Home  »  Company  »  AIA Engineering  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of AIA Engineering Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in submitting the 25th Annual Report and the Audited Annual Accounts of the Company for the year ended 31st March, 2015.

1. FINANCIAL HIGHLIGHTS:

Particulars Standalone Year ended Year ended 31st March 31st March 2015 2014 Rs. Lacs Rs. Lacs

Revenue from operations & Other Income 223,135.20 181,557.14

Profit before Finance Cost, Depreciation & 64,625.69 45,785.46 Amortization and Tax Expenses

Finance Cost 339.88 574.07

Depreciation & Amortization 6,761.45 3,629.48

Profit Before Tax 57,524.36 41,581.91

(i) Provision for Taxation (Current) 15,540.04 12,899.26

(ii) Provision for Taxation (Deferred) 527.13 178.72

Total Tax (i ii) 16,067.17 13,077.98

Profit After Tax 41,457.19 28,503.93

Minority Interest - -

Profit After Tax (After Minority Interest) 41,457.19 28,503.93

Surplus Brought Forward from Previous Year 87,664.19 68,628.21

Balance available for appropriations 129,121.38 97,132.14

Transferred to General Reserve 4,146.00 2,851.00

Proposed Dividend on Equity Shares 7,545.63 5,659.22

Tax on Dividend on Equity Shares 1,534.17 957.73

Balance Carried to Balance Sheet 115,895.58 87,664.19

Particulars Consolidated Year ended Year ended 31st March 31st March 2015 2014 Rs. Lacs Rs. Lacs

Revenue from operations & Other Income 226,685.28 211,348.54

Profit before Finance Cost, Depreciation & 66,802.42 50,444.95 Amortization and Tax Expenses

Finance Cost 393.55 636.45

Depreciation & Amortization 6,974.68 3,814.22

Profit Before Tax 59,434.19 45,994.28

(i) Provision for Taxation (Current) 15,795.75 13,254.74

(ii) Provision for Taxation (Deferred) 545.14 167.62

Total Tax (i ii) 16,340.89 13,422.36

Profit After Tax 43,093.30 32,571.92

Minority Interest (0.63) 74.94

Profit After Tax (After Minority Interest) 43,093.93 32,496.98

Surplus Brought Forward from Previous Year 121,453.30 98,436.66

Balance available for appropriations 164,546.60 131,008.58

Transferred to General Reserve 4,146.00 2,901.00

Proposed Dividend on Equity Shares 7,558.39 5,691.13

Tax on Dividend on Equity Shares 1,536.77 963.15

Balance Carried to Balance Sheet 151,306.86 121,453.30

2. OPERATIONAL REVIEW:

During the year under review, the Revenue from Operations of the Company has gone up to Rs. 209,402.79 Lacs as compared to Rs.178,301.05 Lacs in the previous Financial Year. Exports Turnover has also gone up to Rs.145,529.92 Lacs as compared to Rs.122,970.36 Lacs in the previous Financial Year.

During the year under review, Company has earned a Profit Before Tax (PBT) of Rs.57,524.36 Lacs and Profit After Tax (PAT) of Rs.41,457.19 Lacs as compared to PBT of Rs.41,581.91 Lacs and PAT of Rs.28,503.93 Lacs respectively in the previous Financial year.

During the year under review, on a Consolidated basis, your Company (together with its Subsidiaries) has earned Revenue from Operations of Rs.218,363.69 Lacs as compared to Rs.208,007.83 Lacs in the previous Financial Year. Correspondingly, the Consolidated Profit After Tax (PAT) registered during the year under review is ''43,093.93 Lacs (After Minority Interest) as compared to PAT (After Minority Interest)of ''32,496.98 Lacs in the previous Financial Year.

3. DIVIDEND:

The Board of Directors are pleased to recommend a Dividend of Rs.8 (400%) per Equity Share of the face value of Rs.2 each amounting to Rs.7,545.63 Lacs for the Financial Year 2014-15.

The Dividend, if declared by the Shareholders at the ensuing Annual General Meeting, will be paid to those Shareholders, whose names stand registered in the Register of Members as on 12th September, 2015. In respect of Shares held in dematerialized form, it will be paid to the members whose names are furnished by National Securities Depository Limited and Central Depository Services [India] Limited, as beneficial owners.

The total Dividend outgo for the year ended 31st March, 2015 would be Rs.9,079.80 Lacs including the Corporate Dividend Tax of ''1,534.17 Lacs.

4. CREDIT RATING:

CRISIL has reaffirmed both the Long Term and Short Term rating of the Company as CRISIL AA/Stable and CRISIL A , respectively.

5. SHARE CAPITAL:

The paid-up Share Capital of the Company as on 31st March, 2015 is Rs.1,886.41 Lacs. During the year under review, the Company has not issued any Share to Shareholders. Further, the Company has not issued Shares with differential voting rights nor granted stock options or sweat equity.

6. FINANCE:

Cash and cash equivalents as at 31st March, 2015 were ''72,758.47 Lacs. The Company continues to focus on judicious management of its Working Capital, Receivables, Inventories, whole other Working Capital parameters were kept under strict check through continuous monitoring.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the Investments made by the Company are given in the notes to the Financial Statements.

8. CAPITAL EXPENDITURE OUTLAY:

During the year under review, the Company has incurred an expense of Rs.28,088.60 Lacs (including Rs.4,647.57 Lacs of Capital work- in-progress) on Capital Expenditure.

9. HUMAN RESOURCE POLICY:

The Company gives utmost importance to its Human Resources and believes that employee involvement is crucial to sustaining growth. Our Human Resource policy, therefore, promotes employee engagement at all levels. Organization structure design, role profiles, and goal setting exercise are periodically reviewed and strengthened to inculcate a performance oriented culture in the organization, and afford adequate growth opportunities within the organization. Behavioural training programmes and motivational seminars are regularly organized to keep employees motivated and involved. The employees are also encouraged to participate in sporting events inside and outside the Company to foster team spirit. As a result of all these initiatives, we are able to sustain and strengthen employee''s bond with the Company which has resulted in very low attrition rates for many years.

10. BUSINESS PROSPECTS:

Although Cement industry continued to remain sluggish in all key markets during the last financial year, there is an expectation that to stimulate growth in sluggish economies - and in India - respective governments will have to resort to infrastructure spending which will trigger improvement in capacity utilization at Cement plants. The Company will be a beneficiary as and when the same is witnessed. In addition, there are certain specific markets in Asia, Africa and South America, which continue to add capacity or have increased capacity utilization. In China, the Company currently maintains a limited presence by marketing specific products but China continues to remain an important market where we will continue to invest resources and strategize for a bigger market share. In India, while new capacities were created in this segment, the pace has distinctively slowed down. Nevertheless, with the initiatives now being taken to provide stimulus to the Infrastructure Industry, India''s cement production is expected to increase in the next financial year and your Company is confident of maintaining a similar growth in the cement replacement market in India.

