Mar 31, 2018
The Directors are pleased to present their 71st Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended March 31, 2018.
GENERAL OUTLOOK OF INDUSTRY AND ECONOMY:
The previous year has seen a lot of disturbances in the business environment especially after demonetization and GST rollout. As GST related operational issues get sorted over time, we expect a gradual recovery in economic activity. While the demand-supply position still remains unfavorable, we continue to focus on volume growth without substantially compromising the margins. This is important to maintain our market position while we wait for a meaningful revival of capital expenditure cycle.
We continue to focus on building our order book and customer connect while simultaneously working on enhancing on our internal capabilities to capitalize on the next business cycle.
FINANCIAL PERFORMANCE:
(Rs. in Lakhs)
Year ended 31st March, 2018 |
Year ended 31st March, 2017 |
|
Revenue from operations |
78,980.95 |
74,970.35 |
Other Income |
2,116.88 |
2,673.19 |
81,097.83 |
77,643.54 |
|
Profit before Interest & Financial Charges, Depreciation, Exceptional items and Tax |
5,449.61 |
4,387.92 |
Less: Interest and Financial Charges |
1,928.27 |
1,594.82 |
Less: Depreciation |
931.44 |
987.42 |
Profit before Exceptional items and Tax |
2,589.90 |
1,805.68 |
Add: Exceptional items |
4677.92 |
0.00 |
Profit before Tax |
7,267.82 |
1,805.68 |
Less: Provision for Taxation |
1,171.06 |
363.86 |
Profit after Taxation |
6,096.76 |
1,441.82 |
Add: Profit Brought Forward |
5,341.71 |
3,800.60 |
Add: Other Comprehensive Income arising from remeasurement of Defined Benefit Plan (net of tax) |
68.80 |
99.29 |
Profit Carried Forward |
11,507.27 |
5,341.71 |
Previous yearâs figures have been regrouped for comparison purposes with current yearâs presentation wherever necessary.
DIVIDEND:
In line with the improved financial performance as compared to previous three (3) financial years, your Directors are pleased to recommended a dividend of Rs.2.50 (Rupees Two and Paise Fifty ) (25%) (Previous year NIL) per equity share of Rs.10/- (Rupees Ten only) each, for the financial year 2017-2018. The dividend, if approved by the Members at the 71st Annual General Meeting will result in the total dividend appropriation of Rs.170.33 lakhs including dividend distribution tax of Rs.29.04 lakhs (Previous year NIL).
OPERATIONS:
The Company had to maintain its operations amidst disruptions caused by GST implementation and mandatory shift to IE2 (High Efficiency) electric motors from earlier IE1 (Standard Efficiency) electric motors. Private spending and investment relating to capital goods did not show any remarkable recovery during the year.
Income from Sales and Services (Net of Excise duty) for the Company increased from Rs.67,747.33 lakhs in the previous year to Rs.77,399.06 lakhs, a rise of 14%. With continued focus on deeper market penetration and value engineering, the profit before exceptional items and tax improved from Rs.1,805.68 lakhs in the previous year to Rs.2,589.90 lakhs. During the year, an exceptional income before tax of Rs.4677.92 lakhs accrued to the Company on surrender of a part of its leasehold factory land at Navi Mumbai to Maharashtra Industrial Development Corporation for a public road project.
FINANCE:
Increase in sales, GST and elongated working capital cycle caused negative cash flows from operations and caused an increase of Rs.333.45 lakhs in finance cost for the year. The Company managed enough lines of credit to ensure a smooth flow of operations. The free Reserves of the Company as on March 31, 2018 increased by Rs.6,165.56 lakhs to Rs.35,978.64 lakhs.
During the year, Rs.9.67 lakhs was transferred to the Investor Education and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS:
There is an ongoing emphasis on building a progressive Human Resources culture within the Organisation. Structured initiatives to nurture talent and create a working environment that fosters motivation, team-work and result orientation continue to be addressed. Productivity level continued to be subject to continuous monitoring.
Employee strength as on March 31, 2018 was 1,603 as compared to 1,540 in the previous year.
SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES:
The Company has no Subsidiary/Joint Venture/Associate Companies during the Financial year ending March 31, 2018. Accordingly, a statement under the provisions of Section 129(3) of the Companies Act, 2013, containing salient features of the financial statements of the Companyâs subsidiary(ies) in Form AOC-1 is not enclosed.
DEPOSITS:
The Company has not accepted/renewed any fixed deposits from the public or the Members, within the meaning of Section 73 of the Companies Act, 2013, read with Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, during the financial year 2017-2018, and, as such, no amount of principal or interest on deposits from public or the Members, was outstanding as of the Balance Sheet date.
MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY FROM THE END OF THE FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT:
Except as disclosed elsewhere in this Boardâs Report, no material changes and commitments which could affect the Companyâs financial position have occurred since the close of the financial year, i.e., March 31, 2018 till the date of this Boardâs Report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.
DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate and commensurate with the size, scale and complexity of its operation. The internal controls are tested for adequacy, efficiency and effectiveness through audits by the in-house internal audit department and the observations, corrective and preventive actions are reviewed by the management and Audit Committee of the Board of Directors.
During the financial year under review, no material or serious observation has been received from the Internal Auditors of the Company for inadequacy or ineffectiveness of such controls.
INDIAN ACCOUNTING STANDARDS:
Your Company has adopted Indian Accounting Standards (âInd ASâ) with effect from April 1, 2017. Financial Statements for the year ended March 31, 2018 have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Rules, 2016, the Companies (Indian Accounting Standards) Rules, 2017 read with Section 133 and other applicable provisions of the Companies Act, 2013. Previous periods figures have been re-stated to confirm to Ind AS, for comparative information.
Note No. 2.24 to the financial statement provides further explanation on the transition to Ind AS.
GOODS AND SERVICES TAX (GST)
Goods and Service Tax (GST) came into effect from July 1, 2017 through the implementation of One Hundred and First Amendment of the Constitution of India. The tax replaced existing multiple cascading taxes levied by the Central and State Governments.
Your Company has successfully implemented and migrated to GST followed by the changes across various departments/operations of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:
There are no significant and/or material orders passed by the Regulator(s) or Court(s) or Tribunal(s) impacting the going concern status of the Company and its business operations in future.
PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:
All contracts/arrangements/transactions entered by the Company during the financial year 2017-2018, with related parties, as defined under Section 188 of the Companies Act, 2013 and the Rules made there under and as per the applicable provisions of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 (hereinafter referred as âthe Listing Regulationsâ), were in the ordinary course of business and on armâs length basis. Further no material related party transactions were entered during the Financial Year under review, by your Company. Accordingly, disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, in Form AOC-2, is not applicable to your Company.
Further, all such contracts/arrangements/transactions were placed before the Audit Committee and Board, for their approval. Prior omnibus approval of the Audit Committee/ Board is obtained on an annual basis, which is reviewed and updated on quarterly basis.
Your Company has formulated a policy on Related Party Transactions, which is also available on the website of the Company, www.bharatbijlee.com.
Your Directors draw attention of the Members to Note No. 35.2 of Financial Statements which sets out disclosures on related parties and transactions entered into with them during the financial year under review.
PARTICULARS OF LOANS, GUARANTEE, INVESTMENTS AND SECURITIES:
Particulars of loans, guarantees, investments and securities provided during the financial year under review, covered under the provisions of Section 186 of the Companies Act, 2013, have been provided in the Financial Statements which forms part of this Annual Report. (Please refer Note Nos. 5, 8, 10 and 12 to the Financial Statements).
PARTICULARS OF LOANS/ADVANCES/INVESTMENTS AS REQUIRED UNDER THE LISTING REGULATIONS:
The details of related party disclosures with respect to loans/advances/investments at the year end and maximum outstanding amount thereof during the year, as required under [Part A of Schedule V of the Listing Regulations have been provided in the notes to the Financial Statements of the Company. (Please refer Note Nos. 5, 8, 10 and 12 to the Financial Statements)].
DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:
The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:
The Company has not issued any sweat equity shares during the financial year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:
The Company has not issued any equity shares under Employees Stock Option Scheme during the financial year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:
During the financial year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 and hence no information has been furnished.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ravishanker Prasad (DIN 06641845), Non-Executive Director, being longest in the office, shall retire by rotation at the ensuing 71st Annual General Meeting and being eligible, offers himself for re-appointment.
During the period under review, Mr. Shome N. Danani (DIN 00217787) was re-appointed as a Whole-time Director, designated as âExecutive Directorâ of the Company, for a period of three (3) years w.e.f. January 28, 2017, at the 70th Annual General Meeting of Members held on June 30, 2017. His re-appointment and remuneration is in terms of Section 196, 197, 198, 200 and 203 read with Section II Part II, of Schedule V of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013.
Except as explained hereinabove, there were no changes in Directorship of the Company as well as in Key Managerial Personnel category during the period under review. As on March 31, 2018, your Company has Nine (9) Directors consisting of four (4) Independent Directors, Three (3) Executive Directors and Two (2) Non-Executive Directors, including one (1) Woman Director.
None of the Directors of your Company is disqualified under the provisions of Section 164(2)(a) and (b) of the Companies Act, 2013.
During the period under review, no Non-Executive Director of the Company had any pecuniary relationship or transactions with the Company.
Further, necessary resolutions relating to Directors who are seeking re-appointment, as required under Regulation 36 of the Listing Regulations/SS-2, is disclosed as part of the Notice dated May 10, 2018 of the ensuing 71st Annual General Meeting.
As for the requirement under the provisions of Section 203 of the Companies Act, 2013, the Board of Directors noted that Mr. Nikhil J. Danani (DIN: 00056514), Managing Director, Mr. Nakul P Mehta (DIN: 00056561), Managing Director, Mr. Shome N. Danani (DIN: 00217787), Executive Director, Mr. Durgesh N. Nagarkar, Company Secretary and Mr. Sandeep M. Tilak, Chief Financial Officer, are the Key Managerial Personnel of the Company as on the date of this Boardâs Report.
DECLARATIONS BY INDEPENDENT DIRECTORS:
Pursuant to the provisions of Section 149(7) of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations, the Company has received individual declarations from all the Independent Directors, whose names are appended herein below, confirming that they fulfill the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and the rules made there under to hold the office of Independent Director of the Company for the financial year ended March 31, 2018.
1. Mr. Prakash V. Mehta;
2. Mr. Sanjiv N. Shah;
3. Mr. Jairaj C. Thacker; &
4. Mr. Rajeshwar R. Bajaaj
There has been no change in the circumstances which may affect their status as Independent director during the financial year under review.
NUMBER OF MEETINGS OF THE BOARD:
A notice of the Board Meeting is circulated well in advance with the Agenda, including detailed explanation to be discussed, to enable the Board to take an informed decision. The Board met five (5) times during the financial year ended March 31, 2018 viz., on May 19, 2017, June 30, 2017, August 24, 2017, November 24, 2017 and January 24, 2018, in accordance with the provisions of the Companies Act, 2013 and rules made there under and Listing Regulations. Detailed information on the Board Meetings with regard to their dates and attendance of each of the Directors thereat have been included in the Corporate Governance Report, which forms part of this Boardâs Report.
Additionally, during the financial year ended March 31, 2018 a separate meeting of the Independent Directors was convened on January 24, 2018, in compliance with the requirements of Schedule IV of the Companies Act, 2013 and Regulation 25(3) and 25(4) of the Listing Regulations. However, since half the number of Directors were not present, it was adjourned and held on March 31, 2018.
Post the Independent Directors Meeting, the collective feedback of each of the Independent Director was scaled and measured on defined ratings, thereby covering the performance of Board as a whole, performance of the nonindependent directors and performance of the Chairman.
AUDIT COMMITTEE:
An Audit Committee as constituted by the Board of Directors of the Company, in accordance with the provisions of Section 177 of the Companies Act, 2013, comprises Independent Directors, namely:
1. Mr. Sanjiv N. Shah (Chairman) (Din: 00007211);
2. Mr. Prakash V. Mehta (Member) (DIN: 00001366); and
3. Mr. Jairaj C. Thacker (Member) (DIN: 00108552).
All the recommendations made by the Audit Committee during the financial year under review were accepted by the Board. The terms of reference of Audit Committee and other details are included in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee (âNRCâ) as constituted by the Board of Directors of the Company, in accordance with the provisions of Section 178(3) of the Companies Act, 2013, comprises:
1. Mr. Sanjiv N. Shah (Chairman) (Din: 00007211);
2. Mr. Prakash V. Mehta (Member) (DIN: 00001366); and
3. Mr. Jairaj C. Thacker (Member) (DIN: 00108552)
Further the NRC has formulated necessary policy on appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director. The details of âNominations and Remuneration Policyâ are explained in the Report on Corporate Governance along with the other details, which forms part of this Boardâs Report and are also available on the website of the Company, www.bharatbijlee.com.
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholder Relationship Committee (âSRCâ) as constituted by the Board of Directors of the Company, in accordance with the provisions of Section 178 of the Companies Act, 2013, comprises:
1. Mr. Prakash V. Mehta (Chairman) (Din: 00001366);
2. Mr. Sanjiv N Shah (Member) (DIN: 00007211);
3. Mr. Nikhil J. Danani (Member) (DIN: 00056514); and
4. Mr. Nakul P Mehta (Member) (DIN: 00056561)
The detailed terms of reference and other information about the Committee has been provided in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Corporate Social Responsibility (CSR) Committee comprises of
1. Mr. Nakul P Mehta (Chairman) (DIN: 00056514);
2. Mr. Shome N. Danani (Member) (DIN: 00217787); and
3. Mr. Jairaj C. Thacker (Member) (DIN: 00108552).
The CSR Policy of your Company as approved by the Board of Directorsâis hosted on the Companyâs website, www.bharatbijlee.com.
The frequency of CSR Committee meetings is decided by the Chairman and Members of the committee, with a minimum frequency of once a year. Over the last financial year under review, the CSR Committee has met once, i.e., on January 24, 2018, wherein all the three (3) Members were present.
The Annual Report on CSR activities as required under Section 134 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, including a brief outline of the Companyâs CSR Policy, total amount to be spent under CSR Policy for the financial year 2017-2018, amount unspent and the reason for the unspent amount, is set out at Annexure I, forming part of this Boardâs Report.
EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board of Directors has carried out evaluation of its own performance, its Committees and individual Directors. The evaluation process has been explained in the Report on Corporate Governance, which forms part of this Boardâs Report.
Also, the Independent Directors, at their meeting held on March 31, 2018 reviewed the performance of the Board, its Chairman and Non-Executive Directors of the Company.
