Dec 31, 2022
Your Directors have pleasure in presenting the 66th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended December 31, 2022.
Summary of Financial Performance |
(All Figures in ? lakh) |
|
Particulars |
Accounting year ended December 31, 2022 |
Accounting year ended December 31, 2021 |
Total Revenue from Operations |
40,673.51 |
33,801.11 |
Operating Expenses |
(33,650.23) |
(28,880.66) |
Earnings before interest, tax, depreciation and amortisation (EBITDA) |
7,023.28 |
4,920.45 |
Finance Cost |
-- |
-- |
Depreciation and amortisation expense |
(890.21) |
(588.18) |
Profit Before Tax (PBT) |
6,133.07 |
4,332.27 |
Total Tax Expense |
(1,536.25) |
(1,065.24) |
Profit for the Period (PAT) |
4,596.82 |
3,267.03 |
Other Comprehensive Income, net of tax |
(11.53) |
(43.19) |
Total Comprehensive Income for the Year |
4,585.29 |
3,223.84 |
Balance brought forward from previous year |
14,599.23 |
12,014.04 |
Amount available for appropriation |
19,184.52 |
15,237.88 |
Appropriations: |
||
Interim Dividend |
-- |
-- |
Final Dividend |
(1,596.61) |
(638.65) |
Total Retained Earnings |
17,587.91 |
14,599.23 |
Business Operations/Performance of the Company
The year was marked with your Company reporting its highest ever annual turnover of ? 40,673.51 lakh and a Profit Before Tax of ? 6,133.07 lakh. The Company has recorded an improvement in a majority of its key financial parameters, largely due to sales revenue growth of its premium strategic product lines coupled with prudent credit evaluation of targeted customers. Meeting customers and offering solutions in optimal use of raw material in their manufacturing process and technology was also an important element of the Company''s strategy.
As on December 31, 2022, the paid-up share capital of the Company stood at ? 638,64,590/-, consisting of 63,86,459 equity shares of face value of ? 10 fully paid-up. Out of the above, the Promoters held 47,88,845 equity shares comprising 74.98% of the equity share capital of the Company. There was neither any change in the share capital of the Company nor was there any change in the shareholding of the Promoter of the Company during the year.
Your Directors are pleased to recommend for approval of the Members, a Final Dividend of ? 25/- per share
(i.e., 250%), on a paid-up equity share of ? 10/- each for the financial year ended December 31, 2022, plus a one-time special dividend of ? 15/- per share (i.e., 150%), giving a total final dividend of ? 40/-per share (400%) (against the total dividend of ? 25 per share i.e., 250% in the previous year). The one-time special dividend is recommended on the occasion of completion of 65 years of existence of your Company in the current year.
The dividend is subject to approval of members at the ensuing AGM and shall be subject to deduction of income tax at source. The dividend recommended is in accordance with the Company''s Dividend Distribution Policy. The policy includes the parameters as set out in Regulation 43A(2) of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations"). The policy is available on the Company''s website and can be accessed at https://fosecoindia.com/Policies.aspx.
The total dividend that will be paid out will aggregate to ? 2,554.58 lakh for the financial year ended December 31, 2022, as compared to ? 1,596.61 lakh paid for the financial year ended December 31, 2021.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI Listing
Regulations, is presented in a separate section, forming part of the Annual Report.
The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India ("SEBI"). The Company has implemented several best governance practices. The Report on Corporate Governance as stipulated under the SEBI Listing Regulations forms part of the Annual Report. Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance. The disclosure requirement laid down in Schedule V, Section II under Clause IV of the Companies Act, 2013 ("the Act") are covered in the Report of Corporate Governance under the title ''Remuneration Policy''.
Business Responsibility and Sustainability Report
In accordance with the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) describing the initiatives taken by the Company from an environmental, social and governance perspective is available on the Company''s website and can be accessed at https://www.fosecoindia.com/DownloadFiles/ BRR2021-22.pdf
Your Company does not have any subsidiary / subsidiaries within the meaning of Section 2 of the Companies Act, 2013. Therefore, a statement under the provisions of Section 129(3) of the Act, containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is not attached as the same is not applicable in the case of your Company.
The Company has not accepted any deposits from the public and accordingly no amount was outstanding as on the date of the Balance Sheet.
As required under Section 92(3) read with Section 134(3) (a) of the Companies Act 2013, the Annual Return in Form No. MGT 7 as at the financial year ended December 31,
2021, has been uploaded on the website of the Company at http://fosecoindia.com/View/AnnualReturn.aspx.
Number of Meetings of the Board
A total of four Board Meetings were held during the year 2022 on the following dates: February 10, 2022, May 12,
2022, July 29, 2022, and November 09, 2022. During the year, one meeting was held in physical mode and the other meetings were held virtually in audio-visual mode. The information on the meetings is given in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between any two meetings was within the period of 120 days prescribed by the Companies Act, 2013.
Directors and Key Managerial Personnel
The composition of the Board of Directors of the Company is in accordance with the provisions of Section 149 of the Companies Act 2013 and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Executive Director, Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.
Mr. Ravi Moti Kirpalani (DIN: 02613688) was appointed as an Independent Director of the Company at the 62nd AGM held on April 26, 2019 for a term of 5 consecutive years commencing from October 26, 2018 and ending on October 25 2023. Pursuant to the provisions of Section 149 of the Act read with relevant rules made thereunder, an Independent Director can hold the office for a term of up to 5 consecutive years on the Board of a company, but is eligible for re-appointment on passing of a special resolution by the company, based on the report of evaluation of performance for another term of up to 5 years. No independent director can hold office for more than two consecutive terms.
Further to the aforesaid and based on the recommendation of the Nomination and Remuneration Committee of the Company ("NRC"), the Board at its Meeting held on February 27, 2023 has approved the re-appointment of Mr. Ravi Moti Kirpalani as an Independent Director for a second term of 5 consecutive years from October 26, 2023 to October 25, 2028, subject to the approval of the Members of the Company by means of a Special Resolution at the ensuing Annual General Meeting. He will not be liable to retire by rotation.
In the opinion of the Board, Mr. Kirpalani possesses requisite expertise, integrity, experience and relevant proficiency for appointment as an Independent Director of the Company and the Board considers that, given his professional background, experience and contributions made by him during his tenure, his continued association would be beneficial to the Company.
The Board of Directors at its Meeting held on February 27, 2023, based on the recommendation of the Nomination and Remuneration Committee, has appointed Mr. Mark Russell Collis (DIN: 10054384) as an Additional Director of the Company with effect from February 27, 2023, subject to the approval of the Members of the Company at the ensuing Annual General Meeting. Mr. Mark Russell Collis is nominated as a Non-Executive Non-Independent Director on the Board of the Company by the Holding Company, Foseco Overseas Limited.
Mr. Guy Franklin Young, a Non-Executive and NonIndependent Director, resigned from the Directorship of the Company with effect from February 27, 2023, as he has stepped down from his responsibilities within the Vesuvius Group. Accordingly, his nomination was withdrawn by the Holding Company, Foseco Overseas Limited. The Board places on record its appreciation of the valuable contributions made by him during his tenure as a Director of the Company.
The Board of Directors hereby affirms that Mr. Ravi Moti Kirpalani and Mr. Mark Russell Collis are not debarred from holding the Office of Director by virtue of any order passed by SEBI or any other such authority and are therefore not disqualified to be appointed as the Directors.
In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Karena Cancilleri (DIN: 07163534), a Non-Executive and Non-Independent Director on the Board of the Company, who is a nominee of the Promoter Company - Foseco Overseas Limited, retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. She has submitted a declaration of her eligibility for appointment. The Board recommends her re-appointment. A brief resume and other relevant details of her re-appointment is provided in the Corporate Governance Report which forms part of this Annual Report.
Declaration of independence from Independent Directors
In terms of Section 149 of the Act and Regulation 16(1) (b) of the SEBI Listing Regulations, the Company has received declarations from all the Independent Directors of the Company confirming that:
a) they meet the criteria of independence prescribed under the Companies Act, 2013 and the SEBI Listing Regulations;
b) in terms of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, they have registered themselves with the Independent Directors'' database maintained by the Indian Institute of Corporate Affairs;
c) in terms of Regulation 25(8) of the SEBI Listing Regulations, they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.
In terms of Regulation 25(9) of the SEBI Listing Regulations, based on the declarations and confirmations received from the Independent Directors, the Board of Directors has ensured the veracity of the disclosures made under Regulation 25(8) of the SEBI Listing Regulations by the Independent Directors of the Company.
The Board of Directors hereby affirms that none of the Directors on the Board of the Company are debarred from holding the Office of Director by virtue of any order passed by SEBI or any other statutory authority and are therefore not disqualified to be appointed as the Directors. Further, pursuant to Regulation 34(3) and Schedule V, Para C, Clause 10(i) of the SEBI Listing Regulations, the practicing Company Secretary has issued a certificate to the Company to this effect which is annexed with this Report marked Annexure A. All the above appointments / re-appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your approval. Profile of these Directors are given in the Report on Corporate Governance.
During the year under review, no Non-Executive Director has had any pecuniary relationship or transactions with the Company.
During the year under review, no changes have taken place in the position of the Key Managerial Personnel (KMP) of the Company.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down Internal Financial Controls in the Company that are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that these are adequate and are operating effectively;
Policy on Directors'' Appointment and Remuneration
The policy of the Company on Directors'' Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a
Director and other matters provided in Section 178(3) of the Companies Act 2013, adopted by the Board is covered in the Report on Corporate Governance which forms part of this Annual Report.
Performance Evaluation of the Directors
The Nomination and Remuneration Committee has laid down the criteria for performance evaluation by the Board of its own performance and that of the various Committees of the Board and the individual Directors including the Chairperson. The framework of performance evaluation of the Directors captures the following points:
- Key attributes of the Independent Directors that justify his / her extension / continuation on the Board of the Company;
- Participation of the Directors in the Board proceedings and his / her effectiveness;
More details on this subject is provided in the Report on Corporate Governance.
Composition of the Audit Committee
The Audit Committee comprises Mr. Amitabha Mukhopadhyay as its Chairperson, Mr. Ravi Moti Kirpalani and Ms. Anita Belani, all of whom are Independent Directors and Mr. Guy Young as a Non-Executive, Non-Independent Member. More details on the Committee are given in the Report on Corporate Governance.
Adequacy of Internal Financial Controls (IFC)
The Company has an Internal Financial Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The internal controls are designed in a manner that facilitates achievement of three-pronged objectives viz., i) support the achievement of the Company''s business objectives, ii) mitigate risks to acceptable level, and iii) support sound decision making and good governance.
The adequacy and effectiveness of the internal financial controls are demonstrated by following the procedures as set out below: -
i. The internal controls have been designed to provide reasonable assurance with regard to recording and producing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance with corporate policies. The Company has a well-defined delegation of power with authority limits for approving revenue as-well-as expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down.
ii. The Audit Committee periodically deliberates on the operations of the Company with the Members of the Management. It also sought the views of Price Waterhouse Chartered Accountants LLP, who are the Statutory Auditors, on the internal financial control systems. The extensive audit on the internal financial control systems was done by P G Bhagwat, Chartered Accountants.
iii. The Company has appointed P. G. Bhagwat, Chartered Accountants, as Internal Auditors of the Company. The Audit Committee in consultation with the Internal Auditors formulates the audit plan, scope, functioning and methodology, which are reviewed every year, in a manner that they cover all areas of operation. The Internal Audit covers inter alia, monitoring and evaluating the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and adequacy of insurance coverage of all assets. Periodical Internal Audit Reports are submitted to the Audit Committee, to ensure complete independence, which are then extensively deliberated at every Audit Committee Meeting in the presence of the Internal and External Auditors. Based on the review by the Audit Committee, process owners undertake corrective actions in their respective areas and consider suggestions for improvement. The Internal Auditors have expressed that the internal control system in the Company is robust and effective.
iv. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively.
v. The Company''s financial records are maintained on the ERP System which is effective and adequate in line with the size of its operations.
Not to pursue delisting of the Company''s Shares from the Bombay Stock Exchange
Since 2019, the Company was pursuing delisting of the Company''s Equity Shares from the BSE Limited. During the year, the Board of Directors after reviewing all the conditions and requirements of delisting, reconsidered their earlier decision and decided that the Company shall continue to remain listed on the BSE Limited. Apart from the BSE Limited, the Company''s Equity Shares continues to remain listed on the National Stock Exchange of India Limited, which provides nation-wide trading terminals.
Particulars of Loans, Investments, Guarantees and Securities
Your Company has neither advanced any loans, nor made any investments or given any guarantees and / or provided any securities to anybody, whether directly or indirectly, within the meaning of Section 185 & 186
of the Companies Act 2013. In addition thereto, the Company has not extended any loans and advances in the nature of loans to firms/companies in which directors are interested.
Fund raising by issuance of debt securities, if any
Pursuant to SEBI Circular No. SEBI/HO/DDRS/ CIR/P/2018/144 dated November 26, 2018, the Directors confirm that your Company is not identified as a "Large Corporate" during the year ended December 31, 2022 as per the framework provided in the said Circular. Moreover, your Company has not raised any fund by issuance of debt securities.
