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Simplex Castings Ltd.
|BSE: 513472||Sector: Engineering|
|NSE: SIMPLEXCAS||ISIN Code: INE658D01011|
|BSE 00:00 | 24 Feb||34.45||
|NSE 05:30 | 01 Jan||Simplex Castings Ltd|
Simplex Castings Ltd. (SIMPLEXCAS) - Director Report
Company director report
Your Directors take pleasure in presenting their 38th Annual Report ofthe Company together with the audited accounts for the financial year ended 31st March2018.
Financial results are presented in the table below:
(Rs in Lacs
Your Company financial statements for the year ended March 312018 arethe financial statements prepared in accordance with Ind AS notified under the Companies(Indian Accounting Standards) Rules 2015 and Companies (Indian Accounting Standards)Amendment Rules 2016 as applicable. The figures for all the comparative periods havebeen restated to give impact to the IND AS.
The Board of Directors of your Company are pleased to recommenddividend Rs 0.50 (5%) on Equity Shares of Rs 10/- each for the FY ended 31st March2018subject to approval of the shareholding at the ensuring Annual General Meeting.
The financial year 2017-18 was yet another challenging year for theeconomy. While the domestic economy was looking for improvement post demonetization ledslowdown in growth the same was delayed caused by the further disruptions followed byimplementation of Goods and Service Tax (GST). While GST in long term is beneficial fordomestic economy the implementation of the same delayed due to initial teething troublesthe process of industrial recovery by couple of months.
The robust domestic demand focused cost reduction drive and valueadded special product portfolio helped the Company deliver strong profitable performanceand consequently the Company's profitability improved during F.Y 2017-18.
Revenue from operations for the F.Y. 2017-18 stood at Rs 22442.04 Lacsagainst the Rs 23676.33 Lacs of previous year. However Net Profit after tax for the F.Y2017-18 was Rs 335.47 Lacs an increase of 50.10% over the previous year of Rs 223.51Lacs. EBIDTA for the F.Y 2017-18 Rs 2735.70 Lacs as compared to previous year Rs 2281.55Lacs an increase of 19.91%.
SUBSIDIARY JOINT VENTURE (JV) AND ASSOCIATE COMPANIES
The Company does not have any subsidiary associate or joint venturecompany.
Your Company did not transfer any amount to the General ReservesAccount during the Financial Year 2017-18.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed report on the Management Discussion and Analysis in terms ofthe provisions of Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is provided as a separate chapter in the annual report.
MATERIAL CHANGES AND COMMITEMENT AFFECTING FINANCIAL POSITION OF THECOMPANY
There are no material changes or commitments occurring after 31st March2018 which may affect the financial position of the company or may require disclosure.
The Company's financial disciple and Prudence is reflected in thestrong credit ratings ascribed rating agencies as given below:
During the year under review your Company has not accepted anydeposits within the meaning of Sections 73 and 74 of the Companies Act 2013 read withCompanies (Acceptance of Deposits )Rules 2014 (including any statutory Modification(s) orre-enactment(s) for the time being in force).
The Company has taken the requisite steps to comply with therecommendations concerning Corporate Governance.
A separate statement on Corporate Governance together with acertificate from the auditors of the Company regarding compliance of conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of the Annual Report.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during theFinancial Year ended 31st March 2018.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed under theprovisions of the Companies Act 2013 read with the Schedules and Rules issued thereunderas well as Regulation 16(1)(b) of Listing Regulations (including any statutorymodification(s) or reenactments) for the time being in force).
In accordance with the provisions of the Companies Act 2013 none ofthe Independent Directors are liable to retire by rotation.
In accordance with the provisions of Section 152 of the Companies Act2013 and in terms of the Articles of Association of the Company Mr Piyush Shah (DIN:00199205) retires by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for reappointment.
The Shareholders have approved the Change of Designation of MrsSangeeta K Shah (DIN:05322039) from Whole Time Director to Managing Director and Mr KetanM Shah from Chairman & Managing Director (DIN:00312343) to Chairman & Whole TimeDirector of the Company through Postal Ballot Dated 24th March2018 during the year.