RISK MANAGEMENT POLICY:
Risk Management is an enterprise wide function that aims at assessing threats to business sustainability and mitigating those threats. The Board of Directors along with the senior management of the Company, having deep industry experience has developed and approved Risk Management Policy framework and Guidelines, wherein all material risks faced by the Company are identified and assessed. Moreover in the said Risk Management Policy the Board has defined a structured approach to manage uncertainty, cultivating the same in their decision making pertaining to all business divisions and corporate functions. For each of the risks identified, corresponding controls are assessed and policies and procedures are put in place for monitoring, mitigating and reporting on periodic basis.
VIGIL MECHANISM POLICY:
Pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, a âVigil Mechanism Policyâ for Directors and employees of the Company is in place, to report their genuine concern of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, unethical behavior, actual or suspected fraud, or violation of the Companyâs code of conduct etc. During the financial year under review, no employee has been denied access to the Chairman of the Audit Committee. Also, Whistle blower complaints, if any and their redressal are discussed at the meeting of Audit Committee of the Board. During the financial year under review, no such complaints were received.
The details of âVigil Mechanism Policyâ are available on the website of the Company (http://www.bharatbijlee.com.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company has zero tolerance policy in case of sexual harassment at workplace and is committed to provide a healthy environment to each and every employee of the Company. The Company has in place âPolicy for Prevention and Redressal of Sexual Harassmentâin line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (hereinafter referred as âthe said Actâ) and Rules made there under. As per the provisions of Section 4 of the said Act, the Board of Directors has constituted the Internal Complaints Committee (âICCâ) at the Registered Office, Works and at all the Regional Offices of the Company to deal with the complaints received by the Company pertaining to gender discrimination and sexual harassment at workplace.
The ICC has been constituted covering the offices at Mumbai/Navi Mumbai, consisting of the following Members:
Sr. No. |
Name of Officer |
Designation |
Position in Committee |
1. |
Ms. Aarti Madhankar |
General Manager, Human Resources |
Presiding Officer |
2. |
Mr. Durgesh N. Nagarkar |
Company Secretary & Senior General Manager |
Member |
3. |
Mr. Nitin R. Rathod |
General Manager, Employee Relations |
Member |
4. |
Ms. Anjali Ranade |
Senior Manager, Design |
Member |
5. |
Ms. Renu Rao |
General Manager, Business Solutions (Information Technology) |
Member |
Also, each branch of the Company, has its own ICC consisting of officers from Serial no. 1, 3 and 4, as mentioned herein above, along with two more members employed at the branches, one of them consisting of a woman employed in those respective branches.
During the financial year under review, your Company appointed a reputed agency to design the awareness programme in line with the said Act. With the help of this agency, HR Division conduced various sessions in batches for sensitizing our employees with the provision of the said Act.
Further, as per the provisions of Section 21 & 22 of the said Act, the Report on the details of the number of cases filed under Sexual Harassment and their disposal for the financial year under review, is as under:
Sr. |
No. of cases |
No. of complaints |
No. of cases |
No. |
pending as on the |
filed during the |
pending as on |
beginning of the |
financial year |
the end on the |
|
financial year |
under review |
financial year |
|
under review |
under review |
||
1. |
Nil |
Nil |
Nil |
DIRECTORSâRESPONSIBILITY STATEMENT:
In terms of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms 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. such accounting policies have been selected and applied consistently and the Directors have 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 as at March 31, 2018 and of the Profit and Loss of the Company for the year ended on that date;
c. proper and sufficient care has been taken 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 annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
TRANSFER OF UNCLAIMED EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) DEMAT ACCOUNT:
Pursuant to the provisions of Section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ), (including any statutory modification(s)/ re-enactment(s)/amendment(s) thereof, for the time being in force), the dividend which remains unclaimed/unpaid for a period of seven (7) years from the date of transfer to the unpaid dividend account of the Company, is required to be transferred to the Investor Education and Protection Fund Authority (âIEPFâ) established by the Central Government. Also, according to the IEPF Rules, the shares in respect of which dividend has not been paid/claimed by the Shareholders for seven (7) consecutive years or more, shall also be transferred to demat account created by the IEPF Authority.
Further, in compliance with the provisions laid down in IEPF Rules, the Company had sent notices and also advertised in the newspapers seeking action from Shareholders who have not claimed their dividends for seven (7) consecutive years or more. Accordingly, for the financial year ended March 31, 2010, the Company has transferred all corresponding equity shares on which dividend remained unclaimed for a period of seven (7) years, to the Demat Account of the IEPF, the due date of which was November 30, 2017 (as per the Notification issued by Ministry of Corporate Affairs, dated October 16, 2017). It may please be noted that no claim shall lie against the Company in respect of share(s) transferred to IEPF pursuant to the said Rules.
However, the Shareholders are entitled to claim their shares including all the corporate benefits accruing on such shares, if any, from the IEPF Authority by submitting an online application in Form IEPF-5 and sending a physical copy of the Form IEPF-5 duly signed by all the joint shareholders, if any, as per the specimen signature recorded with the Company along with requisite documents enumerated in the Form IEPF-5, to the Companyâs RTA. The Rules and Form IEPF-5, as prescribed, for claiming back the shares, are available on the website of the IEPF, i.e., on www.iepf.gov.in.
Members who have not claimed the dividends declared for the financial year March 31, 2011 were notified to lodge their claim on or before May 30, 2018, with the Companyâs Registrar and Transfer Agents at the address mentioned in the Annual Report. The Company has already sent reminders to all such Members at their registered address in this regards.
Further, all the shareholders who have not claimed their dividends in the last seven (7) consecutive years from 2011 were notified to claim the same by May 30, 2018. In case valid claim is not received by that date, the Company will proceed to transfer the respective shares to the IEPF Account in terms of the IEPF Rules. In this regard, the Company has individually informed the shareholders concerned and also published notice in the newspapers as per the IEPF Rules. It may please be noted that no claim shall lie against the Company once such share(s)/ dividend transferred to IEPF demat account, pursuant to the said Rules.
The Statement containing details of Name, Address, Folio No., Demat Account No. and No. of shares due for transfer to IEPF demat Account is made available on www.bharatbijlee.com.
The Shareholders are therefore encouraged to verify their records and claim their dividends, if not claimed.
PARTICULARS OF EMPLOYEES AND REMUNERATION:
Information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s)/amendment(s)/re-enactment thereof, for the time being in force), is set out in Annexure II hereto, which forms part of this Boardâs Report.
CORPORATE GOVERNANCE:
As stipulated under the provisions of Regulation 34(3) read with Schedule V (C) of the Listing Regulations, a separate Report on Corporate Governance enclosed as Annexure V, forms integral part of this Boardâs Report. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. The requisite Compliance Certificate as required under Part E of Schedule V of the Listing Regulations, issued by Messrs N. L. Bhatia and Associates, Practicing Company Secretaries, Mumbai, Secretarial Auditors of the Company, pertaining to the compliance of conditions of Corporate Governance, is annexed.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA) REPORT:
Pursuant to Regulation 34(3) read with Schedule V (B) of the Listing Regulations, a separate report on Management Discussion and Analysis (âMDAâ) forms part of this Annual Report.
STATUTORY AUDITOR AND THEIR REPORT:
In compliance with the provisions of Section 139 and other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s)/re-enactment(s)/ amendment(s) thereof, for the time being in force), Messrs Deloitte Haskins & Sells, LLP, Chartered Accountants, (Firm Registration No. 117366W/W-100018) were appointed as Statutory Auditors at the 70th Annual General Meeting of the Company held on June 30, 2017, to hold office for a term of five (5) consecutive years from the conclusion of the 70th Annual General Meeting until the conclusion of the 75th Annual General Meeting, subject to the ratification at the Annual General Meeting in each of the subsequent years during the aforementioned term of their appointment.
However, with the Notification dated May 7, 2018 issued by the Ministry of Corporate Affairs (âMCAâ), the first proviso to section 139(1) of the Companies Act, 2013 pertaining to the requirement of annual ratification of appointment of Auditors by Members is omitted.
Accordingly, as per the Companies (Amendment) Act, 2017, ratification of the appointment of Statutory Auditors during their period of appointment will not be considered.
OBSERVATIONS OF STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018:
The Auditorâs report given by Messrs Deloitte Haskins & Sells, LLP, Statutory Auditors, on the Financial Statements of the Company, for the year ended March 31, 2018, forms part of the Annual Report. There has been no qualification, reservation or adverse remark or any Disclaimer in their Report.
REPORTING OF FRAUDS:
There have been no frauds reported by the Auditors, under sub section (12) of Section 143 of the Companies Act, 2013 (including amendments), during the financial year under review, to the Audit Committee or the Board of Directors and hence, as such there is nothing to report by the Board under Section 134 (3)(ca) of the Companies Act, 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING:
Pursuant to Clause 9 of the Revised Secretarial Standard-1 (SS-1), your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India, during the Financial Year under review.
SECRETARIAL AUDITORS AND THEIR REPORT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Messrs N. L. Bhatia & Associates, Practicing Company Secretaries, Mumbai (Firm Registration No.: P1996MH055800), as its Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2017-2018.
The Report on Secretarial Audit for the financial year 2017-2018, in Form MR-3, as Annexure VI, forms integral part of this Boardâs Report. There has been no qualification, reservation or adverse remark or any Disclaimer in their Report.
In terms of Section 204 of the Companies Act, 201 3, on the recommendation of the Audit Committee, the Board of Directors appointed Messrs N. L. Bhatia & Associates, Practicing Company Secretaries, Mumbai, (Firm Registration No.: P1996MH055800), as the Secretarial Auditors of the Company for the financial year 2018-2019. The Company has received their consent for the said appointment.
COST AUDITORS AND THEIR REPORT:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 (including any amendment(s), modification(s), variation or re-enactment thereof for the time being in force), and as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated May 10, 2018, have appointed Messrs P M. Nanabhoy & Co., Cost Accountants (Firm Registration No.: 000012), as the Cost Auditors of the Company, for the financial year 2018-2019, to audit the cost records of Electric Motors, Power Transformers, Drives and Magnet Technology Machines. A resolution for ratification of the payment to be made for such appointment is included in the Notice of the ensuing 71st Annual General Meeting.
A Certificate from Messrs P M. Nanabhoy & Co., has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Companies Act, 2013 and the Rules framed there under.
For the financial year ending March 31, 2017, the due date of filing the Cost Audit Report submitted by Messrs. P. M. Nanabhoy & Co., Cost Accountants, Mumbai, was September 23, 2017 and the same was filed with the MCA on September 22, 2017.
EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the Extract of the Annual Return for the financial year ended March 31, 2018 made under the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is attached as Annexure III, which forms part of this Boardâs Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure IV which forms part of this Boardâs Report.
ACKNOWLEDGEMENT:
Employee relations throughout the Company were harmonious. The Board wishes to place on record its appreciation to all employees in the Company, for their sustained efforts and immense contributions to the good levels of performance and growth that your Company has achieved during the financial year under review.
Your Directors also place on record their sincere thanks and appreciation for the continuing support and assistance received from the financial institutions, banks, Government as well as non-government authorities, customers, vendors, stock exchange and members during the financial year under review.
For and on behalf of the Board of Directors
Prakash V. Mehta
DIN 00001366
Chairman
Place: Mumbai
Date: May 10, 2018
Mar 31, 2017
The Directors are pleased to present their 70th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended March 31, 2017.
GENERAL OUTLOOK OF INDUSTRY AND ECONOMY:
The waiting game continues for the capital goods recovery in the domestic market. While there have been signs of recovery in the past few months, these are still early days to infer whether this is a sustainable recovery or just a post-demonetization adjustment. In any case, the margins still elude us to make a meaningful and profitable business recovery.
During the year under review, we have focused on building our order book and ensuring that our customer reach is not impacted despite the poor market conditions. We continue to enhance our design capabilities and supply chain efficiencies.
FINANCIAL PERFORMANCE:
(Rs. in Lakhs)
|
Year Ended March 31, 2017 |
Year Ended March 31, 2016 |
Sales and Services (Gross) |
73,480.92 |
71,381.14 |
Less: Excise Duty |
7,223.02 |
7,429.82 |
|
66,257.90 |
63,951.32 |
Other Income |
2,785.62 |
2,092.70 |
|
69,043.52 |
66,044.02 |
Profit/(Loss) before Interest & Financial Charges, Depreciation, Exceptional items and Tax |
4,596.45 |
3,818.86 |
Less: Interest and Financial Charges |
1,594.82 |
2,056.05 |
Less: Depreciation |
987.42 |
1,027.44 |
Profit/(Loss) before Tax |
2,014.21 |
735.37 |
Less: Provision for Taxation |
45.45 |
52.41 |
Profit/(Loss) for the year |
1,968.76 |
682.96 |
Short/(Excess) provision of Tax for earlier years |
7.99 |
(36.23) |
Profit/(Loss) after Taxation |
1,960.77 |
719.19 |
Add: Profit/(Loss) Brought Forward |
2,217.76 |
1,498.57 |
Less: Depreciation Adjustment |
â |
â |
Net Surplus available for Appropriation |
4,178.53 |
2,217.76 |
Previous yearâs figures have been regrouped for comparison purposes with current yearâs presentation wherever necessary.
OPERATIONS:
The capital goods industry continues to remain stagnated and investment recovery is still some way away for the Indian market.
It is in this background that the Companyâs operations need to be seen.
Income from Sales and Services for the Company increased from Rs. 71,381.14 lakhs in the previous year to Rs.73,480.92 lakhs, a rise of 3%. The concentrated efforts to reach deeper into the markets, do cherry picking while accepting the orders and the value engineering helped the Company to make a profit before exceptional items and tax of Rs.2,014.21 lakhs as against Rs.735.37 lakhs in the previous year.
FINANCE:
Tighter working capital management, positive cash flow from operations and lower interest rates negotiated with the banks enabled the Company to reduce the finance cost by Rs.461 lakhs compared to the previous year. The Free Reserves of the Company as on March 31, 2017 increased by Rs.1960.77 lakhs to Rs.28,649.90 lakhs.
During the year Rs.11.22 lakhs was transferred to the Investor Education and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS:
There is an ongoing emphasis on building a progressive Human Resources culture within the Organization. Structured initiatives to nurture talent and create a working environment that fosters motivation, team-work and result orientation continue to be addressed. Productivity level continued to be subject to continuous monitoring.
Employee strength as on March 31, 2017 was 1540 as compared to 1412 in the previous year.
SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES:
The Company has no Subsidiary/Joint Venture/ Associate Companies during the Financial year ending March 31, 2017.
DEPOSITS:
The Company has not accepted/renewed any fixed deposits from the public or the Members, within the meaning of Section 73 of the Companies Act, 2013, read with Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, during the financial year 2016-2017, and, as such, no amount of principal or interest on deposits from public or the Members, was outstanding as of the Balance Sheet date.
MATERIAL CHANGES AND COMMITMENTS IF ANY; AFFECTING FINANCIAL POSITION OF THE COMPANY FROM THE END OF THE FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT:
Except as disclosed elsewhere in this Boardâs Report, no material changes and commitments which could affect the Companyâs financial position have occurred since the close of the financial year, i.e., March 31, 2017 till the date of this Boardâs Report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.
DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate, and commensurate with the size, scale and complexity of its operation. The internal controls are tested for adequacy, efficiency and effectiveness through audits by the in-house internal audit department and the observations, corrective and preventive actions are reviewed by the management and Audit Committee of the Board of Directors.
During the financial year under review, no material or serious observation has been received from the Internal Auditors of the Company for inadequacy or ineffectiveness of such controls.
INDIAN ACCOUNTING STANDARDS:
Your Company shall adopt Indian Accounting Standards (âInd ASâ) with effect from April 1, 2017 pursuant to Ministry of Corporate Affairs notification dated February 16, 2015, notifying the Companies (Indian Accounting Standards) Rules, 2015. The implementation of IND AS in 2017 will be a major change process and the Company is well positioned to ensure a smooth transition.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:
There are no significant and/or material orders passed by the Regulator(s) or Court(s) or Tribunal(s) impacting the going concern status of the Company and its business operations in future.
PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:
All contracts/arrangements/transactions entered by the Company during the financial year 2016-2017, with related parties, as defined under Section 188 of the Companies Act, 2013 and the Rules made there under and as per the applicable provisions of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 (hereinafter referred as âthe Listing Regulationsâ), were in the ordinary course of business and on armâs length basis. Further no material related party transactions were entered during the Financial Year under review, by your Company. Accordingly, disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, in Form AOC -2, is not applicable to your Company.
Further, all such contracts/arrangements/transactions were placed before the Audit Committee and Board, for their approval. Prior omnibus approval of the Audit Committee/ Board is obtained on an annual basis, which is reviewed and updated on quarterly basis.
Your Company has formulated a policy on Related Party Transactions, which is also available on the website of the Company, http://www.bharatbijlee.com.
Your Directors draw attention of the Members to Note No. 39 of Financial Statements which sets out disclosures on related parties and transactions entered into with them during the financial year under review.
PARTICULARS OF LOANS; GUARANTEE; INVESTMENTS AND SECURITIES:
Particulars of loans, guarantees, investments and securities provided during the financial year under review, covered under the provisions of Section 186 of the Companies Act, 2013, have been provided in the Financial Statements which forms part of this Annual Report. (Please refer Note No. 13, 14 and 16 to the Financial Statements).
PARTICULARS OF LOANS/ADVANCES/INVESTMENTS AS REQUIRED UNDER THE LISTING REGULATIONS:
The details of related party disclosures with respect to loans/advances/investments at the year end and maximum outstanding amount thereof during the year, as required under Part A of Schedule V of the Listing Regulations have been provided in the notes to the Financial Statements of the Company. (Please refer Note No. 13, 14 and 16 to the Financial Statements).
DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:
The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:
The Company has not issued any sweat equity shares during the financial year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:
The Company has not issued any equity shares under Employees Stock Option Scheme during the financial year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:
During the financial year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 and hence no information has been furnished.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Mahnaz Amir Curmally (DIN 06907271), Non-Executive Director, being longest in the office, shall retire by rotation at the ensuing 70th Annual General Meeting and being eligible, offers herself for re-appointment.
The term of office of Mr. Shome N. Danani (DIN 00217787), as Whole-time Director, designated as âExecutive Director" of the Company, expired on January 27, 2017. The Board of Directors on the recommendation of the Nomination and Remuneration Committee, at their respective meeting held on January 24, 2017, have accorded their approval to re-appoint Mr. Shome N. Danani as Whole-time Director, designated as âExecutive Director" of the Company, for a further period of three (3) years w.e.f. January 28, 2017, subject to the approval of Members of the Company. His re-appointment and remuneration is in terms of Section 196, 197, 198, 200 and 203 read with Section II Part II, of Schedule V of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013. The detailed terms and conditions including remuneration have been mentioned in the Notice convening 70th Annual General Meeting. The details of Mr. Shome N. Danani (DIN 00217787), as required under Listing Regulations and SS-2 are provided in the Corporate Governance Report and Notice of 70th Annual General Meeting.
During the period under review, Mr. Nikhil J. Danani (DIN: 00056514) and Mr. Nakul PI Mehta (DIN: 00056561) were re-appointed as Managing Directors, for a period of three (3) years w.e.f. June 20, 2016, at the 69th Annual General Meeting of Members held on September 20, 2016. Their re-appointment and remuneration is in terms of Section 196, 197, 198, 200 and 203 read with Section II Part II, of Schedule V of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013.
Except as explained hereinabove, there were no changes in Directorship of the Company as well as in Key Managerial Personnel category during the period under review. As on March 31, 2017, your Company has Nine (9) Directors consisting of four (4) Independent Directors, Three (3) Executive Directors and Two (2) Non-Executive Directors, including one (1) Woman Director.
None of the Directors of your Company is disqualified under the provisions of Section 164(2)(a) and (b) of the Companies Act, 2013.
During the period under review, no Non-Executive Director of the Company had any pecuniary relationship or transactions with the Company.
Further, necessary resolutions relating to Directors who are seeking appointment/re-appointment, as required under Regulation 36 of the Listing Regulations/SS-2, is disclosed as part of the Notice dated May 19, 2017 of the ensuing 70th Annual General Meeting.
As for the requirement under the provisions of Section 203 of the Companies Act, 2013, the Board of Directors noted that Mr. Nikhil J. Danani (DIN: 00056514), Managing Director, Mr. Nakul P Mehta (DIN: 00056561), Managing Director, Mr. Shome N. Danani (DIN: 00217787), Executive Director, Mr. Durgesh N. Nagarkar, Company Secretary and Mr. Sandeep M. Tilak, Chief Financial Officer, are the Key Managerial Personnel of the Company as on the date of this Boardâs Report.
DECLARATIONS BY INDEPENDENT DIRECTORS:
Pursuant to the provisions of Section 149(7) of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations, the Company has received individual declarations from all the Independent Directors, whose names are appended herein below, confirming that they fulfill the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and the rules made there under to hold the office of Independent Director of the Company for the financial year ended March 31, 2017.
1. Mr. Prakash V. Mehta;
2. Mr. Sanjiv N. Shah;
3. Mr. Jairaj C. Thacker; and
4. Mr. Rajeshwar R. Bajaaj.
There has been no change in the circumstances which may affect their status as Independent director during the financial year under review.
NUMBER OF MEETINGS OF THE BOARD:
A notice of the Board Meeting is circulated well in advance with the Agenda, including detailed explanation to be discussed, to enable the Board to take an informed decision. The Board met five (5) times during the financial year ended March 31, 2017 viz., on May 12, 2016, July 18, 2016, September 20, 2016, October 25, 2016 and January 24, 2017, in accordance with the provisions of the Companies Act, 2013 and rules made there under and Listing Regulations. Detailed information on the Board Meetings with regard to their dates and attendance of each of the Directors thereat have been included in the Corporate Governance Report, which forms part of this Boardâs Report.
Additionally, during the financial year ended March 31, 2017 a separate meeting of the Independent Directors was convened on January 24, 2017, in compliance with the requirements of Schedule IV of the Companies Act, 2013 and Regulation 25(3) and 25(4) of the Listing Regulations. Post the Independent Directors Meeting, the collective feedback of each of the Independent Director was discussed, covering performance of the Board as a whole, performance of the Non-Independent Directors and performance of the Chairman.
AUDIT COMMITTEE:
An Audit Committee as constituted by the Board of Directors of the Company in accordance with the provisions of Section 177 of the Companies Act, 2013, comprises Independent Directors, namely :
1. Mr. Sanjiv N. Shah (Chairman) (DIN: 00007211);
2. Mr. Prakash V. Mehta (Member) (DIN: 00001366); and
3. Mr. Jairaj C. Thacker (Member) (DIN: 00108552).
All the recommendations made by the Audit Committee during the financial year under review were accepted by the Board. The terms of reference of Audit Committee and other details are included in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee (âNRCâ) as constituted by the Board of Directors of the Company, in accordance with the provisions of Section 178(3) of the Companies Act, 2013, comprises:
1. Mr. Sanjiv N. Shah (Chairman) (DIN: 00007211);
2. Mr. Prakash V. Mehta (Member) (DIN: 00001366); and
3. Mr. Jairaj C. Thacker (Member) (DIN: 00108552).
Further the NRC has formulated necessary policy on appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director. The details of âNominations and Remuneration Policyâ are explained in the Report on Corporate Governance along with the other details, which forms part of this Boardâs Report and are also available on the website of the Company : http://www.bharatbijlee.com.
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholder Relationship Committee (âSRCâ) as constituted by the Board of Directors of the Company, in accordance with the provisions of Section 178 of the Companies Act, 2013, comprises:
1. Mr. Prakash V. Mehta (Chairman) (DIN: 00001366);
2. Mr. Sanjiv N. Shah (Member) (DIN: 00007211);
3. Mr. Nikhil J. Danani (Member) (DIN: 00056514); and
4. Mr. Nakul P Mehta (Member) (DIN: 00056561).
The detailed terms of reference and other information about the Committee has been provided in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Corporate Social Responsibility (CSR) Committee comprises of
1. Mr. Nakul P Mehta (Chairman) (DIN: 00056514);
2. Mr. Shome N. Danani (Member) (DIN: 00217787); and
3. Mr. Jairaj C. Thacker (Member) (DIN: 00108552).
The CSR Policy of your Company as approved by the Board of Directorsâ is hosted on the Companyâs website, www.bharatbijlee.com.
The frequency of CSR Committee meetings is decided by the Chairman and Members of the committee, with a minimum frequency of once a year. Over the last financial year under review, the CSR Committee has met once, i.e., on January 24, 2017, wherein all the three (3) Members were present.
The Annual Report on CSR activities as required under Section 134 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, including a brief outline of the Companyâs CSR Policy, total amount to be spent under CSR Policy for the financial year 2016-2017, amount unspent and the reason for the unspent amount, is set out at Annexure I, forming part of this Boardâs Report.
EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board of Directors has carried out evaluation of its own performance, its Committees and individual Directors. The evaluation process has been explained in the Report on Corporate Governance, which forms part of this Boardâs Report.
Also, the Independent Directors, at their meeting reviewed the performance of the Board, its Chairman and Non-Executive Directors of the Company.
RISK MANAGEMENT POLICY:
The Board of Directors of the Company has approved Risk Management Policy and Guidelines, wherein all material risks faced by the Company are identified and assessed. Moreover in the said Risk Management Policy the Board has defined a structured approach to manage uncertainty, cultivating the same in their decision making pertaining to all business divisions and corporate functions. For each of the risks identified, corresponding controls are assessed and policies and procedures are put in place for monitoring, mitigating and reporting on periodic basis.
VIGIL MECHANISM POLICY:
Pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, a âVigil Mechanism Policyâ for Directors and employees of the Company is in place, to report their genuine concern of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc. During the financial year under review, no employee has been denied access to the Chairman of the Audit Committee. Also, Whistle blower complaints, if any and their redressal are discussed at the meeting of Audit Committee of the Board. During the financial year under review, no such complaints were received.
The details of âVigil Mechanism Policyâ are available on the website of the Company (http://www.bharatbijlee.com)
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company has zero tolerance policy in case of sexual harassment at workplace and is committed to provide a healthy environment to each and every employee of the Company. The Company has in place âPolicy for Prevention and Redressal of Sexual Harassmentâ in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (hereinafter referred as âthe said Actâ) and Rules made there under. As per the provisions of Section 4 of the said Act, the Board of Directors has constituted the Internal Complaints Committee (âICCâ) at the Registered Office, Works and at all the Regional Offices of the Company to deal with the complaints received by the Company pertaining to gender discrimination and sexual harassment at workplace.
The ICC has been constituted covering the offices at Mumbai/Navi Mumbai, consisting of the following Members:
Sr. No. |
Name of Officer |
Designation |
Position in Committee |
1. |
Ms. Aarti Madhankar |
General Manager, Human Resources |
Presiding Officer |
2. |
Mr. Durgesh N. Nagarkar |
Company Secretary & Senior General Manager: Legal |
Member |
3. |
Mr. Nitin R. Rathod |
General Manager, Employee Relations |
Member |
4. |
Ms. Anjali Ranade |
Senior Manager, Design |
Member |
5. |
Ms. Renu Rao |
General Manager-Business Solutions (Information Technology) |
Member |
Also, each branch of the Company, has its own ICC consisting of officers from Serial No. 1, 3 and 4, as mentioned herein above, along with two more members employed at the branches, one of them consisting of a woman employed in those respective branches.
As per the provisions of Section 21 & 22 of the said Act, the Report on the details of the number of cases filed under Sexual Harassment and their disposal for the financial year under review, is as under:
Sr. |
No. of cases |
No. of complaints |
No. of cases |
No. |
pending as on |
filed during the |
pending as on |
|
the beginning of |
financial year |
the end on the |
|
the financial year |
under review |
financial year |
|
under review |
|
under review |
1. |
Nil |
Nil |
Nil |
DIRECTORSâ RESPONSIBILITY STATEMENT:
In terms of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms 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. such accounting policies have been selected and applied consistently and the Directors have 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 as at March 31, 2017 and of the Profit and Loss of the Company for the year ended on that date;
c. proper and sufficient care has been taken 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 annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
TRANSFER OF UNCLAIMED EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) SUSPENSE ACCOUNT:
The Ministry of Corporate Affairs (âMCAâ) has vide Notification No. S.O. 2866(E) dated September 5, 2016 notified the provisions of Sections 124 and 125 (except for the sub-sections already notified earlier vide notification dated January 13, 2016) of the Companies Act, 2013. Further MCA vide Notification dated September 5, 2016, brought the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ), w.e.f. September 7, 2016.
Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all shares on which dividend has not been paid or claimed for seven (7) consecutive years or more, shall be transferred to an Investor Education and Protection Fund (âIEPFâ) suspense account (in the name of the Company) with one of the Depository Participants as may be identified by the IEPF Authority, within thirty (30) days of such shares becoming due to be transferred to the IEPF.