Particulars of Contracts or Arrangements with Related Parties
Under the Companies Act 2013, all contracts / arrangements / transactions entered into by the Company during the financial year ended December 31, 2022 with related parties were on an arm''s length basis and were in the ordinary course of business. Moreover, none of the transaction were material in nature, and therefore, Members'' approval was not required to be obtained, in accordance with the Policy of the Company on materiality of related party transactions. Thus, provisions of Sections 134(3)(h) and 188(1) of the Companies Act,
2013 and Rule 8(2) of the Companies (Accounts) Rules,
2014 are not applicable to the Company and therefore, Form No. AOC-2 has not been attached.
In compliance with the requirements laid down in the SEBI Listing Regulations, all related party transactions were placed before the Independent Directors who were Members of the Audit Committee for approval. Prior omnibus approval of the Independent Directors who were Members of the Audit Committee had been obtained for transactions which were foreseeable and of repetitive nature. All transactions entered into with the related parties are presented to the Audit Committee by way of a statement giving details of all transactions.
The Policy on materiality of Related Party Transactions and dealing with Related Parties as approved by the Board has been uploaded on the Company''s website at https://fosecoindia.com/Policies.aspx. Your Directors draw attention of the Members to Note 29 attached to the financial statement which sets out related party disclosures.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Information under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure B to this Report.
Particulars of Employees and Related Disclosures
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act,
2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 and also the Statement containing particulars of employees as required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 is provided in Annexure C forming part of this Report.
Auditors and Auditors'' Report
Statutory Auditors
The Company at its 65th AGM held on May 11, 2022 re-appointed Price Waterhouse Chartered Accountants LLP (Firm registration no. - 012754N / N500016), Chartered Accountants, as the Statutory Auditors of the Company to hold office for the second term of five years from the conclusion of 65th AGM until the conclusion of the 70th AGM to be held in the year 2027.
The Company has received a written confirmation from Price Waterhouse Chartered Accountants LLP, to the effect that their continuation as the Statutory Auditors of the Company, meets the requirements laid down under Section 139 and 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and that they are not disqualified.
Auditors'' Report
The observations of the Statutory Auditors on the annual financial statement for the year ended December 31, 2022 including the relevant notes to the financial statement are self-explanatory and therefore do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark or disclaimer. The Auditors'' Report has been issued with unmodified opinion on the annual financial results of the Company.
Report on Frauds, if any
During the year under review, no incidence of any fraud has occurred against the Company by its officers or employees. Neither the Audit Committee nor the Board of the Company has received any report involving any fraud from the Statutory Auditors of the Company. As such, there is nothing to report by the Board, as required under Section 134 (3) (ca) of the Companies Act, 2013.
Cost Auditors
Joshi Apte & Associates, Cost Accountants, were appointed as the Cost Auditors of the Company to examine the Cost Records and submit the Cost Audit Report. The Company has maintained the required cost
accounting records as per the Companies (Cost Records and Audit) Rules, 2014 and is in compliance therewith. The Cost Audit Report in Form CRA-4 relating to the year ended December 31, 2021 has already been filed with the Ministry of Corporate Affairs.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, Rajesh Karunakaran & Co., Practicing Company Secretary (FCS 7441; CP No. 6581), Pune, was appointed to conduct a secretarial audit of the Company''s Secretarial and related records for the year ended December 31, 2022. The Practicing Company Secretary has submitted the Secretarial Audit Report which is annexed as Annexure D to this Report. The same does not contain any qualification, reservation, adverse remark or disclaimer.
In addition to the above, a Report on Secretarial Compliance has been submitted by Rajesh Karunakaran & Co. There are no observations, reservations, qualifications, adverse remark or disclaimer in the said Report. The Secretarial Compliance Report is annexed as Annexure E to this Report.
Secretarial Standards of the Institute of Company Secretaries of India (ICSI)
The Company has complied with the requirements prescribed under the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).
Vigil Mechanism / Whistle Blower Policy
The Company has established a vigil mechanism (which incorporates a whistle blower policy) for Directors, employees and business associates, to report their genuine concerns. The details of the same are provided in the Report on Corporate Governance forming part of this Annual Report. The Policy is also available on the Company''s website at https://fosecoindia.com/Policies.aspx.
Your Company has posted the following documents on its website at https://fosecoindia.com/Policies.aspx.
- Code of Conduct;
- Familiarisation Programme for the benefit of the Independent Directors;
- Archival Policy;
- Policy for Determination of Material Events or Information;
- Policy of Preservation of Documents;
- Dividend Distribution Policy.
The Board regularly monitors and reviews the risk management strategy of the Company and ensures the effectiveness of its implementation. Your Directors take all necessary steps towards mitigation of any elements of risk, which in their opinion, can impact the Company''s survival.
All the identified risks are managed through review of business parameters by the Management, and the Board of Directors are informed of the risks and concerns.
The Company has a structured Risk Management Framework, designed to identify, assess and mitigate risks appropriately. The Risk Management Committee was formed during the year. Two meetings of the Committee were held during the year. The Committee has been entrusted with the responsibility to assist the Board in:
a) overseeing and approving the Company''s enterprise wide risk management framework; and
b) ensuring that all material Strategic and Commercial including Cybersecurity, Safety and Operations, Compliance, Control and Financial risks have been identified and assessed and adequate risk mitigations are in place, to address these risks.
Further details on the Risk Management activities including the implementation of risk management policy, key risks identified, and their mitigations are covered in Corporate Governance Report, which forms part of the Annual Report.
Corporate Social Responsibility (CSR)
The Board of your Company has constituted a CSR Committee. As on December 31, 2022, the Committee comprises four Directors. A brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure F of this Report in the prescribed format of the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy is available on the website of the Company at https://fosecoindia.com/ Policies.aspx.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Your Company has in place a Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year under review, one complaint of sexual harassment was received by it from the ICC which was thoroughly investigated by the ICC and closed after discussion with and agreement of the complainant. There were no complaints remaining pending as at the end of the year.
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:
⢠Details relating to deposits covered under Chapter V of the Act.
⢠Issue of equity shares with differential rights as to dividend, voting or otherwise.
⢠There has been no change in the nature of business of the Company.
⢠There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.
⢠There was no instance of onetime settlement with any Bank or Financial Institution.
⢠Issue of shares (including sweat equity shares) to employees of the Company under any scheme
⢠No significant or material orders were passed by the Regulators or Courts or Tribunals which would impact the going concern status and Company''s operations in future.
Employee relations throughout the Company were harmonious. Your Board of Directors would like to place on record their sincere appreciation for the wholehearted support and contributions made by all the employees of the Company as well as customers, suppliers, bankers, stakeholders and other authorities. The Directors also thank the Central and State Governments/Government Departments/Agencies and the parent Company for their co-operation and valuable support.
Dec 31, 2018
Directorsâ Report
Dear Members,
The Directors have pleasure in presenting the 62nd Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31 December 2018.
Financial Highlights (All Figures in Rs, Lakhs)
Particulars |
Accounting year ended 31-Dec-2018 |
Accounting year ended 31-Dec-2017 |
Total Revenue from Operations |
36,215.58 |
37,868.79 |
Operating Expenses |
(30,733.55) |
(32,482.36) |
Earnings before interest, tax, depreciation and amortization (EBITDA) |
5,482.03 |
5,386.43 |
Finance Cost |
(20.87) |
(35.26) |
Depreciation and amortization expense |
(453.90) |
(534.13) |
Profit Before Tax (PBT) |
5,007.26 |
4,817.04 |
Total Tax Expense |
(1,803.61) |
(1,659.63) |
Profit for the Period (PAT) |
3,203.65 |
3,157.41 |
Other Comprehensive Income, net of tax |
(81.00) |
(25.50) |
Total Comprehensive Income for the Year |
3,122,65 |
3,131.91 |
Balance brought forward from previous year |
8,341.41 |
7,060.01 |
Amount available for appropriation |
11,464.06 |
10,191.92 |
Appropriations: |
||
Interim Dividends |
957.97 |
830.24 |
Final Dividend (Proposed) |
766.38 |
447.05 |
Tax on Dividends (Interim and Final) |
352.93 |
260.03 |
Transferred to General Reserves |
-- |
313.19 |
Total Retained Earnings |
9,386.78 |
8,341.41 |
Indian Accounting Standards (Ind-AS)
The Ministry of Corporate Affairs (MCA) had notified the Indian Accounting Standards (Ind-AS) applicable to certain classes of companies. Ind-AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.
Upon being applicable, the Company has adopted Ind-AS from 1 January 2018 and accordingly, the transition has been carried out, from the Accounting Principles generally accepted in India as specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 (previous GAAP) to Ind-AS 101 âFirst time adoption of Indian Accounting Standardsâ. The impact of transition has been recorded in opening reserves as at 1 January 2017 and the periods presented have been restated / reclassified.
The reconciliation and descriptions of the effect of the transition from Indian GAAP to Ind-AS have been provided in the notes forming part of separate financial statements.
Financial Year of the Company
Your Company follows the Calendar Year from 1st January to 31st December as its Financial Year.
Transfer to Reserves
In accordance with Ind-AS, the earnings for the year will be retained in the Statement of Profit and Loss. For the year 2018, no amount will be transferred to the General Reserves as was done in the earlier years. In the previous year, an amount of Rs, 313.19 Lakhs was transferred to the General Reserves Account.
Dividend
During the year, your Directors declared two Interim Dividends, as detailed below:
Particulars of Dividend |
Date of declaration |
Record Date |
Dividend % |
Dividend per share |
1st Interim Dividend |
18 July 2018 |
28 July 2018 |
70 |
Rs, 7 |
2nd Interim Dividend |
26 October 2018 |
10 November 2018 |
80 |
Rs, 8 |
Your Directors are pleased to recommend for approval of the Members, a Final Dividend of Rs, 10/- per share (i.e., 100%), on an Equity Share of Rs, 10/- each, for the financial year ended 31 December 2018, taking the total dividend to Rs, 25/- per share (i.e., 250%) (previous year Rs, 25 per share i.e., 250%).
The total pay-out of the two Interim Dividends for the financial year ended 31 December 2018 and Final Dividend for the financial year ended 31 December 2017, inclusive of dividend distribution tax, aggregated to Rs, 2077.28 Lakhs as compared to Rs, 1537.32 Lakhs in the previous period.
Report on Corporate Governance & Management Discussion & Analysis
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015, a separate section titled Report on Corporate Governance together with a Certificate from the Practicing Company Secretary forms part of this Annual Report.
A detailed Management Discussion and Analysis is included as a part of this Annual Report.
Subsidiaries
Your Company does not have any subsidiary / subsidiaries within the meaning of Section 2 of the Companies Act, 2013 (âActâ). Therefore, a statement under the provisions of Section 129(3) of the Act, containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is not attached as the same is not applicable in the case of your Company.
Public Deposits
The Company has not accepted any deposits from the public and accordingly no amount was outstanding as on the date of the Balance Sheet.
Extract of the Annual Return
As required under Section 92(3) read with Section 134(3)(a) of the Companies Act 2013, an extract of the Annual Return in Form No. MGT 9, at the financial year ended 31 December 2018, is given in Annexure A, which forms part of this Board Report.
Delisting of the Companyâs Shares from the Bombay Stock Exchange
The Company''s Equity Shares are listed on the Bombay Stock Exchange Limited (BSE Limited) and the National Stock Exchange of India Limited. The Board of Directors propose to delist the Company''s Equity Shares from the BSE Limited. In compliance with the SEBI (Delisting of Shares) Regulations, 2009, as amended from time to time, the Company will make an application for delisting from the BSE Limited. However, the Company''s Equity Shares will continue to remain listed on the National Stock Exchange of India Limited, which provides nation-wide trading terminals.
Amendment to the Articles of Association
The Board of Directors proposes to amend the Articles of Association of the Company (AOA) to bring it in line with the Companies Act 2013, as amended from time to time. No changes are proposed to be made to the Memorandum of the Association of the Company. In this regard, a Special Resolution for effecting amendment to the AOA is carried in the Notice of the Annual General Meeting.
Number of Meetings of the Board
The Board of Directors met four times during the year 2018 on the following dates: 1 February 2018, 23 April 2018, 18 July 2018 and 26 October 2018. The information on the Meetings is given in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between any two meetings was within the period of 120 days prescribed by the Companies Act, 2013.
Directors and Key Managerial Personnel
Mr. Pradeep Mallick, Independent Director and Chairperson of the Company retired with effect from 25 April 2018, as he has attained the age of 75 years. Ms. Merryl France Durrenbach, a Non-Executive and Non-Independent Director, resigned with effect from 26 October 2018, from the Directorship of the Company due to a change in her role and responsibilities. Accordingly, her nomination was withdrawn by the Holding Company, Foseco Overseas Limited. The Board places on record its appreciation of the valuable contributions made by them during their tenure as Directors of the Company.
