Your Directors are pleased to present the 2nd Annual Report together with the AuditedFinancial Statements of the company for the financial year ended on 31st March 2019.
1 FINANCIAL PERFORMANCE
The Audited Financial Statements of the Company as on 31st March 2019 are prepared inaccordance with the relevant applicable IND AS and provisions of the Companies Act 2013.
The summarized financial highlight is depicted below:
| || ||(र in Lakhs) |
|Particulars ||2018-19 ||2017-18 |
|Revenue from operations ||24299.19 ||- |
|Other Income ||458.15 ||- |
|Total Income ||24757.34 ||- |
|Profit before Finance Cost Depreciation & || || |
|Amortization and Tax Expenses ||6851.82 ||(1.07) |
|Finance Cost ||179.85 ||- |
|Depreciation & Amortization ||793.00 ||- |
|Profit /(Loss) Before Tax ||5878.97 ||(1.07) |
|(i) Provision for Taxation (Current) ||1492.00 ||- |
|(ii) Deferred Tax ||188.38 ||- |
|(iii) Provision for tax of earlier years ||- ||- |
|Profit/(Loss) After Tax ||4198.59 ||(1.07) |
|Non-Controlling Interest ||- ||- |
|Net Profit after Non-Controlling Interest ||- ||- |
|Other Comprehensive income ||(7.73) ||- |
|Total Comprehensive Income /(Expenses) ||4190.86 ||(1.07) |
Note : Pursuant to the approval of the Composite Scheme of Arrangement by the Hon'bleNational Company Law Tribunal ("NCLT") vide its order dated 26th October 2018the entire business and all assets and liabilities of The Anup Engineering Limited(Transferor Company) were transferred to and vested in your Company being TransfereeCompany from 1stJanuary 2018 the appointed date.
2 PERFORMANCE HIGHLIGHTS
Your company recorded overall revenues of र247.5 Crores for the year and ProfitAfter Tax for the full year was र42 Crores. Anup's order book continues to remainvery strong and opened this financial year with confirmed orders of र300 Crores to bedelivered in next 4-5 quarters. In comparison the opening order book as of 1st April2018 was र155 Crores. Earnings per share stood at र41.19 on face value ofर10 each.
Your Directors have recommended a dividend of 70% i.e. र7/- per equity share ofर10/- each for the year ended on 31st March 2019. The dividend if approved by themembers would involve a cash outflow of र8.60 Crores (inclusive of tax on dividend).
4 TRANSFER TO RESERVES
During the year under review the Company has not transferred any amount to reserves.
5 MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and/or commitments which may affect the financialposition of the Company between the end of the financial period and the date of thisreport.
6 COMPOSITE SCHEME OF ARRANGEMENT
During the year under review the Hon'ble National Company Law Tribunal("NCLT") Ahmedabad Bench at Ahmedabad vide its order dated 26th October 2018has approved the Composite Scheme of Arrangement under Sections 230 to 232 read withSection 66 and other applicable provisions of the Companies Act 2013 amongst ArvindLimited Arvind Fashions Limited Anveshan Heavy Engineering Limited and The AnupEngineering Limited and their respective shareholders and creditors ("Scheme ofArrangement").
Pursuant to the Scheme of Arrangement the name of the Company has changed to TheAnup Engineering Limited' vide fresh certificate of incorporation pursuant to change ofname issued by Registrar of Companies Gujarat dated 29th January 2019.
The Scheme has become effective on 30th November 2018 and the appointed date was 1stJanuary 2018. Aforesaid order of NCLT is available at Company's website www.anupengg.com> Investors > Updates.
7 SHARE CAPITAL
Authorised Share Capital
The Authorised Capital was increased from र2500000/- to र652500000/- onaccount of the Scheme of Arrangement. Consequently the Authorized Share Capital of theCompany as on 31st March 2019 was र652500000/- (Rupees Sixty Five Crore TwentyFive Lakhs Only) divided into 65250000 (Six Crore Fifty Two Lakhs Fifty Thousand)equity shares of ` 10/- (Rupees Ten) each.
Issued Subscribed and Paid-up Capital
During the year under review the Company had allotted 10193962 (One Crore One LakhNinety Three Thousand Nine Hundred and Sixty Two) equity shares of र10/- (Rupees Ten)each to the equity shareholders of Arvind Limited (Demerged Company) and The AnupEngineering Limited (Transferor Company) pursuant to the Scheme of Arrangement.