The process of transfer of the shares to the said Suspense Account could not be completed, due to lack of clarity in the said Rules, upto April 26, 2017. However, the Company has initiated the process and issued individual notices to the 144 shareholders holding 16,878 equity shares, who have not claimed their dividends for the last seven (7) consecutive years.
The Statement containing details of Name, Address, Folio No., Demat Account No. and No. of shares due for transfer to IEPF Suspense Account is made available on www.bharatbijlee.com.
Both the unclaimed dividends and the shares transferred to the IEPF can be claimed back by the concerned shareholders from IEPF Authority after complying with the procedure prescribed under the âRules".
As per the latest development, the MCA on April 27, 2017, via General Circular No. 03/2017, came up with clarification on âTransfer of Shares to IEPF Authority", the key highlights of which are:
- The IEPF Authority shall open a special demat account with National Securities Depository Limited (âNSDLâ);
- NSDL to prescribe the file formats and operational procedures for transfer of shares to special demat account of the IEPF Authority by April 30, 2017 and May 31, 2017 respectively;
- The due date for transfer of such shares by your Company is May 31, 2017.
However, MCA via General Circular No. 05/2017 dated May 16, 2017 notified that the aforementioned Circular No. 03/2017 stands withdrawn with immediate effect and further stated that fresh instructions on the matter to be issued in due course of time.
PARTICULARS OF EMPLOYEES AND REMUNERATION:
Information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s)/amendment(s)/re-enactment thereof, for the time being in force), is set out in Annexure II hereto, which forms part of this Boardâs Report.
CORPORATE GOVERNANCE:
As stipulated under the provisions of Regulation 34(3) read with Schedule V (C) of the Listing Regulations, a separate Report on Corporate Governance enclosed as Annexure V, forms integral part of this Boardâs Report. The requisite Compliance Certificate as required under Part E of Schedule V of the Listing Regulations, issued by Messrs Dalal and Shah LLP, Chartered Accountants, pertaining to the compliance of conditions of Corporate Governance, is annexed thereto.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA) REPORT:
Pursuant to Regulation 34(3) read with Schedule V (B) of the Listing Regulations, a separate report on Management Discussion and Analysis (âMDAâ) forms part of this Annual Report.
STATUTORY AUDITOR AND THEIR REPORT:
In terms of Section 139(1) of the Companies Act, 2013, no listed Company can appoint or re-appoint an audit firm (including its affiliate firm) as auditor for more than two (2) terms of five (5) consecutive years. The Act also provided for additional transition period of three (3) years from the commencement of the Act, i.e. from April 1, 2014.
The Members are informed that Messrs Dalal & Shah, Chartered Accountants, having Registration No. 102021W, are Statutory Auditors of the Company since 1952. At the 67th Annual General Meeting of the Company held on September 11, 2014, Messrs Dalal & Shah were appointed as Statutory Auditors for a period of period of 3 (three) years (transitional period), to hold office as such from the conclusion of 67th Annual General Meeting until the conclusion of the 70th Annual General Meeting of the Company, subject to ratification of such appointment by the Members of the Company at every Annual General Meeting, in line with the provisions of Section 139 of the Act.
Accordingly, Messrs Dalal & Shah have completed period of ten (10) years and will also be completing the additional transition period of three (3) years at the conclusion of ensuing 70th Annual General Meeting, and the Company therefore need to appoint a new auditor in their place.
Pursuant to and in light of the above, the Company has identified Messrs Deloitte Haskins & Sells LLP Chartered Accountants (ICAI Firm Registration Number : 117366W/W-100018), Mumbai, as the new Statutory Auditors of the Company and subsequently the Board of Directors on the recommendation of Audit Committee, at their respective Meeting held on May 19, 2017, has appointed Messrs Deloitte Haskins & Sells LLP, Chartered Accountants as Statutory Auditors of the Company, for a period of five (5) years from the conclusion of 70th Annual General Meeting till the conclusion of the 75th Annual General Meeting of the Company, subject to the ratification at the Annual General Meeting in each of the subsequent years during the aforementioned term of their appointment.
Messrs Deloitte Haskins & Sells LLP, Chartered Accountants have confirmed that their appointment, if made, shall be in accordance with the limits specified under Section 141 (3) (g) of the Act and that they are not disqualified to be appointed as statutory auditors in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules.
The Audit Committee and the Board of Directors wishes to place on record their deep appreciation for the professional services rendered by Messrs Dalal & Shah during their long association with the Company while maintaining the ethical standards and zenithal level of governance.
OBSERVATIONS OF STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017:
The Auditorâs report given by Messrs Dalal & Shah, Statutory Auditors, on the Financial Statements of the Company, for the year ended March 31, 2017, forms part of the Annual Report. There has been no qualification, reservation or adverse remark or any Disclaimer in their Report.
REPORTING OF FRAUDS:
There have been no frauds reported by the Auditors, under sub section (12) of Section 143 of the Companies Act, 2013 (including amendments), during the financial year under review, to the Audit Committee or the Board of Directors and hence, as such there is nothing to report by the Board under Section 134 (3)(ca) of the Companies Act, 2013.
SECRETARIAL AUDITORS AND THEIR REPORT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Messrs N. L. Bhatia & Associates, Practicing Company Secretaries, Mumbai (Firm Registration No.: P1996MH055800), as its Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2016-2017.
The Report on Secretarial Audit for the financial year 2016-2017, in Form MR-3, as Annexure VI, forms integral part of this Boardâs Report. There has been no qualification, reservation or adverse remark or any Disclaimer in their Report.
In terms of Section 204 of the Companies Act, 2013, on the recommendation of the Audit Committee, the Board of Directors appointed Messrs N. L. Bhatia & Associates, Practicing Company Secretaries, Mumbai, (Firm Registration No.: P1996MH 055800), as the Secretarial Auditors of the Company for the financial year 2017-2018. The Company has received their consent for the said appointment.
COST AUDITORS AND THEIR REPORT:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 (including any amendment(s), modification(s), variation or re-enactment thereof for the time being in force), and as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated May 19, 2017, have appointed Messrs P M. Nanabhoy & Co., Cost Accountants (Firm Registration No.: 000012), as the Cost Auditors of the Company, for the financial year 2017-2018, to audit the cost records of Electric Motors, Power Transformers, Drives and Elevator System Products. A resolution for ratification of the payment to be made for such appointment is included in the Notice of the ensuing 70th Annual General Meeting.
A Certificate from Messrs P M. Nanabhoy & Co., has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Companies Act, 2013 and the Rules framed there under.
For the financial year ending March 31, 2016, the due date of filing the Cost Audit Report submitted by Messrs. P. M. Nanabhoy & Co., Cost Accountants, Mumbai, was September 30, 2016 and the same was filed with the MCA on August 12, 2016.
EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the Extract of the Annual Return for the financial year ended March 31, 2017 made under the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is attached as Annexure III, which forms part of this Boardâs Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure IV which forms part of this Boardâs Report.
ACKNOWLEDGEMENT:
Your Company takes pride in all of its highly motivated officers, employees and workers, who have been wholeheartedly supporting and sincerely contributing their best for the sustained success and growth of your Company as well as maintaining harmonious relations throughout the Company.
Your Directors also place on record their sincere thanks and appreciation for the continuing support and assistance received from the financial institutions, banks, Government as well as non-government authorities, customers, vendors, stock exchange and members during the period under review.
For and on behalf of the Board of Directors
Prakash V. Mehta
DIN 00001366
Chairman
Place : Mumbai Date : May 19, 2017
Registered Office:
Electric Mansion, 6th Floor,
Appasaheb Marathe Marg,
Prabhadevi, Mumbai 400 025.
CIN: L31300MH1946PLC005017
Mar 31, 2015
Dear Members,
The Directors are pleased to present their 68th Annual Report on the
business and operations of the Company together with the Audited
Accounts for the financial year ended March 31, 2015.
GENERAL OUTLOOK OF INDUSTRY AND ECONOMY:
The economic recovery in our business segments has not materialized as
anticipated. This has adversely affected the demand for our products
and continues to put immense pressure on our margins. Given the pace of
economic revival that we have seen during the past year, we expect a
subdued business environment at least during the course of the
financial year 2015-16. We would continue to take appropriate internal
measures to mitigate the impact of the continued adverse macro factors.
During the year under review, there has been consistent focus to
maintain our market shares although this has, in some cases, resulted
in lower margins. As we await the impending capex cycle and the
associated recovery of the business cycle, we will take efforts to
balance our market presence while maintaining margins. To ensure that
we do not lose sight of growth potential in the future, we have
maintained our focus on building capabilities that will help us build
better products. We continue to diligently focus on working capital
optimization and collection recovery efforts. The Drives & Automation
as well as the Elevator Systems business continue to do well.
FINANCIAL PERFORMANCE: (Rs. in Lakhs)
Year Ended Year Ended
March 31, March 31,
2015 2014
Income from Sales & Service 66,788.90 53,748.76
Less: Excise Duty 5,700.20 5,100.61
61,088.70 48,648.15
Other Income 1,818.04 1,814.98
62,906.74 50,463.13
Profit/(Loss) before Interest, Finance
Charges, Depreciation, Exceptional
Items and Tax (253.75) 1,061.50
Less: Interest & Finance Charges 1,995.05 1,309.55
Less: Depreciation 1,194.34 1,094.07
Profit/(Loss) before Exceptional Item
and Tax (3,443.14) (1,342.12)
Profit/(Loss) before Tax (3,443.14) (1,342.12)
Less: Provision for Taxes - (144.20)
Profit after Tax (3,443.14) (1,197.92)
Short(-)/Excess Provision of tax
for earlier years 38.19 68.53
Profit after Taxation (3,404.95) (1,129.39)
Add: Profit brought forward from
previous year 5,041.90 6,171.29
Less: Depreciation adjustment 138.38 -
Profit available for appropriation 1,498.57 5,041.90
APPROPRIATION :
Proposed Equity Dividend - -
Tax on Proposed Equity Dividend - -
General Reserve - -
Profit Carried Forward 1,498.57 5,041.90
Previous year's figures have been regrouped for comparison purposes
with current year's presentation wherever necessary.
DIVIDEND:
In view of the loss during the financial year 2014-2015, the Directors
have not recommended payment of dividend for the year ended March 31,
2015.
OPERATIONS:
For the third successive year, the economy and market conditions were
dominated by demand gap, low price realisation, negative growth in the
capital goods industry, low levels of investment by government/industry
and delays in project execution. The Company had to maintain its
operations against this background.
Income from Sales and Services for the Company increased from Rs.
53748.76 lakhs in the previous year to Rs. 66788.90 lakhs, a rise of 24%.
However, the position of over-supply and intense competition took a
toll on margins. Consequently in spite of increase in revenue, Company
incurred a loss before exceptional items and tax of Rs. 3443.14 lakhs as
against a loss before exceptional items and tax of Rs. 1342.12 lakhs in
the previous year.
FINANCE:
Tight money market conditions, elongated working capital cycle and
substantial erosion in profitability resulted in negative cash flows
from operations and caused an increase of Rs. 685.50 lakhs in finance
cost for the year. The Company ensured that there was no default in
meeting its obligation and maintained a smooth flow of operations.
The Free Reserves of the Company as on March 31, 2015 decreased by Rs.
3543.33 lakhs to Rs. 25969.94 lakhs.
During the year Rs. 9.24 lakhs was transferred to the Investor Education
and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS:
There is an ongoing emphasis on building a progressive Human Resources
culture within the organisation. Structured initiatives to nurture
talent and create a working environment that fosters motivation,
team-work and result- orientation continue to be addressed.
The long term wage agreement with the Union expired on December 31,
2014. Union submitted a new charter of demand for next wage agreement
in November 2014. Negotiations for the same are in progress.
Productivity levels continued to be subject to continuous monitoring.
Employee strength as on March 31, 2015 was 1378 as compared to 1436 in
the previous year.
DEPOSITS:
As on March 31, 2015 the company had no outstanding Fixed Deposits. The
Company has neither accepted nor renewed any deposits during the
financial year 2014-2015 and in accordance with the provisions of
Section 74(1)(b) of the Companies Act, 2013, repaid all its outstanding
deposits as on March 31, 2014 aggregating to Rs. 2160.90 lakhs.
DISCLOSURE UNDER SECTION 134(3)(I) OF THE COMPANIES ACT, 2013:
Except as disclosed elsewhere in this Report, no material changes and
commitments which could affect the Company's financial position have
occurred between the end of the financial year and the date of this
Report.
DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements
as designed and implemented by the Company are adequate. During the
financial year under review, no material or serious observation has
been received from the Internal Auditors of the Company for
inefficiency or inadequacy of such controls.
SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR
TRIBUNAL:
There are no significant and / or material orders passed by the
Regulator(s) or Court(s) or Tribunal(s) impacting the going concern
status of the Company and its business operations in future.
PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:
All contracts/arrangements/transactions entered by the Company during
the financial year 2014-2015, with related parties, as defined under
Section 188 of the Companies Act, 2013 and the rules made there under
and Clause 49 of
the Listing Agreement entered into by the Company with the Stock
Exchanges, were in the ordinary course of business and on arm's
length basis. Consequently no particulars in Form AOC-2 have been
furnished.
Further, during the year under review, the Company has not entered into
any contracts/arrangements/transactions with related parties which
could be considered material in accordance with the Related Party
Transactions Policy of the Company, which can be accessed by using the
following link: http://www.bharatbijlee.com/doc/RPT-Policy.pdf
Members can refer Note no. 41 to the financial statement which set out
the related party disclosures.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:
Particulars of loans, guarantees, investments and securities provided
during the financial year under review, covered under the provisions of
Section 186 of the Companies Act, 2013, have been provided in the
Financial Statements which forms part of this Annual Report. (Please
refer Note No. 14, 15 and 17 to the Financial Statements).
DISCLOSURE UNDER SECTION 43(a)(ii) OF THE
COMPANIES ACT, 2013:
The Company has not issued any shares with differential rights and
hence no information as per provisions of Section 43(a)(ii) of the Act
read with Rule 4(4) of the Companies (Share Capital and Debenture)
Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 54(1)(d) OF THE
COMPANIES ACT, 2013:
The Company has not issued any sweat equity shares during the financial
year under review and hence no information as per provisions of Section
54(1)(d) of the Act read with Rule 8(13) of the Companies (Share
Capital and Debenture) Rules, 2014 has been furnished.