In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Glenn Allan Cowie (DIN: 07163534), a Non-Executive and Non-Independent Director on the Board of the Company, who is a nominee of the Promoter Company - Foseco Overseas Limited, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. He has submitted a declaration that he is eligible for appointment. The Board recommends his re-appointment. A brief resume and other relevant details of his re-appointment is provided in the Corporate Governance Report which forms part of this Annual Report.
The Board of Directors at its Meeting held on 26 October 2018, based on the recommendation of the Nomination and Remuneration Committee, has appointed Mr. Ravi Moti Kirpalani (DIN: 02613688) as an Additional Independent Director for a period of 5 years with effect from 26 October 2018 to 25 October 2023, subject to the approval of the Members of the Company at the ensuing Annual General Meeting. He has also been appointed the Chairperson of the Company.
The Board of Directors at its Meeting held on 25 January 2019, based on the recommendation of the Nomination and Remuneration Committee, has appointed Mr. Guy Franklin Young (DIN: 08334721) as an Additional Director of the Company with effect from 25 January 2019, subject to the approval of the Members of the Company at the ensuing Annual General Meeting. Mr. Guy Franklin Young was nominated as a Non-Executive Non-Independent Director on the Board of the Company by the Holding Company, Foseco Overseas Limited.
The Board of Directors hereby affirms that Mr. Ravi Moti Kirpalani and Mr. Guy Franklin Young are not debarred from holding the Office of Director by virtue of any order passed by SEBI or any other such authority and are therefore not disqualified to be appointed as the Directors.
Pursuant to the provisions of Section 149 of the Companies Act 2013, Mr. Ajit Shah (DIN: 02396765), was appointed as Independent Director at the Annual General Meeting of the Company held on 27 March 2015. The terms and conditions of his appointment is as per Schedule IV of the Act. Mr. Ajit Shah is seeking re-appointment for a second consecutive term commencing from 26 April 2019 to 10 October 2021, being the date when he attains the age of 75 years.
The Company has received declarations from both the Independent Directors that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year.
Mr. Sanjay Mathur (DIN: 00029858) was re-appointed as Managing Director of the Company for a period of three years from 1 April 2016 to 31 March 2019 at the Annual General Meeting of the Company held on 26 April 2016. The Board of Directors at its Meeting held on 25 January 2019 has re-appointed him as the Managing Director and Chief Executive Officer of the Company for a further period of 3 (three) years from 1 April 2019 to 31 March 2022 and have also fixed a ceiling on his remuneration on the recommendation of the Nomination and Remuneration Committee. The Board recommends his re-appointment and fixation of his remuneration to the Members of the Company.
All the above appointments / re-appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your approval. Profiles of these Directors, are given in the Report on Corporate Governance.
During the year, no Non-Executive Director except the Nominee Directors appointed by the Promoter Company has had any pecuniary relationship or transactions with the Company.
The following persons are designated as Key Managerial Personnel of the Company:
1. Mr. Sanjay Mathur, Managing Director,
2. Mr. R Umesh, Chief Financial Officer,
3. Mr. Mahendra Kumar Dutia, Controller of Accounts and Company Secretary.
There was no change in the Key Managerial Personnel during the year 2018.
Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the same period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down Internal Financial Controls in the Company that are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that these are adequate and are operating effectively;
Policy on Directorsâ Appointment and Remuneration
The policy of the Company on Directors'' Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Section 178(3) of the Companies Act 2013, adopted by the Board is covered in the Report on Corporate Governance which forms part of this Annual Report.
Performance Evaluation of the Directors
The Nomination and Remuneration Committee has laid down the criteria for performance evaluation by the Board of its own performance and that of the various Committees of the Board and the individual Directors including the Chairperson. The framework of performance evaluation of the Directors captures the following points:
- Key attributes of the Independent Directors that justify his / her extension / continuation on the Board of the Company;
- Participation of the Directors in the Board proceedings and his / her effectiveness;
More details on this subject is provided in the Report on Corporate Governance.
Composition of the Audit Committee
The Audit Committee comprises Mr. Ajit Shah as its Chairperson, Mr. Ravi Moti Kirpalani and Mrs. Indira Parikh, all of whom are Independent Directors and Mr. Guy Young as a Non-Executive, Non-Independent Member. More details on the Committee are given in the Report on Corporate Governance.
Adequacy of Internal Financial Controls (IFC)
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The internal controls are designed in a manner that facilitates achievement of three-pronged objectives viz., i) support the achievement of the Company''s business objectives, ii) mitigate risks to acceptable level, and
iii) support sound decision making and good governance.
The adequacy and effectiveness of the internal financial controls are demonstrated by following the procedures as set out below: -
i. The internal controls have been designed to provide reasonable assurance with regard to recording and producing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. The Company has a well-defined delegation of power with authority limits for approving revenue as-well-as expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down.
ii. The Audit Committee periodically deliberates on the operations of the Company with the Members of the Management. It also sought the views of Price Waterhouse Chartered Accountants LLP, who are the Statutory Auditors, on the internal financial control systems.
iii. The Company has appointed P G Bhagwat, Chartered Accountants, as Internal Auditors of the Company. The Audit Committee in consultation with the Internal Auditors formulates the audit plan, scope, functioning and methodology, which are reviewed every year, in a manner that they cover all areas of operation. The Internal Audit covers inter alia, monitoring and evaluating the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and adequacy of insurance coverage of all assets. Periodical Internal Audit Reports are submitted to the Audit Committee, to ensure complete independence, which are then extensively deliberated at every Audit Committee Meeting in the presence of the Internal and External Auditors. Based on the review by the Audit Committee, process owners undertake corrective actions in their respective areas and consider suggestions for improvement. The Internal Auditors have expressed that the internal control system in the Company is robust and effective.
iv. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively.
v. The Company''s financial records are maintained on the ERP System which is effective and adequate in line with the size of its operations.
Particulars of Loans, Investments, Guarantees and Securities
Your Company has neither advanced any loans, nor made any investments or given any guarantees and / or provided any securities to anybody, whether directly or indirectly, within the meaning of Section 185 of the Companies Act 2013. Hence, there are no details worth providing.
Particulars of Contracts or Arrangements with Related Parties
All contracts / arrangements / transactions entered into by the Company during the financial year ended 31 December 2018 with related parties were on an arm''s length basis and were in the ordinary course of business. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material, and therefore, Members'' approval was not required to be obtained, in accordance with the Policy of the Company on materiality of related party transactions. Thus, provisions of Sections 134(3)(h) and 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 are not applicable to the Company and therefore, Form No. AOC-2 has not been attached.
In compliance with the requirements laid down in the SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015 [SEBI (LODR)], all related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee had been obtained for transactions which were foreseeable and of repetitive nature. All transactions entered into with the related parties are presented to the Audit Committee by way of a statement giving details of all transactions.
A new Regulation 23 (1A) inserted in the SEBI (LODR) vide SEBI Notification No. SEBI/LAD-NRO/GN/2018/10 dated 9 May 2018,, which takes effect from 1 April 2019, lays down that a transaction involving payments made to a related party with respect to brand usage or royalty shall be considered material if the transaction(s) to be entered into individually or taken together with previous transaction(s) during a financial year, exceed 2% of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity.
Your Company makes payment of royalty to Foseco International Limited, a group company falling within the definition of a related party. The amount exceeds 2% of the annual consolidated turnover of the Company as per the audited financial statements of the Company for the year ended 31 December 2018, and hence it is considered material. Therefore, the royalty already paid or that will be paid to Foseco International Limited, during the year ending on 31 December 2019 and which shall continue to be paid in the future, till the existence of this contract, agreement or arrangement, is placed for approval of the Members at the ensuing Annual General Meeting.
In accordance with Regulation 23(8), all existing âmaterialâ related party contract, agreement or arrangement, by whatever name called, entered into prior to the date of notification of these Regulations and which may continue beyond such date shall be placed for approval of the Members in the first General Meeting subsequent to notification of these Regulations. Regulation 23(8) becomes applicable to the Company and in this regard the existing Licence Agreement which is currently in force, will be considered material with effect from 1 April 2019, requiring the Company to place the said Licence Agreement for approval by the Members at the ensuing Annual General Meeting.
The Board of Directors have amended the Policy on Related Party Transactions to bring it in line with the amendment carried out in the Companies Act 2013 and the Rules made thereunder and the SEBI (LODR). The Policy on materiality of Related Party Transactions and dealing with Related Parties as approved by the Board has been uploaded on the Company''s website at URL: Fosecolndia/View/policies.aspx. Your Directors draw attention of the Members to Note 30 attached to the financial statement which sets out related party disclosures.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Information under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure B to this Report.
Particulars of Employees and Related Disclosures
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and also the Statement containing particulars of employees as required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 is provided in Annexure C forming part of this Report.
Auditors and Auditorsâ Report
Statutory Auditors
Price Waterhouse Chartered Accountants LLP (Firm registration no. - 012754N / N500016), Chartered Accountants, 7th Floor, Business Bay, Tower A, Wing - 1, Airport Road, Yerwada, Pune - 411006 were appointed as the Statutory Auditors in the 60th Annual General Meeting held on 27 April 2017, by the Members of the Company, to hold office as the Statutory Auditors of the Company, for a period of 5 years until the conclusion of the 65th Annual General Meeting to be held in the year 2022 and the said appointment was subject to ratification by members at every Annual General Meeting.
The Companies (Amendment) Act, 2017, has amended Section 139(1) of the Companies Act, 2013 effective from 7 May 2018, whereby first proviso to Section 139(1) is omitted which provided for ratification of appointment of Statutory Auditors by the Members at every Annual General Meeting.
In view of the same, the Board of Directors have proposed to ratify the appointment of Price Waterhouse Chartered Accountants LLP, as Auditors of the Company, for the period of three years i.e. from the conclusion of the 62nd Annual General Meeting to be held on 26 April 2019 till the conclusion of the 65th Annual General Meeting to be held in 2022. The Members of the Company should note that the Securities Exchange Board of India (âthe SEBIâ) had issued an order against the various firms of Price Waterhouse including Price Waterhouse Chartered Accountants LLP, the Statutory Auditors of your Company, (âPwCâ or âthe PwCâ) which inter alia, directed that entities / firms practicing as Chartered Accountants in India under the brand and banner of PW, shall not directly or indirectly issue any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with SEBI and the requirements under the SEBI Act, 1992, the SCRA 1956, the Depositories Act, 1996, those provisions of the Companies Act 2013 which are administered by SEBI under section 24 thereof, the Rules, Regulations and Guidelines made under those Acts which are administered by SEBI for a period of two years. However, Applicants / Appellants were allowed to complete their ongoing tasks till 31 March 2018.
Later, the Securities Appellate Tribunal of India (âthe SATâ) passed an order on 15 February 2018, allowing PwC to continue with conducting audit of its existing clients till 31 March 2019 or till a Division Bench hears and decides the matter. Against the said order, PwC went in to appeal to the Hon''ble Supreme Court of India. The Hon''ble Supreme Court thereafter, vide their order dated 7 December 2018, inter alia held that, the interim order of the SAT should continue to operate until 31 March 2019 or until the Tribunal as properly constituted decides the appeal. Subsequently, the PwC have obtained an opinion from an Eminent Jurist who has opined that PwC can continue to act as the Statutory Auditors of their existing clients even beyond 31 March 2019, if the appeal filed by PwC to the SAT continues to remain pending till it is heard and disposed of.
The Directors recommend ratification of appointment of Auditors from the conclusion to the ensuing Annual General Meeting till the conclusion of the 65th Annual General Meeting to be held in 2022.
The observations of the Statutory Auditors on the annual financial statement for the year ended 31 December 2018 including the relevant notes to the financial statement are self-explanatory and therefore does not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark or disclaimer. The Auditors'' Report have been issued with unmodified opinion on the annual financial results of the Company.
Report on Frauds, if any
During the year under review, no incidence of any fraud has occurred against the Company by its officers or employees. Neither the Audit Committee of the Board, nor the Board of the Company has received any report involving any fraud, from the Statutory Auditors of the Company. As such, there is nothing to report by the Board, as required under Section 134 (3) (ca) of the Companies Act, 2013.
Cost Auditors
Joshi Apte & Associates, Cost Accountants, were appointed as the Cost Auditors of the Company to examine the Cost Records and submit the Cost Audit Report. The Company has maintained the required cost accounting records as per the Companies (Cost Records and Audit) Rules, 2014 and is in compliance therewith. The Cost Audit Report in Form CRA-4 relating to the year ended 31 December 2017 has already been filed with the Ministry of Corporate Affairs.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, Rajesh Karunakaran & Co., Practicing Company Secretary (FCS 7441; CP No. 6581), Pune, was appointed to conduct a secretarial audit of the Company''s Secretarial and related records for the year ended 31 December 2018. The Practicing Company Secretary has submitted the Report which is annexed as Annexure D to this Report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Significant and Material Orders passed by the Regulators or Courts
There are no significant and material orders passed by the Regulators or Courts which would impact the going concern status of the Company and its future operations.