From a strategic positioning perspective, a significant contribution in your Company''s growth is expected to come from the mining industry. The growth prospects are primarily emanating out of the large annual replacement market in this industry. Here, we are currently catering to the requirements of four major metal ore types, viz., Iron, Platinum, Gold and Copper, with total emphasis on the replacement market. Further, your Company is positioned as perhaps the only Company in the world offering complete range of High- Chrome consumables to the mining industry, which include grinding media as well as mining liners. This positioning is unique to your Company and augurs well for the consistent and steady growth in this industry over medium to long term. As the Company is focused on four major ores, the declining fortunes of one commodity do not significantly impact your Company''s growth prospects. During last few years, we have steadily increased our presence in the major mining groups across the globe with a stronger focus on major mining centers like Australia, Africa, North America and the Far East Asia, etc. While the current focus of the Company in mining segment is outside India, your Company also has a major share of the domestic mining demand and shall be able to capture incremental demand as and when the same arises.

In as much as the Thermal Power Plants are concerned the Company continues to enjoy a niche position in this particular segment in India. The Company will strive to maintain a steady growth rate in this particular segment matching with the rate at which the sector grows.

11. FUTURE EXPANSION:

The Company''s effective capacity reached 260,000 Metric Tonnes after successful commission of Moraiya brownfield expansion project during 2014-15. We are on target for the capital expenditure plans for Financial Year 2015-16 and will augment the installed capacity to 340,000 MT by commissioning the first of GIDC Kerala Greenfield Project and augmentation of capacity in the Trichy facility. The installed capacity will further be augmented to 440,000 MT when the second phase of the Greenfield expansion in Kerala GIDC is commissioned.

12. SUBSIDIARY COMPANIES:

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements as provided under the Listing Agreement with the Stock Exchanges, the audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, income, profits and other details of the Company and its subsidiaries as a single entity as per Annexure-"A".

The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Subsidiary Companies will also be kept open for inspection at the Registered Office of the Company and that of the respective Subsidiary Companies. The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Companies.

The Annual Accounts of the Subsidiary Companies and the related detailed information will be made available to the members of the Company seeking such information at any point of time.

13. INSURANCE:

The Company has taken adequate insurance coverage of all its assets and Inventories against various calamities viz. fire, floods, earthquake, cyclone etc.

14. DEPOSITS:

The Company has not accepted any deposit from the Public during the year under review, within the meaning of Section 73 of the Companies Act, 2013.

15. INDUSTRIAL RELATIONS (IR):

The Company continues to maintain harmonious industrial relation. We periodically review our HR policies and procedures to aid and improve the living standards of our employees, and to keep them motivated and involved with the larger interests of the organization. The Company has systems and procedures in place to hear and resolve employees grievances in a timely manner, and provides avenues to its employees for their all-round development on professional and personal levels. All these measures aid employee satisfaction and involvement, resulting in good Industrial Relations.

16. INTERNAL CONTROL AND AUDIT:

The Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all assets are safeguarded and protected against loss from un-authorized use or disposition and those transactions are authorized, recorded and reported correctly.

The Board of Directors at the recommendations of the Audit Committee appointed M/s. Shah & Shah Associates, Chartered Accountants as Internal Auditors of the Company for the Financial Year 2015-16.

Internal Auditors monitors and evaluates the efficacy and adequacy of Internal Control System in the Company, its compliance with operating systems, accounting procedures, policies at all locations of the Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

17. CORPORATE GOVERNANCE:

In line with the Company''s commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Clause 49 of the Listing Agreement with the Stock Exchanges.

A separate report on Corporate Governance and Practicing Company Secretaries Report thereon is included as a part of the Annual Report.

18. MANAGEMENT''S DISCUSSION AND ANALYSIS (MDA):

MDA covering details of operations, International markets, Research and Development, Opportunities and Threats etc. for the year under review is given as a separate statement, which forms part of this Annual Report.

19. RISK MANAGEMENT:

In compliance with the provisions of Clause 49 of the Listing Agreement, the Board of Directors have constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. Corporate Risk Evaluation and Management is an ongoing process within the Organization. The Company has a well-defined Risk Management framework to identify, monitor and minimizing/mitigating risks.

The Risk Management framework has been developed and approved by the senior management in accordance with the business strategy.

The key elements of the framework include:

* Risk Structure;

* Risk Portfolio;

* Risk Measuring & Monitoring and

* Risk Optimizing.

The implementation of the framework is supported through criteria for Risk assessment, Risk forms & MIS.

The objectives and scope of Risk Management Committee broadly comprises of:

* Oversight of risk management performed by the executive management:

* Reviewing the Corporate Risk Management Policy and framework within the local legal requirements and Clause 49 of the Listing Agreement;

* Reviewing risks and evaluate treatment including initiating mitigation actions and ownerships as per a predefined cycle;

* Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.

20. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In compliance with Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated a Vigil Mechanism / Whistle Blower Policy (Mechanism) for its Stakeholders, Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct policy.

This Mechanism also provides for adequate safeguards against victimization of Director (s) / Employee (s) / Stakeholders who avail the mechanism and also provide for direct access to the Chairman of the Audit Committee.

The policy is available on the website of the Company www.aiaengineering.com. Any Stakeholder comes across any instances of unethical matters, the same can be reported by sending an email to inform@aiaengineering.com.

21. DIRECTORS:

Mr. Yashwant M. Patel (DIN-02103312), a Whole-Director, of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offered himself for re-appointment.

On the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on 7th November, 2014 appointed Mrs. Khushali Samip Solanki (DIN-07008918) and Mrs. Bhumika Shyamal Shodhan (DIN - 02099400) as Additional Directors of the Company who will hold office of Director up to the date of the ensuing 25th Annual General Meeting. Notices have been received from the members proposing their names for appointment as Directors (Non-Independent Non-Executive) liable to retire by rotation.

The Board of Directors of the Company have also appointed Mr. Rajan Harivallabhdas (DIN 00014625) as an Additional Director (Independent) of the Company on 14th May, 2015 who will also hold office of Director upto the ensuing Annual General Meeting of the members of the Company.

The Remuneration and Nomination Committee recommended the Board for the re-appointment / appointment of the above Directors for the approval of members of the Company at the ensuing 25th Annual General Meeting.

Mr. Vinod Narain (DIN-00058280), an Independent Director of the Company resigned as Director effective from 4th August, 2014 on account of personal reasons. The Board of Directors in their meeting held on 4th August, 2014 took note of the same.

The Board members also placed on record their appreciation of the valuable contributions made by Mr. Vinod Narain in furthering the objectives of the Company.

In the 24th Annual General Meeting of the members of the Company held on 11th September, 2014, Mr. Dileep C. Choksi, Mr. Sanjay S. Majmudar and Mr. Rajendra S. Shah were appointed as Independent Directors under the Companies Act, 2013 for a term of 5 Years effective from 11th September, 2014.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The requisite resolutions for the re-appointment / appointment of Mr. Yashwant M. Patel, Mrs. Khushali Samip Solanki, Mrs. Bhumika Shyamal Shodhan and Mr. Rajan Harivallabhdas as Directors of the Company, are being proposed in the Notice of the ensuing 25th Annual General Meeting for the approval of members.

As required under Clause 49 of the Listing Agreement, the information on the particulars of the Directors proposed for appointment has been given in the Notice of the Annual General Meeting.

a) BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an Annual Performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

b) REMUNERATION POLICY:

The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report which is a Part of the Board''s Report.

c) MEETINGS:

During the year under review, Four Board Meetings and Four Audit Committee meetings were convened and held. The details of Composition of the Committees and dates of the meetings are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement as amended from time to time.

