web links:

Policy Web link
Code of Conduct http://www.shivamautotech.com/Uploads/image/34imguf_SHIVAMCodeofConductforBM.pdf
Prohibition of Insider Trading http://www.shivamautotech.com/Uploads/image/38imguf_insidertradingshivam.pdf
Payment to Non- Executive Directors http://www.shivamautotech.com/Uploads/image/33imguf_PaymenttoNED.pdf
Board Diversity Policy http://www.shivamautotech.com/pdf/Board_Diversity_Policy.pdf
Records and Archives Policy http://www.shivamautotech.com/pdf/records_and_archives_policy.pdf
Related Party Transaction Policy http://www.shivamautotech.com/pdf/RPT_policy.pdf
Anti-Harassment Policy http://www.shivamautotech.com/pdf/Anti_harassment_Policy.pdf
Corporate Social Responsibility Policy http://www.shivamautotech.com/pdf/CSR_POLICY.pdf
Risk Management Policy http://www.shivamautotech.com/pdf/Risk_Management_Policy.pdf
Whistle Blower Policy http://www.shivamautotech.com/pdf/Whistle_Blower_Policy.pdf

Secretarial Standards

During the year under review your Company had complied with all the applicableSecretarial Standards. Acknowledgments

Your Company's organisational culture upholds professionalism integrity and continuousimprovement across all functions as well as efficient utilisation of the Company'sresources for sustainable and profitable growth.

The Directors express their appreciation for the sincere co-operation and assistance ofCentral and State Government Authorities Bankers Customers Suppliers and BusinessAssociates. Your Directors also wish to place on record their deep sense of appreciationfor the committed services by your Company's employees. Your Directors acknowledge withgratitude the encouragement and support extended by our valued shareholders.

For and on behalf of the Board For and on behalf of the Board
Sd/- Sd/-
Neeraj Munjal Dr. Anil Kumar Gupta
Place: New Delhi Managing Director Whole Time Director
Date: August 13 2018 DIN:00037792 DIN: 02643623