Vigil Mechanism / Whistle Blower Policy
The Company has established a vigil mechanism (which incorporates a whistle blower policy) for Directors, employees and business associates, to report their genuine concerns. The details of the same are provided in the Report on Corporate Governance forming part of this Annual Report. The Policy is also available on the Company''s website at URL: Fosecolndia/View/policies.aspx.
Policies of the Company
Your Company has posted the following documents on its website at URL: Fosecolndia/View/policies.aspx.
- Code of Conduct;
- Familiarization Programme for the benefit of the Independent Directors;
- Archival Policy;
- Policy for Determination of Material Events or Information;
- Policy of Preservation of Documents.
Risk Management Framework
The Board regularly monitors and reviews the risk management strategy of the Company and ensures the effectiveness of its implementation. Your Directors take all necessary steps towards mitigation of any elements of risk, which in their opinion, can impact the Company''s survival.
All the identified risks are managed through review of business parameters by the Management, and the Board of Directors are informed of the risks and concerns.
Corporate Social Responsibility (CSR)
The Board of your Company has constituted a CSR Committee. As on 31 December 2018, the Committee comprises four Directors. A brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure E of this Report in the prescribed format of the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy is available on the website of the Company at URL: FosecoIndia/ View/policies.aspx.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Your Company has in place a Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors have to report that, during the year under review, neither any complaints of sexual harassment were received by it from the ICC, nor were there any complaints relating thereto which required any disposal thereof.
Acknowledgements
Employee relations throughout the Company were harmonious. Your Board of Directors would like to place on record their sincere appreciation for the wholehearted support and contributions made by all the employees of the Company as well as customers, suppliers, bankers and other authorities.
The Directors also thank the Central and State Governments/Government Departments/Agencies for their co-operation. The Board of Directors thanks all the stakeholders of the Company and the parent Company, for their valuable support.
For and on behalf of the Board of Directors
Ravi Moti Kirpalani
Place: Pune Chairperson
Date: 25 January 2019 DIN: 02613688
Dec 31, 2016
The Directors are pleased to present the Company''s 60th Annual Report and the audited accounts for the year ended 31 December 2016.
Financial Results & Performance Review (All Figures in Rs. Lakhs)
Particulars |
Accounting year ended 31-Dec-2016 |
Accounting year ended 31-Dec-2015 |
Total Revenue from Operations |
34,159.94 |
29,402.49 |
Operating Expenses |
(28,480.95) |
(24,145.44) |
Earnings before interest, tax, depreciation and amortization (EBITDA) |
5,678.99 |
5,257.05 |
Finance Cost |
(41.52) |
(12.20) |
Depreciation and amortization expense |
(505.20) |
(454.00) |
Profit Before Tax (PBT) |
5,132.27 |
4,790.85 |
Tax Expense |
(1,824.10) |
(1,617.96) |
Profit for the Period (PAT) |
3,308.17 |
3,172.89 |
Balance brought forward from previous year |
5,312.70 |
4,524.69 |
Amount available for appropriation |
8,620.87 |
7,697.58 |
Appropriations: |
|
|
Interim Dividends |
1,021.83 |
1,245.35 |
Final Dividend (Proposed) |
447.05 |
447.05 |
Tax on Dividends (Interim and Final) |
299.04 |
375.19 |
Transferred to General Reserves |
331.00 |
317.29 |
Surplus carried to the Balance Sheet |
6,521.95 |
5,312.70 |
Total Appropriations |
8,620.87 |
7,697.58 |
Your Directors are pleased to inform that during the year under review your Company registered a growth of 16.2% in Revenue and 4.3% in Profit after Tax over the year 2015. The growth was achieved through effective implementation of our core strategy and projects that give higher sales growth. However, the margins growth was smaller due to intense competitive pressure on pricing, product mix and lowered production in sectors that use high margin products.
Dividend
During the year, your Directors declared two Interim Dividends, as detailed below:
Particulars of Dividend |
Date of declaration |
Record Date |
Dividend % |
Dividend per share |
1st Interim Dividend |
20 July, 2016 |
5 August, 2016 |
100 |
Rs. 10 |
2nd Interim Dividend |
20 October, 2016 |
4 November, 2016 |
60 |
Rs. 6 |
Your Directors are pleased to recommend for approval of the Shareholders'', a Final Dividend of Rs. 7/- per share (i.e., 70%), on an Equity Share of Rs. 10/-each, for the financial year ended 31 December, 2016, taking the total dividend to Rs. 23/- per share (i.e., 230%) (Previous year Rs. 26.50 per share i.e., 265%).
The total pay-out of the two Interim Dividends and Proposed Final Dividend for the financial year ended 31 December, 2016, inclusive of dividend distribution tax, will aggregate to Rs. 1767.92 Lakhs as compared to Rs. 2067.59 Lakhs in the previous year.
Transfer to Reserves
Your Company has transferred Rs. 331 Lakhs (previous year: Rs. 317.29 Lakhs) to the General Reserves out of the current year profit.
Financial Year of the Company
Your Company follows the Financial Year from 1st January to 31st December of the same year.
Report on Corporate Governance & Management Discussion & Analysis
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, a separate section titled Report on Corporate Governance together with a Certificate from the Practicing Company Secretary forms part of this Annual Report.
A detailed Management Discussion and Analysis is included as a part of this Annual Report.
Subsidiaries
Your Company does not have any subsidiary I subsidiaries within the meaning of Section 2 of the Companies Act, 2013 ("Act"). Therefore, a statement under the provisions of Section 129(3) of the Act, containing salient features of the financial statements of the Company''s subsidiaries in FormAOC-1 is not attached.
Pub lie Deposits
The Company has not accepted any deposits from the public and accordingly no amount was outstanding as on the date of the Balance Sheet.
Extract of the Annual Return
As required under Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in Form No. MGT 9, at the financial year ended 31 December, 2016, is given in Annexure A, which forms part of this Board Report.
Number of Meetings of the Board
The Board of Directors met four times during the year 2016 on the following dates: 21 January 2016, 27 April 2016, 20 July 2016 and 20 October 2016. The information on the Meetings is given in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between any two meetings was within the period of 120 days prescribed by the Companies Act, 2013.
Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of your Company, Mr. Glenn Allan Cowie (DIN: 07163534), a Non-Executive and Non-Independent Director on the Board of the Company, who is a nominee of the Promoter Company - Foseco Overseas Limited, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
The Board recommends his re-appointment and a brief resume and other relevant details of his re-appointment are provided in the Corporate Governance Report which forms part of this Annual Report.
Pursuant to the provisions of Section 149 of the Companies Act 2013, Mr. Pradeep Mallick (DIN: 00061256), Mr. Ajit Shah (DIN: 02396765) and Mrs. Indira Parikh (DIN: 00143801) were appointed as Independent Directors at the Annual General Meeting of the Company held on 27 March 2015. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. They have submitted a declaration confirming that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as Independent Director during the year.
During the year, no Non-Executive Director of the Company has had any pecuniary relationship or transactions with the Company.
The following persons are designated as Key Managerial Personnel ofthe Company:
1. Mr. Sanjay Mathur, Managing Director,
2. Mr. RUmesh, Chief Financial Officer,
3. Mr. Mahendra Kumar Dutia, Controller of Accounts and Company Secretary.
There was no change in the Key Managerial Personnel during the year 2016.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013, your Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;
b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for the same period;
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) They have prepared the annual accounts on a going concern basis;
e) They have laid down internal financial controls in the Company that are adequate and are operating effectively; and
f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that these are adequate and are operating effectively;
Policy on Directors'' Appointment and Remuneration
The policy of the Company on Directors'' Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Section 178(3) of the Companies Act, 2013, adopted by the Board is covered in the Report on Corporate Governance which forms part of this Annual Report.
Performance Evaluation of the Directors etc.
The Nomination and Remuneration Committee has laid down the criteria for performance evaluation by the Board of its own performance and that of the various Committees of the Board and the individual Directors including the Chairperson. The framework of performance evaluation of the Directors captures the following points:
- Key attributes of the Independent Directors that justify his / her extension / continuation on the Board of the Company;
- Participation of the Directors in the Board proceedings and his/her effectiveness;
More details on these subjects are provided in the Report on Corporate Governance.
Composition of the Audit Committee
The Audit Committee comprises Mr. Ajit Shah as its Chairperson, Mr. Pradeep Mallickand Mrs. Indira Parikh, all of whom are Independent Directors and Mrs. Merryl Durrenbach as a Non-Executive, Non-Independent Member. Further details on the Committee are given in the Report on Corporate Governance.
Adequacy of Internal Financial Controls (IFC)
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The internal controls are designed in a manner that facilitates achievement of three-pronged objectives viz., i) support the achievement of the Company''s business objectives, ii) mitigate risks to acceptable level, and Hi) support sound decision making and good governance.
The adequacy and effectiveness of the internal financial controls are demonstrated by following the procedures as set out below:-
i. The internal controls have been designed to provide reasonable assurance with regard to recording and producing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, and executing transactions with proper authorization and ensuring compliance with corporate policies. The Company has a well-defined delegation of power with authority limits for approving revenue as-well-as expenditure. Processes for formulating and reviewing annual and long term business plans have been laid down.
ii. The Audit Committee periodically deliberates on the operations of the Company with the Members of the Management. It also sought the views of B S R & Associates LLP, the Statutory Auditors, on the internal financial control systems.
Hi. The Company has appointed P G Bhagwat, Chartered Accountants, as Internal Auditors of the Company. The Audit Committee in consultation with the Internal Auditors formulates the audit plan, scope, functioning and methodology, which are reviewed every year, in a manner that they coverall areas of operation. The Internal Audit covers inter alia, monitoring and evaluating the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and adequacy of insurance coverage of all assets. Periodical Internal Audit Reports are submitted to the Audit Committee, to ensure complete independence, which is then extensively deliberated at every Audit Committee Meeting in the presence of the Internal and External Auditors. Based on the review by the Audit Committee, process owners undertake corrective actions in their respective areas and consider suggestions for improvement. The Internal Auditors have expressed that the internal control system in the Company is robust and effective.
iv. The Board has also Putin place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively.
v. The Company''s financial records are maintained on the ERP System which is effective and adequate in line with the size of its operations.
Particulars of Loans, Investments, Guarantees and Securities
Your Company has neither advanced any loans, nor made any investments or given any guarantees and I or provided any securities to anybody, whether directly or indirectly, within the meaning of Section 185 of the Companies Act, 2013. Hence, there are no details worth providing.
Particulars of Contracts or Arrangements with Related Parties
All contracts I arrangements I transactions entered into by the Company during the financial year ended 31 December, 2016 with related parties were on an arm''s length basis and were in the ordinary course of business. During the year, the Company had not entered into any contract I arrangement I transaction with related parties which could be considered material, and therefore, Shareholders'' approval was not required to be obtained, in accordance with the Policy of the Company on materiality of related party transactions. Thus, provisions of Sections 134(3)(h) and 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 are not applicable to the Company and therefore, Form No. AOC-2 has not been attached.
In compliance with the requirements laid down in the SEBI (Listing Obligations And Disclosure Requirements) Regulations,
2015, all related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee had been obtained for transactions which were foreseeable and of repetitive nature. All transactions entered into with the related parties are presented to the Audit Committee byway of a statement giving details of all transactions.
The Policy on materiality of Related Party Transactions and dealing with Related Parties as approved by the Board has been uploaded on the Company''s website at URL: Fosecolndia/View/policies.aspx. Your Directors draw attention of the Members to Note 28 to the financial statement which sets out related party disclosures.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Information under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure B to this Report.
Particulars of Employees and Related Disclosures
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and also the Statement containing particulars of employees as required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 is provided in Annexure C forming part of this Report.
Auditors and Auditors'' Report Statutory Auditors
Price Waterhouse Chartered Accountants LLP (Firm registration no. - 012754N / N500016), Chartered Accountants, 7th Floor, Business Bay, Tower A, Wing -1, Airport Road, Yerwada, Pune-411006 are proposed to be appointed as the Statutory Auditors in place of B S R & Associates LLP, whose term ends at the conclusion of the forthcoming Annual General Meeting of the Company.
They will hold office as the Statutory Auditors of the Company, for a period of 5 years that will begin from the conclusion of the 60th Annual General Meeting until the conclusion of the 65th Annual General Meeting to beheld in the year 2022. In terms of the provision of Section 139 of the Companies Act, 2013, the appointment of the Statutory Auditors shall be placed for ratification at every Annual General Meeting, if required under the Companies Act 2013, as amended from time to time.
Your Company has received a written confirmation from Price Waterhouse Chartered Accountants LLP, to the effect that their appointment as the Statutory Auditors of the Company, if made, will be as per the requirements laid down under Section 139 and 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and that they are not disqualified for appointment.
The observations of B S R & Associates LLP, the Statutory Auditors on the financial statement for the year ended 31 December, 2016 including the relevant notes to the financial statement are self-explanatory and therefore does not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.
