Directors Report of Shivam Autotech Ltd.
Mar 31, 2023
The Directors are pleased to present before you, the 18th Annual Report on the business and operations of the Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2023.
The Company''s financial performance, for the year ended March 31, 2023 is summarized below:
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Rupees (in Lacs) |
||
|
Particulars |
For the year ended |
|
|
March 31,2023 |
March 31, 2022 |
|
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Gross Sales & Other Income |
47,322.62 |
47,338.14 |
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Earnings before Depreciation and Interest |
5,229.98 |
7,544.42 |
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Depreciation |
3,523.45 |
4,089.10 |
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Interest |
4,989.96 |
5,061.36 |
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Profit/(Loss) before Taxation |
(3,283.44) |
(1,606.06) |
|
Provision for Taxation (Deferred & Current) |
188.30 |
- |
|
Profit/(Loss) after Taxation |
(3,471.74) |
(1,606.06) |
State of Company''s Affairs and Future Outlook
During the financial year 2022-23, revenue from operations was Rs. 47,322.62/- lacs as compared to Rs. 47,338.14/- lacs in 2021-22, registering a decrease in 0.03%.
The Company remains optimistic about growth in the next financial year, as a credible recovery in the Indian economy and a positive momentum towards personal mobility is likely to further strengthen the demand for two-wheelers. The wide range of best-in-class products and consistent alignment of new technologies and services will also ensure Company''s strong growth impetus.
Further, the Company is constantly working on new business models and aims to go beyond the automotive sector.
Company''s efforts to utilize its manufacturing facilities optimally have continued during the year. Aside from Hero Motocorp which continues to be the major customer of the Company, newly developed customers such as Hilti, Mando, Maruti, Denso and Others, their business has gained further
traction during the year. Outlook for the coming year looks positive with further consolidation of Company''s Business based on such wider pool of Customers.
By expanding the customer base company is de-risking the dependence on single customer. Four different plants in various parts of the country will enable company to cater its customer globally.
During the year under review, the Company has not transferred any amount to General Reserves.
Considering the state of economy and industry, the Board of Directors have not recommended any dividend for the financial year 2022-23.
Holding Company
The promoters of the Company i.e. Dayanand Munjal Investments Private Limited (DMIPL) hold 9,14,17,272 equity shares of Rs. 2/- each which represents 74.80% of the paid up equity capital of the Company.
Your company continues to be a subsidiary company of DMIPL.
Subsidiary Companies, Joint Ventures or Associate Companies
The Company neither has any subsidiaries, joint ventures or associate companies nor any company have become or ceased to be its subsidiaries, joint ventures or associate companies during the year under review.
Management Discussion and Analysis report
A detailed discussion on the business performance and future outlook forms part of Management Discussion and Analysis Report, which is separately attached as Annexure A to this Board''s Report.
Board of Directorsa) Meeting of Board of Directors
A calendar of Meetings is prepared and circulated in advance to the Directors. During the Financial Year 2022-23, 5 meetings of the Board of Directors of the Company were held on 30th May, 2022, 10th August, 2022, 22nd October,2022, 13th February, 2023 and 27th March,2023. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 read with MCA General Circular No. 11/2020 dated March 24, 2020 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations")
read with SEBI Circular SEBI/HO/CFD/CMD1/ CIR/P/2020/3 dated March 19, 2020 & SEBI/HO/CFD/ CMD1/CIR/P/2020/110 dated June 26, 2020. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Annual Report.
b) Appointment/re-appointment of Directors
Mrs. Charu Munjal, (DIN: 03094545) whole Time Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. A resolution seeking shareholders'' approval for her re-appointment forms part of the Notice.
The notice convening the meeting sets out the details of his re-appointment.
c) Changes in Directors and Key Managerial Personnel
During the year under review and between the end of the Financial Year and date of this report, the following are the changes in Directors and Key Managerial Personnel of the Company:
i. During the year under review, pursuant to the provisions of Section 2(51) and Section 203 of the Companies Act, 2013, Mr. Rakesh Gupta (PAN AFYPG0718E) Chief Financial Officer of the Company has resigned with immediate effect from October 31,2022. The Board placed on record its appreciation for his invaluable contribution, guidance & support during his tenure with the Company. Further, based on the recommendation of Nomination and Remuneration Committee, Mr. Devendra Kumar Goyal (PAN AGNPG1981F), has been appointed as the Chief Financial Officer of the Company by the Board of Directors with effect from February 13,2023.
None of the aforesaid Directors are disqualified under Section 164(2) of the Companies Act 2013. Further, they are not debarred from holding the office of Director pursuant to order of SEBI or any other authority as required under the Circular dated 20th June, 2018 issued by The BSE Limited and The National Stock Exchange of India Limited.
However, Mr. Bhagwan Das Narang and Ms. Jyothi Prasad (Independent Directors of the Company) ceased to be the Directors of the Company SEBI vide order No. WTM/SM/MIRSD/MIRSD-SEC-4/26042/2023-24 dated April28,2023
Brief resume and other details of directors who is proposed to be appointed/re-appointed as a Director of your Company, have been furnished as part of the Notice of the ensuing Annual General Meeting.
The appointment/re-appointments form part of the Notice of the Eighteenth Annual General Meeting and the relevant resolutions are recommended for your approval.
Key Managerial Personnel
Mr. Neeraj Munjal (DIN: 00037792), Managing Director & CEO, Mr. Devendra Kumar Goyal, Chief Financial Officer, and Ms. Preeti Sharma, Company Secretary & Compliance Officer are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as on March 31, 2023.
d) Committees of the Board
The Company has several Committees which have been established in compliance with the requirement of the relevant provisions of applicable laws and statutes. As on March 31, 2023, the Board has three committees: The Audit Committee, Nomination and Remuneration Committee and Stakeholders''Relationship Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report, which forms integral part of the Board''s Report.
e) Declaration by Independent Director
The Company has received necessary declaration from all Independent Directors under Section 149 (7) of the Companies Act, 2013 and Regulation 25(8) of SEBI Listing Regulations that they meet the criteria of Independence laid down in Section 149(6) of Companies Act, 2013 and Regulation 16(1) (b) of SEBI Listing Regulations.
In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and SEBI Listing Regulations and are independent of the management.
f) Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under the SEBI Listing Regulations, the Board is required to carry out an Annual Performance Evaluation of its own, Board''s committees and Individual Directors on the criteria as recommended by the Nomination and Remuneration Committee of the Company.
The performance of the Board as a whole, it''s Committee(s) and Individual Directors including the Chairman of the Board, was evaluated by a questionnaire formulated by the Company.
The questionnaire was formulated based on the following criteria:
⢠The Board composition and structure,
⢠Effectiveness of board processes,
⢠Information and functioning, Knowledge & Skill
⢠Personal Attributes,
⢠The composition of committees,
⢠Effectiveness of committee meetings,
⢠The contribution of the individual director to the Board and committee meetings
⢠Preparedness of Directors on the issues to be discussed,
⢠Meaningful and constructive contribution of Directors and their inputs in meetings
As part of the evaluation process, the performance of Non-Independent Directors, the Chairman and the Board as a whole was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of the Independent and Non-Independent Directors was done by the Board excluding the Director being evaluated. The performance evaluation was found satisfactory.
g) Separate Meeting of Independent Directors
In terms of requirements under Schedule IV of the Companies Act 2013 and SEBI Listing Regulations, a separate meeting of Independent Directors was held on February 13, 2023. In a separate meeting of Independent Directors, performance of NonIndependent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.
h) Policy on Directors'' remuneration and other details
The Company''s policy on Directors'' remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of the Board''s report.
Statutory Auditors and Auditor''s Report
Pursuant to Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company in 12th Annual General Meeting ("AGM") approved the appointment of M/s NSBP & Co., Chartered Accountants, New Delhi (Firm Registration no. 001075N) as the Statutory Auditors of the Company for the period of 5 years, whose term of office was come to end after conclusion of ensuing 17th Annual General Meeting (AGM) of the Company. The Shareholder of the Company in its meeting held on 28th September, 2022, approved the re-appointment of M/s NSBP & Co., Chartered Accountants, New Delhi (Firm Registration no. 001075N) as the Statutory Auditor of the Company for a second term of 5 consecutive years and who shall hold office upto the conclusion of the 21st AGM of the Company to be held in the financial year 2027-28.
Explanation to Auditors'' Remarks
The observations of Statutory Auditors in their Report read with relevant Notes to Accounts are self-explanatory and therefore, do not require further explanation. The Auditors'' Report does not contain any qualification, reservation or adverse remark. Further, there were no frauds reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Act.