Meeting the requirements of the statute and considering BoardPerformance Evaluation as an important step for a Board to transit to a higher level ofperformance the Nomination and Remuneration Committee has laid down a comprehensiveframework for carrying out the evaluations prescribed in the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The framework was developed to give all Board members an opportunity toevaluate and discuss the Board's performance openly from multiple perspectives and enhancegovernance practices within the Board. The framework describes the evaluation coverage andthe process thereof.
A structured questionnaire each for evaluation was prepared and aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board.
The performance evaluation of the Independent Directors was alsocarried by the entire Board. The performance evaluation of the Chairman Managing Director& Executive Directors was carried out by the independent Directors at its separatemeeting held on 10th February 2018. The Directors expressed their satisfaction with theevaluation process.
FAMILIARISATION PROGRAMME OF INDEPENDENT DIRECTORS
The Company conducts Familiarization Programme for the IndependentDirectors to provide them an opportunity to familiarize with the Company its Managementand its operations so as to gain a clear understanding of their roles rights andresponsibilities and contribute significantly towards the growth of the Company. Theinitiatives undertaken by the Company in this respect has been disclosed on the website ofthe Company and can be accessed through the following link: http://www.simplexcastings.com/investors/notice-announcements/docs/notices/2017-18/Familirisation-Programme-for- Independent-Director-on-10-02-2018.pdf
NOMINATION AND REMUNERATION POLICY
The remuneration paid to the Directors is in accordance with theNomination and Remuneration Policy formulated in accordance with Section 178 of theCompanies Act 2013 and Regulation 19 of the Listing Regulations (including any statutorymodification(s) or re-enactment(s) for the time being in force). The silent aspectscovered in the Nomination and Remuneration Policy have been outlined in the CorporateGovernance Report which forms part of this report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197 of the Companies Act 2013and Rule 5 (1) Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014(including any statutory modification(s) or reenactments) thereof for the time being inforce is set out in the Annexure-I to this report.
The Company does not have any employee whose particulars are requiredto be given pursuant to the provisions of section 197 of the Companies Act 2013 read withRule 5(2) & (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
The statement containing the names of top ten employees in terms ofremuneration drawn as required under Section 197(12) of the Act read with Rule 5(2) of theaforementioned Rules are open for inspection at the Registered Office of the Company onall working days (except Saturdays Sundays and Public holidays) between 11.00 am to 1.00pm up to the date of AGM.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 (including anystatutory modification's or re-enactments thereof for the time being in force) theDirectors of the Company confirm that:
a. in the preparation of the annual accounts for the financial yearended 31st March 2018 the applicable Accounting Standards and Schedule III of theCompanies Act 2013 have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31st March 2018and of the profit and loss of the Company for the financial year ended 31st March 2018;
c. proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. the Annual Accounts have been prepared on a going concern basis;
f. proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems are adequate and operatingeffectively.
BOARD AND COMMITTEES
The details of the meetings of the Board of Directors and itsCommittees convened during the financial Year 2017-18 are given in the CorporateGovernance Report which forms a part of Annual Report.
STATUTORY AUDITORS AND THEIR REPORT
M/s O P Singhania & Co Chartered Accountants (Firm RegistrationNo. 002172C) Statutory Auditors of the Company were appointed until the conclusion of the38th Annual General Meeting of the Company.
The Board of Directors in its meeting held on 11th August 2018 haveapproved the reappointment of M/s O P Singhania & Co Chartered Accountants (FirmRegistration No. 002172C) as the Statutory Auditors of the Company for a period of 5years.
They have confirmed their eligibility to the effect that theirappointment if made would be within the prescribed limit under the Act and that they arenot disqualified for appointment.
A resolution proposing reappointment of M/s O P Singhania & CoChartered Accountants as Statutory Auditors of the Company pursuant to Section 139 of theCompanies Act 2013 forms part of the Notice for the ensuing AGM.
Explanations response to Point 2(e) of Independent Auditors Report:
Point 2(e) -On the basis of Written Representations received from theDirectors as on 31st March 2018 taken on record by the Board of Directors we report thatone of the Director is disqualified as on 31st March 2018 from being appointed as aDirector in terms of section 164(2) of the Act.