Report on Frauds, if any
During the year under review, no incidence of any fraud has occurred against the Company by its officers or employees. Neither the Audit Committee of the Board, nor the Board of the Company has received any report involving any fraud, from the Statutory Auditors of the Company. As such, there is nothing to report by the Board, as required under Section 134 (3) (ca) of the Companies Act, 2013.
Cost Auditors
Joshi Apte & Associates, Cost Accountants, were appointed as the Cost Auditors of the Company to examine the Cost Records and submit the Cost Audit Report. The Company has maintained the required cost accounting records as per the Companies (Cost Records and Audit) Rules, 2014 and is in compliance therewith. The Cost Audit Report in Form CRA-4 relating to the year ended 31 December, 2015 was filed with the Ministry of Corporate Affairs within the due date.
5 Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under, Rajesh Karunakaran
6 Co., Practicing Company Secretary (FCS 7441; CP No. 6581), Pune, was appointed to conduct a secretarial audit of the Company''s Secretarial and related records for the year ended 31 December, 2016. The Practicing Company Secretary has submitted the Report which is attached as Annexure D and forms part of this Report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Significant and Material Orders passed by the Regulators or Courts
There are no significant and material orders passed by the Regulators or Courts which would impact the going concern status ofthe Company and its future operations.
Vigil Mechanism I Whistle Blower Policy
The Company has established a vigil mechanism (which incorporates a whistle blower policy) for Directors, employees and business associates, to report their genuine concerns. The details of the same are provided in the Report on Corporate Governance forming part of this Annual Report. The Policy is also available on the Company''s website at URL: Fosecolndia/View/policies.aspx.
Policies of the Company
Your Company has posted the following documents on its website at URL: Fosecolndia/View/policies.aspx.
- Code of Conduct;
- Familiarization Programme for the benefit often Independent Directors;
- Archival Policy;
- Policy for Determination of Material Events or Information;
- Policy of Preservation of Documents.
Risk Management Framework
The Board regularly reviews the risk management strategy of the Company and the effectiveness of its implementation. Your Directors do not foresee any elements of risk, which in their opinion, may risk the Company''s survival.
Corporate Social Responsibility (CSR)
The Board of your Company has constituted a CSR Committee. As on 31 December 2016, the Committee comprises four Directors. A brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure E of this Report in the prescribed format of the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy is available on the website of the Company at URL: Fosecolndia/View/policies.aspx.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013.
Your Company has in place a Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors have to report that, during the year under review, neither any complaints of sexual harassment were received by it from the ICC, nor were there any pending complaints relating thereto which required any disposal thereof.
Acknowledgements
Employee relations throughout the Company were harmonious. Your Board of Directors would like to place on record their sincere appreciation for the wholehearted support and contributions made by all the employees of the Company as well as customers, suppliers, bankers and other authorities.
The Directors also thank the Government of various countries, Government of India, State Governments in India and concerned Government Departments/Agencies for their co-operation.
The Board of Directors thanks all the stakeholders of the Company and the parent Company, for their valuable support.
For and on behalf of the Board of Directors
Place: Pune Pradeep Mallick
Date: 8 February 2017 Chairperson
DIN: 00061256
Dec 31, 2014
Dear Members,
The Directors are pleased to present the Company''s 58th Annual Report
and the audited accounts for the year ended 31 December 2014. This
Directors'' Report has been prepared and presented in accordance with
Section 217 of the Companies Act, 1956 in terms of the General Circular
no. 08/2014 dated 4 April, 2014, as the Company''s Financial Year
commenced prior to 1 April, 2014. However, reference has been made in
this Report, to the Companies Act, 2013 to such matters which are same
/ similar to the Companies Act, 1956 and which are relevant to this
Report.
1. PERFORMANCE REVIEW
The year 2014 saw India getting adversely impacted by the weakening
global economic scenario. The Indian economic growth remained weak in
Q1/2014 with GDP growing at 4.6%, similar to Q1/2013, in view of
decision paralysis due to impending General Elections. Q2/2014
witnessed a surge in the feel good factor with the new Government in
power, which reflected in higher GDP growth of 5.7%. The performance
for the rest of the year was not aligned with the expectations and
Q3/2014 GDP growth fell to 5.3%. The GDP growth was aided by improved
performance of agriculture and services, whilst manufacturing and
mining continued to report subdued performance as explained by the
Index of Industrial Production. Inflation started easing during second
half of the year on account of reducing demand and monetary control by
RBI. The foundry industry segment was also affected by low demand and
excess capacity which made it difficult to pass on the increase in
input costs to the Original Equipment Manufacturers. Exchange rate
remained stable for most part of the year losing around 3% in the
second half of the year due to strengthening of the Dollar against all
major currencies. Liquidity in money market and higher interest cost
also affected the performance of Foundry Industry.
Your Directors would like to inform that despite weak market conditions
during the year under review, your Company achieved a revenue of Rs.
28,678.25 Lacs, up 14.6% from Rs. 25,022.06 Lacs in 2013. Profit before
Tax was Rs. 3,773.53 Lacs, up 39.1% from Rs. 2,713.53 Lacs in 2013 and
the Profit after Tax was Rs. 2,459.01 Lacs, up 38% from Rs. 1,782.05
Lacs in 2013.
2. DIVIDEND & APPROPRIATIONS
Your Directors declared three Interim Dividends during the financial
year ended 31 December, 2014, totalling Rs. 11/- per Equity Share
(110%) on the Equity Share face value of Rs. 10/- each viz., 10% First
Interim Dividend in April 2014, 40% Second Interim Dividend in July
2014 and 60% Third Interim Dividend in November 2014 aggregating to Rs.
702.52 Lacs (exclusive of tax on dividend).
Your Directors are pleased to recommend payment of a Final Dividend of
Rs. 10/- per Equity Share (100%) of the face value of Rs. 10/- each
aggregating to Rs. 638.65 Lacs (exclusive of tax on dividend) for your
consideration.
The total of the Interim and Proposed Final Dividends for the financial
year ended 31 December, 2014 is Rs. 21/- per Equity Share (210%).
An amount of Rs. 245.90 Lacs (previous year: Rs. 178.21 Lacs) has been
credited to General Reserves during the year.
3. CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section titled Report on Corporate Governance has
been included in this Annual Report. Your Directors are pleased to
report that as on 31 December 2014, your Company is fully compliant
with the SEBI Guidelines on Corporate Governance.
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, annexed to this Directors'' Report, provides a more detailed
review of the operating performance.
5. SUBSIDIARIES
Your Company does not have any subsidiary / subsidiaries within the
meaning of the Companies Act, 2013.
6. FIXED DEPOSITS
The Company has not accepted any fixed deposits and accordingly no
amount was outstanding as on the date of the Balance Sheet.
7. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013, your Directors
confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed with no material departures;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for the same period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls in the Company that
are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that these are adequate and are
operating effectively;
8. DIRECTORS
In accordance with Article 132 of the Articles of Association of your
Company, Foseco Overseas Limited replaced their existing nominee
Director Chris O''Shea with Merryl France Durrenbach, who was appointed
a nominee Director of Foseco Overseas Limited, on 21 July, 2014.
Your Board looks forward to gain from the wide international experience
she brings with her.
As Christopher Nail, Non-Executive Director of the Company was retiring
from Vesuvius plc in December, 2014, the Board of Directors accepted
his resignation as a Director of the Company with effect from 14
November, 2014.
David Hughes, Non-Executive Director of the Company nominated by Foseco
Overseas Limited, has left the Vesuvius plc group of Companies. He has
tendered his resignation from the Board of the Company with effect from
31 December, 2014. The Board at its Meeting held on 28 January, 2015
took note of the same.
Your Board wishes to place on record their appreciation of the valuable
contributions made by Chris O''Shea, Christopher Nail and David Hughes
in furthering the objectives of your Company.
A Resolution seeking approval of the Members for the appointment of
Merryl France Durrenbach (DIN: 06920690), as a Director has been
incorporated in the Notice of the forthcoming AGM.
Indira Parikh (DIN: 00143801), was appointed as an Additional
Independent Director on the Board of the Company on 21 July, 2014. In
accordance with the requirements of Section 149 and 152 of the
Companies Act, 2013 and Clause 49 of the Listing Agreement, her
continuation as an Independent Director on the Board of the Company
will have to be approved by the Members of the Company.
Pursuant to Section 149 and 152 of the Companies Act, 2013 and Clause
49 of the Listing Agreement, the Board of Directors have, at its
Meeting held on 28 January, 2015, appointed the existing Independent
Directors, Pradeep Mallick (DIN: 00061256) and Ajit Shah (DIN:
02396765) as Independent Directors for a term commencing from 27 March,
2015 and ending on the date of the Annual General Meeting to be held in
the years 2018 and 2019 respectively, subject to the approval of the
Members, since the Company policy requires that the Board Members
retire at the Annual General Meeting following their 75th birthday,
even if it falls before the end of their 5 years tenure.
The requisite Resolutions for the appointment of Indira Parikh, Pradeep
Mallick and Ajit Shah as Independent Directors, are being proposed in
the Notice of the ensuing Annual General Meeting for the approval of
the Members.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed in Section 149(6) of the Companies Act,
2013.
As required under Clause 49 of the Listing Agreement with the Stock
Exchanges, the information on the particulars of the Directors proposed
for appointment has been given in the Notice of the Annual General
Meeting.
9. AUDITORS
In view of the internal process of re-alignment at the Statutory
Auditors'' firms, B S R & Associates LLP, (Firm registration number:
116231W/ W100024), Chartered Accountants, Pune replaces B S R and Co.,
(ICAI Firm Registration Number: 128510W) as the Statutory Auditors of
the Company.
The Statutory Auditors of the Company, B S R & Associates LLP (ICAI
Firm Registration Number: 116231W / W-100024), Chartered Accountants,
hold office until the conclusion of the ensuing Annual General Meeting.
The Company has received a letter from B S R & Associates LLP to the
effect that their appointment, if made, will be as per the requirements
laid down under Section 139 and 141 of the Companies Act, 2013 read
with Rule 4 of the Companies (Audit and Auditors) Rules, 2014. The
Statutory Auditors have expressed its intention to hold office from the
conclusion of the 58th Annual General Meeting of the Company, upto the
conclusion of the 60th Annual General Meeting to be held in the year
2017, pursuant to the provisions of the said sections, subject to
approval of the Members and thereafter, ratification of the appointment
at every Annual General Meeting.
Accordingly, a resolution is being submitted to the Members for the
appointment of B S R & Associates LLP, and to allow the Board to fix
their remuneration for the current year.
10. AUDITOR''S REPORT
The observations of the Statutory Auditors in their report, read with
the relevant notes to the financial statement in Note no.28 are self
explanatory.
11. COST AUDITORS
Joshi Apte & Associates, Cost Accountants are the Cost Auditors of the
Company. The Cost Records of the Company are examined by them.
The Company has maintained the required cost accounting records as per
the Cost Accounting Records (Chemical Industries) Rules 2004 and the
Company is in compliance therewith.
12. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Rules made thereunder, Grishma Khandwala, Practicing Company
Secretary (ACS 6515; C P No. 1500), Mumbai, has been appointed to
conduct a secretarial audit of the Company''s Secretarial and related
records for the year ended 31 December, 2014. The Practicing Company
Secretary has submitted her Report on the secretarial audit conducted
by her which is annexed to this Board''s Report.
The Board has noted that Form No. MGT-14 for filing of Resolution
relating to the Quarterly Financial Results as required by Section 179
of the Companies Act, 2013 and Rule 8 of the (Companies Meetings of
Board and its Powers) Rules, 2014 have not been filed. Steps are being
taken to file the same at the earliest.
13. POLICIES OF THE COMPANY
Your Company has posted the following documents on its website
www.fosecoindia.com at FosecoIndia/View/policies.aspx link:
1. Code of Conduct and Ethics
2. Whistle Blower Policy
3. Related Party Transaction Policy
4. Familiarisation Programme for the benefit of the Independent
Directors
14. CONSERVATION OF ENERGY
Continued efforts are made throughout the Company to effect
improvements to production processes resulting in reduced energy
consumption.
15. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
Your Company continues to place significant importance on Research and
Development as the primary means of continuously advancing its product
technology. A sum of Rs. 98.21 Lacs (previous year Rs. 88.86 Lacs) was
spent during the year towards Research & Development. Technology
transfer into the Company from its overseas affiliates is by three main
routes:
1. The information exchanged during periods of secondment when the
Company''s technical and marketing personnel spend extended periods
working at the facilities of its overseas affiliates undergoing
training in new technologies.
2. The Company''s marketing and technology personnel travelling
overseas to meet Foundry Division colleagues and customers in order to
identify and bring back best practices.
3. Visits to the Company by technology experts from various parts of
the Foundry Division.
There is a continuous flow of technology into the Company from the
parent, Foseco International Limited, in the form of technology
upgrades and new products.
16. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. IMPORTS
Imports of raw materials during the year amounted to Rs.2434.26 Lacs
(previous year Rs. 1,787.21 Lacs) and capital goods & spares of
Rs.25.79 Lacs (previous year Rs. 35.72 Lacs).