During the year under review, the Issued, Subscribed and Paid-up Equity Share Capital as on March 31, 2023 was 12,22,22,222 Equity shares of Rs.2/- each amounting to Rs.24,44,44,444 Crores.
During the year under review, there was no change in the authorised, subscribed and paid-up share capital of the Company from the last financial year. However, the Company has increased its Authorised Share Capital from Rs. 25,00,00,000/- (Rupees Twenty-Five Crores) divided into 125000000 equity shares of Rs.2/- (Rupees Two) each to Rs.30,00,00,000/- (Rupees Thirty Crores only) divided into 150000000 equity shares of Rs.2/- (Rupees Two) each ranking pari-passu with the existing equity shares in the Company with the approval of shareholders through postal ballot dated August 09, 2023.
During the year under review, the Company has not issued any shares with differential voting rights nor granted any stock options or sweat equity shares. The Company has not issued or repaid any Debentures, Preference Shares, Bonds and Security during the financial year. None of the Directors of the Company hold any shares or security of the Company
Deposits
During the year, the Company has not accepted any fixed deposit.
Cash and cash equivalent as at March 31, 2023 was 5,792.45 lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
Transfer to Investor Education and Protection Fund
During the Financial Year under review, your Company has transferred unpaid/ unclaimed dividend, amounting to Rs.9,11,167 for financial Year 2014-15 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.
Secretarial Auditor and Secretarial Audit & Compliance Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2022-23. Secretarial Audit Report in prescribed format MR-3 are annexed as Annexure - D to this Board''s Report.
Further, pursuant to SEBI Circular CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Company has obtained Secretarial Compliance Report from Practising Company Secretary on compliance of all applicable SEBI (Listing Obligations and Disclosure requirements), Regulations 2015 and circulars/guidelines issued thereunder and the copy of the same has been submitted with the Stock exchanges within the prescribed due date.
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Explanation to Secretarial Audit Report The Management response to the qualification, reservation or adverse remarks in Secretarial Audit Report are as below: |
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S. No. |
Qualification or Adverse Remark |
Management Response |
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1. |
The Board of Directors of the Company vide resolution dated 22.9.2021 had approved a limit of short term loan of Rs. 28 crores, that may be borrowed from Dayanand Munjal Investment Private Limited, its holding Company and terms of repayment were revised from time to time. Subsequently, the Board in its meeting held on 13.2.2023 had noted the loan transaction for an amount of Rs. 36 Crores with its holding Company during the Financial Year 2022-23 whereas the amount of loan as on 13.2.2023 was Rs. 68.88 Crores which was in excess of limits approved by the Board Resolution dated 22.9.2021. Further the Board vide resolution dated 13.2.2023 approved the additional loan limit of Rs. 36 crores during the remaining period of Financial Year 2022-23 with its holding Company and Form MGT 14 in this regard was filed on 12.8.2023 with additional fees. |
The Company has taken shareholder''s approval under Section 180 (1)(a) and 180(1)(c) vide Postal Ballot dated February 11, 2017 of Rs. 500 Crores for obtaining loan and borrowings. Furthermore, its Holding Company recording borrowing on time to time basis. Also, the Company has ratified and recorded the same in its meeting held on February 13, 2023. However, inadvertently and unintentionally there was a delay in filing of MGT-14. |
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2 |
The Company has carried related party transaction with Earthly Possessions in excess of limits approved by the Board. The total transaction value during the year as per the Financial Statements 2022-23 was Rs. 588.15 lacs as against approved limit of Rs. 400 lacs. |
Earthly Possessions is a Firm owned by the sister of the whole time Director of the Company. At the end of each year, the Company used to take omnibus approval in the Audit Committee and Board of Directors as well for each and every transaction related to sales and purchase of the Company with the related party(ies). During the Audit, the management comes to know that transactions limit exceeds with the related party. However, the Company has ratified the same in the current year meeting. |
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3 |
The Company during the year under review, has filed 9 (Nine) forms beyond the due dates as detail under: Four Form CHG 1 (Modification of Charge ID 100447266, 100466112, 100036612, 100177003 created on 2.4.2022) were filed on 7.5.2022, Four Form CHG 1 (Modification of Charge ID 100447266, 100466112, 100036612, 100177003 created on 7.4.2022) were filed on 13.5.2022; and Form MGT 14 dated 13.2.2023 was filed on 12.8.2023. |
E Form MGT-14 & CHG-1 were filed delayed due to administrative process. |
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4 |
The details of one unpublished price sensitive information (UPSI) has been maintained in Structured Digital Database software w.e.f. 18.1.2023 whereas there were total four UPSI during Financial year 2022-23. |
Due to administrative process, Company has purchased the software in third quarter and captured the UPSI details from October onwards. However, meeting of the Board of Directors was held on 22" October, 2022 so were able to record the UPSI from fourth quarter onwards only. Prior to that period the company was maintaining the details internally in physical form. |
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5 |
The Transcript of post-results Investor call held on 10.8.2022 have not been intimated to the Stock Exchanges and also not hosted on website of the Company as required under Regulation 30 read with Regulation 46 of the Listing Regulations. |
The call was arranged by investor''s side only and the Company was not able to get recording and transcripts of the same from their side. Due to non-availability of the information and inadvertently, post call compliances of the investor meet could not be uploaded with the Stock Exchanges and website of the Company as well. |
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Audit Committee The Audit Committee comprises mainly of Independent Directors and the composition is as under: Ms. Jyothi Prasad* : Chairperson Mr. Bhagwan Dass Narang* : Member Dr. Anil Kumar Gupta : Member Mr. Sunil Chinubhai Vakil : Member *Ceased to be Director w.e.f. April 28, 2023 |
The terms of reference of the Audit Committee are wide enough to cover the matters specified for the Audit Committee under Listing Regulations as well as Section 177 of the Companies Act, 2013; the detailed terms of reference are as mentioned in the Annexure B to this Board Report.
During the year under review, the Board has accepted all recommendation of Audit Committee and accordingly no disclosure is required to be made in respect of nonacceptance of the recommendation of the Audit Committee by the Board.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee (NRC) has been constituted according to Section 178(5) of the Companies Act, 2013 and the composition is as under:
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Ms. Jyothi Prasad* : Chairperson Mr. Bhagwan Dass Narang* : Member Dr. Anil Kumar Gupta : Member Mr. Sunil Chinubhai Vakil : Member *Ceased to be Director w.e.f. April 28, 2023 |
The detailed terms of reference are as mentioned in the Annexure B to this Board''s Report.
Nomination and Remuneration Policy and Remuneration to the Directors
The Board on the recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors, Senior Management Personnel including Key Management Personnel and affixing their remuneration. The salient features of the Nomination and Remuneration Policy and the details of remuneration under Section 197 of the Companies Act, 2013 paid to Directors are provided in Corporate Governance Report which forms integral part of this Report.
The Company has in place a robust risk management framework that identifies and evaluates business risks and opportunities. The Company recognises that these risks need to be handled effectively and mitigated to protect the interests of the shareholders and stakeholders, to achieve business objectives and create sustainable value and growth. The Company''s risk management processes focus on ensuring that these risks are promptly identified and a mitigation action plan is developed and monitored
periodically to ensure that the risks are being addressed accordingly. The Company''s risk management framework operates with the following objectives:
⢠Proactively identify and highlight risks to the right stakeholders
⢠Facilitate discussions around risk prioritisation and mitigation
⢠Provide a framework to assess risk capacity and appetite;
⢠develop systems to warn when the appetite is getting breached
Last year, the lockdown imposed significant hardships on the entire human race and tested their survival. Many businesses were forced to adopt varied cost cutting measures. However, your Company also ensured investments on employee well-being measures. Your Company came up with a comprehensive risk mitigation plan and a dedicated team to manage Covid-19 risk. Some of the risk mitigation steps were:
a. frequent interactions with dealers, suppliers, investors so that the ecosystem remained motivated;
b. proactive announcement of Work from Home policy, and an increased hygiene level at the workplace;
c. manufacturing at all the plants was proactively suspended, however with preparedness to restart at a short notice;
d. multiple communications sent to employees on end user awareness due to increased risk of cyber-attacks.
With a multi-sourcing strategy plan, your Company was able to successfully manage this risk.
The Company has maintained Debt Equity Ratio at 4.03 as compared to 3.11 from previous year
Further the Board has also identified the following risks:
Over dependence on few customer base, imposition of strict environmental / safety / regulatory regulations intensifying competition, declining margins, increase in raw material prices, economic downturn, inappropriate addressing of customer grievances, and risk of natural or manmade disasters.