DISCLOSURE UNDER SECTION 62(1)(b) OF THE
COMPANIES ACT, 2013:
The Company has not issued any equity shares under Employees Stock
Option Scheme during the financial year under review and hence no
information as per provisions of Section 62(1)(b) of the Act read with
Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014
has been furnished.
DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:
During the financial year under review, there were no instances of
non-exercising of voting rights in respect of shares purchased directly
by employees under a scheme pursuant to Section 67(3) of the Act read
with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014
and hence no information has been furnished.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:
There was no change in Directorship of the Company during the period
under review. Your Company has Nine (9) Directors consisting of four
(4) Independent Directors, Three (3) Executive Directors and Two (2)
Non-Executive Directors as on March 31, 2015.
Further, in accordance with the provisions of Section 152 of the
Companies Act, 2013, Mr. Shome N. Danani, being longest in the office
shall retire at the ensuing 68th Annual General Meeting and being
eligible, offers himself for re- appointment.
Information on Mr. Shome N. Danani, Director eligible for
re-appointment, as required under Clause 49 of the Listing Agreement
with Stock Exchanges, is disclosed as part of the Notice dated July 24,
2015 of the ensuing 68th Annual General Meeting.
As for the requirement under the provisions of Section 203 of the
Companies Act, 2013, the Board of Directors noted that Mr. Nikhil J.
Danani, Managing Director, Mr. Nakul P Mehta, Managing Director, Mr.
Shome N. Danani, Executive Director, Mr. Durgesh N. Nagarkar, Company
Secretary and Mr. Sandeep M. Tilak, Chief Financial Officer are the Key
Managerial Personnel of the Company.
DECLARATIONS BY INDEPENDENT DIRECTORS:
Pursuant to the provisions of Section 149(7) of the Companies Act,
2013, the Company has received individual declarations from all the
Independent Directors, whose names are appended herein below,
confirming that they fulfill the criteria of independence as prescribed
under Section 149(6) of the Companies Act, 2013 and the rules made
there under to hold the office of Independent Director of the Company.
1. Mr. Prakash V. Mehta;
2. Mr. Sanjiv N. Shah;
3. Mr. Jairaj C. Thacker; &
4. Mr. Rajeshwar R. Bajaaj
DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:
NUMBER OF MEETINGS OF THE BOARD:
The Board of Directors met five (5) times during the financial year
ended March 31, 2015 viz., on May 28, 2014, July 25, 2014, September
11, 2014, November 11, 2014 and January 23, 2015, in accordance with
the provisions of the Companies Act, 2013 and rules made there under.
All the Directors actively participated in the meetings and contributed
valuable inputs on the matters brought before the Board of Directors
from time to time. Detailed information on the meetings of the Board
are included in the Report on Corporate Governance, which forms part of
this Board's Report.
Additionally, during the financial year ended March 31,2015 the
Independent Directors held a separate meeting in compliance with the
requirements of Schedule IV of the Companies Act, 2013 and Clause
49(II)(B)(6) of the Listing Agreement.
COMMITTEES OF THE BOARD:
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee as constituted by the Board
of Directors of the Company, has in accordance with the provisions of
Section 178(3) of the Companies Act, 2013, formulated necessary policy
on appointment and remuneration including criteria for determining
qualifications, positive attributes, independence of a Director. The
details of "Nominations and Remuneration Policy" are explained in
the Report on Corporate Governance, which forms part of this Report and
are also available on the website of the Company
(www.bharatbijlee.com).
AUDIT COMMITTEE:
An Audit Committee as constituted by the Board of Directors of the
Company in accordance with the provisions of Section 177 of the
Companies Act, 2013, comprises Independent Directors, namely Mr. Sanjiv
N. Shah (Chairman), Mr. Prakash V. Mehta and Mr. Jairaj C. Thacker as
Members of the Committee. All the recommendations made by the Audit
Committee were accepted by the Board.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Board of Directors have constituted a Corporate Social
Responsibility (CSR) Committee as per the provisions of Section 135 of
the Companies Act, 2013. The Terms of Reference of the CSR Committee
are to:
i. Formulate and recommend to the Board a Corporate Social
Responsibility ('CSR') Policy which shall indicate the activities
to be undertaken by the Company as specified in Schedule VII and the
prescribed Rules under Sections 135 of the Companies Act, 2013;
ii. Recommend the amount of expenditure to be incurred on the
activities referred to in point (i) above;
iii. Monitor the CSR Policy of the Company from time to time;
iv. Ensure disclosure of CSR Policy in the Boards' Report and on the
website of the Company;
v. Ensure activities as included in CSR Policy are undertaken and are
monitored regularly;
vi. Ensure the CSR spend is made in terms of Section 135(5), i.e., at
least 2% of the average net profits of the Company made during the 3
annually preceding financial years.
The CSR Committee comprises of Mr. Nakul P Mehta as Chairman and Mr.
Shome N. Danani and Mr. Jairaj C. Thacker as Members.
The CSR Committee has met once in the financial year, i.e., on January
23, 2015, wherein all members were present.
The Board has also framed a CSR policy for the Company, on the
recommendation of the CSR Committee. The Report on CSR activities as
required under the Companies (Corporate Social Responsibility) Rules,
2014, including a brief outline of the Company's CSR Policy, total
amount to be spent under CSR Policy for the financial year, amount
unspent and the reason for the unspent amount, is set out at Annexure
I, forming part of this Report.
ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the evaluation of all the Directors and the
Board as a whole was conducted based on the criteria and framework
adopted by the Board. The evaluation process has been explained in the
Report on Corporate Governance, which forms part of this Report.
RISK MANAGEMENT POLICY:
The Board of Directors of the Company have approved Risk Management
Policy and Guidelines, wherein all material risks faced by the Company
are identified and assessed. Moreover in the said Risk Management
Policy the Board has defined a structured approach to manage
uncertainty, cultivating the same in their decision making pertaining
to all business divisions and corporate functions. For each of the
risks identified, corresponding control are assessed and policies and
procedures are put in place for monitoring, mitigating and reporting
risks on periodic basis.
VIGIL MECHANISM POLICY:
The Board of Directors of the Company have, pursuant to the provisions
of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the
Companies (Meetings of Board and its Powers) Rules, 2014, framed
"Vigil Mechanism Policy" for Directors and employees of the
Company, to report their genuine concern of any violations of legal or
regulatory requirements, incorrect or misrepresentation of any
financial statements and reports etc.
The details of "Vigil Mechanism Policy" are available on the
website of the Company (http://www.bharatbijlee.com/doc/
BBL-WHISTLEBLOWER-POLICYpdf).
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
As per the requirement of Section 4 of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules
made there under, the Board of Directors has constituted the Internal
Complaints Committee ('ICC') at the Registered Office, Works and at
all the Regional Offices of the Company to deal with the complaints
received by the Company pertaining to gender discrimination and sexual
harassment at workplace.
The ICC has been constituted covering the offices at Mumbai/Navi
Mumbai, consisting of the following Members:
Sr. Name of Officer Designation Position in
No. Committee
1. Ms. Aarti Madhankar General Manager, Presiding
Human Resources Officer
2. Mr. Durgesh N. Nagar Company Secretary Member
kar & Senior General
Manager
3. Mr. Nitin R. Rathod General Manager, Member
Employee Relations
4. Ms. Anjali Ranade Senior Manager, Member
Design
Also, each branch of the Company, has its own ICC consisting of
officers from Serial no. 1, 3 and 4, as mentioned herein above, along
with two more members employed at the branches, one of them consisting
of a woman employed in those respective branches.
As per the provisions of Section 21 & 22 of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the
Report on the details of the number of cases filed under Sexual
Harassment and their disposal is as under:
Sr. No. of cases pending No. of complaints No. of cases
No. as on the beginning filed during the pending as on the
of the financial year year end on the financial year
1. Nil Nil Nil
DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(3)(c) read with Section 134(5) of the Companies
Act, 2013, the Board of Directors hereby confirms 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. such accounting policies have been selected and applied consistently
and the Directors have 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 as at March 31, 2015 and of the Profit and Loss of the
Company for the year ended on that date;
c. proper and sufficient care has been taken 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 annual accounts of the Company have been prepared on a going
concern basis;
e. internal financial controls have been laid down to be followed by
the Company and that such internal financial controls are adequate and
were operating effectively;
f. proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
REPORTING ON FRAUDS:
There were no frauds reported by the Auditors under sub section (12) of
Section 143 of the Companies (Amendment) Act, 2015, to the Audit
Committee, Board of Directors or to the Central Government and hence no
information has been furnished in this regard.
PARTICULARS OF EMPLOYEES AND REMUNERATION:
Information as required under the provisions of Section 197(12) of the
Companies Act, 2013 and Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are set out in
Annexure II hereto, which forms part of this report.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance along with Auditor's
Certificate on its compliance, have been furnished in the Annual Report
and forms part of this Board Report.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA) REPORT:
A separate report on MDA forms part of the Annual Report.
AUDITORS AND THEIR REPORTS:
The matters pertaining to Auditors and their Reports are appended below
OBSERVATIONS OF STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS FOR THE
FINANCIAL YEAR ENDED MARCH 31, 2015:
The Auditor's report does not contain any qualification, reservation
or adverse remark or any Disclaimer.
STATUTORY AUDITORS:
M/s. Dalal & Shah, Chartered Accountants, bearing Firm Registration No.
102021W, have been appointed as Statutory Auditors of the Company for a
period of three (3) years from the conclusion of the 67th Annual
General Meeting upto the conclusion of the 70th Annual General Meeting.
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the Companies (Audit and Auditors) Rules, 2014, their appointment
as Statutory Auditors upto the conclusion of 70th Annual General
Meeting is required to be ratified by the members at every Annual
General Meeting. Necessary resolution for ratification of appointment
of the said Auditors is included in the Notice of the ensuing 68th
Annual General Meeting.
The consent of the Auditors along with certificate under Section 139 of
the Companies Act, 2013 have been obtained from the Auditors to the
effect that their appointment, if made, shall be in accordance with the
prescribed conditions and that they are eligible to hold the office of
Auditors of the Company.
SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013,
your Company has appointed M/s N. L. Bhatia & Associates, Practicing
Company Secretaries, as its Secretarial Auditor to conduct the
secretarial audit of the Company for the financial year 2014-2015.
The Report on Secretarial Audit for the financial year
2014- 2015, in Form MR-3 forms part of this Board Report. As regards
the observation made by the Secretarial Auditor on CSR spend in the
said secretarial audit report, please refer Annexure I - Annual Report
on CSR Activities, the Board of Directors have explained that due to
the loss incurred by the Company in the last three (3) financial years,
the required amount of CSR spend has not been carried out.
COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act, 2013
read with Notifications/Circulars issued by the Ministry of Corporate
Affairs from time to time and as per the recommendation of the Audit
Committee, the Board of Directors at their meeting dated May 15, 2015
have appointed M/s. PM. Nanabhoy, Cost Accountants as the Cost Auditors
of the Company for the financial year 2015- 2016 to audit the cost
records of electric motors, power transformers, drives and elevator
system products.
A resolution for ratification of the payment to be made for such
appointment is included in the Notice of the ensuing 68th Annual
General Meeting.
It may be noted that the Board had appointed M/s. P.M. Nanabhoy, Cost
Accountants as the Cost Auditors of the Company for the financial year
2014-2015 to carry out cost audit of the Company. However pursuant to
the clarification provided by the Ministry of Corporate Affairs, the
Cost Audit for the Company's products was not required for the
financial year 2014-2015 and hence the same was not conducted.
EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act,
2013, Extract of the Annual Return for the financial year ended March
31, 2015 made under the provisions of Section 92(3) of the Act is
attached as Annexure III, which forms part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3) (m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014 in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo etc. are furnished in
Annexure IV which forms part of this Report.
ACKNOWLEDGEMENT:
Your Directors would like to express their appreciation for the
assistance and cooperation received from the financial institutions,
banks, Government authorities, customers, vendors and members during
the year under review. Your Directors take on record their deep sense
of appreciation to the contributions made by the employees through
their hard work, dedication, competence, support and co- operation
during this difficult period in the performance of the Company.
For and on behalf of the Board of Directors
Prakash V. Mehta
DIN 00001366
Date : July 24, 2015 Chairman
Mar 31, 2014
Dear Members,
The Directors are pleased to present their 67th Annual Report on the
business and operations of the Company together with the Audited
Accounts for the financial year ended 31st March, 2014.
The Indian economy continued to be sluggish during the year under
review and this has adversely impacted the businesses of your Company.
Investments in infrastructure and manufacturing will be the key for
revival of our business prospects. We expect the macro-economic
situation to improve steadily going ahead and are building internal
capabilities to leverage on that.
During the year under review there was continued emphasis on improving
customer reach, diversifi cation of customer and geographical mix while
keeping strong focus on cost control. Concurrently, important steps
have been taken to prepare your Company for the next phase of growth
and expansion. The higher voltage motor facility inaugurated last year
has successfully delivered its fi rst export order. This is an
important milestone as we establish our capabilities in the market
place. The Drives and Elevators Systems businesses also continue to
grow profi tably as they scale up. Both the businesses have very good
traction in the market and continue to see healthy growth.
FINANCIAL PERFORMANCE
Year Ended Year Ended
31st March 31st March
2014 2013
(Rs. In Lakhs) (Rs in lakhs)
Income from Sales &
Service 53748.76 59401.25
Less: Excise Duty 5100.61 5148.52
48648.15 54252.73
Other Income 1814.98 1745.34
50463.13 55998.07
Profit before Interest,
Finance Charges,
Depreciation,
Exceptional Items and
Tax 1061.50 1492.66
Less: Interest & Finance
Charges 1309.55 1242.06
Less: Depreciation 1094.07 1069.93
Profit before Exceptional
Item and Tax (1342.12) (819.33)
Add : Exceptional Item - -
Profit before Tax (1342.12) (819.33)
Less: Provision for Taxes (144.20) (329.83)
Profit after Tax (1197.92) (489.50)
Short (-) / Excess
Provision of tax for
earlier years 68.53 2.67
Profit after Taxation (1129.39) (486.83)
Add: Profit brought
forward from previous year 6171.29 6823.42
Profit available for
appropriation 5041.90 6336.59
APPROPRIATION
Proposed Equity
Dividend - 141.29
Tax on Proposed Equity
Dividend - 24.01
General Reserve - -
Profit Carried Forward 5041.90 6171.29
Previous year''s figures have been regrouped for comparison purposes
with current year''s presentation wherever necessary.
DIVIDEND
In view of the net loss during the financial year 2013-2014, the
Directors have not recommended payment of dividend for the year ended
31st March, 2014.