22. DIRECTORS'' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Clause (c) of Sub-section (3) of Section 134 of the Companies Act, 2013, which states that-

(a) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the Company and that such Internal Financial Controls are adequate and were operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

23. RELATED PARTY TRANSACTIONS:

All the Related Party Transactions that were entered into during the financial year were on an Arm''s Length basis and in the Ordinary Course of Business. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel (KMP) which may have a potential conflict with the interest of the Company at large.

During the year under review, the transactions of Purchase / Sale of material with a Subsidiary Company crossed the 10% limit of material transactions. Pursuant to Clause 49 of the Listing Agreement, Company proposes to take the permission of members of the Company by way of Special Resolution to be passed at the ensuing 25th Annual General Meeting.

All Related Party Transactions are placed before the Audit Committee and the Board for their Approval. Prior Omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the Board of Directors for their approval on quarterly basis. The details of Related Party Transactions entered by the Company are disclosed in Form AOC-2 - as per Annexure "B".

The Policy on Related Party Transactions as approved by the Board of Directors is uploaded on the website of the Company viz www.aiaengineering.com.

24. AUDITORS:

STATUTORY AUDITORS:

M/s. Talati & Talati, Chartered Accountants, the Company''s Statutory Auditors will hold office until the conclusion of the ensuing 25th Annual General Meeting and being eligible offer themselves for re- appointment. The Audit Committee and the Board of Directors recommend their re-appointment as Statutory Auditors of your Company.

The Company has received a letter to the effect that their re-appointment, if made, would be within the prescribed limit under Section 139 (1) of the Companies Act, 2013 (the Act) and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act and rules framed thereunder.

As required under Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014, the Cost Audit records maintained by the Company are required to be audited by Cost Accountant. On the recommendations of the Audit Committee, the Board of Directors of the Company have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2014-15.

The Cost Auditor has filed the Cost Audit Report for the financial year ended 31st March, 2014 within the stipulated time frame.

The Board of Directors on the recommendations of the Audit Committee has appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2015- 16. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the members of the Company for their ratification at the ensuing Annual General Meeting. Accordingly, a Resolution seeking member''s ratification of the remuneration payable to M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad is included in the Notice convening the 25th Annual General Meeting.

SECRETARIAL AUDIT REPORT:

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, Mr. Tushar M. Vora, Practicing Company Secretary (ACS-3459, CP No. 1745), Ahmedabad to conduct a Secretarial Audit of the Company''s Secretarial and related records for the year ended 31st March, 2015.

The Report on the Secretarial Audit is annexed herewith as Annexure "C" to this Board''s Report.

25. AUDITORS'' REPORT AND NOTES ON ACCOUNTS:

The Board has duly reviewed the Statutory Auditors'' Report on the Accounts. The observations and comments, appearing in the Auditors'' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors.

The Board has duly reviewed the Statutory Auditors'' Report for the Financial Year ended 31st March, 2015. The observations and comments, appearing in the Statutory Auditors'' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors.

26. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith to this report.

27. CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz AS-21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

28. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure "D".

29. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment of Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided on request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Disclosures in respect of the Remuneration of the Managerial Personnel are given in Annexure "E".

30. CORPORATE SOCIAL RESPONSIBILITY (CSR):

In compliance with the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, the Board of Directors of the Company have constituted a CSR Committee. The Committee is governed by its Charter. The terms of reference of the committee inter alia comprises of the following:

* To review, formulate and recommend to the Board a CSR policy which shall indicate the activities to be undertaken by the Company specified in Schedule VII of the Companies Act, 2013 and rules made thereunder;

* To provide guidance on various CSR activities and recommend the amount of expenditure to be incurred on the activities;

* To Monitor the CSR policy from time to time and may seek outside agency advice, if necessary."

The composition and other details of the CSR Committee are included in the Corporate Governance Report which form part of Board''s Report.

The amount required to be spent on CSR activities during the year under report in accordance with the provisions of Section 135 of the Companies Act, 2013 and rules made thereunder is Rs.587.12 Lacs and the Company has spent Rs.114.47 Lacs during the Financial Year ended 31st March, 2015. The shortfall in the spending during the year under report is intended to be utilized in a phased manner in future, upon identification of suitable projects within the Company''s CSR Policy. The requisite details of CSR activities pursuant to Section 135 of the Companies Act, 2013 and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure ''F''.

31. ENVIRONMENT, HEALTH AND SAFETY:

The Company is committed to health and safety of its employees, contractors and visitors. We are compliant with all EHS Regulations stipulated under the Water (Prevention and Control of Pollution) Act, The Air (Prevention and Control of Pollution) Act, The Environment Protection Act and The Factories Act and Rules made thereunder. Our mandate is to go beyond compliance standards and we have made a considerable improvement in this direction.

32. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the Company''s customers, vendors, bankers, auditors, investors and Government bodies during the year under review. Your Directors place 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, solidarity, co-operation and support.

For and on behalf of the Board,

Place : Ahmedabad (Bhadresh K. Shah) (Yashwant M. Patel) Date : 19th May, 2015 Managing Director Whole-time Director


Mar 31, 2014

The Members,

AIA Engineering Limited

Ahmedabad

The Directors take pleasure in submitting the 24th Annual Report and the Audited Annual Accounts of the Company for the year ended 31st March, 2014.

1. FINANCIAL HIGHLIGHTS:

Particulars Year ended Year ended 31st March, 2014 31st March, 2013 Rs. Lacs Rs. Lacs

Revenue from Operations & Other Income 181,557.92 160,536.72

Profit before Finance Cost, Depreciation & Amortization and Tax Expenses 45,785.46 27,979.07

Finance Cost 574.07 405.93

Depreciation & Amortization 3,629.48 3,069.32

Profit Before Tax 41,581.91 24,503.82

(i) Provision for Taxation (Current) 12,899.26 7,455.88

(ii) Provision for Taxation (Deferred) 178.72 137.59

Total Tax (i ii) 13,077.98 7,593.47

Profit After Tax 28,503.93 16,910.35

Surplus Brought Forward from Previous Year 68,628.21 57,820.00

Balance available for appropriations 97,132.14 74,730.35

Transferred to General Reserve 2,851.00 1,691.10

Proposed Dividend on Equity Shares 5,659.22 3,772.81

Tax on Dividend on Equity Shares 957.73 638.23

Balance Carried to Balance Sheet 87,664.19 68,628.21

2. OPERATIONAL REVIEW:

During the year under review, the Revenue from Operations of the Company has gone up to Rs. 178,301.05 Lacs as compared to Rs. 158,603.66 Lacs in the previous Financial Year. Exports Turnover has also gone up to Rs. 122,970.36 Lacs as compared to Rs. 103,394.24 Lacs in the previous Financial Year.

During the year under review, Company has registered a Profit Before Tax (PBT) of Rs. 41,581.91 Lacs and Profit After Tax (PAT) of Rs. 28,503.93 Lacs as compared to PBT of Rs. 24,503.82 Lacs and PAT of Rs. 16,910.35 Lacs respectively in the previous Financial year.

During the year under review, on a Consolidated basis, your Company (together with its Subsidiaries) registered Revenue from Operations of Rs. 208,007.83 Lacs as compared to the Turnover of Rs. 175,131.07 Lacs in the previous Financial Year. Correspondingly, the Consolidated Profit After Tax (PAT) [After Minority Interest] registered during the year under review is Rs. 32,496.98 Lacs as compared to PAT [After Minority Interest] of Rs. 21,081.96 Lacs in the previous Financial Year.