B. EXPORTS
Exports were mainly to Middle East, ASEAN and China. Exports during the
year increased to Rs.1,285.57 Lacs from Rs. 1,045.54 Lacs in the
previous year.
C. EARNINGS AND OUTGO
Details are provided under Point 5.1 to 5.4 of Note 28 of "Notes to
Financial Statements" for the year ended 31 December 2014.
17. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of your Company have constituted a CSR Committee. As on 31
December 2014, the Committee comprises three Directors. Your Company
has developed a CSR Policy which is carried in this Annual Report.
Additionally, the CSR Policy has been uploaded on the website of the
Company at www.fosecoindia.com at FosecoIndia/View/policies.aspx link.
18. PERFORMANCE EVALUATION OF THE DIRECTORS ETC.
The Nomination and Remuneration Committee has laid down the criteria
for performance evaluation of the individual Directors and the Board.
The framework of performance evaluation of the Independent Directors
captures the following points:
A) Key attributes of the Independent Directors that justify his / her
extension / continuation on the Board of the Company;
B) Participation of the Directors in the Board proceedings and his /
her effectiveness;
The evaluation was carried out by means of the replies given /
observations made by all the Independent Directors on the set of
questions developed by them which brought out the key attributes of the
Directors, quality of interactions among them and its effectiveness.
19. INTEGRATED MANAGEMENT SYSTEM POLICY
The Company has adopted an Integrated Management System comprising
quality, health, safety and environmental management system in
accordance with ISO and OHSAS Standards and in line with the
Maharashtra Factories Act, 1948 read with Rule 73-L (5)d of the
Maharashtra Factories Rules 1963.
20. STATUTORY DISCLOSURES
Information as per Section 217 (2-A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975 and under Section
217(1)(e) of the said Act read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules 1988, forms part
of this Report. However, as per provisions of Section 219(1)(b)(iv) of
the Companies Act, 1956, the Report and Accounts are being sent to all
shareholders of the Company excluding the aforesaid information. Any
shareholder interested in obtaining such particulars may write to the
Company Secretary at the Registered Office of the Company.
Details regarding technology absorption, conservation of energy and
foreign exchange earnings and outgo required under section 217(1)(e) of
the Companies Act, 1956 and Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules 1988 are included as Annexure A, B
and C to the Directors'' Report.
A Cash Flow Statement for the year ended 31 December 2014 is attached
to the Balance Sheet.
21. EMPLOYEE RELATIONS
Employee relations throughout the Company were harmonious. The Board
wishes to place on record its sincere appreciation of the devoted
efforts of all employees in advancing the Company''s vision and strategy
to deliver good performance.
22. INTERNAL CONTROL SYSTEMS
The Company''s internal control systems are audited by P. G. Bhagwat,
Chartered Accountants. The Internal Auditor independently evaluates the
adequacy of internal controls and reviews major transactions. The
Internal Auditor reports directly to the Audit Committee to ensure
complete independence.
23. ACKNOWLEDGMENTS
Your Directors thank Customers, Vendors and all the Foseco Stakeholders
for their continued support to your Company''s performance and growth.
The Directors also wish to place on record their sincere appreciation
of the commitment and enthusiasm of all employees for their significant
role in the Company''s growth till date.
For and on behalf of the Board of Directors
Place: Pune Pradeep Mallick
Date: 28 January 2015 Chairman
Dec 31, 2013
The Directors are pleased to present the Company''s 57th Annual Report
and the audited accounts for the year ended 31 December 2013.
1. PERFORMANCE REVIEW
The year 2013 saw India getting adversely impacted by the weakening
global economy. The rate of GDP growth fell to sub 5 per cent by the
end of the year, the lowest in a decade. The inflation remained
persistently high and the exchange rate fluctuated sharply creating a
highly challenging industrial scenario in the country. The IIP (Index
of Industrial Production) contracted cumulatively 0.1% for the April -
December 2013 period signalling that the slowdown of the economy was
well entrenched. The foundry industry segment in which your Company
operates faced challenges of excess capacity, high input costs due
adverse exchange rates and exorbitant power and fuel costs. Higher
interest cost crippled the liquidity in the Foundry Industry apart from
affecting the sales growth. Southern India, having the largest clusters
of foundries, suffered from acute power shortage for most part of the
year, thereby causing loss of production at these units.
During the year under review, your Company achieved a lower gross
turnover of Rs. 25022.06 Lacs against Rs. 27277.38 Lacs achieved in
the previous financial year. Profit Before Tax fell to Rs. 2713.53 Lacs
(previous year: Rs. 3225.87 Lacs) and Profit After Tax dropped to Rs.
1782.05 Lacs (previous year: Rs. 2181.50 Lacs).
The Management Discussion and Analysis Report annexed provides a more
detailed review of the operating performance.
2. DIVIDEND & APPROPRIATIONS
An amount of Rs. 178.21 Lacs (previous year: Rs. 218.15 Lacs) has been
credited to General Reserves during the year.
For the year ended 31st December, 2013, your Directors have recommended
payment of a final dividend of 155% on paid-up equity share capital
(i.e., Rs. 15.50 per share), which includes a special one-time dividend
of 125% on paid- up equity share capital (i.e., Rs. 12.50 per share),
which, if approved by the Members, will be paid to the:
Equity Shareholders whose names appear in the Register of Members on
22nd April, 2014 and Beneficial owners whose names are furnished by
National Securities Depository Limited and Central Depository Services
(India) Limited.
The Board had declared 15% first interim dividend in April 2013, 30%
second interim dividend in August 2013 and 45% third interim dividend
in October 2013 on the paid-up equity share capital of the Company and
this has been paid to registered holders of equity shares. The total of
the interim and proposed final dividends is 245% (inclusive of special
one-time dividend of 125%) of paid-up equity share capital.
3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
Your Company continues to place significant importance on Research and
Development as the primary means of continuously advancing its product
technology. A sum of Rs.88.86 Lacs (previous year Rs. 76.87 Lacs) was
spent during the year towards Research & Development. Technology
transfer into the Company from its overseas affiliates is by three main
routes:
1. The information exchanged during periods of secondment when the
Company''s technical and marketing personnel spend extended periods
working in the facilities of its overseas affiliates undergoing
training in new technologies.
2. The Company''s marketing and technology personnel travelling
overseas to meet Foundry Division colleagues and customers in order to
identify and bring back best practices.
3. Visits to the Company by technology experts from overseas
affiliates of the Foundry Division.
4. CONSERVATION OF ENERGY
Continued efforts were made throughout the Company to effect
improvements to production processes resulting in reduced energy
consumption.
5. INTEGRATED MANAGEMENT SYSTEM POLICY
The Company has adopted an Integrated Management System comprising
quality management system, environmental management system and
occupational health & safety management system in accordance with ISO
and OHSAS Standards in line with Rule 73-L (5) d of the Maharashtra
Factories Rules 1963, under the Maharashtra Factories Act, 1948.
6. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. IMPORTS
Imports of raw materials during the year amounted to Rs.1787.21 Lacs
(previous year: Rs. 1947.11 Lacs) and capital goods & spares of Rs.
35.72 Lacs (previous year: Rs. 32.38 Lacs).
B. EXPORTS
Exports were mainly to Middle East, ASEAN and China. Exports during the
year decreased marginally to Rs.1045.54 Lacs from Rs. 1093.67 Lacs in
the previous year.
C. EARNINGS AND OUTGO
Details are provided under Point 5.1 to 5.3 of Note 28 of "Notes to
Financial Statements" for the year ended 31st December 2013.
7. EMPLOYEE RELATIONS
Employee relations throughout the Company were harmonious. The Board
wishes to place on record its sincere appreciation of the devoted
efforts of all employees in advancing the Company''s vision and strategy
to deliver good performance.
8. STATUTORY DISCLOSURES
Information as per Section 217 (2-A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975 and under Section
217(1)(e) of the said Act read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules 1988, forms part
of this Report. However, as per provisions of Section 219(1)(b)(iv) of
the Companies Act, 1956, the Report and Accounts are being sent to all
shareholders of the Company excluding the aforesaid information. Any
shareholder interested in obtaining such particulars may write to the
Company Secretary at the Registered Office of the Company.
Details regarding technology absorption, conservation of energy and
foreign exchange earnings and outgo required under section 217(1)(e) of
the Companies Act, 1956 and Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules 1988 are included as Annexure A, B
and C to the Director''s Report.
A Cash Flow Statement for the year ended 31st December 2013 is attached
to the Balance Sheet.
9. CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section titled Report on Corporate Governance has
been included in this Annual Report. Your Directors are pleased to
report that your Company is fully compliant as on 31st December 2013
with the SEBI Guidelines on Corporate Governance.
10. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act 1956, your Directors
confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed with no material departures;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable,
prudent and in the best interest of the Company''s business so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit of the Company for the same
period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis.
11. DIRECTORS
Ajit Shah was appointed as an Additional Director on the Board of the
Company with effect from 17th October, 2013. As an Additional
Director, Ajit Shah holds office up to the date of the ensuing Annual
General Meeting and being eligible, offers himself for appointment as
Director. The Company has received notice from a Member under Section
257 of the Companies Act, 1956 along with a deposit of Rs. 500/-, in
respect of Ajit Shah, proposing his appointment as a Director of the
Company.
Pradeep Mallick retires by rotation as Director at the ensuing Annual
General Meeting and being eligible, offers himself for re-appointment.
The Board recommends his re-appointment.
A brief resume and other detail of the Directors seeking appointment /
re-appointment at the ensuing Annual General Meeting as required under
Clause 49(IV)(G) of the Listing Agreement are provided in the Notice of
the Annual General Meeting and forms part of this Annual Report.
During the year under review, Mukund Chitale resigned from the Board of
the Company. Your Directors wishes to place on record their
appreciation of the valuable contribution made by him during his
tenure.
12. AUDITORS
The Statutory Auditors of the Company, B S R and Co, Chartered
Accountants, hold office until the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment. The Company has
received a certificate from them to the effect that their appointment,
if made, would be within the prescribed limits of Section 224 (1-B) of
the Companies Act, 1956.
Accordingly a resolution is being submitted to the Members for the
re-appointment of B S R and Co., and to allow the Board of Directors to
fix their remuneration for the current year.
13. COST AUDITORS
Joshi Apte & Associates, Cost Accountants are the Cost Auditors of the
Company. The Cost Records of the Company are examined by them.
The Company has maintained the required cost accounting records as per
the Cost Accounting Records (Chemical Industries) Rules 2004 and the
Company is in compliance therewith.
14. INTERNAL CONTROL SYSTEMS
The Company''s internal control systems are audited by P. G. Bhagwat,
Chartered Accountants. The Internal Auditor independently evaluates the
adequacy of internal controls and reviews major transactions. The
Internal Auditor reports directly to the Audit Committee to ensure
complete independence.
15. AUDITORS'' REPORT
The observations of the Statutory Auditors in their report, read with
the relevant notes to the financial statement in Note 28 are
self-explanatory.
16. ACKNOWLEDGMENTS
Your Directors thank Customers, Vendors and all the Foseco Stakeholders
for their continued support to your Company''s performance and growth.
The Directors also wish to place on record their sincere appreciation
of the commitment and enthusiasm of all employees for their significant
role in the Company''s growth till date.
On behalf of the Board of Directors
Place: Pune Pradeep Mallick
Date: 21 January 2014 Chairman
Dec 31, 2012
The Directors are pleased to present the Company''s 56th Annual Report
and the audited accounts for the year ended 31 December 2012.
1. PERFORMANCE REVIEW
The year 2012 saw India getting adversely impacted by the weakening
global economic scenario. The rate of GDP growth fell to nearly 5 per
cent by the end of the year. The inflation remained persistently high
and the exchange rate fluctuated sharply creating a highly challenging
industrial scenario in the country. The IIP (Index of Industrial
Production) contracted in six out of twelve months of the year. The
foundry industry segment in which your Company operates faced
challenges of high input and finance costs and tight liquidity.
Southern India, having the largest clusters of foundries, suffered from
acute power shortage for most part of the year, thereby causing loss of
production at these units.
Your Directors would like to inform that your Company recorded good
results in 2012 against the adverse economic and industrial scenario.
It reported a record gross turnover of Rs. 27277.38 Lacs, Profit Before
Tax of Rs. 3225.87 Lacs and Profit After Tax of Rs. 2181.50 Lacs.
The Management Discussion and Analysis Report annexed provide a more
detailed review of the operating performance.
2. DIVIDEND & APPROPRIATIONS
An amount of Rs 218.15 Lacs has been credited to General Reserves
during the year.
Your Directors have recommended payment of a final dividend of 70% on
paid-up equity share capital for the year ended 31 December 2012,
which, if approved by the members, will be paid to the:
Equity shareholders whose names appear in the register of members on 23
March 2013 and Beneficial owners whose names are furnished by National
Securities Depository Limited and Central Depository Services (India)
Limited.