In order to mitigate these risks, the Company has adopted the implementation of the risk management policy focusing on the elements of risks which in the opinion of the Board may threaten the existence of the company. We through qualitative products, regular improvement in productivity, controls over overhead and Labour cost, internal audit of environmental safety and regulatory compliance, IATF 16949 certification, TPM certification, capturing customer complaints and response to them, have effective risk mitigating plans.
Further, pursuant to Regulation 21(5) of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015, the Company has dissolved the Risk Management
Committee, and the Risk Management System/policy of the Company is then to be looked after by the Audit Committee. The details of the same are mentioned in the Annexure B to this Board''s Report.
Disclosure on Establishment of a Vigil Mechanism
Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a vigil mechanism through Whistle Blower Policy for directors and employees to deal with instances of unethical behaviour, actual or suspected, fraud or violation of Company''s code of conduct or ethics policy and to report their genuine concerns or grievances to the Vigilance and Ethics Officer. Your Company hereby affirms that no Director/ Employee have been denied access to the Chairman of the Audit Committee. The policy is available on the company''s website www.shivamautotech.com.
Material Changes Affecting the Financial Position of the Company
There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and on the date of this report.
Your Company was able to raise the short-term/long term funds needed for its working capital related requirements at reasonable rates. By efficient management of working capital, the Company has been able to reduce some interest cost. The Company continues to focus on judicious management of its working capital.
Significant or Material Orders passed by the Regulators
No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
Changes in the Nature of Business
There is no change in the nature of the business of the Company during the Financial Year 2022-23.
Annual Return
In terms of provisions of Section 92(3), 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, annual return of the Company for the Financial Year ended March 31, 2023 is available under the ''Investors'' section of the Company''s website www.shivamautotech.com.
Business Responsibility Report
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, mandates the top 1000 Listed Companies by market capitalisation to include Business Responsibility Report ("BR Report") in their Annual Report.
Your Company falls under the top 2000 Listed Companies by market capitalisation. Accordingly, a BR Report describing the initiatives taken by the Company from an
environmental, social and governance perspective, does not forms part of this Report.
Particulars of Loan, Guarantees and Investments under Section 186 of the Companies Act, 2013
The Company has neither given any loans/guarantees / provided security nor have any investments been made by the Company under the provision of Section 186 of the Companies Act, 2013.
Particulars of Contracts or Arrangements with Related Parties
All contracts /arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on arm''s length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. Hence, requirement of Form AOC-2 as required under Section 188(1) of the Act is not applicable to the Company.
All related party transactions are placed before the Audit Committee for its approval. During the year under review, the Audit Committee approved transactions through the omnibus mode in accordance with the provisions of the Act and SEBI Listing Regulations.
During the year under review, the Company had not entered into any contracts /arrangements/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Suitable disclosure as required by the IND AS 24 has been made in the notes to the Financial Statements.
Conservation of Energy, Technology Absorption-Foreign Exchange Earnings and Outgo
The Company continues to use the latest technologies for improving the productivity and quality of its products and components. The details of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure - C to this Board''s Report.
Statement in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements
The Company believes that Internal Control is one of the key pillars of governance, which provides freedom to the management within a framework of appropriate checks and balances. The Company has a robust internal control framework, which has been instituted considering the nature, size and risks in the business.
Your company has adequate internal control for its business processes across departments to ensure efficient operations, compliance with internal policies, applicable laws and regulations. The internal controls are complemented, on an on-going basis, by an extensive program of internal audits being implemented throughout the year. The internal controls are designed to ensure that the financial and other records of the company are reliable for preparing financial statements and other data for maintaining the
accountability of assets in conformity with established accounting principles and that the assets of the company are adequately safe-guarded against any significant misuse or loss.
The Company has robust ERP systems based on SAP platform. This ensures high degree of systems-based checks and controls. The systems and processes are continuously improved by adopting best-in-class processes and automation and implementing the latest IT tools.
The Company also has an internal audit system which is conducted by an independent firm of Chartered Accountants. The same has also been verified by the statutory auditors who have reported that all the material internal financial controls exist during the financial year 2022-23. The internal audit plan is dynamic and aligned to the business objectives of the Company which is reviewed by the Audit Committee each quarter. Further, the Audit Committee monitors the adequacy and effectiveness of your Company''s internal control framework.
Most importantly, the senior management sets the tone at the top of no tolerance to non-compliance and promotes a culture of continuous innovation and improvement.
IATF 16949/ISO 14001/ISO 45001 Accreditation
Your Company''s manufacturing facilities are located at Binola, Haridwar, Kolar and Rohtak and we continue to maintain and uphold the prestigious IATF 16949:2016, ISO 14001:2015 and ISO 45001:2018 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes, prevention of near misses and to ensure maximized customer delight.
Pursuant to Clause C(9)(d) of Schedule V of SEBI Listing Regulations, 2015, the shares of your Company are listed at The National Stock Exchange of India Limited and The BSE Limited, and pursuant to the SEBI Listing Regulations, the Annual Listing fees for the year 2023-24 have been paid to them well before the due date i.e. April 30, 2023. The Company has also paid the annual custodian fees for the year 2023-24 in respect of Shares held in dematerialized mode to National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL).
The Company has complied with the requirements of Corporate Governance as stipulated under the SEBI Listing Regulations, as applicable.
Your Company is committed to follow the highest standards and principles of Corporate Governance with all integrity and fairness. The Company always places major thrust on managing its affairs with diligence, transparency, responsibility and accountability thereby upholding the important dictum that an org anisation''s
corporate governance philosophy is directly linked to high performance. It has put in place an effective Corporate Governance system which ensures that provisions of the Act and SEBI Listing Regulations are duly complied with, not only in form but also in substance.
A certificate from the Practising Company Secretary regarding the compliance of the conditions of Corporate Governance by the Company as stipulated under Chapter IV of SEBI Listing Regulations is also attached to this Report.
Separate detailed chapters on Corporate Governance, additional Shareholder information and Management Discussion and Analysis are attached herewith and form part of this Report. Declaration by CEO that the Board Members and Senior Management Personnel have complied with the Code of Conduct for the financial year 2022-23 is annexed with this report.
Disclosures for Maintenance of Cost Records
Your company is not covered under subsection (1) of Section 148 of Companies Act, 2013 for maintenance of Cost records and accordingly such accounts and records are not required to be made and maintained.
Prevention of Sexual Harassment Cases
The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules thereunder. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company''s office premises or women service providers are covered under this Policy.
The Company has constituted an "Internal Complaints Committee" under the POSH Act which is responsible for redressal of complaints related to sexual harassment. The Company aims at providing a workplace that enables employees to work without gender bias and sexual harassment.
The necessary disclosure in terms of requirements of SEBI Listing Regulations in this regard is given below:
a) Number of complaints filed during the financial year -Nil
b) Number of complaints disposed of during the financial year - N.A.
c) Number of complaints pending as at the end of the financial year - N.A.
Various workshops and awareness Programmes w.r.t. prevention of sexual harassment has been carried out during the FY 2022-23
Directors'' Responsibility Statement
Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, as amended, with respect to the directors'' responsibility statement, it is hereby confirmed:
(i) That in preparation of annual accounts for the financial year ended March 31,2023, the applicable accounting standards have been followed along with proper explanation relating to the material departures;
(ii) That the directors of the company have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the losses of the Company for the financial year ended March 31,2023;
(iii) That the directors of the company 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; and
(iv) That the directors of the company have prepared the annual accounts on a going concern basis.
(v) That the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(vi) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The details required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 are provided in Corporate Governance Report attached as Annexure - B to this Board''s Report.
The information required under Section 197 of the Act read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure - E to this Board''s Report.
The Company is conscious of the importance of environmentally clean and safe operations. The Company''s policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.
The Company has taken an initiative to preserve environment by indulging in paper recycling activity. The paper recycling pertains to the processes of reprocessing waste paper for reuse. Recycling paper preserves trees and forests. Recycled paper serves as an environmental friendly resource for paper manufacturers, saving costs and energy. The Company has recycled approx. 2620 kgs of waste paper till March 31,2023, contributing in saving 45 nos. of trees.
The Company is committed to adhere to the highest standards of health and safety. It strives to provide its employees with a safe and healthy workplace. The Company continuous to focus on deploying behaviour based safety programmes and global safety standards across its locations. Its manufacturing units are certified with ISO-45001 (International Occupational health & safety management system and standards), abiding by the highest standards of safety.
The Company regularly conducts counselling and safety review meetings for the workers to appraise and educate them on the adoption of safety measures and avoidance of unsafe practices. Safe operating procedures, standards and systems have been laid down at all manufacturing locations. Prompt medical assistances are provided to its employees.