Your Directors are happy to inform the members that the consolidated Revenue from Operations has crossed the coveted Rs. 2,000 crore mark in the year under review, which is a significant milestone in the history of your Company''s growth. The profitability for the year under review has also improved significantly.

3. DIVIDEND:

The Board of Directors are pleased to recommend a Dividend of Rs. 6 (300%) per Equity Share of the face value of Rs. 2 each amounting to Rs. 5,659.22 Lacs for the Financial Year 2013-14.

The dividend, if declared by the Members at the ensuing Annual General Meeting, will be paid to those Members, whose names stand registered in the Register of Members as on 31st August, 2014. In respect of Shares held in dematerialized form, it will be paid to the Members whose names are furnished by National Securities Depository Limited (NSDL) and Central Depository Services [India] Limited (CDSL), as beneficial owners.

The total Dividend outgo for the year ended 31st March, 2014 would be Rs. 6,616.95 Lacs including the Corporate Dividend Tax of Rs. 957.73 Lacs.

4. CREDIT RATING:

CRISIL has upgraded the rating from "[CRISIL AA/Positive] to CRISIL AA /Stable for your Company''s working capital lines of Rs. 1,000 million from bank indicating a higher stability for timely payment of financial obligations. The Short-term rating of Rs. 500 million has been reaffirmed by CRISIL at "[CRISIL A1 ] indicating the ability of timely servicing of financial obligations.

5. INCREASE IN THE SHAREHOLDING IN WELCAST STEELS LTD., A SUBSIDIARY OF THE COMPANY:

Your Directors are pleased to inform that the Company has increased its shareholding in Welcast Steels Ltd., Bangalore, a Subsidiary of the Company from 72.59% to 74.85% during the year under review.

6. AMALGAMATION OF DCPL FOUNDRIES LIMITED WITH THE COMPANY:

Your Directors are pleased to inform that the Scheme of Amalgamation of DCPL Foundries Ltd. with the Company has been sanctioned by the Hon''ble High Court of Gujarat, Ahmedabad vide its order dated 4th April, 2014 (received by the Company on 2nd May, 2014).

The Scheme has become effective from 3rd May, 2014 and has been implemented with effect from the Appointed Date i.e. 1st April, 2013. The Company has given the accounting effects of the Scheme of Amalgamation of the above Company in its Annual Results for the year ended 31st March, 2014 and in view of this, the previous year''s figures are not comparable with this year''s figures.

7. CAPITAL EXPENDITURE OUTLAY:

During the year under review, the Company has incurred Rs. 10,956.23 Lacs (including Rs. 6,831.48 Lacs of Capital work-in-progress) on Capital Expenditure.

8. HUMAN RESOURCE POLICY:

The Company has till date witnessed very low attrition level. This is on account of its special emphasis on ensuring a fair and sustainable working environment in addition to sufficient growth opportunities. Staff undergoes regular functional and cross- functional training to ensure they are current with skill sets relevant in today''s time. The Company has inducted some senior staff to further augment its HR function in this Fiscal Year. The Company''s business is highly specialized and involves full cycle from designing solutions for customer specific applications, production of highest quality material, supervision of installation of parts at the customer''s end. This requires dedicated staff at all level. Company''s HR policy is aligned periodically to energize the employees for giving competitive edge to the customers in the present volatile market.

9. BUSINESS PROSPECTS:

The Company closed the Fiscal Year 2013-2014 with a growth of 13.09% in terms of revenue as compared to the previous year. Bulk of this growth has come from the mining space. The Company continued its pace of customer addition in this business segment. The Company today services different mineral ores like iron, copper, gold, platinum and zinc for blue chip mining customers in geographies like USA, Canada, Brazil, South Africa, Australia etc.

Bulk of your Company''s growth is focused on mining segment where the Company relies heavily in its endeavour of replacing its products in place of the conventional forged parts or taking away some market share from its existing key competitor based out of Belgium. The addressable market opportunity relating to the replacement demand of consumable ware parts from the key ores can be regarded to be at least 1.5 million tons per annum and as against that not more than 20% has been converted into the high Chrome use – which is the opportunity on which your Company is very much focused upon. No doubt this entails a tremendous degree of customization which involves a long process anywhere between 9 to 15 months or even longer in some cases.

For the upcoming Fiscal Year, i.e. 2014-15, the Company expects to further increase its market share in the mining space by targeting increased business from existing customers as well as new customers. In the Cement market, the Company will continue to focus on countries with high growth potential.

In the utility market in India, there is a lot of optimism in relation to the planned commissioning of coal fired thermal power stations in the country and the Company will continue to benefit from its strong presence in this market.

10. FUTURE EXPANSION:

Company''s effective capacity at end of Fiscal Year 2013-2014 stood at 260,000 Metric tons, the Company having successfully completed the Brownfield expansion project at its Moraiya plant. The Company is on target in implementing its Capex plans for FY 2014-15 and 2015-16 so as to effectively augment the total available capacity from the exiting level of 2.60 Lac TPA as on 31.03.2014 to 4.40 Lac TPA by 31.03.2016. The major expansion in the capacity will be at a new Greenfield site at GIDC Kerala, which is close to the existing Moraiya plant which is expected to be commissioned in phases; partly in FY 2014-15 and partly in FY 2015-16.

11. SUBSIDIARY COMPANIES:

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements as provided under the Listing Agreement with the Stock Exchanges, the audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, income, profits and other details of the Company and its Subsidiaries as a single entity.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the Subsidiary Companies are not being attached with the Balance Sheet of the Company. As required under the circular, the Board of Directors at its meeting held on 27th January, 2014 passed a resolution giving consent for not attaching these documents with the Balance Sheet of the Company.

The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any Member of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies will also be kept open for inspection at the Registered Office of the Company and that of the respective Subsidiary Companies. The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Companies.

The Annual Accounts of the Subsidiary Companies and the related detailed information will be made available to the members of the Company seeking such information at any point of time.

12. INSURANCE:

The Company has taken adequate insurance coverage of all its Assets and Inventories against various calamities viz. fire, floods, earthquake, cyclone etc.

13. DEPOSITS:

The Company has not accepted any deposit from the public during the year under review, within the meaning of Section 58A of the Companies Act, 1956.

14. INDUSTRIAL RELATIONS:

The Company is extremely sensitive in dealing with its staff and workers and continues to take steps towards achieving the highest standards of industrial harmony. All statutory compliances are maintained and its focused efforts towards nurturing its staff are reflected in its work culture. Company has always tuned its policy and process to help staff and workers to have a quality life and keep high morale in the organization. Company has continued regular interaction with the business and industrial fraternity through prestigious institutions like Confederation of Indian Industries (CII), Gujarat Chamber of Commerce and Industries (GCCI), Ahmedabad Management Association (AMA) and other recognized associations and institutes.

15. INTERNAL CONTROL AND AUDIT:

Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all assets are safeguarded and protected against loss from un-authorised use or disposition and those transactions are authorised, recorded and reported correctly.

During the year under review, M/s. Kunte & Associates, Chartered Accountants, Ahmedabad resigned as Internal Auditors of the Company on 31st August, 2013.