Subsequently the equity shares of the company got listed on BSE Limited and theNational Stock Exchange of India Limited w.e.f 1st March 2019.
During the year under review the Company has not issued shares with differentialvoting rights and sweat equity shares.
8 EMPLOYEE STOCK OPTION SCHEME
During the year under review pursuant to the Scheme of Arrangement the Board ofDirectors of the company vide its Board Meeting dated 6th February 2019 approved The AnupEngineering Limited - Employee Stock Option Scheme - 2018 ("TAEL ESOS - 2018")by adopting the Anup ESOS (The Anup
Engineering Limited Employee Stock Option Scheme 2017) of theamalgamating company (i.e. The Anup Engineering Limited) and The Anup Engineering Limited- Employee Stock Option Scheme (Demerger) - 2018 ("TAEL ESOS (Demerger) - 2018")by adopting the AL ESOS (Arvind Limited Employee Stock Option Scheme 2008) of theDemerged Company (i.e. Arvind Limited). Disclosures in compliance with Section 62 of theCompanies Act 2013 Rule 12 of the Companies (Share Capital and Debentures) Rules 2014and the Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 are set out in Annexure-A to this report.
9 DISCLOSURE UNDER SECTION 67 (3) (c) OF THE COMPANIES ACT 2013
No disclosure is required under section 67 (3) (c) of the Companies Act 2013 read withRule 16(4) of the Companies (Share Capital and Debentures) Rules 2014 in respect ofvoting rights not exercised directly by the employees of the Company as the provisions ofthe said section are not applicable.
During the year under review your company has not availed any fresh financialassistance from the Banks. Consortium Arrangement availed by the Transferor Company for `200 Crores with ICICI Bank HDFC Bank and Bank of Baroda was transferred to the Companypursuant to the Scheme of Arrangement. The Company is regular in repayment of fund basedworking capital loan and interest and no payment is overdue to the Banks.
During the period under review your Company has not accepted any deposits within themeaning of Section 73 of the Companies Act 2013 and the rules made there under.
12 PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
13 CORPORATE SOCIAL RESPONSIBILITY
The Anup Engineering Limited (formerly known as Anveshan Heavy Engineering Limited) hasframed Corporate Social Responsibility (CSR) Policy that defines its philosophy and guidesits actions for undertaking and supporting socially relevant programmes. The AnupEngineering Limited Policy on Corporate Social Responsibility (TAELCSR) has been put inplace to facilitate and formalize the CSR processes set up a guiding structure and definebroader thematic areas for projects and programs to help maintain a common CSR thoughtthread. For doing so the Company would define an annual budget select CSR initiativesselect geography work with either its own CSR team or partner with like-mindedindividuals and organizations. In addition the company would utilize the skills of vastmajority of Employee Talents that the company has in accomplishment of its CSR vision. Thebrief details of Corporate Social Responsibility are enclosed as
14 HUMAN RESOURCES
The Company believes that human capital is its biggest asset and immensely values itshuman resources. The Company acknowledges that employee participation and involvement isthe key to sustained growth and hence encourages various measures to promote the same. TheCompany is of the opinion that motivated employees are very crucial to the growth of theorganization and hence puts in a lot of emphasis on promoting employee engagement at alllevels.
A well-defined organization structure with clarity of role profiles and key resultareas is one thing which the Company had introduced for inculcating a performance-orientedculture within the organization. This also leads to a lot of objectivity in the appraisalsystem and transparency within the organization. The Company also believes in providingample opportunities to its employees for their all-round growth and organizes variousfunctional technical behavioral and motivational training programs and seminars duringthe year.
The Company also believes in providing an environment which is conducive to developmentof entrepreneurial skills and team work. The employees are encouraged to participate invarious sports activities and festival celebrations.
15 RISK MANAGEMENT
The Company has developed and implemented a Risk Management Policy. The policyidentifies the threat of such events as "Risks" which if occurred willadversely affect value to shareholders ability of Company to achieve objectives abilityto implement business strategies the manner in which the Company operates and reputation.Such risks are categorized into Strategic Risks Operating Risks and Regulatory Risks. Theframework defines the process for identification of risks its assessment mitigationmeasures monitoring and reporting. While the Company through its employees and ExecutiveManagement continuously assess the identified Risks the Audit Committee reviews theidentified Risks and its mitigation measures annually.