The Company believes that people who feel truly associated with the organisation are the ones who perform to their peak capability. As a core part of our business strategy, it is committed to providing an environment where all of its employees feel enabled and have a sense of belonging. The Company believes in greater diversity within the business will maximise collective capability, allowing leveraging the diversity of thought, and better reflecting and understanding the diverse customer base. This should, in turn, lead to better decision making and higher shareholder value.
The Company takes pride in the commitment, competence and dedication of its employees in all areas of the business. The Company has a structured induction process at all locations. Objective appraisal systems based on key result areas (KRAs) are in place for staff members.
Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. The Company''s thrust is on the promotion of talent internally through job rotation and job enlargement. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.
The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors.
Proceeding Under Insolvency and Bankruptcy Code, 2016
The Company has not made any application or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) ("IBC Code") during the year.
Further, at the end of the year, Company does not have any proceedings related to IBC Code.
The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof
During the year under review, the Company has not made one-time settlement therefore, the same is not applicable.
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI Listing Regulations mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website www.shivamautotech.com.
|
Following are the policies adopted by the company with their web links: |
|
|
Policy |
Web link |
|
Code ofConduct |
http://www.shivamautotech.com/pdf/Code of Conduct for Board Members |
|
and Senior Mangement.pdf |
|
|
Prohibition of Insider Trading |
|
|
ProhibitionofInsidertrading.pdf |
|
|
Payment to Non- Executive Directors |
http://www.shivamautotech.com/pdf/Payment to Non-Executive Directors.pdf |
|
Nomination and Remuneration |
http://www.shivamautotech.com/Uploads/image/163imguf 15.nrc.pdf |
|
Policy |
|
|
Board Diversity Policy |
http://www.shivamautotech.com/pdf/Board Diversity Policy.pdf |
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Records and Archives Policy |
http://www.shivamautotech.com/pdf/records and archives policy.pdf |
|
Related Party Transaction Policy |
http://www.shivamautotech.com/Uploads/image/261imguf related-party-policy- |
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shivam-autotech-limited-30-03-2022.pdf |
|
|
Anti-Harassment Policy |
http://www.shivamautotech.com/pdf/anti-harassment-policy.pdf |
|
Risk Management Policy |
http://www.shivamautotech.com/pdf/Risk Management Policy.pdf |
|
Whistle Blower Policy |
http://www.shivamautotech.com/Uploads/image/295imguf WhistleBlowerPolicy. |
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|
|
|
Familiarization Policy |
http://www.shivamautotech.com/Uploads/image/270imguf familarization- |
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program-2022-23.pdf |
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Policy on Determination and |
http://www.shivamautotech.com/Uploads/image/269imguf policy-on- |
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Disclosure of Materiality of Events |
determination-of-material-events.pdf |
During the year under review, your Company had complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Your Company''s organisational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilisation of the Company''s resources for sustainable and profitable growth.
The Directors express their appreciation for the sincere cooperation and assistance of Central and State Government Authorities, Bankers, Customers, Suppliers and Business Associates. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company''s employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders.
The Board would like to reiterate its commitment to continue to build the organization into a truly world-class enterprise in all aspects.
Mar 31, 2018
Dear Members,
The Directors are pleased to present before you, the 13th Annual Report on the business and operations of the Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2018.
Financial Highlights
The Companyâs financial performance, for the year ended March 31, 2018 is summarized below:
Rupees (in Lacs)
|
Particulars |
For the year ended |
|
|
March 31, 2018 |
March 31, 2017 |
|
|
Gross Sales & Other Income |
56,685.15 |
48,565.87 |
|
Profit before Depreciation and Interest |
7940.33 |
4798.08 |
|
Depreciation |
4126.90 |
3220.16 |
|
Interest |
4570.45 |
2903.14 |
|
Profit before Taxation |
(757.03) |
(1325.22) |
|
Provision for Taxation (Deferred & Current) |
(633.89) |
(967.29) |
|
Profit after Taxation |
(123.13) |
(357.93) |
State of Companyâs Affairs and Future Outlook
During the financial year 2017-18, revenue from operations was Rs. 56,685.15 lacs as compared to Rs.48,565.87 lacs in 2016-17, registering an increase of 17%.
Operating profit of the Company has increased to Rs. 7940.33 lacs from Rs. 4798.08 lacs in 2016-17. The Company has achieved major milestones in setting up of two state of the art manufacturing facilities at Bengaluru and Rohtak, though the capex of these facilities has impacted the profitability of FY 17-18. However, these capex in new plants has widen the Companyâs product portfolio and has enhanced further its capability as a niche auto components producer.
Your Company has taken measures to enhance operational efficiencies by focusing on improving yields, reducing rejections and enhancing capacity utilisation. The Company is taking necessary steps for improvements at all levels. Critical precise components by very nature call for near zero tolerance/ rejections approach at all stages of operations. Thorough quality check, standard operating procedures, top class tools usage and detailed training and awareness among all - from operator level to the senior manager level ensures prevalence of sound work culture and high level of productivity. Necessary POKAYOKE are being implemented in the processes to nib the problem in the bud and minimize rejections.
Business Overview
With the impressive, technology driven high end machineries installed in all its facilities, the Company is able to produce high volumes with impeccable quality required for complex, wide range of transmission and precision engineering components. With the state of art manufacturing facilities, the Company is functioning successively to strengthen its Customer Base. The Sales to other Customers like Bosch, Denso, INEL, Mitsuba, Yamaha, ZF, Hilti, Volvo Eicher and Maruti etc. has increased compared to last year, still Hero MotoCorp Limited (HMCL) being the major customer.
With the increase in growth rate of Customers, the Company is expecting to maintain a healthy growth in its scale of operations and widen its geographical reach. It is also expected to add new customers in the upcoming financial years. Cutting edge technology on a sustained basis is the touch stone of the manufacturing excellence of the Company.
The Company is working meticulously towards mitigating its concentration risk by diluting the percentage of the concentration by increasing sales to other customers or entering new markets which is principally the focus area. The Company is successively clearing the major audits of its Customers in all plants and working towards entering into new verticals with the set-up of world class facilities at Bengaluru and Rohtak plant.
Awards & Accolades
The Company is proud recipient of the following Awards as shown in Awards & Accolades Section:
1. Certificate of Appreciation from Maruti Suzuki for recognition of superior performance in the field of 2 Wheeler Cost Down in the year 2017-18.
2. Certificate of Excellence from SEG Automotive for recognition in Ramp up Support for year 2017-18
3. Awarded for Ramp Up Support Award by SEG Automotive in Business Partner Meet 2018
4. Green Merit Award for recognition in Green Initiative of Waste Paper Recycling through Green-O-Tech India in year 2017
Transfer to General Reserve
During the year under review, the Company has not transferred any amount to General Reserves. The closing balance amount of Reserves and Surplus of Rs. 17,094.78 Lacs (Previous year Rs. 17,201.72 lacs) will be retained as surplus in the Statement of Profit and Loss.
Dividend
The Board of Directors have not recommended any dividend for the financial year 2017-18.
The Register of Members and Share Transfer Books shall remain closed from Saturday, September 22, 2018 to Saturday, September 29, 2018 (both days inclusive).
Holding Company
The promoters of the Company i.e. Dayanand Munjal Investments Private Limited (DMIPL) hold 74,795,950 equity shares of Rs. 2/- each which represents 74.80% of the paid up equity capital of the Company.
Your company continues to be a subsidiary company of DMIPL.
Subsidiary Companies, Joint Ventures Or Associate Companies
The Company neither has any Subsidiaries, joint ventures or associate companies nor any company have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year under review.
Management Discussion and Analysis report
A detailed discussion on the business performance and future outlook forms part of Management Discussion and Analysis Report, which is separately attached as Annexure A to this Boardâs Report.
Board of Directors
a) Meeting of Board of Directors
A calendar of Meetings is prepared and circulated in advance to the Directors. During the Financial Year 2017-18, 4 (four) meetings of the Board of Directors of the Company were held on May 30, 2017, August 10, 2017, November 13, 2017 and February 14, 2018. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as âSEBI LODR, 2015â). For details of the meetings of the board, please refer to the Corporate Governance report, which forms part of this Annual Report.
b) Details of Directors and Key Managerial Personnel
Mrs. Charu Munjal and Dr. Anil Kumar Gupta, Whole Time Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Brief profile of the Director(s), as required by the SEBI LODR, 2015, is given in the Notice / Corporate Governance Report forming part of this Annual Report.