The Board of Directors at the recommendation of the Audit Committee appointed M/s. Shah & Shah Associates, Chartered Accountants, Ahmedabad as Internal Auditors of the Company for the period from 1st September, 2013 to 31st March, 2014.

16. CORPORATE GOVERNANCE:

In line with the Company''s commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Clause 49 of the Listing Agreement with the Stock Exchanges.

A separate report on Corporate Governance and Practicing Company Secretaries Report thereon is included as a part of the Annual Report.

17. MANAGEMENT''S DISCUSSION AND ANALYSIS (MDA):

MDA covering details of operations, International markets, Research and Development, Opportunities and Threats etc. for the year under review is given as a separate statement, which forms part of this Annual Report.

18. DIRECTORS:

Dr. S. Srikumar, a Director, of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offered himself for re-appointment.

The Board recommends for the approval of the Members, the re-appointment of Dr. S. Srikumar, as Director of the Company, at the ensuing Annual General Meeting of the members of the Company.

The Board of Directors of the Company in their meeting held on 27th January, 2014 appointed Mr. Dileep C. Choksi as an Additional Director (Independent) of the Company who holds office of Director up to the date of the forthcoming Annual General Meeting. Notice has been received from a member proposing his name for appointment as a Director.

The Board recommends for the approval of the members, the re-appointment of Mr. Dileep C. Choksi, as an Additional Director (Independent) of the Company, at the ensuing Annual General Meeting of the members of the Company.

The Board also recommends the appointment of Mr. Vinod Narain, Mr. Sanjay S. Majmudar and Mr. Rajendra S. Shah as Independent Directors for the 2nd term of five years from 11th September, 2014 to 10th September, 2019 for approval of the Members at the ensuing Annual General Meeting.

19. STATUTORY AUDITORS:

M/s. Talati & Talati, Chartered Accountants, Ahmedabad the Company''s Statutory Auditors will hold office until the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re- appointment. The Audit Committee and the Board of Directors recommend their re-appointment as Statutory Auditors of your Company.

The Company has received a letter to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 (1) of the Companies Act, 2013 (the Act) and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act.

20. AUDITORS'' REPORT AND NOTES ON ACCOUNTS:

The Board has duly reviewed the Statutory Auditors'' Report on the Accounts. The observations and comments, appearing in the Auditors'' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors under Section 217[3] of the Companies Act, 1956.

21. COST AUDITORS:

In compliance with the Ministry of Corporate Affairs'' order No. 52/26/CAB-2010 dated 3rd May, 2011, on the recommendations of the Audit Committee, the Board of Directors of the Company has appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors to audit the Cost Accounting Records of the Company for the Financial Year 2013-14.

The Cost Auditor has filed the Cost Audit Report for the Financial Year ended 31st March, 2013 within the stipulated time.

22. PARTICULARS OF EMPLOYEES:

In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the Shareholders excluding the particulars of the employees as mentioned in Section 217(2A) of the Companies Act, 1956. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure is related to any Director of the Company.

23. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are provided as an Annexure–A to this report.

24. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors hereby confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

(ii) sound accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year ended 31st March, 2014 and the Profit for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Annual Accounts have been prepared on a going concern basis.

25. SUSTAINABLE DEVELOPMENT:

The Company is firm in its commitment towards sustainable growth and its social responsibility. Various initiatives are planned which are explained in more detail in Annexure ''B'' of this report.

26. ENVIRONMENT, HEALTH AND SAFETY:

The Company is committed to health and safety of its employees, contractors and visitors. We are compliant with all EHS Regulations stipulated under the Water (Prevention and Control of Pollution) Act, The Air (Prevention and Control of Pollution) Act, The Environment Protection Act and The Factories Act and Rules made thereunder. Our mandate is to go beyond compliance and we have made a considerable improvement.

27. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the Company''s customers, vendors, bankers, auditors, investors and Government bodies during the year under review. Your Directors place 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, solidarity, co-operation and support.

For and on behalf of the Board, Place : Ahmedabad (Rajendra S. Shah)

Date:20th May, 2014 Chairman


Mar 31, 2013

To, The Members of AIA Engineering Limited Ahmedabad

The Directors take pleasure in submitting the 23rd Annual Report and the Audited Annual Accounts of the Company for the year ended 31st March, 2013.

1. FINANCIAL HIGHLIGHTS:

Particulars Year ended Year ended 31st March, 2013 31st March, 2012 Rs. Lacs Rs. Lacs

Revenue from operations & Other Income 160536.73 128421.30

Profit before Finance Cost, Depreciation & Amortization and Tax Expenses 27979.07 24759.72

Finance Cost 321.93 213.40

Depreciation & Amortization 3069.32 2547.20

Profit before tax 24587.82 21999.12

(i) Provision for Taxation (Current) 7539.88 6659.00

(ii) Provision for Taxation (Deferred) 137.59 249.36

Total Tax (i ii) 7677.47 6908.36

Profit after tax 16910.35 15090.75

Surplus Brought Forward from Previous Year 57820.00 47525.51

Balance available for Appropriations 74730.35 62616.26

Transferred to General Reserve 1691.10 1509.10

Proposed Dividend on Equity Shares 3772.81 2829.61

Tax on Dividend on Equity Shares 638.23 457.55

Balance Carried to Balance Sheet 68628.21 57820.00

2. OPERATIONAL REVIEW:

During the year under review, the Revenue from Operations of the Company has gone up to Rs. 158603.66 Lacs as compared to Rs. 127256.00 Lacs in the previous Financial Year. Exports Turnover has also gone up to Rs. 103394.25 Lacs as compared to Rs. 75602.15 Lacs in the previous Financial Year.

During the year under review, Company has registered a Profit Before Tax (PBT) of Rs. 24587.82 Lacs and Profit After Tax (PAT) of Rs. 16910.35 Lacs as compared to PBT of Rs. 21999.12 Lacs and PAT of Rs. 15090.75 Lacs respectively in the previous Financial year. During the year under review, on a Consolidated basis, your Company (together with its Subsidiaries) registered Revenue from Operations of Rs. 175131.07 Lacs as compared to the Turnover of Rs. 141666.64 Lacs in the previous Financial Year. Correspondingly, the Consolidated Profit After Tax (PAT) registered during the year under review is Rs. 21162.33 Lacs as compared to PAT of Rs. 18120.43 Lacs in the previous Financial Year.

3. DIVIDEND:

The Board of Directors is pleased to recommend a Dividend of Rs. 4 (200%) per Equity Shares of the face value of Rs. 2 each amounting to Rs. 3772.81 Lacs for the Financial Year 2012-13.

The dividend, if declared by the shareholders at the ensuing Annual General Meeting, will be paid to those shareholders, whose names stand registered in the Register of Members as on 3rd August, 2013. In respect of shares held in dematerialized form, it will be paid to the members whose names are furnished by National Securities Depository Limited and Central Depository Services [India] Limited, as beneficial owners.

The total Dividend outgo for the year ended 31st March, 2013 would be Rs. 4411.04 Lacs including the Corporate Dividend Tax of Rs. 638.23 Lacs.

4. ACQUISITION OF REMAINING 30% EQUITY SHARES OF DCPL FOUNDRIES LTD.:

The Company has acquired the remaining 3,00,000 (30%) Equity Shares of the face value of Rs. 10 at a price of Rs. 10 each of DCPL Foundries Ltd. from Dhandapani Cements Pvt. Ltd. and its Promoters.