16 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has an Internal Audit department with adequateexperience and expertise in internal controls operating system and procedures. The systemis supported by documented policies guidelines and procedures to monitor business andoperational performance which are aimed at ensuring business integrity and promotingoperational efficiency. The Internal Audit Department reviews the adequacy of internalcontrol system in the Company its compliance with operating systems and laid downpolicies and procedures. Based on the report of internal audit function process ownersundertake corrective actions in their respective areas and thereby strengthen thecontrols. Significant audit observations and corrective actions thereon are presented tothe Audit Committee of the Board of Directors from time to time.
17 VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy to deal with instances offraud and mismanagement if any. The details of the Whistle Blower Policy are explained inthe Corporate Governance Report and also posted on the website of the Company atwww.anupengg.com > Investors > Policies.
18 SUBSIDIARIES ASSOCIATES AND JOINT VENTURES COMPANIES
The Company does not have any subsidiary joint venture or associate companies withinthe meaning of Sections 2(6) and 2(87) of the Companies Act 2013 as on 31st March 2019.The Company has framed a policy for determining material subsidiaries which has beenuploaded on website of the company at www.anupengg.com > Investors > Policies.
19 DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors
The Board of Directors consists of 6 members out of which 3 are Independent Directorsincluding one women Independent Director and 3 are Non-Executive and Non-IndependentDirectors. As per the provisions of Section 152(6) of the Companies Act 2013 and thecompany's Articles of Association Mr. Sanjay S. Lalbhai (DIN: 00008329) shall retire byrotation at the ensuing Annual General Meeting and being eligible has offered himself forreappointment as the Director of the Company.
During the year Mr. Samvegbhai Lalbhai (DIN: 00009278) was appointed as an AdditionalDirector (Non-Executive) with effect from 1st November 2018 and shall hold the office upto the ensuing Annual General Meeting. The Company has received notice from memberproposing his appointment as Director of the Company.
During the year the Board of Directors had appointed Mr. Arpit Patel (DIN: 00059914)Mr. Ganpatraj Chowdhary (DIN: 00344816) and Ms. Reena Bhagwati (DIN: 00096280) asIndependent Directors of the company for a term of five years subject to the approval ofmembers in ensuing Annual General Meeting.
During the year under review Mr. Paresh Shah (DIN: 07993550) has resigned from thedirectorship of the company with effect from 1st November 2018.
Key Managerial Personnel
During the year the Board of Directors on the recommendation of the Nomination andRemuneration Committee appointed Mr. Rishi Roop Kapoor as Chief Executive Officer Mr.Rakesh Kumar Poddar as Chief Financial Officer and Mr. Chintankumar Patel as CompanySecretary of the Company with effect from 3rd December 2018.
20 BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual evaluation of its performance as well as that of its Committees andindividual directors. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.
21 REMUNERATION POLICY
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andSenior Management and their remuneration. The Remuneration Policy is available on thewebsite of the Company at www.anupengg.com > Investors > Policies.
22 FAMILIARIZATION PROGRAM FOR THE INDEPENDENT DIRECTORS
The Independent Directors have been updated with their roles rights andresponsibilities in the Company by specifying it in their appointment letter along withnecessary documents reports and internal policies to enable them to familiarize with theCompany's procedures and practices. The Company has through presentations at regularintervals familiarized and updated the Independent Directors with the strategyoperations and functions of the Company and Engineering Industry as a whole. The detailsof such familiarization programmes for Independent Directors are explained in theCorporate Governance Report and posted on the website of the Company at www.anupengg.com> Investors > Policies.
23 DECLARATION OF INDEPENDENCE
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and they have complied with the Code for Independent Directors asprescribed in Schedule IV to the Companies Act 2013.
24 NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Five (5) Meetings of the Board of Directors were held during the financial year ended31st March 2019. The intervening gap between two consecutive meetings was within theperiod prescribed under the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The details of the Board and Committeemeetings are provided in the Corporate Governance Report forming part of this Report.