The Board had declared 10% first interim dividend in April 2012, 40%
second interim dividend in July 2012 and 20% third interim dividend in
October 2012 on the paid-up equity share capital of the Company and
this has been paid to registered holders of equity shares. The total of
the interim and proposed final dividends is 140% of paid-up equity
share capital.
3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
Your Company continues to place significant importance on Research and
Development as the primary means of continuously advancing its product
technology. A sum of Rs. 76.87 Lacs was spent during the year towards
Research & Development. Technology transfer into the Company from its
overseas affiliates is by three main routes:
1. The information exchanged during periods of secondment when the
Company''s technical and marketing personnel spend extended periods
working in the facilities of its overseas affiliates undergoing
training in new technologies.
2. The Company''s marketing and technology personnel traveling overseas
to meet Foundry Division colleagues and customers in order to identify
and bring back best practices.
3. Visits to the Company by technology experts from various parts of
the Foundry Division.
4. CONSERVATION OF ENERGY
Continued efforts were applied throughout the Company to effect
improvements to production processes resulting in reduced energy
consumption.
5. INTEGRATED MANAGEMENT SYSTEM POLICY
The Company has adopted an integrated management system comprising of
quality management system, environmental management system and
occupational health & safety management system in accordance with ISO
and OHSAS Standards in line with Rule 73-L (5)d of the Maharashtra
Factories Rules 1963, made under the Maharashtra Factories Act, 1948.
6. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. IMPORTS
Imports of raw materials during the year amounted to Rs.1947.11 Lacs
(previous year Rs. 1,564.93 Lacs) and capital goods & spares of
Rs.32.38 Lacs (previous year Rs. 113.31 Lacs).
B. EXPORTS
Exports were mainly to Middle East, ASEAN and China. Exports during the
year increased to Rs. 1093.67 Lacs from Rs. 869.65 Lacs in the previous
year.
C. EARNINGS AND OUTGO
Details are provided under Point 6.1 to 6.4 of Note 28 of "Notes to
Financial Statement" for the year ended 31st December 2012.
7. EMPLOYEE RELATIONS
Employee relations throughout the Company were harmonious. The Board
wishes to place on record its sincere appreciation of the devoted
efforts of all employees in advancing the Company''s vision and strategy
to deliver good performance.
8. STATUTORY DISCLOSURES
Information as per Section 217 (2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975 and under Section
217(1 )(e) of the said Act read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules 1988, forms part
of this report. However, as per provisions of Section 219(1 )(b)(iv) of
the Companies Act, 1956, the report and accounts are being sent to all
shareholders of the Company excluding the aforesaid information. Any
shareholder interested in obtaining such particulars may write to the
Company Secretary at the Registered Office of the Company.
Details regarding technology absorption, conservation of energy and
foreign exchange earnings and outgo required under section 217(1 )(e)
of the Companies Act, 1956 and Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules 1988 are included as Annexure
A, B and C to the Director''s Report.
A Cash Flow Statement for the year ended 31st December 2012 is attached
to the Balance Sheet.
9. CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a
separate section titled Report on Corporate Governance has been
included in this Annual Report. Your Directors are pleased to report
that your Company is fully compliant as on 31st December 2012 with the
SEBI Guidelines on Corporate Governance.
10. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act 1956, your Directors
confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed with no material departures;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable,
prudent and in the best interest of the Company''s business so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit of the Company for the same
period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis.
11. DIRECTORS
In accordance with Article 132 of the Articles of Association of your
Company, Foseco Overseas Limited is entitled to nominate directors who
shall be permanent non-retiring Director on the Board of your Company,
such that the total number of Directors shall not exceed one-third of
the total number of Directors on the Board of Directors. Foseco
Overseas Limited can also replace its director in place of the existing
director.
Your company has received a letter dated 16 January 2013 from Foseco
Overseas Limited expressing its intention to replace their existing
permanent non-retiring nominee director, Francois Wanecq with
Christopher O'' Shea. In accordance therewith the Board of your Company
at its meeting held on 21st January, 2013 appointed Chris O'' Shea as a
permanent non-retiring nominee director in place of Francois Wanecq.
Your Board wishes to place on record their appreciation of the valuable
contribution made by Francois Wanecq in furthering the objective of
your company.
Christopher O'' Shea is a British National and serves as a Finance
Director of Vesuvius pic. He joined Cookson pic. (Group Company of
Vesuvius pic.) on 11 October 2012. Prior to joining Cookson,
Christopher held a number of senior finance roles at BG Group, latterly
serving as Chief Financial Officer for the group''s businesses in
Africa, the Middle East and Asia. From 1998 to 2005 Christopher worked
in the UK, the US and Nigeria for Royal Dutch Shell in a variety of
roles, including Chief Financial Officer for Shell''s offshore
exploration and production business in Nigeria. Christopher is a
Chartered Accountant with an MBA from Duke University, and has also
worked for Ernst & Young.
Your Board is glad to welcome Christopher O'' Shea on the Board of the
Company and looks forward to gain from the wide ranging experience he
brings with him.
Resolution seeking approval of the members for the appointment of
Christopher O'' Shea as a permanent non-retiring Director have been
incorporated in the Notice of the forthcoming AGM.
12. RE-APPOINTMENT AND REMUNERATION OF THE MANAGING DIRECTOR
Sanjay Mathur was re-appointed as Managing Director for a period of
three years from 1 April 2010 to 31 March 2013 in the Shareholders
Meeting held on 21 April 2010.
Your Board recommends the re-appointment of Sanjay Mathur for a further
period of three years from 1 April 2013 to 31 March 2016 and fix his
remuneration. A resolution in this regard have been incorporated in the
Notice of the forth coming AGM .
13. AUDITORS
The Statutory Auditors of the Company, B S R and Co, Chartered
Accountants, hold office until the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment. The Company has
received a certificate from them to the effect that their appointment,
if made, would be within the prescribed limits of Section 224 (1-B) of
the Companies Act, 1956.
Accordingly a resolution is being submitted to the members for the
re-appointment of B S R and Co., and to allow the Board to fix their
remuneration for the current year.
14. COST AUDITORS
Joshi Apte & Associates, Cost Accountants were appointed as Cost
Auditors for the year under review to audit the cost records maintained
by the Company in respect of its resin products pursuant to the
notification issued by the Central Government bringing the above
products under the purview of Cost Accounting Records (Chemical
Industries) Rules 2004.
The Cost Auditor has issued a certificate for the year 2012 stating
that the Company has maintained the required cost accounting records as
per the Cost Accounting Records (Chemical Industries) Rules 2004 and
the Company is in compliance therewith.
15. INTERNAL CONTROL SYSTEMS
The Company''s internal control systems are audited by P.G.Bhagwat &
Co., Chartered Accountants. The Internal Auditors independently
evaluates the adequacy of internal controls and review major
transactions. The Internal Auditors report directly to the Audit
Committee to ensure complete independence.
16. AUDITORS'' REPORT
The observations of the Statutory Auditors in its report, read with the
relevant notes to the financial statement in Note no.28 are
self-explanatory and do not require further explanation.
17. ACKNOWLEDGMENTS
Your Directors thank Customers, Vendors and all the Foseco Stakeholders
for their continued support to your Company''s performance and growth.
The Directors also wish to place on record their sincere appreciation
of the commitment and enthusiasm of all employees for their significant
role in the Company''s growth till date.
On behalf of the Board of Directors
Place: Pune Pradeep Mallick
Date: 21 January 2013 Chairman
Dec 31, 2011
1. PERFORMANCE REVIEW
The buoyant growth in the Indian economy during 2010 continued for the
first few months of the year under review. This growth was, however,
dampened during the second half due to hyperinflation and high interest
cost, weakening the economic sentiment and causing a drop in the index
of Industrial Production (IIP). Weak global cues also appeared to slow
down the pace of the Indian economy in the last few months of the year.
The foundry industry segment in which your Company operates,
correspondingly recorded growth in production levels in the first
half, but faced challenges of higher input costs and liquidity, coupled
with high cost of funds during the rest of the year.
Your Directors are pleased to report that notwithstanding these
challenges, your Company recorded excel- lent results in 2011, far
exceeding the economic and industrial rate of growth. It reported a
record gross turn- over of Rs. 252.53 crores, Profit Before Tax of Rs.
3743 crores and Profit After Tax of Rs. 25.28 crores.
The Management Discussion and Analysis Report annexed provides a more
detailed review of the operating performance.
2. DIVIDEND & APPROPRIATIONS
An amount of Rs 2.53 crores has been credited to General Reserves
during the year.
Your Directors have recommended payment of a final dividend of 70% on
equity capital for the year ended 31 December 2011, which, if approved
by the members, will be paid to the:
- Equity shareholders whose names appear in the register of members on
23 March 2012 and
- Beneficial owners whose names are furnished by National Securities
Depository Limited and Central Depository Services (India) Limited.
The Board had declared 20% first interim dividend in April 2011, 40%
second interim dividend in July 2011 and 50% third interim dividend in
October 2011 on the equity capital of the Company and this has been
paid to registered holders of equity shares. The total of the interim
and proposed final dividends is 180% of equity capital.
3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
Your Company continues to place significant importance on Research
and Development as the primary means of continuously advancing its
product technology. A sum of Rs. 62.74 Lacs was spent during the
year. Technology transfer into the Company from its overseas affiliates
is by three main routes:
1. The information exchanged during periods of secondment when the
Company's technical and marketing personnel spend extended periods
working in the facilities of its overseas affiliates undergoing
training in new technologies.
2. The Company's marketing and technology personnel traveling
overseas to meet Foundry Division colleagues and customers in order to
identify and bring back best practices.
3. Visits to the Company by technology experts from various parts of
the Foundry Division.
4. CONSERVATION OF ENERGY
Continued efforts were applied throughout the Company to effect
improvements to production processes resulting in reduced energy
consumption.
5. HEALTH, SAFETY AND THE ENVIRONMENT
The Company's Health, Safety and Environment policy ensures a firm
commitment to health, safety and environmental management by making
it an integral part of the Company's business strategy, in line with
Rule 73-L (5) d of the Maharashtra Factories Rules 1963, Rule made
under the Maharashtra Factories Act, 1948.
6. IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. IMPORTS
Imports of raw materials during the year amounted to Rs. 1,564.93 Lacs
(previous year Rs. 1,919.37 Lacs) and capital goods of Rs. 113.31 Lacs
(previous year Rs. 43.12 Lacs).
B. EXPORTS
Exports were mainly to Middle East, ASEAN and China. Exports during the
year increased to Rs.869.65 Lacs from Rs. 576.75 Lacs in the previous
year.
C. EARNINGS AND OUTGO
Details are provided in notes 12.3, 12.4, 12.5 and 12.7 of Schedule 19
forming part of the Profit & Loss Account for the year ended 31st
December 2 011.
7. EMPLOYEE RELATIONS
Employee relations throughout the Company were harmonious. The Board
wishes to place on record its sincere appreciation of the devoted
efforts of all employees in advancing the Company's vision and
strategy to deliver good performance.
8. STATUTORY DISCLOSURES
Information as per Section 217 (2-A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975 and under Section
217(1)(e) of the said Act read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules 1988, forms part
of this report. However, as per provisions of Section 219(1)(b)(iv)
of the Companies Act, 1956, the report and accounts are being sent to
all shareholders of the Company excluding the aforesaid information.
Any shareholder interested in obtaining such particulars may write to
the Company Secretary at the Registered Office of the Company.
Details regarding technology absorption, conservation of energy and
foreign exchange earnings and outgo required under section 217(1)(e) of
the Companies Act, 1956 and Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules 1988 are included as Annexure A, B
and C to the Director's Report.
A Cash Flow Statement for the year 2011 is attached to the Balance
Sheet.
9. CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a
separate section titled Report on Corporate Governance has been
included in this Annual Report. Your Directors are pleased to report
that your Company is fully compliant as on 31st December 2011 with the
SEBI Guidelines on Corporate Governance.
10. SECRETARIAL COMPLIANCE
During the year the Company appointed a practicing Company Secretary to
conduct an audit of secretarial compliance under section 383A of the
Companies Act 1956. Though not a mandatory requirement, in its pur-
suit of achieving the highest standards of Corporate Governance, the
Company believes such an audit to be of benefit.
The scope of the audit was to review compliance under the following:
1. Companies Act, 1956.
2. Listing Agreement executed with the Stock Exchanges.
3. Corporate Governance requirements of Clause 49 of the Listing
Agreement.
Your Directors are pleased to state that the audit con- firmed that the
Company is in compliance with the Companies Act, 1956, Stock Exchange
and SEBI regulations.
11. COMPLIANCE - OTHER MATTERS
The Board of Directors also requested the practicing Company
Secretary to conduct an audit of compliance with the legislation
listed below as part of its drive towards the highest standards of
corporate governance.
1. Disclosure requirements of the Listing Agreements with Stock
Exchanges.
2. Dividend transfer/payments/remittance to nonresident
shareholders with RBI permission.
3. Transfer of unpaid dividend to the Investor Education and
Protection Fund.