With the acquisition of the said Equity Shares, DCPL Foundries Ltd. has become the Wholly-owned Subsidiary of the Company with effect from 5th September, 2012.

5. JOINT VENTURE AGREEMENT WITH POLYEX MINERALS PVT. LTD.:

The Company has entered into a Share Purchase Agreement on 11th April, 2013 for the acquisition of 5,000 Equity Shares of Rs. 10 each (being 50% of the Paid-up Share Capital) of Polyex Minerals Private Limited, Ahmedabad (Polyex) at a price of Rs. 10 per Share, for a total consideration of Rs. 50000. The Joint Venture has come into effect from 11th May, 2013.

The said Joint Venture proposes to establish a SiLca Sand Refining Project with refining Capacity of 2,00,000 MT of raw sand per annum to produce 100,000 MT of Special graded Sand, subject to clearances of various approvals from Statutory Authorities.

The Joint Venture has significance for the Company as a backward integration project that will allay the Company''s concerns with the procurement of Quality Sand on a continuous basis.

6. CAPITAL EXPENDITURE OUTLAY:

During the year under review, the Company has incurred Rs. 8647.20 Lacs (including Rs. 3174.85 Lacs of Capital work-in-progress) on Capital Expenditure.

7. HUMAN RESOURCE POLICY:

The Company has till date witnessed very low attrition levels. This is on account of its special emphasis on ensuring a fair and sustainable working environment in addition to sufficient growth opportunities. Staff undergoes regular functional and cross- functional training to ensure they are current with skill sets relevant in today''s time. The Company has inducted some senior staff to further augment its HR function in this Fiscal Year. The Company''s business is highly specialized and involves full cycle from designing solutions for customer specific applications, production of highest quality material, supervision of installation of parts at the customer''s end. This requires dedicated staff at all level. Company''s HR policy is aligned periodically to energize the employees for giving competitive edge to the customers in the present volatile market.

8. BUSINESS PROSPECTS:

The Company closed the Fiscal Year 2012-2013 with a growth of 13.38 % in terms of tonnage and 24.76% in terms of revenue as compared to the previous year. Bulk of this growth has come from the mining space. The Company continued its pace of customer addition in this business segment. The Company today services different mineral ores like iron, copper, gold, platinum and zinc for blue chip mining customers in geographies like USA, Canada, Brazil, South Africa, Australia, etc.

While the cement sector worldwide continuous to remain flat, your company has managed to achieve a nominal growth in this segment in Fiscal Year 2012-13 as compared to the previous year. However, in all fairness it must be stated that while this may be read as some early signs of recovery, the same could be confined only to a select few geographies only. Thus, the European markets particularly Western Europe still continue to face very difficult situation while some revival may be seen in North American market and a few other markets.

Bulk of your company''s growth is therefore focused on mining segment where the company relies heavily in its endeavour of replacing its products in place of the conventional forged parts or taking away some market share from its existing key competitor based out of Belgium. The addressable market opportunity relating to the replacement demand of consumable ware parts from the key ores can be regarded to be at least 1.5 million tons per annum and as against that not more than 15% has been converted into the high Chrome use - which is the opportunity on which your company is very much focused upon. No doubt this entails a tremendous degree of customization which involves a long process of anywhere between 9 to 15 months or even longer in some cases. However with a sales tonnage of over 75000 tons already attained in the mining space in Fiscal Year 2013 your company is now positioned as a serious long term committed player in this space and with many new mines under development, your company continues to remain bullish about a steady and sustainable Growth over a medium to long term from this particular segment.

For the upcoming Fiscal Year, i.e. 2013-14, the Company expects to further increase its market share in the mining space by targeting increased business from existing customers as well as new customers. In the Cement market, the company will continue to focus on countries with high growth potential.

In the utility market in India, there is a lot of optimism in relation to the planned commissioning of coal fired thermal power stations in the country and the Company will continue to benefit from its strong presence in this market.

9. FUTURE EXPANSION:

AIAE''s effective capacity at end of Fiscal Year 2012-2013 stood at 200,000 Metric tons. The company is on target in implementing its Capex plans for Fiscal Year 2013-14 and 2014-15 so as to effectively augment the total available capacity from the existing level of 2 lac TPA as on 31.03.2013 to 3 lac TPA by 31.03.2015. Out of this in the current Fiscal Year 2013-14 the company has plans to implement the Moraiya Brown field capacity expansion project and in Fiscal Year 2014-15 the Kerala Greenfield project is expected to come on stream.

10. SUBSIDIARY COMPANIES:

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates and as provided under the Listing Agreement with the Stock Exchanges, the audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, income, profits and other details of the Company, its associates companies and its subsidiaries as a single entity.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. As required under the circular, the Board of Directors at its meeting held on 30th May, 2013 passed a resolution giving consent for not attaching these documents with the Balance Sheet of the Company.

The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

The Annual Accounts of the Subsidiary Companies and the related detailed information will be made available to the members of the Company seeking such information at any point of time.

11. INSURANCE:

The Company has taken adequate insurance coverage of all its Assets and Inventories against various calamities viz. fire, floods, earthquake, cyclone etc.

12. DEPOSITS:

The Company has not accepted any deposit from the public during the year under review, within the meaning of Section 58A of the Companies Act, 1956.

13. INDUSTRIAL RELATIONS:

The Company is extremely sensitive in dealing with its staff and workers and continues to take steps towards achieving the highest standards of industrial harmony. All statutory compliances are maintained and its focused efforts towards nurturing its staff are reflected in its work culture. Company has always tuned its policy and process to help staff and workers to have a quality life and keep high morale in the organization. Company has continued regular interaction with the business and industrial fraternity through prestigious institutions like Confederation of Indian Industries (CII), Gujarat Chamber of Commerce and Industries (GCCI), Ahmedabad Management Association (AMA) and other recognized associations and institutes.

14. INTERNAL CONTROL AND AUDIT:

Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all assets are safeguarded and protected against loss from un-authorised use or disposition and those transactions are authorised, recorded and reported correctly.

During the year under review, Internal Audit of the Company has been carried out by M/s. Kunte & Associates, Chartered Accountants, Ahmedabad.

15. CORPORATE GOVERNANCE:

In line with the Company''s commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Clause 49 of the Listing Agreement with the Stock Exchanges.

A separate report on Corporate Governance and Practicing Company Secretaries Report thereon is included as a part of the Annual Report.

16. MANAGEMENT''S DISCUSSION AND ANALYSIS (MDA):

MDA covering details of operations, International markets, Research and Development, Opportunities and Threats etc. for the year under review is given as a separate statement, which forms part of this Annual Report.

17. DIRECTORS:

Mr. Sanjay S. Majmudar, Director and Mr.Yashwant M. Patel, Whole-time Director, of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment.

The Board recommends the re-appointments of Mr.Sanjay S. Majmudar, Director and Mr.Yashwant M. Patel, Whole-time Director as Directors of the Company.

Mr.Bhupendra A Shah, an Independent Director of the Company expired on 23-2-2013. Board of Directors in their meeting held on 30-5-2013 has decided not to fill the casual vacancy created by the sad demise of Mr.Bhupendra A. Shah, Independent Director as the present composition of the Board of Directors of the company is in compliance with Clause 49 of the Listing Agreement.