Management Reply - Mr Goverdhana Gopalswamy (DIN:02101651) Director ofthe Company has filed the petition in Bombay High Court against his disqualification.
Observations other than above made by the Statutory Auditors in theirreport for the Financial year ended 31st March 2018 read with the explanatory notestherein are self-explanatory and therefore do not call for any further explanation orcomments from the Board under section 134(3) of the Companies Act 2013.
COST AUDITOR AND THEIR REPORT
Pursuant to Section 148(2) of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 your Company is required to getits cost accounting records audited by a Cost Auditor.
Accordingly the Board at its meeting held on May 26 2018 has on therecommendation of the Audit Committee re-appointed M/s Arindam & Associates CostAccountants to conduct the audit of the cost accounting records of the Company for F. Y2018-19 on a remuneration of Rs 2.00 lacs plus taxes as applicable and out-of-pocketexpenses. The remuneration is subject to the ratification of the Members in terms ofSection 148 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 and isaccordingly placed for your ratification. The due date for filing the Cost Audit Report ofthe Company for the Financial Year ended March 31 2017 was September 30 2017 and theCost Audit Report was filed in XBRL mode on August 29 2017.
SECRETARIAL AUDITOR AND THEIR REPORT
In terms of Section 204 of the Companies Act 2013 the Board ofDirectors of the Company at their meeting held on 26th May 2018 has reappointed SatishBatra & Associates Practicing Company Secretary (Certificate of Practice No. 2875)as the Secretarial Auditor to conduct an audit of the secretarial records for thefinancial year 2018-19.
Your Company has received consent from Satish Batra & Associates toact as the auditor for conducting audit of the Secretarial records for the financial yearending 31st March 2019.
The Secretarial Audit Report for the financial year ended 31st March2018 is annexed herewith as Annexure II to this report.
The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
M/s. Agrawal Jain & Co Chartered Accountants were reappointed asInternal Auditors for the FY 2018-19.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSEWHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors Cost Auditor or Secretarial Auditor of theCompany have not reported any frauds to the Audit Committee or to the Board of Directorsunder Section 143(12) of the Companies Act 2013 including rules made thereunder.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on 31stMarch 2018 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act 2013read with Companies (Management and Administration) Rules 2014 is set out herewith asAnnexure III to this report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into by the Companyduring the year under review were on arms length basis and were in the ordinary course ofbusiness. There are no materially significant related party transactions made by theCompany with promoters directors key managerial personnel or related parties which mayhave a potential conflict with the interest of the Company at large.
Members may refer to Note No 36 to the financial statement which setsout related party disclosures pursuant to Ind AS.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the Financial Year ended 31st March 2018 no Loan under section186 of the Companies Act 2013 was made by the Company. Details of Loan Guarantees andInvestments are given in the notes to the financial statements.
Your Company has increased its authorised share capital from Rs 7.50 Crto Rs 10.00 Cr.
During the year the Company has received ' 7.97 Crores (25% of theissue price) from the issue and allotment of 1993700 warrants (1137900 Warrants Dated28/03/2018 701500 Warrants Dated 31/03/2018 and 154300 Warrants Dated 03/04/2018 ) of' 10/- each at a premium of ' 150/- to non promoters on preferential basis in pursuanceof the approval of the shareholder accorded through Postal Ballot on 24th March 2018 fromthe objects of the issue stated in the explanatory statement to the Notice of PostalBallot dated 15th February 2018. The proceeds of convertible warrants have been utilizedfor procurement of raw material and components along with routine expenses of workingcapital requirement of the company.
Presently the Company's shares is listed on Bombay Stock Exchange. TheDelisting application is pending before delisting Committee at Delhi Stock Exchange. TheCompany is also listed on Calcutta Stock Exchange but trading is suspended.
Your Company has not issued equity shares with differential rights asto dividend voting or otherwise; and does not have any ESOP Scheme for itsemployees/Directors.
The Company has in place comprehensive risk assessment and minimizationprocedures which are reviewed by the Board periodically .The Company has been addressingvarious risks impacting the Company.