The appointment/re-appointments form part of the Notice of the Thirteenth Annual General Meeting and the relevant Resolutions are recommended for your approval.
c) Declaration by Independent Director
The Company has received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013 that he/she meets the criteria of Independence laid down in Section 149(6) of Companies Act, 2013 and SEBI LODR, 2015.
d) Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (âSEBIâ) under the SEBI LODR, 2015, the Board is required to carry out an Annual Evaluation of its own performance, Boardâs committees and Individual Directors.
The performance of the Board as a whole, itâs Committee(s) and Individual Directors including the Chairman of the Board, was evaluated by a questionnaire formulated by the Company.
The questionnaire was formulated based on the following criteria:
- The Board composition and structure,
- Effectiveness of board processes,
- Information and functioning,
- The composition of committees,
- Effectiveness of committee meetings,
- The contribution of the individual director to the Board and committee meetings
- Preparedness of Directors on the issues to be discussed,
- Meaningful and constructive contribution of Directors and their inputs in meetings
e) Separate Meeting of Independent Directors
In terms of requirements under Schedule IV of the Companies Act 2013 and SEBI LODR, 2015, a separate meeting of Independent Directors was held on February 14, 2018. In a separate meeting of independent Directors, performance of nonindependent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.
f) Policy on Directorsâ remuneration and other details
The Companyâs policy on Directorsâ remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the Boardâs report.
Statutory Auditors
NSBP & Co., Chartered Accountants, New Delhi (Firm Registration No. 001075N) were appointed as the Statutory Auditors of the Company for a term of five years as per the provisions of Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, who will hold the office upto the conclusion of the 17th Annual General Meeting. They have confirmed that they are not disqualified from continuing as Auditors of the Company.
The Report given by the Auditors, NSBP & Co., Chartered Accountants, New Delhi, on the financial statements of the Company for the financial year 2017-18, is part of the Annual Report. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report.
Further, with regard to Section 134(3)(ca) of the Companies Act, 2013, no frauds have been reported by the auditors under Section 143(12) of the said Act.
Explanation to Auditorsâ Remarks
The comments on statement of accounts referred to in the report of the auditors are self-explanatory.
Share Capital
During the year under review, the Issued, Subscribed and Paid-up Equity Share Capital as on March 31, 2018 was 10 Crores equity shares of Rs. 2/- each amounting to Rs. 20 Crore.
a) Your Company has not issued shares with differential voting rights nor granted employee stock options nor sweat equity. And also the Company has not accepted or repaid any Debentures, Preference Share Capital and any Bond & Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not have any Debentures, Preferential Shares as on March 31, 2018.
b) Your company has not made any provisions of money for purchase of its own shares by employees or by trustees for the benefit of employees during the year under review.
Deposits
During the year, the Company has not accepted any fixed deposit.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. Secretarial Audit Report in prescribed format MR-3 is annexed as Annexure-D to this Boardâs Report.
Explanation to Secretarial Audit Report
Due to technical issues faced by the Registrar and Transfer Agents of the Company with Depository, the shares were transferred beyond the prescribed date.
The Company is taking effective steps that all statutory forms are filed within the prescribed time limit.
Audit Committee
The Audit Committee comprises mainly of Independent Directors and the composition is as under:
Mr. Surrinder Lal Kapur - Chairman
Mr. Bhagwan Dass Narang - Member
Dr. Vinayshil Gautam - Member
Mr. Sunil Kant Munjal - Member
Dr. Anil Kumar Gupta - Member
The terms of reference of the Audit Committee are wide enough to cover the matters specified for the Audit Committee under SEBI LODR, 2015 as well as Section 177 of the Companies Act, 2013; the detailed terms of reference are as mentioned in the Annexure B to this Boardâs Report. During the year, the Board has accepted all recommendation of Audit Committee and accordingly no disclosure is required to be made in respect of non-acceptance of the recommendation of the Audit Committee by the Board.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee (NRC) has been constituted according to Section 178(5) of the Companies Act, 2013 and the composition is as under:
Dr. Vinayshil Gautam - Chairman
Mr. Bhagwan Dass Narang - Member
Mr. Surrinder Lal Kapur - Member
Mr. Sunil Kant Munjal - Member
The detailed terms of reference are as mentioned in the Annexure B to this Boardâs Report.
Corporate Social Responsibility (CSR) Policy
The Corporate Social Responsibility Committee has been constituted as per the provisions of Section 135 of the Companies Act, 2013 and the composition is as under:
Mr. Bhagwan Dass Narang - Chairman
Dr. Anil Kumar Gupta - Member
Mrs. Charu Munjal - Member
The details about the policy indicating the activities to be undertaken by the Company, activities implemented by the company and the amount spent on CSR activities as per the provisions of Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed as Annexure - E to this Boardâs Report.
Risk Management Policy
In order to mitigate the risks, the Company has adopted the implementation of the risk management policy focusing on the elements of risks which in the opinion of the Board may threaten the existence of the company.
The Company has constituted a risk management committee, the constitution and the terms of reference of the same are mentioned in the Annexure B to this Boardâs Report.
Disclosure on Establishment of a Vigil Mechanism
The Company has adopted a policy on vigil mechanism for directors and employees to report their genuine concerns or grievance to be the Vigilance and Ethics Officer. The policy is available on the companyâs website www.shivamautotech. com.
Material Changes Affecting the Financial Position of the Company
There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and on the date of this report.
Your Company was able to raise the short-term/long term funds needed for its working capital related requirements & term loans for new capital expenditure at reasonable rates. By efficient management of working capital, the Company has been able to reduce some interest cost. The Company continues to focus on judicious management of its working capital. During the year under review, the financial position of the Company was satisfactory.
Significant or Material Orders passed by the Regulators
No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
Changes in the Nature of Business
There is no change in the nature of the business of the Company during the Financial Year 2017-18.
Extract of Annual Return
The weblink for extract of Annual Return, in format MGT-9, for the Financial Year 2017-18 is as follows: http://www. shivamautotech.com/cpage.aspx?mpgid=15&pgidtrail=40
Particulars of Loan, Guarantees and Investments under Section 186 of the Companies Act, 2013
The Company has neither given any loans/guarantees / provided security and nor any investments have been made by the Company.
Particulars of Contracts or Arrangements with Related Parties
All contracts /arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on armâs length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. During the year, the Company had not entered into any contracts /arrangements/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Suitable disclosure as required by the IND AS 24 has been made in the notes to the Financial Statements.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The Company continues to use the latest technologies for improving the productivity and quality of its products and components. The details of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure - C to this Boardâs Report.
Statement in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements
Your company has adequate internal control for its business processes across departments to ensure efficient operations, compliance with internal policies, applicable laws and regulations. The internal controls are complemented, on an on-going basis, by an extensive program of internal audits being implemented throughout the year. The internal controls are designed to ensure that the financial and other records of the company are reliable for preparing financial statement and other data for maintaining the accountability of assets in conformity with established accounting principles and that the assets of the company are adequately safe-guarded against any significant misuse or loss.
The Company also has an internal audit system which is conducted by an independent firm of Chartered Accountants. A summary of Internal audit report and observations thereon are reviewed by the Audit Committee on regular basis and have been found to be adequate.
Listing
The shares of your Company are listed at The National Stock Exchange of India Limited and The BSE Limited, and pursuant to the SEBI LODR, 2015, the Annual Listing fees for the year 2018-19 have been paid to them well before the due date i.e. April 30, 2018. The Company has also paid the annual custodian fees for the year 2018-19 in respect of Shares held in dematerialized mode to National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL).
The Company has complied with the requirements of Corporate Governance as stipulated under the SEBI (LODR) Regulations, 2015, as applicable.
Corporate Governance
Your Company is committed to follow the highest standards and principles of Corporate Governance with all integrity and fairness. The Company always places major thrust on managing its affairs with diligence, transparency, responsibility and accountability thereby upholding the important dictum that an organisationâs corporate governance philosophy is directly linked to high performance.
A certificate from the Practising Company Secretary regarding the compliance of the conditions of Corporate Governance by the Company stipulated under SEBI LODR, 2015 is also attached to this Report.
Separate detailed chapters on Corporate Governance, Additional Shareholder information and Management Discussion and Analysis are attached herewith and form part of this Report. Declaration by CEO/CFO that the Board Members and Senior Management Personnel have complied with the Code of Conduct for the Financial Year 2017-18 is annexed with this report.
Disclosures for Maintenance of Cost Records
Your company is not covered under subsection (1) of Section 148 of Companies Act, 2013 for maintenance of Cost records and accordingly such accounts and records are not required to be made and maintained.
Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
Your Company is committed to provide work environment that ensures every employee is treated with dignity and respect and afforded equitable treatment. The Company has complied with the provisions relating to the Constitution of Internal complaints Committee under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has adopted the policy for prevention of sexual harassment at workplace. No Complaints has been received for the year 2017-18. The annual report has been duly submitted to the District Officer of Department of Women and Child Development stating that no complaints have been received by the Company.
Directorsâ Responsibility Statement
Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, as amended, with respect to the directorsâ responsibility statement, it is hereby confirmed:
(i) That in preparation of annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to the material departures;
(ii) That the directorsâ of the company have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the losses of the Company for the financial year ended March 31, 2018;
(iii) That the directorsâ of the company 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; and
(iv) That the directorsâ of the company have prepared the annual accounts on a going concern basis.
(v) That the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(vi) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Managerial Remuneration
The details required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 are provided in Corporate Governance Report attached as Annexure - B to this Boardâs Report.
Particulars of Employees
The information required under Section 197 of the Act read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure - F to this Boardâs Report.
Environment, Health & Safety
The Company has taken an initiative top reserve environment by indulging in paper recycling activity. The paper recycling pertains to the processes of reprocessing waste paper for reuse. Recycling paper preserves trees and forests. Every ton of recycled paper saves about 17 trees. Recycled paper serves as an environmental friendly resource for paper manufacturers, saving costs and energy. The Company has recycled approx. 7320 kgs of waste paper till March 31, 2018, contributing in saving 124 nos. of trees.
During the year, the Company focused on incident reporting. Use of mobile phones was identified as one of the major distractions, especially while working inside manufacturing plants. The Company took proactive steps to address this risk by limiting smartphone usage during working hours.
The Company is committed to adhere to the highest standards of health and safety. It strives to provide its employees with a safe and healthy workplace. The Company continuous to focus on deploying behaviour based safety programmes and global safety standards across its locations. The Company regularly conducts counselling and safety review meetings for the employees to appraise and educate them on the adoption of safety measures and avoidance of unsafe practices. Safe operating procedures, standards and systems have been laid down at all manufacturing locations. Prompt medical assistance are provided to its employees.
Human Resource Development
Your Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, cooperation and support have enabled the Company to cross new milestones on a continual basis.
The Company strives to provide a work environment that attracts, develops and retains the best talent, promotes a values-driven, high-performance culture embedding diversity and transformation.
Your Company treats its âhuman resourcesâ as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. The Companyâs thrust is on the promotion of talent internally through job rotation and job enlargement.
Policies
The SEBI LODR, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website www.shivamautotech.com.
Following are the policies adopted by the company with their web links:
|
Policy |
Web link |
|
Code of Conduct |
http://www.shivamautotech.com/Uploads/image/34imguf_SHIVAMCodeofConductforBM.pdf |
|
Prohibition of Insider Trading |
http://www.shivamautotech.com/Uploads/image/38imguf_insidertradingshivam.pdf |
|
Payment to Non- Executive Directors |
http://www.shivamautotech.com/Uploads/image/33imguf_PaymenttoNED.pdf |
|
Board Diversity Policy |
http://www.shivamautotech.com/pdf/Board_Diversity_Policy.pdf |
|
Records and Archives Policy |
http://www.shivamautotech.com/pdf/records_and_archives_policy.pdf |
|
Related Party Transaction Policy |
|
|
Anti-Harassment Policy |
http://www.shivamautotech.com/pdf/Anti_harassment_Policy.pdf |
|
Corporate Social Responsibility Policy |
|
|
Risk Management Policy |
http://www.shivamautotech.com/pdf/Risk_Management_Policy.pdf |
|
Whistle Blower Policy |
Secretarial Standards
During the year under review, your Company had complied with all the applicable Secretarial Standards. Acknowledgments
Your Companyâs organisational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilisation of the Companyâs resources for sustainable and profitable growth.
The Directors express their appreciation for the sincere co-operation and assistance of Central and State Government Authorities, Bankers, Customers, Suppliers and Business Associates. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Companyâs employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders.
For and on behalf of the Board For and on behalf of the Board
Sd/- Sd/-
Neeraj Munjal Dr. Anil Kumar Gupta
Place: New Delhi Managing Director Whole Time Director
Date: August 13, 2018 DIN: 00037792 DIN: 02643623
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their 10th Annual Report on
the business and operations of the Company together with the Audited
Statement of Accounts for the year ended March 31, 2015.
Financial Highlights
During the year under review, performance of your Company is as under:
Business Overview
With the main customer being, Hero MotoCorp Limited (HMCL), the Company
continues to maintain its growth at a constant rate. Other customers of
the Company like BOSCH, DENSO etc have increased their sales/business
share marginally as compared to last year. To cater to the requirements
of the customers, the company is utilising its available resources to
achieve a satisfactory growth rate. With the increase in growth rate of
Customers, the Company is expecting to maintain its profits. There is
pressure on the EBITDA margin, due to competitive pricing and increase
in employees cost.
Particulars Year ended Year ended
March 31,2015 March 31,2014
Gross Sales & Other Income 47,012.08 41,937.79
Profit before Depreciation and Interest 8,407.20 8,031.80
Depreciation 2,745.27 3,090.92
Interest 1,997.13 2,045.89
Profit before Taxation 3,664.79 2,894.99
Provision for Taxation (Deferred & Current) 728.13 51.75
Profit after Taxation 2936.66 2,843.24
Profit available for appropriations 2936.66 2,843.24
Appropriations
Amount transferred to General Reserve 300.00 300.00
Proposed Dividend on Equity Shares 600.00 450.00
Tax on Dividend 122.14 76.48
Profit after Appropriations 1914.52 2,016.76
State of Company's Affairs and Future Outlook
During the year under review, your Company has taken measures to
enhance operational efficiencies by focusing on improving yields,
reducing rejections and enhancing capacity utilisation.
The total sales of the Company increased by 12.10% from Rs. 41,937.79
Lacs in 2013-14 to Rs.47,012.08 lacs in 2014-15. Operating profit
(PBDIT) of the company has increased by 4.67% from Rs. 8,031.80 Lacs in
2013-14 to Rs. 8,407.20 Lacs.
The overall performance of the company can be termed as satisfactory.
Transfer to General Reserve
The Board proposes to transfer an amount of Rs.300 lacs to General
Reserve. The balance amount of Rs. 11,703.83 lacs (Previous year Rs.
9,964.36 lacs) will be retained as surplus in the statement of Profit
and Loss Account.
The Directors are pleased to inform that in order to meet the
ever-increasing demand; the Company has planned to set up two new
plants at Bangalore and Rohtak location. Bangalore plant is expected
to be operationalised in H2 of FY16 and Rohtak plant is expected to be
in operation by H1 of FY17.
The company is working towards the PM's Make in India deliberation
through Bangalore plant as the production from this plant will help in
import substitution of indigenised products.
Dividend
Your directors are pleased to recommend a final dividend of 60% i.e.
Rs. 1.20 per equity share of the face value of Rs. 2/- each for the
year ended March 31, 2015 which is provided for in the accounts
absorbing a sum of Rs. 6 crore, if approved by the members in the
ensuing Annual General Meeting. Dividend will be tax free in the hands
of shareholders, as the Company will bear the dividend distribution tax
of Rs. 122.14 lacs (Previous year Rs. 76.48 lacs). The dividend paid
during the previous year was 45% (Rs. 4.50 per share).
The Register of Members and Share Transfer Books will remain closed
from Monday, August 31, 2015 to Monday, September 07, 2015 (both days
inclusive).
(a) Split of Equity Shares: During the Financial Year 2014- 15, the face
value of Equity Shares of the Company has been split from Rs. 10/- per
share to Rs. 2/- per share. The record date for the same was October 31,
2014.
(b) Issue of Bonus Shares: In the Board Meeting held on May 18, 2015,
the Board has recommended Bonus Issue of Shares to the existing Equity
Shares holders of the Company, in the proportion of 1(One) Equity Share
for every 1 (One) Equity Share held by them, subject to the approval of
shareholders in the ensuing Annual General Meeting.
(c) The paid up Equity Share Capital as on March 31,2015 was Rs. 10
Crore. During the year under review, the Company has not issued shares
with differential voting rights nor granted stock options nor sweat
equity. And also the Company has not accepted or repaid any Debentures,
Preference Share Capital and any Bond & Security during the financial
year, and none of the Directors of the Company hold any shares or
security of the Company. The Company does not has any Debentures,
Preferential Shares as on March 31, 2015.