OPERATIONS
Income from Sales and Service for the Company reduced from Rs. 59401
lakhs in the previous year to Rs. 53749 lakhs, a drop of 10%. Revenues
of the Power Systems remained under pressure due to sluggish market
demand and delay in customer project execution timelines.
The Company incurred a loss before exceptional items and tax of Rs.1342
lakhs as against a loss before exceptional items and tax of Rs. 819
lakhs in the previous year mainly due to pressure on margins in the
Industrial Systems segment.
FINANCE
In spite of tight money market conditions, adverse liquidity and
substantial erosion in profi tability, the focus of the Company on the
effi cient management of short-term and long-term funds through
rigorous monitoring of deployment towards working capital, a
comprehensive evaluation and execution process for capital expenditure,
and prudent deployment of surplus funds helped it generate positive
cash fl ow from operations. Although the Company incurred interest and
fi nance costs of Rs.1309.55 lakhs, it also earned income of Rs.1413.29
lakhs from deployment of surplus funds and treasury operations.
The Company''s free reserves as on 31st March, 2014 decreased by
Rs.1129.39 lakhs to Rs. 29513.27 lakhs.
As on 31st March, 2014, the Company had Fixed Deposits aggregating to
Rs. 2160.90 lakhs. Out of the Fixed Deposits which matured for payment
prior to 31st March, 2014, 54 deposits aggregating to Rs. 11.63 lakhs
were neither renewed nor claimed till 31st March, 2014. Of these, 10
deposits aggregating to Rs. 1.80 lakhs have since been refunded on
receipt of requests from the deposit holders. The balance 44 deposits
aggregating to Rs. 9.83 lakhs have been neither claimed nor renewed
till date of this report, in spite of the Company''s intimation to the
deposit holders. There has been no default or delay in meeting any
maturity payment obligations.
During the year Rs. 5.41 lakhs was transferred to the Investor
Education and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
There is an ongoing emphasis on building a progressive Human Resources
culture within the organisation. Structured initiatives to nurture
talent and create a working environment that fosters motivation,
team-work and result-orientation continue to be addressed.
The long term wage agreement with the Union was signed on January 15,
2014 and the same will be valid up to December 31, 2014. Employee
Relations across the Company continued to be cordial, and issues were
settled amicably. Productivity levels continued to be subject to
continuous monitoring.
Employee strength as on March 31, 2014 was 1436 as compared to 1362 in
the previous year.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance along with Auditor''s Certifi
cate on its compliance, is set out in Annexure "A" .
MANAGEMENT DISCUSSION AND ANALYSIS (MDA) REPORT:
A separate report on MDA forms part of the Directors'' Report.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
confi rm that:
a) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanations 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 31st March, 2014, and
the profi t and loss for that period;
c) The Directors have taken proper and sufficient care for maintenance
of adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities;
d) The Directors have prepared Annual Accounts on a going concern
basis;
e) The Directors have laid down internal financial controls to be
followed by the Company and such internal financial controls are
adequate and are operated effectively and;
f) The Directors have devised proper systems to ensure compliance with
the processes of all applicable laws and that such systems were
adequate and operating effectively.
DIRECTORS:
During the year, Mr. Jaisingh R. Danani, Director on the Board of the
Company and who was a Managing Director of the Company for 35 years
until 1990, passed away on August 5, 2013.
Mr. Mukul Harkisondass who joined the Board on August 29, 1972 also
passed away on June 14, 2013.
The Company has suffered an irreparable loss due to their demise and
the Board of Directors place on record their appreciation for the
immense contribution, valuable guidance and commitment rendered by Mr.
Jaisingh R. Danani and Mr. Mukul Harkisondass during their tenure as
Directors.
During the year, Mr. Harish Chandra Mishra resigned from the Board
w.e.f. July 25, 2013. The Board of Directors place on record their
appreciation for the invaluable advice and guidance given by Mr. Harish
Chandra Mishra during his association with the Company.
Mr. Ravishanker Prasad was appointed as an Additional Director with
effect from January 22, 2014 and holds offi ce up to the date of the
forthcoming Annual General Meeting. Notice has been received under
Section 160 of the Companies Act, 2013 from a member proposing his
candidature for offi ce of Director and such appointment has been
proposed at Item No. 5 of the Notice dated July 25, 2014.
Ms. Mahnaz A. Curmally was appointed as an Additional Director with
effect from July 25, 2014 and holds offi ce upto the date of the
forthcoming Annual General Meeting. Notice has been received under
Section 160 of the Companies Act, 2013 from a member proposing her
candidature for offi ce of Director and such appointment has been
proposed at Item No. 4 of the Notice dated July 25, 2014.
Mr. Anand J Danani retires by rotation at the ensuing Annual General
Meeting and being eligible offers himself for reappointment.
Mr. Prakash V Mehta, Mr. Sanjiv N. Shah and Mr. Jairaj C. Thacker,
Non-executive Directors of the Company have submitted declaration under
Section 149(7) of the Companies Act, 2013 confirming that they meet
the criteria of independence prescribed for Independent Directors as
stipulated under Section 149(6) of the said Act.
Notices have been received from members under Section 160 of the
Companies Act, 2013 proposing their appointment as Independent
Directors. The Independent Directors are proposed to be appointed for a
period of 5 years from the date of the ensuing meeting and they shall
not retire by rotation.
Notice has been received under Section 160 of the Companies Act, 2013
from a member proposing the candidature of Mr. Rajeshwar R. Bajaaj as
an Independent Director who has also confi rmed that he meets the
criteria of independence prescribed for Independent Directors as
stipulated under Section 149(6) of the said Act and such appointment
has been proposed at Item No. 9 of the Notice dated July 25, 2014.
Information on the Directors eligible for reappointment/ appointment as
required under Clause 49 of the Listing Agreement with Stock Exchanges
is disclosed in the profi les of the Directors under Item Nos. 4 to 9
forming part of the Notice dated July 25, 2014 circulated along with
the Annual Report 2013-14.
AUDITORS:
The Company''s auditors, M/s. Dalal & Shah, bearing Firm Registration
No. 102021W, hold offi ce till the date of the ensuing Annual General
Meeting and, being eligible, are recommended for reappointment. The
Company has received a confi rmation from M/s. Dalal & Shah to the
effect that their appointment, if made at the ensuing Annual General
Meeting would be in terms of Section 139 and 141 of the Companies Act,
2013 and rules made thereunder. The Board on the recommendation of the
Audit Committee proposes to appoint M/s. Dalal & Shah as Statutory
Auditors of the Company for a period of 3 years from the conclusion of
the ensuing Annual General Meeting, subject to ratification by members
of the Company at each Annual General Meeting. This item of business
is covered under Item No. 3 of the accompanying Notice dated July 25,
2014.
COST AUDITORS:
M/s. P. M. Nanabhoy & Co. an independent firm of Cost Accountants
having an arm''s length relationship with the Company and who are free
from any disqualifi cation as specifi ed under Section 141(3) have been
appointed by the Board as Cost Auditors of the Company, for electric
motors, power transformers, drives and elevator system products for the
Financial Year ending 31st March, 2015, subject to the approval of the
Central Government at a remuneration of Rs. 72,000/- which is subject
to approval by members. Their appointment is in accordance with the
limits specifi ed in Section 141 (3) (g) of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES:
The information required under Section 217 (2A) of the Companies Act,
1956, read with Company''s (Particulars of Employees) Rules, 1975, and
forming part of this Report, are annexed to this Report. However, as
per the provisions of Section 219 (1)(iv) of the Companies Act, 1956,
the Report and Accounts are being sent to all Shareholders of the
Company, excluding the Statement of Particulars of Employees. Any
shareholder interested in the Particulars of Employees, may write to
the Company Secretary at the Registered Offi ce of the Company for a
copy of the Statement.
Additional information as required by Department of Companies Affairs
is presented on Page No. 8 of this Annual Report.
COMPANIES ACT, 2013
The Companies Act, 2013 was notified in the Official Gazette of the
Government of India on August 29, 2013. On September 12, 2013 the
Ministry of Corporate Affairs (MCA) notified 98 sections and on March
27, 2014, the MCA notified another 198 sections, which were deemed to
come into force with effect from April 1, 2014.
The MCA vide Circular No. 08/2014 dated April 4, 2014 clarified that
the financial statements and the documents required to be attached
thereto, the auditors'' and directors'' report in respect of the fi
nancial year under reference shall continue to be governed by the
relevant provisions of the Companies Act, 1956, schedules and rules
made thereunder.
The Company has accordingly prepared this balance sheet, statement of
profi t and loss, the schedules and notes thereto and the Directors''
Report in accordance with the relevant provisions of the Companies Act,
1956, schedules and rules made thereunder.
The Company has taken cognizance of the new legislation and shall
comply with the provisions of the Companies Act, 2013, as applicable.
ACKNOWLEDGEMENTS:
The Directors would like to accept and convey their sincere
appreciation to all employees of the Company for their continued hard
work, dedication and commitment to the Company. The Directors also
acknowledge and are grateful to the Bankers, Government Authorities,
Shareholders, Vendors and other Stake-Holders for their continued
support, confi dence and co-operation in the performance of the
Company.
For and on behalf of the Board of Directors
Bansi S. Mehta
Chairman
Date: July 25, 2014
Mar 31, 2013
The Directors are pleased to present their 66th Annual Report on the
business and operations of the Company together with the Audited
Accounts for the financial year ended 31st March 2013.
The economic environment continued to be hostile during the year under
review. Concerns over growth, inflation and capital investment resulted
in underperformance by core industrial sectors; this has had a direct
bearing on the businesses of your Company. Lower demand and relative
overcapacity have further increased competitive intensity and margin
pressures and it is expected that these conditions will persist during
the current year as well. Implementation of the next phase of reforms
and effective management of structural bottlenecks for infrastructural
and industrial growth will be the key triggers for revival of a
favourable business environment. While we keenly follow the
macroeconomic trends, we continue to evaluate options and take measures
to address current challenges while building organizational
capabilities for the future.
During the year under review there was ongoing emphasis on improving
market share and margins in our existing businesses while focusing on
all possible opportunities to eliminate wasteful expenditure.
Concurrently, your Company has taken important steps to prepare itself
for the next phase of growth and expansion. In May 2012, a new facility
to manufacture Medium Voltage and traction motors was inaugurated. This
will expand our product range and help to build capabilities in the
higher voltage range of motors; the first Medium Voltage motor from
this facility was delivered during the year. A new plant to assemble
and test AC Drives was also commissioned during the year under review.
This will enable us to cater to our customers'' needs for specialized
automation solutions, quicker deliveries and high service standards
while maintaining stringent product quality at a more competitive
price.
FINANCIAL PERFORMANCE
Year Ended Year Ended
31st March 2013 31st March 2012
(Rs. In Lakhs) (Rs in lakhs)
Income from Sales & Service 59401.25 78111.99
Less: Excise Duty 5148.52 6334.10
54252.73 71777.89
Other Income 1745.34 1959.67
55998.07 73737.56
Profit before Interest, Finance
Charges, Depreciation, Exceptional
Items and Tax 1492.66 6291.84
Less: Interest & Finance Charges 1242.06 1337.48
Less: Depreciation 1069.93 960.77
Profit before Exceptional Item and Tax (819.33) 3993.59
Add : Exceptional Item - 2608.92
Profit before Tax (819.33) 6602.51
Less: Provision for Taxes (329.83) 1235.28
Profit after Tax (489.50) 5367.23
Short (-) / Excess Provision of tax
for earlier years 2.67 0.00
Profit after Taxation (486.83) 5367.23
Add: Profit brought forward from
previous year 6823.42 3648.29
Profit available for appropriation 6336.59 9015.52
APPROPRIATION
Proposed Equity Dividend 141.29 1412.89
Tax on Proposed Equity Dividend 24.01 229.21
General Reserve - 550.00
Profit Carried Forward 6171.29 6823.42
Previous year''s figures have been regrouped for comparison purposes
with current year''s presentation wherever necessary.
DIVIDEND
The Directors recommend a Dividend of Rs. 2.50 per Equity Share for the
year ended 31st March, 2013 on 56,51,560 Equity Shares of Rs. 10/-
each. The Dividend payout, including Dividend Tax of Rs. 24.01 lakhs,
will be Rs. 165.30 compared to Rs. 1642.10 lakhs in the previous year.
OPERATIONS
Income from Sales and Service for the Company declined from Rs. 781
crore in the previous year to Rs. 594 crore, a drop of 24%. Revenues of
the Power Systems as well as the Industrial Systems segments reduced
significantly due to sluggish market demand and reduced price
realizations.
The company incurred a loss before exceptional items and tax of Rs.
8.19 crore as against a profit before exceptional items and tax of Rs.
39.94 crore in the previous year mainly due to reduced volumes and poor
price realizations in the Transformer and Motor businesses and cost
overruns in Project operations.
FINANCE
In spite of tight money market conditions, adverse liquidity and
substantial erosion in profitability, the focus of the Company upon on
the efficient management of short-term and long-term funds through
rigorous monitoring of deployment towards working capital, a
comprehensive evaluation and execution process for capital expenditure,
and prudent deployment of surplus funds helped it generate positive
cash flow from operations. Although the Company incurred interest and
finance costs of Rs.12.42 crore, it also earned income of Rs. 14.66
crore from deployment of surplus funds and treasury operations.
The Company''s free reserves as on 31st March, 2013 decreased by Rs.
652.13 lakhs to Rs. 30642.66 lakhs.
As on 31st March, 2013, the Company had Fixed Deposits aggregating to
Rs 1949.81 lakhs. Out of the Fixed Deposits which matured for payment
prior to 31st March, 2013, 56 deposits aggregating to Rs 17.25 lakhs
were neither renewed nor claimed till 31st March, 2013. Of these 10
deposits aggregating to Rs 2.60 lakhs have since been renewed or
refunded on receipt of requests from the deposit holders. The balance
46 deposits aggregating to Rs 14.65 lakhs have been neither claimed nor
renewed till date of this Report, in spite of the Company''s intimation
to the deposit holders. There has been no default or delay in meeting
any maturity payment obligations.
During the year Rs 3.91 lakhs was transferred to the Investor Education
and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
There is an ongoing emphasis on building a progressive Human Resources
culture within the organisation. Structured initiatives to nurture
talent and create a working environment that fosters motivation,
team-work and result-orientation continue to be addressed.
The long term wage agreement with the Union expired on 31st December
2011, and negotiations will commence in due course. Employee Relations
across the Company continued to be cordial, and issues were settled
amicably. Productivity levels continued to be subject to continuous
monitoring.