25 DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that: a. in preparation of the annualaccounts for the financial year ended 31st March 2019 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any; b. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period; c. they havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d. they have prepared theannual accounts on a going concern basis; e. they have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively; f. they have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
26 RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. There are no materially significant related party transactions made by the Companywith Promoters Directors Key Managerial Personnel etc. which may have potentialconflict with the interest of the Company at large or which warrants the approval of theshareholders. Accordingly no transactions are being reported in Form AOC-2 in terms ofSection 134 of the Act read with Rule 8 of the Companies (Accounts) Rules 2014. Howeverthe details of transactions with Related Parties are provided in the Company's financialstatements in accordance with the Accounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board.Omnibus approval is obtained for the transactions which are foreseen and repetitive innature. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions.
The policy on Related Party Transactions as approved by the Board is available onwebsite of the company at www.anupengg.com > Investors > Policies.
27 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
No significant or material orders impacting going concern basis were passed by theregulators or courts or tribunals which impact the going concern status of the Company andits operations in future.
28 AUDITORS AND AUDITORS' REPORT Statutory Auditors
M/s Sorab S. Engineer & Co. Chartered Accountants (ICAI Registration No. 110417W)Statutory Auditors of the Company were appointed as Statutory Auditors of the Company fora period of five years at the 1st Annual General Meeting of the Company held on 29thSeptember 2018 till the conclusion of 6th Annual General Meeting of the Company pursuantto the provisions of Section 139(1) of the Companies Act 2013.
The Report given by the Auditors on the financial statements along with the notes tothe financial statements of the Company for the financial year 2018-19 is forming part ofthe Annual Report. There has been no qualification reservation or adverse remark ordisclaimer in their Report.
M/s Maulin Shah & Associates Cost Accountants Ahmedabad (Firm Registration No.32503) carried out the cost audit for applicable business during the year. The Board ofDirectors has appointed them as Cost Auditors for the financial year 2019-20. Theremuneration payable to the Cost Auditors is required to be placed before the Members in ageneral meeting for their ratification. Accordingly a Resolution seeking Members'ratification for the remuneration payable to M/s Maulin Shah & Associates CostAuditors is included as item No. 4 of the notice convening the Annual General Meeting.
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 hasappointed Ms. Ankita Patel Company Secretary in practice Ahmedabad to conduct theSecretarial Audit of the Company for the financial year 2018- 19. The Secretarial AuditReport is annexed herewith as Annexure - C. There were no qualifications observationsreservations comments or other remarks in the Secretarial Audit Report which have anyadverse effect on the functioning of the Company.
29 CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
The Corporate Governance Report and Management Discussion & Analysis which formpart of this Report are set out as separate Annexures together with the Certificate fromthe auditors of the Company regarding compliance of conditions of Corporate Governance asstipulated in Regulation 34 read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
30 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure-D.
31 EXTRACT OF ANNUAL RETURN
The extract of the Annual Return of the Company as on 31st March 2019 in Form MGT - 9in accordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 is annexed herewith as Annexure-E.
32 PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of the employees of the Company will be provided uponrequest. In terms of Section 136(1) of the Companies Act 2013 the Report and Accountsare being sent to the Members and others entitled thereto excluding the information onemployees' particulars which is available for inspection by the Members at the RegisteredOffice of the Company during business hours on working days of the Company up to the dateof the ensuing Annual General Meeting. If any Member is interested in obtaining a copythereof such Member may write to the Company Secretary in this regard. Disclosurespertaining to remuneration and other details as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are given in Annexure-F to this report.
33 DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.
Anup Internal Complaints Committee (AICC) is formed and its details are declared andaccessible across the organization. All AICC members are trained by subject experts onhandling the investigations and proceedings as defined in the policy.
The Company has not received any sexual harassment related complaints during the year2018-19.
34 ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socioeconomic and environmentaldimensions and contribute to sustainable growth and development.
Your Directors would like to express their appreciation for the assistance andco-operation received from the Company's customers vendors bankers auditors investorsGovernment authorities and stock exchanges during the year under review. Your Directorsplace on record their appreciation of the contributions made by employees at all levels.Your Company's consistent growth was made possible by their hard work solidarityco-operation and support.
| ||For and on behalf of the Board of Directors |
|Date: 20th May 2019 || |
|Place: Ahmedabad ||Sanjay S. Lalbhai |
| ||Chairman |