18. STATUTORY AUDITORS:

M/s. Talati & Talati, Chartered Accountants, the Company''s Statutory Auditors will hold office until the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

The Company has received a letter to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

19. AUDITORS'' REPORT AND NOTES ON ACCOUNTS:

The Board has duly reviewed the Statutory Auditor''s Report on the Accounts. The observations and comments, appearing in the Auditor''s Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors under section 217[3] of the Companies Act, 1956.

20. COST AUDITORS:

In compliance with the Ministry of Corporate Affairs'' order No. 52/26/CAB-2010 dated 3rd May 2011, on the recommendations of the Audit Committee, the Board of Directors of the Company on the approval of the Central Government, has appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2012-13.

The Cost Auditor has filed the cost audit reports for the financial year ended 31st March, 2012 within the due date.

21. PARTICULARS OF EMPLOYEES:

The particulars of employees, as required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended are given as an Annexure - A to this report.

22. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are provided as an Annexure-B to this report.

23. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors hereby confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

(ii) sound accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year ended 31st March, 2013 and the Profit for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Annual Accounts have been prepared on a going concern basis.

24. SUSTAINABLE DEVELOPMENT:

The Company is firm in its commitment towards sustainable growth and its social responsibility. Various initiatives are planned which are explained in more detail in Annexure ''C'' of this report.

25. ENVIRONMENT, HEALTH AND SAFETY:

The Company is committed to health and safety of its employees, contractors and visitors. We are compliant with all EHS Regulations stipulated under the Water (Prevention and Control of Pollution) Act, The Air (Prevention and Control of Pollution) Act, The Environment Protection Act and The Factories Act and Rules made thereunder. Our mandate is to go beyond compliance and we have made a considerable improvement.

26. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the Company''s customers, vendors, bankers, auditors, investors and Government bodies during the year under review. Your Directors place 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, solidarity, co-operation and support.

For and on behalf of the Board,

Place : Ahmedabad (Rajendra S. Shah)

Date : 30th May, 2013 Chairman


Mar 31, 2010

The Directors take pleasure in submitting the 20th Annual Report and the Audited Annual Accounts of the Company for the year ended 31st March, 2010.

1. FINANCIAL HIGHLIGHTS:

Particulars Year ended Year ended 31st March 2010 31st March 2009 Rs. in Lacs Rs. in Lacs

Sales & Other Income 83195.14 94283.38

Profit before Interest, Depreciation and Taxation 20586.94 22283.01

Interest 76.21 84.67

Depreciation 1880.59 1617.08

Profit Before Tax 18630.14 20581.26

(i) Provision for Taxation (Current) 6100.00 6775.00

(ii) Short / Excess provision of Taxation 18.18 7.59

(iii) Provision for Taxation (Deferred) 255.77 421.90

(iv) Provision for Fringe Benefits Tax 0.00 31.00

Total Tax (i+ii+iii+iv) 6373.95 7235.49

Profit After Tax 12256.19 13345.77

Surplus Brought Forward from Previous Year 30855.71 21600.91

Balance available for Appropriations 43111.90 34946.68

Interim Dividend on Equity Shares 754.56 563.90

Proposed Final Dividend on Equity Shares 1603.45 1792.09

Tax on Dividend on Equity Shares 393.03 400.40

Transferred to General Reserve 1225.62 1334.58

Balance Carried to Balance Sheet 39135.24 30855.71

2. OPERATIONAL REVIEW:

During the year under review, your Company has registered a Turnover of Rs.80419.50 Lacs as compared to Rs.92285.95 Lacs in the previous Financial Year on account of decrease in Raw Material prices and consequently decrease in Sales Realization. Exports Turnover is Rs.41026.14 Lacs as compared to Rs. 49182.21 Lacs in the previous Financial Year. *

During the year under review, Company has registered a Profit Before Tax (PBT) of Rs.18630.14 Lacs and Profit After Tax (PAT) of Rs.12256.19 Lacs as compared to PBT of Rs. 20581.26 Lacs and PAT of Rs.13345.77 Lacs respectively in the previous Financial year.

During the year under review, on a consolidated basis, your Company (together with its Subsidiaries) registered a Turnover of Rs.94970.14 Lacs as compared to the Turnover of Rs. 102329.10 Lacs in the previous Financial Year. Correspondingly, the Consolidated Profit After Tax (PAT) registered during the year under review is Rs.17110.25 Lacs as compared to PAT of Rs. 17414.93 Lacs in the previous Financial year.

3. DIVIDEND:

During the Financial Year 2009-10, the Company has paid an Interim Dividend of Rs.0.80 per Share on 94320370 Equity Shares of Rs.2 each aggregating to Rs.754.56 Lacs on 8* February 2010.

The Board of Directors are pleased to recommend a Final Dividend of Rs.1.70 per Equity Share of Rs.2 each amounting to Rs. 1603.45 Lacs for the Financial Year 2009-10 subject to the approval of the Shareholders.

The total Dividend outgo for the year ended 31s* March 2010 would be Rs.2751.04 Lacs including the Corporate Dividend Tax of Rs.393.03 Lacs.

4. ALLOTMENT OF EQUITY SHARES OF THE COMPANY:

During the year under review, the Company has allotted 336430 Equity Shares of Rs.2 each to the Shareholders of erstwhile Reclamation Welding Limited pursuant to the Scheme of Amalgamation of Reclamation Welding Limited and Paramount Centrispun Castings Private Limited with the Company as sanctioned by the HonTsle High Court of Gujarat, Ahmedabad vide their order dated 8th May 2009.

5. PASSING OF RESOLUTIONS THROUGH POSTAL BALLOT:

Pursuant to Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal Ballot) Rules 2001, approval of the members were sought for passing the following Special / Ordinary resolutions through Postal Ballot:

(1) SPECIAL RESOLUTION - Under Section 17 & 149 (2A) of the Companies Act, 1956 for the insertion of a New Object Clause in the Main Object Clause of the Memorandum of Association of the Company;

(2) ORDINARY RESOLUTION - Under Section 293 (1) (d) of the Companies Act, 1956 for amending the Borrowing Powers of the Board of Directors; and

(3) ORDINARY RESOLUTION - Under Section 293 (1) (a) of the Companies Act, 1956 for amending the powers of the Board of Directors for Mortgage / Hypothecate / Create Security, the properties of the Company with respect to the Borrowings made by the Company.

The Scrutinizer Mr. Tushar Vora, Practicing Company Secretary submitted his Report on 3rd April 2010 to the Chairman of the Company. The result of the approval of the members of the above resolutions was announced on 5th April 2010. All the resolutions were approved by the members of the Company with requisite majority.

6. ACQUISITION OF A DOWN THE LINE SUBSIDIARY IN SOUTH AFRICA:

During the year under review, Vega Industries (Middle East) FZE, U AE, a Wholly-owned Subsidiary of the Company has acquired 100% Shares of Tuffsan Trading 295 (Proprietary) Limited, South Africa (Tuffsan). The name of Tuffsan was later changed to Vega Steel Industries (RSA) (Proprietary) Limited, South Africa.

7. CAPITAL EXPENDITURE OUTLAY:

During the year under review, the Company has incurred Rs. 3277.72 Lacs (including Rs.1026.66 Lacs of Capital work-in-progress) on Capital Expenditure.