Employee strength as on 31st March 2013 was 1362 as compared to 1381 in
the previous year.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance along with Auditor''s
Certificate on its compliance, is set out in Annexure "A".
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
confirm that:
i) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanations relating to
material departures.
ii) 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 31st March, 2013, and
the profit for that period.
iii) Directors have taken proper and sufficient care for maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding of assets of the Company and for
preventing and detecting frauds and other irregularities.
iv) The Directors have prepared Annual Accounts on a going concern
basis.
DIRECTORS:
Mr. Anand J Danani, Mr. Bansi S Mehta, and Mr. Jaisingh R Danani retire
by rotation at the ensuing Annual General Meeting and being eligible
offer themselves for reappointment.
During the year Mrs D Vijayalakshmi resigned from the Board on 31st
July, 2013. The Board of Directors place on record their appreciation
for the invaluable advice and guidance given by Mrs Vijayalakshmi
during her association with the Company.
Mr. Harish Chandra Mishra was appointed as an Additional Director with
effect from 19th October 2012 and holds office up to the date of the
forthcoming Annual General Meeting. Notice has been received under
Section 257 of the Companies Act, 1956 from a member proposing his
candidature for office of Director and such appointment has been
proposed at Item No 7 of the Notice dated 17th May, 2013.
The appointments of Mr. N J Danani and Mr. N P Mehta as Managing
Directors expire on 19th June, 2013. The Board of Directors'' at their
meeting held on 17th May, 2013 have reappointed them subject to
approval of Shareholders for a further period of 3 years, w.e.f. 20th
June, 2013. Appropriate Special Resolutions have been proposed for
their appointment and remuneration at Item No. 8 & 9 of the Notice
dated 17th May, 2013.
Information on the Directors eligible for reappointment as required
under Clause 49 of the Listing Agreement with Stock Exchanges is
disclosed in the profiles of the Directors under Item Nos. 3, 4, 5 , 7
,8 and 9 forming part of the Notice dated 17th May, 2013 circulated
along with the Annual Report 2012-13.
AUDITORS:
The Company''s auditors, M/s. Dalal & Shah, bearing Firm Registration
No. 102021W, hold office till the date of the ensuing Annual General
Meeting and, being eligible, are recommended for reappointment. This
item of business is covered under Item No. 6 of the accompanying
notice.
COST AUDITORS:
M/s. P. M. Nanabhoy & Co. an independent firm of Cost Accountants
having an arm''s length relationship with the Company and who are free
from any disqualification as specified under Section 233 B(5) read with
Section 224 and sub section 3 and sub section 4 of Section 226 of the
Companies Act, 1956, have been appointed by the Board as Cost Auditors
of the Company, for electric motors, power transformers, drives and
elevator system products for the Financial Year ending 31st March,
2014, subject to the approval of the Central Government. Their
appointment is in accordance with the limits specified in Section 224
(1B) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES:
The information required under Section 217 (2A) of the Companies Act,
1956, read with Company''s (Particulars of Employees) Rules, 1975, and
forming part of this Report, are annexed to this Report. However, as
per the provisions of Section 219 (1)(iv) of the Companies Act, 1956,
the Report and Accounts are being sent to all Shareholders of the
Company, excluding the Statement of Particulars of Employees. Any
shareholder interested in the Particulars of Employees, may write to
the Company Secretary at the Registered Office of the Company for a
copy of the Statement.
Additional information as required by Department of Companies Affairs
is presented on Page 20 of this Annual Report.
ACKNOWLEDGEMENTS
The Directors accept and convey their sincere appreciation to all
employees of the Company for their continued dedication and commitment
of the Company. The Directors also acknowledge and are grateful to the
Bankers, Government Authorities, Shareholders, Vendors and other
Stake-Holders for their continued support, confidence and co-operation
in these difficult times, in the performance of the Company.
For and on behalf of the Board of Directors
Bansi S. Mehta
Chairman
Date : 17th May, 2013
Mar 31, 2012
The Directors are pleased to present their 65th Annual Report on the
business and operations of the Company together with Audited Accounts
for the financial year ended 31st March, 2012.
FINANCIAL PERFORMANCE :
Year Ended Year Ended
31st March 31st March
2012 2011
(Rs in (Rs in
Lakhs) Lakhs)
Income from Sales &
Service 78111.99 76901.82
Less: Excise Duty 6334.10 6595.05
71777.89 70306.77
Other Income 1959.67 861.01
73737.56 71167.78
Profit before
Finance Costs,
Depreciation,
Exceptional Items and
Tax 6291.84 7642.37
Less: Interest & Finance
Charges 1337.48 896.84
Less: Depreciation 960.77 893.35
Profit before Exceptional
Item and Tax 3993.59 5852.18
Add : Exceptional Item 2608.92 3380.67
Profit before Tax 6602.51 9232.85
Less: Provision for Taxes 1235.28 1880.29
Profit after Tax 5367.23 7352.56
Short (-)/Excess
Provision of tax for
earlier years - 0.03
Profit after Taxation 5367.23 7352.53
Add: Profit brought
forward from previous
year 3648.29 2937.86
Profit available for
appropriation 9015.52 10290.39
APPROPRIATION
Proposed Equity
Dividend 1412.89 1412.89
Tax on Proposed Equity
Dividend 229.21 229.21
General Reserve 550.00 5000.00
Profit Carried Forward 6823.42 3648.29
Previous year's figures have been regrouped for comparison purposes
with current year's presentation wherever necessary.
DIVIDEND :
The Directors recommend a Dividend of Rs. 25/- per Equity Share for the
year ended 31st March, 2012 on 56,51,560 Equity Shares of Rs. 10/- each.
The Dividend payout, including Dividend Tax of Rs. 229.21 lakhs, will be
Rs. 1642.10 lakhs compared to Rs. 1642.10 lakhs in the previous year.
OPERATIONS :
Industrial growth slowed significantly in 2011-2012 on account of
weakened domestic demand companied by interest rate sensitivity,
deceleration in external demand and a subdued investment climate. New
order placement declined, and surplus capacities in several sectors
resulted in low utilisations and brought margins under pressure.
Against this backdrop the Company achieved Income from Sales and
Service of Rs. 781 crore as against Rs. 769 crore in the previous year, a
nominal increase of Rs. 12 crore. Revenues of the Industrial Systems
businesses registered significant growth, and helped offset the
degrowth in the Power Systems segment which was exacerbated by a
planned shutdown of one of the Transformer plants in the first quarter
of the year under review.
Profit before Exceptional Items and Tax dropped by 32% to Rs. 39.94 crore
from Rs. 58.52 crore principally due to poor price realisations in the
Transformer business, cost overruns in Project operations, and
increases in other costs.
Exceptional Items represent proceeds (free of both Capital Gains Tax
and MAT) arising from the sale of shares of Siemens Limited in April
2011.
OTHER INITIATIVES :
During the year, one of the Transformer plants was modernised to
international standards. This has helped the Company to cater more
extensively to international business, and has enhanced production
capacity of higher ratings in the 220 KV class.
Training from an international High Voltage Institute in the
specialised design software for Transformers up to 500 KV was
completed, and will contribute significantly to design optimization and
cost effectiveness.
The Motors business grew significantly over the previous year. The
ongoing initiative to strengthen and synchronise the supply chain from
end to end resulted in measurable improvements in market responsiveness
and operational effectiveness, and will provide a strong platform for
growth, investment continues in manufacturing facilities and product
range extension.
The Drives business continued to expand its application segments, and
the new facility for production of a specific range of AC drives in
cooperation with KEB of Germany is near completion.
FINANCE :
In April 2011, the Company generated an exceptional tax free income of
Rs. 26.09 crore from the sale of 2,97,000 equity shares of Siemens
Limited in the open market at an average price of Rs. 886 per share so as
to augment its existing cash reserves for strategic business
expansions.
As a guiding policy, the Company focuses upon the efficient management
of short-term and long-term funds through rigorous monitoring of
deployment towards working capital, a comprehensive evaluation and
execution process for capital expenditure, and prudent deployment of
surplus funds. Although the Company incurred interest and finance costs
of Rs. 13.37 crore, it also earned income of Rs. 14.05 crore from
deployment of surplus funds and treasury operations.
The Company's free reserves as on 31st March, 2012 increased by Rs. 3725
lakhs to Rs. 31295 lakhs.
As on 31st March, 2012, the Company had Fixed Deposits aggregating to Rs.
2403.47 lakhs. Out of the Fixed Deposits which matured for payment
prior to 31st March, 2012,71 deposits aggregating to Rs. 15.77 lakhs
were neither renewed nor claimed till 31st March, 2012. Of these 5
deposits aggregating to Rs. 0.95 lakhs have since been renewed or
refunded on receipt of requests from the deposit holders. The balance
of 66 deposits aggregating to Rs. 14.82 lakhs have been neither claimed
nor renewed till date of this Report, in spite of the Company's
intimation to the deposit holders. There has been no default or delay
in meeting any maturity payment obligations.
During the year Rs. 1.49 lakhs was transferred to the Investor Education
and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS :
There is an ongoing emphasis on building a progressive Human Resources
culture within the organisation. Structured initiatives to nurture
talent and create a working environment that fosters motivation,
team-work and result- orieritation continue to be addressed.
The long term wage agreement with the Union expired on 31st December,
2011, and negotiations will commence in due course. Employee Relations
across the Company continued to be cordial, and issues were settled
amicably. Productivity levels continued to be subject to continuous
monitoring.
Employee strength as on 31st March, 2012 was 1381 as compared to 1317
in the previous year.
CORPORATE GOVERNANCE :
A separate report on Corporate Governance along with Auditor's
Certificate on its compliance, is set out in Annexure "A".
DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
confirm that:
(i) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanations relating to
material departures.
(ii) 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 31st March, 2012, and
the profit for that period.
(iii) Directors have taken proper and sufficient care for maintenance
of adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding of assets of the Company and for
preventing and detecting frauds and other irregularities.
(iv) The Directors have prepared Annual Accounts on going concern
basis.
DIRECTORS :
Mr. Sanjiv N. Shah, Mr. Jairaj C. Thacker and Mr. Mukul Harkisondass
retire by rotation at the ensuing Annual General Meeting and being
eligible offer themselves for reappointment.
During the year Mr. Deepak S. Parekh resigned as Alternate Director to
Mr. Anand J. Danani. The Board of Directors place on record their
appreciation for the invaluable advice and guidance given by Mr. D. S.
Parekh during his long association with the Company.
Information on the Directors eligible for reappointment as required
under Clause 49 of the Listing Agreement with Stock Exchanges is
disclosed in the profiles of the Directors under Item Nos. 3, 4 and 5
forming part of the Notice dated 16th May, 2012 circulated along with
the Annual Report 2011-12.
AUDITORS :
The Company's auditors, M/s. Dalai & Shah, bearing Firm Registration
No. 102021W, hold office till the date of the ensuing Annual General
Meeting and, being eligible, are recommended for reappointment. This
item of business is covered under Item No. 6 of the accompanying
notice.
COST AUDITORS :
M/s. R M. Nanabhoy & Co. an independent firm of Cost Accountants having
an arm's length relationship with the Company and who are free from
any disqualification as specified under Section 233 B(5) read with
Section 224 and sub- section 3 and sub-section 4 of Section 226 of the
Companies Act, 1956, have been appointed by the Board as Cost Auditors
of the Company, for electric motors, for the Financial Year ending 31st
March, 2013, subject to the approval of the Central Government. Their
appointment is in accordance with the limits specified in Section 224
(iB) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES :
The information required under Section 217 (2A) of the Companies Act,
1956, read with Company's (Particulars of Employees) Rules, 1975, and
forming part of this Report, are annexed to this Report. However, as
per the provisions of Section 219 (1) (iv) of the Companies Act, 1956,
the Report and Accounts are being sent to all Shareholders of the
Company, excluding the Statement of Particulars of Employees. Any
shareholder interested in the Particulars of Employees, may write to
the Company Secretary at the Registered Office of the Company for a
copy of the statement.
Additional information as required by Department of Companies Affairs
is presented on Page 13 & 14 of this Annual Report.
ACKNOWLEDGEMENTS :
The Directors accept and convey their sincere appreciation to all
employees of the Company for their continued dedication and commitment
to achieving the results of the Company. The Directors also
acknowledge and are grateful to the Bankers, Government Authorities,
Shareholders, Vendors and other Stakeholders for their continued
support, confidence and co-operation in the performance of the Company.
For and on behalf of the Board of Directors
Bansi S. Mehta
Chairman
Date : 16th May, 2012
Mar 31, 2011
The Directors are pleased to present herewith the 64th Annual Report of
the Company together with Audited Accountsfor the financial year ended
31st March 2011.
FINANCIAL PERFORMANCE
Year Ended Year Ended
31st March 31st March
2011 2010
(? in (? in
Lakhs) Lakhs)
Income from Sales &
Service 76299.48 70608.64
Less: Excise Duty 6595.05 5094.35
69704.43 65514.29
Other Income 1463.35 1167.72
71167.78 66682.01
Profit before Interest,
Finance Charges,
Depreciation,
Exceptional Items and
Tax 7647.70 7537.95
Less: Interest & Finance
Charges 896.84 605.28
Less: Depreciation 893.35 836.71
Profit before Exceptional
Item and Tax 5857.51 6095.96
Add: Exceptional Item 3380.67 -
Profit before Tax 9238.18 6095.96
Less: Provision for Taxes 1885.62 2007.09
Profit after Tax 7352.56 4088.87
Short (Excess) Provision
of tax for earlier years 0.03 (33.48)
Profit after Taxation 7352.53 4122.35
Add: Profit brought
forward from previous
year 2937.86 2463.06
Profit available for
appropriation 10290.39 6585.41
APPROPRIATION :
Proposed Equity
Dividend 1412.89 1412.89
Tax on Proposed Equity
Dividend 229.21 234.66
General Reserve 5000.00 2000.00
Profit Carried Forward 3648.29 2937.86
Previous years figures have been regrouped for comparison purposes
with current years presentation wherever necessary.
DIVIDEND
The Directors recommend a Dividend of t 25 per Equity Share for the
year ended 31st March, 2011 on 56,51,560 Equity Shares of ? 10/- each.
The Dividend payout, including Dividend Tax of ? 229.21 lakhs, will be?
1642.10 lakhs compared to ? 1647.55 lakhs in the previous year.