(d) Your company has not made any provisions of money for purchase of
its own shares by employees or by trustees for the benefit of employees
during the year under review.
Extract of Annual Return
The extract of Annual Return, in format MGT -9, for the Financial Year
2014-15 is enclosed as Annexure - C to this report.
Meeting of Board of Directors
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the Financial Year 2014- 15, 5 meetings of the Board
of Directors of the company were held on 30-May-2014, 06-Aug-2014,
29-Sep-2014, 12-Nov-2014 and 14-Feb-2015. The intervening gap between
the Meetings was within the period prescribed under the Companies Act,
2013 and Listing Agreement. For details of the meetings of the board,
please refer to the Corporate Governance report, which forms part of
this report.
Particulars of Loan, Guarantees and Investments under Section 186 of
the Companies Act, 2013
The particulars of loans, guarantees and investments have been
disclosed in the financial statements.
Particulars of Contracts or Arrangements with Related Parties
All contracts /arrangements/transactions entered by the Company during
the financial year with the related parties were in the ordinary course
of business and on arm's length basis and do not attract the provisions
of Sec 188 of the Companies Act, 2013. During the year, the Company had
not entered into any contracts /arrangements/transactions with related
parties which could be considered material in accordance with the policy
of the Company on materiality of related party transactions. Suitable
disclosure as required by the Accounting Standards (AS18) has been made
in the notes to the Financial Statements.
Statutory Auditors
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, existing
Statutory Auditors' will retire at the conclusion of the ensuing Annual
General Meeting and seek re- appointment as Statutory Auditors of the
Company at the ensuing Annual General Meeting.
The Company has received letters from them to the effect that their
re-appointment, if made, would be within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that they are not
disqualified for re-appointment.
The Board of Directors recommends to the shareholders the appointment
of M/s. S.S. Kothari Mehta & Co. as Statutory Auditors of the Company
for the financial year 2015-16.
Explanation to Auditors' Remarks
The comments on statement of accounts referred to in the report of the
auditors are self explanatory.
Material Changes Affecting the Financial Position of the Company
There are no material changes and commitments affecting the financial
position of the company which have occurred between the end of the
financial year of the company to which the financial statements relate
and on the date of this report.
Your Company was able to raise the short-term/long term funds needed
for its working capital related requirements & term loans for new
capital expenditure at reasonable rates. By efficient management of
working capital, the Company has been able to reduce some interest
cost. The Company continues to focus on judicious management of its
working capital. During the year under review, the financial position
of the Company was satisfactory.
Significant or Material Orders passed by the Regulators
No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
Changes in the Nature of Business
There is no change in the nature of the business of the Company during
the Financial Year 2014-15.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company continues to use the latest technologies for improving the
productivity and quality of its products and components. The details of
Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are
attached as Annexure - D to this Report.
Holding Company
The promoters of the Company i.e. Dayanand Munjal Investments Private
Limited (DMIPL) hold 37,397,975 equity shares of Rs. 2/- each which
represents 74.80% of the paid up equity capital of the Company.
Your company continues to be a subsidiary company of DMIPL.
Subsidiary Companies, Joint Ventures Or Associate Companies
The Company neither has any Subsidiaries, joint ventures or associate
companies nor any company have become or ceased to be its Subsidiaries,
joint ventures or associate companies during the year.
Details of Directors and Key Managerial Personnel
Mr. Satyanand Munjal, Mr. Brijmohan Lal Munjal and Mr. O. P. Munjal have
resigned from the Board of Directors of Company w.e.f August 06, 2014.
The Board of Directors places on record their appreciation for the
valuable services and guidance provided by them as Directors of the
Company.
Mr. Davendra Ujlayan, Chief Financial Officer has resigned from the
post of Company Secretary w.e.f. February 14, 2015 and Ms. Shivani
Kakkar has been appointed as the Company Secretary and Compliance
Officer of the Company w.e.f. February 14, 2015.
Mrs. Charu Munjal and Dr. Anil Kumar Gupta, Whole Time Directors of the
Company, retire by rotation at the ensuing Annual General Meeting and
being eligible, offer themselves for re-appointment. Brief profile of
the Director, as required by the Listing Agreement provisions, is given
in the Notice / Corporate Governance Report forming part of this Annual
Report.
The appointment/re-appointments form part of the Notice of the Tenth
Annual General Meeting and the relevant Resolutions are recommended for
your approval.
Declaration by Independent Director
The Company has received necessary declaration from each Independent
Director under section 149 (7) of the Companies Act, 2013, that he/she
meets the criteria of Independence laid down in Section 149(6) of
Companies Act, 2013 and Clause 49 of the Listing Agreement.
Statement in Respect of Adequacy of Internal Financial Control with
Reference to the Financial Statements Your company has adequate
internal control for its business processes across departments to
ensure efficient operations, compliance with internal policies,
applicable laws and regulations. The internal controls are
complemented, on an on-going basis, by an extensive program of internal
audits being implemented throughout the year. The internal controls are
designed to ensure that the financial and other records of the company
are reliable for preparing financial statement and other data for
maintaining the accountability of assets in conformity with established
accounting principles and that the assets of the company are adequately
safe-guarded against any significant misuse or loss.
The Company also has an internal audit system which is conducted by an
independent firm of Chartered Accountants. A summary of Internal audit
report and observations thereon are reviewed by the Audit Committee on
regular basis and have been found to be adequate.
Deposits
During the year, the Company has not accepted any fixed deposit.
Receipt of any commission by MD / WTD from a Company
Details of commission received by Mr. Neeraj Munjal, Managing Director
and Mrs. Charu Munjal, Whole Time Director is as follows:
(Amount in Lacs)
Mr. Neeraj Munjal, Mrs. Charu Munjal,
Managing Director Whole Time Director
Commission 50.00 79.00
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar &
Associates, a proprietorship firm of Company Secretaries to undertake
the Secretarial Audit of the Company. Secretarial Audit Report in
prescribed format MR-3 is annexed as Annexure - E to this Board's
Report.
Corporate Social Responsibility (CSR) Policy
During the year, your directors have constituted the Corporate Social
Responsibility Committee comprising with the following members:
Mr. Bhagwan Dass Narang - Chairman
Dr. Anil Kumar Gupta - Member
Mrs. Charu Munjal - Member
The details about the policy indicating the activities to be undertaken
by the Company, activities implemented by the company and the amount
spent on CSR activities as per the provisions of Companies (Corporate
Social Responsibility Policy) Rules, 2014, is annexed as Annexure - F to
this report.
Audit Committee
The Audit Committee comprises mainly of Independent Directors and the
composition is as under:
Mr. Surrinder Lal Kapur - Chairman
Mr. Bhagwan Dass Narang - Member
Dr. Vinayshil Gautam - Member
Mr. Sunil Kant Munjal - Member
Dr. Anil Kumar Gupta - Member
The terms of reference of the Audit Committee are wide enough to cover
the matters specified for the Audit Committee under Clause 49 of the
Listing Agreement as well as Section 177 of the Companies Act, 2013;
the detailed terms of reference are as mentioned in the Annexure B of
the Board Report. During the year, the Board has accepted all
recommendation of Audit Committee and accordingly no disclosure is
required to be made in respect of non-acceptance of the recommendation
of the Audit Committee by the Board.
Nomination & Remuneration Committee
Nomination and Remuneration Committee (NRC) has been constituted
according to section 178(5) of the Companies Act, 2013 and the
composition is as under:
Dr. Vinayshil Gautam - Chairman
Mr. Bhagwan Dass Narang - Member
Mr. Surrinder Lal Kapur - Member
Mr. Sunil Kant Munjal - Member
The detailed terms of reference are as mentioned in the Annexure B of
the Board Report.
Risk Management Policy
In order to mitigate the risks, the Company has adopted the
implementation of the risk management policy focusing on the elements
of risks which in the opinion of the Board may threaten the existence
of the company.
The Company has constituted a risk management committee, the
constitution and the terms of reference of the same are mentioned in
the Annexure B of the Board Report.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Act and the corporate governance requirements as
prescribed by Securities and Exchange Board of India ("SEBI") under
Clause 49 of the Listing Agreements ("Clause 49").
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning, etc.
The performance of the committees was evaluated by the board after
seeking inputs from the committee members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc. The Board and the Nomination and Remuneration Committee
("NRC") reviewed the performance of the individual directors on the
basis of the criteria such as the contribution of the individual
director to the Board and committee meetings like preparedness on the
issues to be discussed, meaningful and constructive contribution and
inputs in meetings, etc. In addition, the Chairman was also evaluated
on the key aspects of his role.