8. HUMAN RESOURCE POLICY:

Company endeavor to become a globally dominant supplier in its products by providing customized innovative solutions and adding value by continuous improvement in all operations at its end and at the customers end through its talented team. By bringing together the talents, energy and enthusiasm of professionals and experienced team members, has institutionalized bonding amongst the team. Company encourages inculcation of fairness and equity amongst the employees with Corporate Governance as a driving force. Company recognizes employees collaborative efforts, honesty and thrust for high integrity and desire for growth as the key values for the growth and development of the Company.

9. BUSINESS PROSPECTS:

The Company is operating in a high technology oriented niche engineering segment, involving manufacturing of impact abrasion and wear resistant High Chrome Mill Internal products used by Cement, Mining and Utility industries. The Company services the replacement demand of these industries and the OEM requirement for which new capacities have been added.

Fiscal year 2008-09 particularly the second half of fiscal year 2008-09 witnessed onset of deep recessionary trends in the major global markets. The countries which were particularly worst hit include North America, South America, European Subcontinent as well as CIS countries. Since your Company is strongly present in the Cement segment in all these major markets, it has witnessed a temporary impact of this slow down in the Cement replacement demand from the above markets. This impact to a large extent was also felt during the fiscal year 2009-10. However, some of the pockets of the world market-particularly Eastern Europe, The Middle East, Latin America, China and the Asia Pacific countries have continued their growth in Cement Business with varying degree. It is hoped that the EU and the US will start recovery in FY 2011.

On the Mining front, since your Company had focused strongly on Iron Ore for its worldwide foray into Mining business, significant slow down in the Iron Ore production world wide resulted into a sizeable destocking activity by the major Iron Ore mines, which affected your Companys plan to ramp up its production for servicing this segment in First Half of FY 2010.

However, the initiatives taken by the Company for sustaining the growth momentum have yielded satisfactory results. Thus, in the Cement segment your Company has widened the market horizon by adding many new Countries and Customers in FY 2010. On the Mining front your Company has aggressively diversified into other minerals like Copper, Platinum and Gold and has added many new Customers and Markets from the Second Half of FY 2010. It is heartening to note that on the Iron Ore front, the demand has revived and the Company has started servicing this segment also.

Similarly on the Cement front, your Company has also started supplies to the Chinese markets.

On the domestic marketing front, your Company continues to enjoy a significant share in all the three segments where it operates.

Thus, the long term prospects continue to remain very much bullish and strong.

10. FUTURE EXPANSION:

Your Company is targeting to increase the production capacity from 165,000 MT per year to 200,000 MT per year and the increased capacity is expected to come online in 2010-2011. This includes a new plant to manufacture 20,000 MT of Vertical Mill Internals. This plant is expected to be commissioned in July 2010.

11. SUBSIDIARY COMPANIES:

As required under the Listing Agreement with the Stock Exchanges and in accordance with the Accounting Standard 21 (AS-21), Consolidated Financial Statements being prepared by the Company include financial information of its Subsidiaries.

In accordance with the provisions laid down in Section 212 of the Companies Act, 1956* the Company is required to attach the Annual Accounts of the Subsidiary Companies to its Annual Accounts.

On an Application made by the Company, the Government of India, Ministry of Corporate Affairs vide its letter No. 47/196/2010-CL-III dated 5th April 2010 granted exemption to the Company from attaching the Audited Accounts of the Subsidiaries to this Annual Report for the Financial Year ended 31st March 2010 subject to the compliance of terms and conditions as mentioned in their letter.

The Company has Subsidiaries in India and Abroad. A statement containing brief financial details of these Companies for the year ended 31st March 2010 forms part of this Annual Report. The Annual Accounts of the Subsidiary Companies will be available for inspection by any investor at the Registered Office of the Company. The Annual Accounts of the Subsidiary Companies and the related detailed information will be made available to the investors of the Company seeking such information at any point of time.

12. INSURANCE:

The Company has taken adequate insurance coverage of all its Assets and Inventories against various calamities viz. fire, floods, earthquake, cyclone etc.

13. DEPOSITS:

The Company has not accepted deposits from the Public during the year under review, within the meaning of Section 58A of the Companies Act, 1956.

14. INDUSTRIAL RELATIONS:

Company has sustained its position as a law binding. All statutory compliances are maintained and excellent family bonding is reflected in its work culture. Company has always perceived the changing needs of its employees and being sensitive to it, have continuously fine tuned its policy and process to help employees to have a quality life and keep high morale in the organization. Company has continued regular interaction with the business and industrial fraternity through prestigious institutions like Confederation of Indian Industries (CII), Gujarat Chamber of Commerce and Industries (GCCI), Ahmedabad Management Association (AMA) and other recognized Associations and Institutes.

15. INTERNAL CONTROL AND AUDIT:

Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all Assets are safeguarded and protected against loss from un-authorised use or disposition and those transactions are authorised, recorded and reported correctly.

During the year under review, Internal Audit of the Company has been carried out by a firm of Chartered Accountants.

16. CORPORATE GOVERNANCE:

In line with the Companys commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Clause 49 of the Listing Agreement with the Stock Exchanges.

A separate report on Corporate Governance and Practicing Company Secretaries Report thereon are included as a part of the Annual Report.

17. MANAGEMENT DISCUSSION AND ANALYSIS (MDA):

MDA covering details of operations, International markets, Research and Development, Opportunities and Threats etc. for the year under review is given as a separate statement, which forms part of this Annual Report.

18. DIRECTORS:

Mr. Rajendra S. Shah and Mr. Sanjay S. Majmudar, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board recommends the re-appointments of Mr. Rajendra S. Shah and Mr. Sanjay S. Majmudar as Directors of the Company.

Pursuance to Clause 49 of the Listing Agreement, brief resumes of Mr. Rajendra S. Shah and Mr. Sanjay S. Majmudar, together with their expertise in specific functional areas and names of the other public Companies in which they hold office of a Director and / or the Chairman / Membership of Committees of the Board, is given in the Notice of the Annual General Meeting.

19. STATUTORY AUDITORS:

M/s. Talati & Talati, Chartered Accountants, the Companys Statutory Auditors will retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

20. PARTICULARS OF EMPLOYEES:

The particulars of employees, as required under Section 217 (2A) of the Companies Act, 1956 are given as an Annexure-A to this report.

21. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 217 (1) (e) of the Companies Act, 1956 are given as an Annexure- B to this report.

22. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors hereby confirm that:

(i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed;

(ii) sound accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year ended 31st March 2010 and the Profit and Loss Account for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing & detecting fraud and other irregularities;

(iv) the Annual Accounts have been prepared on a going concern basis.

23. GROUP FOR INTER-SE TRANSFER OF SHARES:

As required under Clause 3(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) 1997, persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid SEBI Regulations are given in Annexure C, attached herewith and the said Annexure C forms part of this Annual Report.

24. ACKNOWLEDGEMENT:

Your Directors thank the Companys Customers, Vendors, Bankers, Auditors, Investors and Government bodies for their continued support during the year. Your Directors place on record their appreciation of the contributions made by employees at all levels. Your Companys consistent growth was made possible by their hard work, solidarity, co-operation and support.

For and on behalf of the Board,

Place: Ahmedabad (Rajendra S. Shah) Date : 29th May, 2010 Chairman

 
Subscribe now to get personal finance updates in your inbox!