4. SEBI (Prohibition of Insider Trading) Regulations, 1992.
5. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
1997.
6. SEBI (RTI and STA) Regulations, 1993.
7. Foreign Exchange Management Act, 1999.
8. Disclosures under Section 299 and 274 (1)(g) by Directors under the
Companies Act, 1956.
9. Issue of certificates of shares/transmission thereof as per
requirements of the Companies Act, 1956.
10. Necessary approvals of Directors/shareholders and other authorities
as per requirement of the Companies Act, 1956.
Your Directors are pleased to confirm that the Company is in compliance
with the requirements under the above laws and the Compliance Report
issued by the practicing Company Secretary dated 16th January 2012.
12. DIRECTORS' RESPONSIBILITY STATEMENT
Whilst preparing the annual accounts, the Company has adhered to the
following practices:
a) the annual accounts are prepared under the historical cost
convention and on an accrual basis and are in compliance with the
accounting standards referred to in Section 211 (3C) and other require-
ments of the Companies Act, 1956;
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are
reasonable, prudent and in the best interest of the Company's business
so as to give a true and fair view of the state of affairs of the
Company as at 31 December 2011 and of the profit of the Company for the
same period;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provision of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
d) the Directors have prepared the annual accounts on a going concern
basis.
13. DIRECTORS
Independent Director Mr. Pradeep Mallick was appointed as additional
Director on the Board with effect from 21st October 2011 and assumed
office as member of Audit Committee, SIGC, Nomination & Remuneration
Committee from 20th January 2012.
Mr. Christopher Nail, was appointed as additional Foseco Director on
the Board with effect from 20th Jan 2012 and assumed office as member
of SIGC and Remuneration Committee from 20th January 2012.
Information on the details of Directors seeking appointment as
required under Clause 49 of the Listing Agreement has been given under
the Notice to Shareholders.
14. AUDITORS
The Statutory Auditors of the Company, B S R and Co, Chartered
Accountants, hold office until the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment. The Company has
received notification from them to the effect that their appointment,
if made, would be within the prescribed limits under Section 224 (1-B)
of the Companies Act, 1956.
Accordingly a resolution is being submitted to the members for the
re-appointment of B S R and Co and to fix their remuneration for the
current year.
15. COST AUDITORS
Joshi Apte & Associates, Cost Accountants were appointed as Cost
Auditors for the year under review to audit the cost records maintained
by the Company in respect of its resin products pursuant to the
notification issued by the Central Government bringing the above
products under the purview of Cost Accounting Records (Chemical
Industries) Rules 2004.
The Cost Auditor has issued a certificate for the year 2011 stating
that the Company has maintained the required cost accounting records as
per the Cost Accounting Records (Chemical Industries) Rules 2004 and
the Company is in compliance.
16. INTERNAL CONTROL SYSTEMS
The Company's internal control systems are audited by Natu & Pathak
Chartered Accountants. The Internal Auditor independently evaluates the
adequacy of internal controls and reviews major transactions. The
Internal Auditor reports directly to the Audit Committee to ensure
complete independence.
17. AUDITOR'S REPORT
The observations of the Statutory Auditor in its report, read with the
relevant notes to accounts in Schedule 19 are self explanatory and do
not require further explanation.
18. ACKNOWLEDGMENTS
Your Directors thank Customers, Vendors and all the Foseco Stakeholders
for their continued support to your Company's performance and growth.
The Directors also wish to place on record their sincere appreciation
of the commitment and enthusiasm of all employees for their significant
role in the Company's growth till date.
On behalf of the Board of Directors
Place: Pune Pradeep Mallick
Date: 20 January 2012 Chairman
Dec 31, 2009
The directors are pleased to present the Companys 53rd Annual Report
and the audited accounts for the year ended 31 December 2009.
1. PERFORMANCE REVIEW
The year under review, was very challenging. The downturn, which
started in end 2008, became more severe. The automotive, valves & heavy
engineering sectors suffered, thereby adversely affecting the Companys
performance. However, the Company recorded a good performance and
posted a Profit Before Tax of Rs. 18.90 crores, Profit After Tax of
Rs.12.50 crores on a gross annual turnover of Rs. 133.80 crores,
Members are requested to refer to the Management Discussion and
Analysis Report annexed to this report for a more detailed review of
the operating performance.
2. DIVIDEND & APPROPRIATIONS
An amount of Rs 1.25 crores has been credited to General Reserves.
Your directors have recommended payment of a final dividend of 70% on
equity capital for the year ended 31 December 2009, which, if approved
by the members at the forthcoming annual general meeting, will be paid
out of the current years profit to:
- those equity shareholders whose names appear in the register of
members on 7 April 2010, and
- those whose names as beneficial owners are furnished by National
Securities Depository Limited and Central Depository Services (India)
Limited.
The directors have declared interim dividends of 10% each on the equity
capital of the company in July and October 2009 respectively which has
been paid to registered holders of equity shares. The total of the
interim and proposed final dividends is 90%.
3. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
The company continues to place significant importance on research and
development as the primary means of continuously advancing its product
technology. A sum of Rs. 47.28 Lacs was spent during the year.
Technology transfer into the company from its overseas affiliates is by
three main routes:
1. The information exchanged during periods of secondment when the
companys technical and marketing personnel spend extended periods
working in the facilities of its overseas affiliates undergoing
training in new technologies.
2. The companys marketing and technology personnel traveling overseas
to meet Foundry Division colleagues and customers in order to identify
and bring back best practices.
3. Visits to the company of technology experts from various parts of
the Foundry Division.
4. CONSERVATION OF ENERGY
Continued efforts were applied throughout the company to effect
improvements to production processes resulting in reduced energy
consumption.
5. HEALTH, SAFETY AND THE ENVIRONMENT
The companys health, safety and environmental policy ensures a firm
commitment to health, safety and environmental management by making it
an integral part of the Companys business strategy, in line with Rule
73-L (5) d of the Maharashtra Factories Rules 1963, Rule made under the
Maharashtra Factories Act, 1948.
The policy requires the company to maintain a safe and healthy working
environment and to work towards minimising the environmental impact of
all process and practices including the control of dust, airborne
emissions, process residues and the prevention of pollution. Both the
locations of the Company - Sanaswadi, Pune and Puducherry, are
accredited to the international ISO14001:2004, environmental management
ISO9001:2008, quality standards and OHSAS 18001:2007.
8, IMPORTS / EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. IMPORTS
Imports of raw materials during the year amounted to Rs. 1,279.13 Lacs
(previous year Rs. 1,588.46 Lacs) and capital goods of Rs. 34.28 Lacs
(previous year Rs. 0.70 Lacs)
B. EXPORTS
Exports were mainly to the Middle East, ASEAN and China. Exports during
the year dropped to Rs. 287.73 Lacs from Rs. 476.20 Lacs in the
previous year.
C. EXPORT PLANS
The Company continues to act as a regional manufacturing base for
affiliate companies in Asia and the Middle East.
D. EARNINGS AND OUTGO
Members are requested to refer to notes 12.3, 12.4, 12.5 and 12.7 of
Schedule 19 forming part of the Profit & Loss Account for the year
ended 31 December 2009.
7, EMPLOYEE RELATIONS
Employee relations throughout the Company were harmonious. The board
wishes to place on record its sincere appreciation of the devoted
efforts of all employees in advancing the Companys vision and strategy
to deliver a good performance.
8. STATUTORY DISCLOSURES
Information as per Section 217 (2-A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975, and under
Section 217(1)(e) of the said Act read with the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules 1988, forms
part of this report. However, as per provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are
being sent to all shareholders of the Company excluding the aforesaid
information. Any shareholder interested in obtaining such particulars
may write to the Compliance Officer at the Registered Office of the
Company.
Details regarding technology absorption, conservation of energy and
foreign exchange earnings and outgo required under section 217(1)(e) of
the Companies Act, 1956 and Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules 1988 are included as annexure A, B
and C to the Directors Report.
A Cash Flow Statement for the year 2009 is attached to the balance
sheet.
9, CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a
separate section titled Report on Corporate Governance has been
included in this annual report.
10. SECRETARIAL COMPLIANCE CERTIFICATE
During the year the Company appointed a practicing Company Secretary to
conduct an audit of secretarial compliance under section 383A of the
Companies Act 1956. Though not a mandatory requirement, in its pursuit
of achieving the highest standards of Corporate Governance, the Company
believes such an audit to be of benefit.
The scope of the audit was to review compliance under the following:
1. Companies Act, 1956.
2. Listing Agreement executed with the Stock Exchanges.
3. Corporate Governance requirements of Clause 49 of the Listing
Agreement.
Your directors are pleased to inform you that the audit confirmed that
the Company is in compliance with the Companies Act, 1956, Stock
Exchange and SEBI regulations except Clause 40A of the listing
agreement which specifies minimum public holding of 25% in the total
issued and subscribed capital of the Company. The Company is taking
steps to become fully compliant with the provisions at the earliest.
The Company continued to make efforts to identify and appoint qualified
Company Secretary as required by the Companies Act, 1956. The
secretarial compliance certificate issued after the audit is annexed to
this report.
11. COMPLIANCE CERTIFICATE - OTHER MATTERS
The board of directors also requested the practicing company secretary
to conduct an audit of compliance with the legislation listed below as
part of its drive towards the highest standards of corporate
governance.
1. Disclosure requirements of the Listing Agreements with Stock
Exchanges.
2. Dividend transfer/payments/remittance to non-resident shareholders
with RBI permission.
3. Transfer of unpaid dividend to the Investor Education and
Protection Fund.
4. SEBI (Prohibition of Insider Trading) Regulations, 1992.
5. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
1997.
6. SEBI (RTI and STA) Regulations, 1993.
7. Foreign Exchange Management Act, 1999.
8. Disclosures under Section 299 and 274 (1)(g) by directors under the
Companies Act, 1956.
9. Issue of certificates of shares/transmission thereof as per
requirements of the Companies Act, 1956.
10. Necessary approvals of directors/shareholders and other
authorities as per requirement of the Companies Act, 1956.
Your directors are pleased to confirm that the Company is in compliance
with the requirements under the above laws and the Compliance Report
issued by the practicing company secretary dated 19th January 2010 is
annexed to this report.
12. DIRECTORS RESPONSIBILITY STATEMENT
Whilst preparing the annual accounts the Company has adhered to the
following practices:
a) the annual accounts are prepared under the historical cost
convention and on an accrual basis and are in compliance with the
accounting standards referred to in Section 211 (3C) and other
requirements of the Companies Act, 1956;
b) the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable,
prudent and in the best interest of the companys business so as to
give a true and fair view of the state of affairs of the company as at
31 December 2009 and of the profit of the Company for the same period;
c) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provision of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
d) the directors have prepared the annual accounts on a going concern
basis.
13. DIRECTORS
The directors express deep regret to inform about the sad demise of Mr.
P N Ghatalia, independent director and Audit Committee Chairman, on 13
Aug 2009. The Board places on record its appreciation for the valuable
contribution of Mr. Ghatalia in the Companys growth during his tenure.
Mr. Mukund M Chitale was appointed as additional director on the Board
with effect from 27th Oct 2009 and assumed office as Chairman of the
Audit Committee from the said date.
Information on the details of directors seeking appointment as required
under Clause 49 of the Listing Agreement has been given under Notice to
Shareholders.
14. AUDITORS
The statutory auditor of the company, B S R and Co., Chartered
Accountants, holds office until the conclusion of the forthcoming
annual general meeting and is eligible for re-appointment. The Company
has received notification from them to the effect that their
appointment, if made, would be within the prescribed limits under
Section 224 (1-B) of the Companies Act, 1956.
Accordingly a resolution is being submitted to the members for the
re-appointment of B S R and Co. and to fix their remuneration for the
current year.
15. COST AUDITORS
Dhananjay V Joshi & Associates, a firm of cost accountants was
appointed as cost auditor for last year to audit the cost records
maintained by the Company in respect of its resin products pursuant to
the notification issued by the Central Government bringing the above
products under the purview of Cost Accounting Records (Chemical
Industries) Rules 2004.
The cost auditor has issued a certificate for the year 2009 stating
that the company has maintained the required cost accounting records as
per the Cost Accounting Records (Chemical Industries) Rules 2004 and
the Company is in compliance.
16. INTERNAL CONTROL SYSTEMS
The companys internal control systems are audited by Natu & Pathak,
Chartered Accountants. The internal auditor independently evaluates the
adequacy of internal controls and reviews major transactions, and
reports directly to the Audit Committee.
17. AUDITORS REPORT
The observations of the statutory auditor in its report, read with the
relevant notes to accounts in Schedule 17 are self explanatory and do
not require further explanation.
18. ACKNOWLEDGMENT
Your directors would like to express their grateful appreciation for
the support and cooperation of all the Fosecos stakeholders. In
particular, the directors wish to place on record their deep sense of
appreciation for the commitment and enthusiasm of all employees and the
support of the Companys customers and suppliers.
On behalf of the Board of Directors
Place : Pune R. A. Savoor
Dated : 20 January 2010 Chairman