DISCLOSURE ON AUDIT COMMITTEE
The Audit Committee as on 31st March 2018 comprises of the followingIndependent Directors:
Mr Kisan Ratilal Choksey (Chairman) Ms Ushma Nitin Khabaria MrRajendra Amratlal Shah and Mr Champak Kalyanji Dedhia as Members.
The Board has accepted all recommendations made by the Audit Committeeduring the year.
IMPLEMENTATION OF SAP
The Company has implemented SAP a leading ERP solution with effect from1st April 2018 by switching over from existing ERP. The implementation of SAP shallintegrate all the business process across the organization. The new Regime of SAP shallFacilitate by transforming the work culture thereby increase transparency & structuredinformation system. The SAP implementation is under stabilization process & shall soonget established across all the activities. After full stabilization of the same it willenhance the productivity & improve efficiency of the organization in the entire gamutof activities.
A Vigil Mechanism Policy for Directors and employees of the Company isconstituted to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on rising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.
All employees of the Company have access to the Chairman of the AuditCommittee in case they want to report any concern. The Policy on Vigil Mechanism isavailable on your Company website.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The brief outline of the Corporate Social Responsibility (CSR) Policyof the company and the initiatives undertaken by the company on CSR activities during theyear are set out in Annexure of this Report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. (Annexure-IV).
The Policy is available on the website of the Company i.e
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Information on conservation of energy technology absorption foreignexchange earnings and outgo required to be given pursuant to Section 134(3) (m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexedherewith as Annexure - V to this report.
INTERNAL FINANCIAL CONTROL
Internal Financial Controls are an integrated part of the riskmanagement process addressing financial and financial reporting risks. The internalfinancial controls have been documented digitized and embedded in the business processes.
Assurance on the effectiveness of internal financial controls isobtained through management reviews control selfassessment continuous monitoring byfunctional experts as well as testing of the internal financial control systems by theinternal auditors during the course of their audits. We believe that these systems providereasonable assurance that our internal financial controls are designed effectively and areoperating as intended.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS
There are no significant and material orders passed by the Regulatorsor Courts or Tribunals which would impact the going concern status of the Company and itsoperation in future.
TRANSFER OF UNPAID OR UNCLAIMED DIVIDEND AMOUNT TO INVESTOR EDUCATIONAND PROTECTION FUND :
During the year dividend amounting to Rs 3.99 lacs that had not beenclaimed by the shareholders for the year ended 31st March 2010 was transferred to thecredit of Investor Education and Protection Fund as required under Act. As on 31st March2018 dividend amounting to Rs 14.46 lacs has not been claimed by shareholders of theCompany. Shareholders are required to lodge their claims with the Registrar Link IntimeIndia Pvt Ltd. for unclaimed
dividend. Pursuant to the provisions of Investor Education andProtection Fund (Uploading of Information regarding unpaid and unclaimed amounts lyingwith Companies) Rules 2012 the Company has uploaded the details of unpaid and unclaimedamounts lying with the Company on 14th September 2017 (date of the last Annual GeneralMeeting) on the website of the Company www. simplexcastings.com
The same is also available on the website of the Ministry of CorporateAffairs www.mca.gov.in.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
The Company takes pride in the commitment competence and dedication ofits employees in all areas of the business. The Company has a structured induction processat all locations and management development programs to upgrade skills of managers.Objective appraisal systems based on key result areas (KRAs) are in place for seniormanagement staff.
The Company is committed to nurturing enhancing and retaining its toptalent through superior learning and organizational development. This is a part of ourCorporate HR function and is a critical pillar to support the organization's growth andits sustainability in the long run.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013
During the year under review there were no complaint received pursuantto the Sexual Harassment of Woman at Workplace (Prevention Prohibition and Redressal)Act 2013.
The Board of Directors would like to express their sincere appreciationfor the assistance and co-operation received from the financial institutions banksGovernment authorities customers vendors and members during the year under review. TheBoard of Directors also wish to place on record its deep sense of appreciation for thecommitted services by the Company's executives staff and workers.
For and on behalf of the Board of Directors
Sangeeta K Shah Managing Director DIN:05322039
Ketan M Shah
Place : Mumbai Date:11.08.2018