OPERATIONS
Although the Indian economy in general, and the electrical equipment
industry in particular, displayed growth and buoyancy, the overhang of
built-up capacities coupled with inflation, surging commodity prices,
and higher financing costs kept market conditions fiercely competitive
and exerted relentless pressure on margins, Further, upgradation of one
of the transformer plants affected production and deliveries during the
last two months of the year under review.
Against this backdrop, the Company was able to increase Income from
Sales and Service from ? 706 crores to ? 763 crores, a growth of 8%
over the previous year. The motors, drives, elevator systems and
projects businesses contributed significantly to the turnover growth.
The PBT from operations and before exceptional items decreased
marginally, by ? 2 crore to ? 59 crore.
OTHER INITIATIVES
During the year one of the transformer plants was upgraded and
modernised to cater to international business and to enhance production
capacity of higher ratings up to 220 KV.
Specialised design software for transformers up to 500 KV, installed
under a turnkey contract with an international high-voltage research
institute, will enhance design capabilities by improving
predictability, optimization and cost- effectiveness.
The ongoing distributorship arrangement for AC drives with KEB,
Germany, was strengthened by an agreement under which the Company will
assemble drives of ratings above 45 KW. This is expected to improve
market share by enabling specific application segments to be more
effectively addressed. Production from the new facility at the Airoli
works is expected to begin during the second half of this year.
A comprehensive end-to-end project to streamline the supply chain for
motors was initiated during the year. This is expected to significantly
improve both customer responsiveness and the effectiveness of
operations, and to establish a robust platform for continued growth.
There is ongoing emphasis on value engineering, product development,
cycle time reduction, and process and system scalability.
FINANCE
The Company continues to focus on efficient management of short-term
and long-term funds through rigorous monitoring of deployment for
working capital, a critical evaluation and negotiation of proposals for
capital expenditure, and optimising terms from fund providers. This
enabled the Company to restrict net financing cost (net of income from
cash surplus) - notwithstanding increased interest rates - to 0.45%
(previous year: 0.41%) of sales.
The Company sold 3,90,000 equity shares of Siemens Ltd. during the year
through the open market at an average price of ? 874 with the objective
of part financing contemplated expansions of the motors and
transformers businesses. This generated exceptional income (free of
both Capital Gains Tax and MAT) of ? 34.10 crore, and is reflected as
such in the Accounts.
The Companys free reserves as on March 31, 2011 increased by ^ 5711
lakhs to ? 27570 lakhs.
As on 31st March, 2011, the Company had Fixed Deposits aggregating to ?
1955.93 lakhs. Out of the Fixed Deposits which matured for payment
prior to 31 st March, 2011,32 deposits aggregating to ? 5.56 lakhs were
neither renewed nor claimed till 31st March, 2011. Of these 4 deposits
aggregating to ? 0.56 lakh have since been renewed or refunded on
receipt of requests from the deposit holders. The balance of 28
deposits aggregating to ? 5.00 lakhs have been neither claimed nor
renewed till date of this Report, in spite of the Company^ intimation
to the deposit holders. There has been no default or delay in meeting
any maturity payment obligations,
During the year ? 1.16 lakhs was transferred to the Investor Education
and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
The Company remains committed to developing and fostering a culture of
participation, engagement and accountability, and takes pride in the
initiative and team-work, and in the spirit of excellence, demonstrated
by all its employees; they have displayed exemplary team-work, result-
orientation, and motivation; and also a sense of accomplishment from
their contribution to the Companys goals.
The work environment was cordial throughout the year and. in an
atmosphere of harmonious Industrial Relations, the year under review
was peaceful, with no loss of man-days. The long term wage settlement,
settled amicably, was signed on 29th June 2010, and is valid until 31st
December 2011.
The employee strength as of 31 March, 2011 was 1317, compared to 1298
in the previous year.
CORPORATE GOVERNANCE
A separate report on Corporate Governance along with Auditors
Certificate on its compliance, is set out in Annexure "A".
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
confirm that:
(i) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanations relating to
material departures.
(ii) 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 31st March 2011, and
the profit for that period.
(iii) Directors have taken proper and sufficient care for maintenance
of adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding of assets of the Company and for
preventing and detecting frauds and other irregularities.
(iv) The Directors have prepared Annual Accounts on going concern
basis.
DIRECTORS
Mr. Bansi S. Mehta, Mr. Jaisingh R. Danani and Mr. Prakash V. Mehta
retire by rotation at the ensuing Annual General Meeting and being
eligible offer themselves for reappointment.
Mrs. D. Vijayalakshmi was appointed as Additional Director by the Board
of Directors with effect from 22nd July, 2010. In terms of Section 260
of the Companies Act, 1956 and Article 161 of the Articles of
Association of the Company she holds office as Director only till the
date of the forthcoming Annual General Meeting but is eligible for
reappointment for the office of Director in the Company. Notice has
been received from a member under Section 257 of the Companies Act,
1956 signifying their intention to propose the candidature of Mrs. D.
Vijayalakshmi for the office of Director liable to retire by rotation.
The Board of Directors of the Company are confident that her vast
knowledge and experience will be of great value to the Company and
hence recommends the Resolution No. 7 of the Notice dated 9th May, 2011
for approval of the members.
Information on the Directors eligible for reappointment as required
under Clause 49 of the Listing Agreement with Stock Exchanges is
disclosed in the profiles of the Directors under Item Nos. 3, 4, 5 and
7 forming part of the Notice dated 9th May, 2011 circulated along with
the Annual Report 2010-11.
AUDITORS
The Companys auditors, M/s. Dalai & Shah, bearing Firm Registration
No. 102021W, hold office till the date of the ensuing Annual General
Meeting and, being eligible, are recommended for reappointment. This
item of business is covered under Item No. 6 of the accompanying
notice.
COST AUDITORS
M/s. R M. Nanabhoy & Co. an independent firm of Cost Accountants having
an arms length relationship with the Company and who are free from any
disqualification as specified under Section 233B(5) read with Section
224 and sub- section 3 and sub section 4 of Section 226 of the
Companies Act, 1956, have been appointed by the Board as Cost Auditors
of the Company, for the Financial Year ending 31st March, 2012, subject
to the approval of the Central Government. Their appointment is in
accordance with the limits specified in Section 224 (1B) of the
Companies Act, 1956.
PARTICULARS OF EMPLOYEES
The information required under Section 217 (2A) of the Companies Act,
1956, read with Companys (Particulars of Employees) Rules, 1975, and
forming part of this Report, are annexed to this Report. However, as
per the provisions of Section 219 (1)(iv) of the Companies Act, 1956,
the Report and Accounts are being sent to all Shareholders of the
Company, excluding the Statement of Particulars of Employees. Any
shareholder interested in the Particulars of Employees, may write to
the Company Secretary at the Registered Office of the Company for a
copy of the Statement.
Additional information as required by Department of Companies Affairs
is presented on Page 14 & 15 of this Annual Report.
ACKNOWLEDGEMENTS
The Directors accept and convey their sincere appreciation to all
employees of the Company for their continued dedication and commitment
to achieving the results of the Company. The Directors also acknowledge
and are grateful to the Bankers, Government Authorities, Shareholders,
Vendors and other Stakeholders for their continued support, confidence
and co- operation in the performance of the Company.
For and on behalf of the Board of Directors
Bansi S. Mehta
Chairman
Date : 9th May, 2011
Mar 31, 2010
The Directors are pleased to present herewith the 63rd Annual Report of
the Company together with Audited Accounts for the year ended 31st
March 2010.
FINANCIAL RESULTS
Year Ended Year Ended
31st March 31st March
2010 2009
(Rs. In (Rs In
Lakhs) Lakhs)
Sales & Service 70608.64 60077.08
Less: Excise Duty 5094.35 5607.55
65514.29 54469.53
Other Income 576.77 299.23
66091.06 54768.76
Profit before Interest 7537.95 8499.68
& financial Charges,
Depreciation and Tax
Less: Interest & 605.28 449.34
Financial charges
Less: Depreciation 836.71 708.38
Profit before Tax 6095.96 7341.96
Less: Provision for 2007.09 2555.86
Taxes
Profit after Tax 4088.87 4786.10
Short / (Excess) (33.48) 33.31
Provision of tax for
earlier years
Profit after Taxation 4122.35 4752.79
Add: Profit brought 2463.06 1363.28
forward from previous
year
Profit available for 6585.41 6116.07
appropriation
APPROPRIATION :
Proposed Equity 1412.89 1412.89
Dividend
Tax on Proposed 234.66 240.12
Equity Dividend
General Reserve 2000.00 2000.00
Profit Carried Forward 2937.86 2463.06
Previous years figures have been regrouped for comparison purposes
with current yearÃs presentation wherever necessary.
DIVIDEND
The Directors recommend a Dividend of Rs. 25/- per Equity Share for the
year ended 31st March, 2010 on 56,51,560 Equity Shares of Rs. 10/-
each. The Dividend payout, including Dividend Tax of Rs. 234.66, will
be Rs.1647.55 as compared to Rs. 1653.01 lakhs in the previous year.
OPERATIONS
Economic growth during the previous five years led to a very large
build up of capacities, and made market conditions fiercely competitive
during the year under review. The resulting adverse effect on price
realizations, coupled with contracted demand during the first half of
the year, affected margins of both Motors and Transformers.
Income from Sales and Services, at Rs. 706 Crores, grew by 17% (Rs. 105
Crores) over the previous year. However, PBT declined by 16% (Rs. 12
Crores) to Rs.61 Crores.
Large orders of higher ratings for Transformers, and increased sales of
large Motors, contributed to the growth in turnover. Customer
deliveries of Transformers aggregated to 12047 MVA (7850 MVA in the
previous year), while sales of Motors were 789 MW (684 MW in the
previous year)
Order inflow during the year was Rs. 650 Crores (618 Crores in the
previous year), an improvement of 5%, and unexecuted orders at year-end
were Rs. 387 Crores (392 Crores).
OTHER INITIATIVES
Upgrading and enhancement of 132 KV / 220 KV Transformer manufacturing
facilities are planned during the year, as are replacement and
upgrading of critical testing equipment. A facility for High Tension
Traction Motors is also planned during the current year.
The Company intends to systematically strengthen the focus on the
Projects business.
Gearless machines for elevators have found market acceptance, and a
significant growth in sales is expected during the current year.
FINANCE
With continuous focus and monitoring of the working capital deployed in
business operations, and systematic funds management, the Company was
able to leverage substantially higher business volumes with a marginal
increase in financing cost. After funding the incremental working
capital gap and the capital expenditure, the financing cost (net of
income from current investments) was Rs.3.66 crores, ie. 0.52% of
sales, compared to 0.71% in the previous year.
As on 31st March, 2010, the Company had Fixed Deposits aggregating to
Rs. 1871.86 lakhs. Out of the Fixed Deposits which matured for payment
prior to 31st March, 2010, 31 deposits aggregating to Rs. 4.70 lakhs
were neither renewed nor claimed till 31st March, 2010. Of these 2
deposits aggregating to Rs. 0.60 lakhs have since been renewed or
refunded on receipt of requests from the deposit holders. The balance
of 29 deposits aggregating to Rs. 4.10 lakhs have been neither claimed
nor renewed till date of this Report, in spite of the CompanyÃs
intimation to the deposit holders. There has been no default or delay
in meeting any maturity payment obligations.
During the year Rs. 0.56 lakhs was transferred to the Investor
Education and Protection Fund.
HUMAN RESOURCES AND EMPLOYEE RELATIONS
The CompanyÃs Human Resources function is undergoing re-alignment so as
to increase its contribution to the success of the Business, and to
enhance the quality and efficiency of H.R. processes across the
organization. Organisational and structural changes aligned to the
CompanyÃs strategic intent are under review.
With a cordial work environment and a culture of harmonious Industrial
Relations, there was no loss of man days during the year under review.
The long term wage settlement which expired on 31st December 2008 is
presently under negotiation.
The employee strength as at 31st March 2010 was 1298 compared to 1302
in the previous year.
CORPORATE GOVERNANCE
A separate report on Corporate Governance along with Auditors
Certificate on its compliance, is set out in Annexure ÃAÃ.
DIRECTORSÃ RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
confirm that:
i) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanations relating to
material departures.
ii) 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 31st March, 2010, and
the profit for that period.
iii) Directors have taken proper and sufficient care for maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding of assets of the Company and for
preventing and detecting frauds and other irregularities.
iv) The Directors have prepared Annual Accounts on going concern basis.
DIRECTORS
Mr. Mukul Harkisondass, Mr. Meghendra Kumar and Mr. Anand J. Danani
retire by rotation at the ensuing Annual General Meeting. Mr. Mukul
Harkisondass and Mr. Anand J. Danani being eligible offer themeseves
for reappointment. However Mr. Maghendra Kumar has expressed his
unwillingness to be re-appointed as Director. It is proposed not to
fill up the vacancy created on retirement of Mr. Meghendra Kumar for
the time being.
Information on the Directors eligible for reappointment as required
under Clause 49 of the Listing Agreement with Stock Exchanges is
disclosed in the profiles of the Directors under item Nos.3, and 5
forming part of the Notice dated 6th May, 2010 circulated along with
the Annual Report 2009-10.
AUDITORS
M/s. Dalal & Shah, Auditors of the Company, retire at the ensuing
Annual General Meeting, and being eligible offer themselves for
reappointment. This item of business is covered under Item 6 of the
accompanying notice.
COST AUDITORS
M/s. P. M. Nanabhoy & Co. has been appointed by the Board as Cost
Auditors of the Company, for electric motors, for the Financial Year
ending 31st March, 2011 subject to the approval of the Central
Government.
PARTICULARS OF EMPLOYEES
The information required under Section 217 (2A) of the Companies Act,
1956, read with CompanyÃs (Particulars of Employees) Rules, 1975, and
forming part of this Report, are annexed to this Report. However, as
per the provisions of Section 219 (1) (iv) of the Companies Act, 1956,
the Report and Accounts are being sent to all Shareholders of the
Company, excluding the Statement of Particulars of Employees. Any
shareholder interested in the Particulars of Employees, may write to
the Company Secretary at the Registered Office of the Company for a
copy of the Statement.
Additional information as required by Department of Companies Affairs
is presented on Page 12 of this Annual Report.
APPRECIATION
The Directors wish to place on record their appreciation to all the
employees for their dedicated and spirited efforts in the results of
the Company. The Directors also wish to place on record their
appreciation for the confidence, support and co- operation received
from Banks, Government Authorities, Share Holders, Suppliers and other
Stake Holders during the year.
For and on behaif of the Board of Directors
Bansi S. Mehta
Chairman
Date :6th May 2010
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