Separate Meeting of Independent Directors
In terms of requirements under Schedule IV of the Companies Act 2013
and clause 49 of the listing agreement, a separate meeting of
Independent Directors was held on March 24, 2015. In a separate meeting
of independent Directors, performance of non-independent directors,
performance of the board as a whole and performance of the Chairman was
evaluated, taking into account the views of executive directors and
non-executive directors. The same was discussed in the board meeting
that followed the meeting of the independent Directors, at which the
performance of the Board, its committees and individual directors was
also discussed.
Postal Ballot updates
During the year under review, the Company conducted the postal ballot
for taking approval of shareholders and declared the results on
December 29, 2014 for passing the following resolutions:
(a) Creation of Mortgage/Charge over the movable and immovable
properties of the Company under Section 180(1)(a) of the Companies Act,
2013 and
(b) Increase in Sitting Fees/Commission of Independent Directors
Policy on directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration and
other matters provided in Section 178(3) of the Act has been disclosed
in the corporate governance report, which forms part of the Board's
report.
Disclosure on Establishment of a Vigil Mechanism
The Company has adopted a policy on vigil mechanism for directors and
employees to report their genuine concerns or grievance to be the
Vigilance and Ethics Officer. The policy is available on the company's
website www. shivamautotech.com.
Listing
The shares of your Company are listed at The National Stock Exchange of
India Limited and BSE Limited, and pursuant to Clause 38 of the Listing
Agreement, the Annual Listing fees for the year 2015-16 have been paid
to them well before the due date i.e. April 30, 2015. The Company has
also paid the annual custodian fees for the year 2015- 16 in respect of
Shares held in dematerialized mode to National Securities Depository
Limited (NSDL) & Central Depository Services Limited (CDSL).
Corporate Governance
Your Company is committed to follow the highest standards and
principles of Corporate Governance with all integrity and fairness. The
Company always places major thrust on managing its affairs with
diligence, transparency, responsibility and accountability thereby
upholding the important dictum that an organisation's corporate
governance philosophy is directly linked to high performance.
A certificate from the Practising Company Secretary regarding the
compliance of the conditions of Corporate Governance by the Company
stipulated under Clause 49 of the Listing Agreement is also attached to
this Report.
Separate detailed chapters on Corporate Governance, Additional
Shareholder information and Management Discussion and Analysis are
attached herewith and form part of this Report Declaration by CEO/CFO
that the Board Members and Senior Management Personnel have complied
with the Code of Conduct for the Financial Year 2014-15 is annexed with
this report.
Managerial Remuneration
The information required under Section 197 of the Act read with Rcxule
5 of Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, is attached as Annexure - G to this Report.
Disclosures under Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013
Your Company is committed to provide work environment that ensures
every employee is treated with dignity and respect and afforded
equitable treatment. The Company has adopted the policy for prevention
of sexual harassment at workplace. An appropriate complaint mechanism
in the form of "Complaints Committee" has been created in the Company
for time-bound redressal of the complaint made by the victim.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134 (5) of the Companies Act,
2013, as amended, with respect to the directors' responsibility
statement, it is hereby confirmed:
(i) That in preparation of accounts for the financial year ended March
31, 2015, the applicable accounting standards have been followed along
with proper explanation relating to the material departures;
(ii) That the directors' of the company have selected such accounting
policies and applied them consistently and made judgements and
estimates that are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2015
and of the profits of the Company for the year ended March 31, 2015;
(iii) That the directors' of the company 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; and
(iv) That the directors' of the company have prepared the annual
accounts on a going concern basis.
(v) That the directors, in the case of a listed company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating
effectively.
(vi) That the directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Environment, Health & Safety
The Company is very keen on its responsibilities with respect to the
clean environment. Company's Health and Safety Policy commits to
provide a healthy and safe work environment to all employees.
The Company regularly conducts counselling and safety review meetings
for the employees to appraise and educate them on the adoption of
safety measures and avoidance of unsafe practices. Safe operating
procedures, standards and systems have been laid down at all
manufacturing locations. Prompt medical assistances is provided to its
employees. The Company has an internal plant dispensary which operates
round the clock and is managed by the qualified doctors supported by
staff who are available for addressing health issues of employees.
Human Resource Development
The Company continues its focus on retention through employee engagement
initiatives and provides a holistic environment where employees get
opportunities to realize their potential. The Company believes that its
human capital is the most valuable asset that helps it remain
competitive. The Company's policy not only meets all applicable
statutory requirements but also focuses on motivation, learning and
training of employees. Human resources being one of the most important
factors of production, the Company is initiating measures towards
competence and overall development of people at all levels to be future
ready. The Company arranges training sessions for its employees to
empower and upgrade them to achieve business motives and help them build
their career.
The Company encourages long-term commitment by rewarding its people for
the opportunities they create through KAIZEN activities and the value
generated for customers and shareholders. The Company's progressive
workforce policies and benefits, various employee engagement and
welfare initiatives program, have addressed stress management, promoted
work life balance and helped the Company maintain a low attrition rate.
The Directors are pleased to record their appreciation for the services
rendered by the employees and staff at all levels.
Acknowledgments
The Directors express their appreciation for the sincere co-operation
and assistance of Central and State Government Authorities, Bankers,
Customers, Suppliers and Business Associates. Your Directors also wish
to place on record their deep sense of appreciation for the committed
services by your Company's employees. Your Directors acknowledge with
gratitude the encouragement and support extended by our valued
shareholders.
For and on behalf of the Board For and on behalf of the Board
Sd/- Sd/-
Neeraj Munjal Dr. Anil Kumar Gupta
Managing Director Whole Time Director
DIN: 00037792 DIN: 02643623
Place: New Delhi
Date: August 4, 2015
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the 9th Annual Report of the
Company together with its Audited Statement of Profit and Loss Account
for the year ended March 31, 2014 and the Balance Sheet as on that
date:
FINANCIAL RESULTS
The summarized financial results of the Company for the year ended
March 31, 2014 are presented below:
The Register of Members and Share Transfer Books will remain closed
from Monday, September 22, 2014 to Monday, September 29, 2014 (both
days inclusive).
BUSINESS OVERVIEW
Hero MotoCorp Limited (HMCL), the main customer of the company and the
world No. 1 two wheeler manufacturer for 13 consecutive years,
continues to maintain its leadership position in the two wheeler
industry.
(Rs. In Lacs)
Particulars 2013-14 2012-13
Gross Sales & Other Income 41,937.79 39,208.79
Profit before Depreciation 8031.80 8,734.23
and Interest
Depreciation 3,090.92 3,077.00
Interest 2,045.89 2,482.30
Profit before Taxation 2,894.99 3174.94
Provision for Taxation 51.75 353.46
(Deferred & Current)
Profit after Taxation 2,843.24 2821.48
Profit available for 2,843.24 2821.48
appropriations
Appropriations
Amount transferred to 300.00 300.00
General Reserve
Proposed Dividend on 450.00 400.00
Equity Shares
Tax on Dividend 76.48 67.98
Profit after Appropriations 2,016.76 2053.50
PERFORMANCE
During the year under review, your Company focused on enhancing
operational efficiencies - improving yields, lowering rejections and
enhancing capacity utilisation.
The total sales of the Company increased by 6.96% from Rs.39,208.79
Lacs in 2012-13 to Rs. 41,937.79 Lacs in 2013-14. Operating profit
(PBDIT) of the company has decreased by 8.04% from Rs. 8,734.23 Lacs in
2012-13 to Rs. 8,031.80 in 2013-14.
The overall performance of the company can be termed as satisfactory.
DIVIDEND
The Board of Directors of the Company recommend, for consideration of
shareholders at the 9th Annual General Meeting, payment of dividend of
45% (Rs. 4.50 per share) on equity shares of the face value of Re.10/-
each for the year ended March 31, 2014. The dividend paid during the
previous year was 40% (Rs. 4.00 per share).
Our existing customers have assured to meet predetermined sales targets
and the Company has consolidated supply to other customers like BOSCH,
DENSO etc. The Company is utilising the resources available to expand
the basket of the customers. The customers of the Company are on a
growth path and the Company is confident to meet their increased
demand.
Competitive pressure on pricing and increase in employees cost has put
pressure on EBITA margin. However, the volume increase and reduction in
Interest Cost during the year have held company to contain decline in
PBT to Rs. 279.95 lacs in 2013-14.
NEW PROJECTS & EXPANSION
To cater the requirements of its existing customer BOSCH, the Company
is required to have a new manufacturing setup. The Directors are happy
to inform that the Company has finalised the project and chosen
Kolar-District (Near Bangalore, Karnataka) as new location for new
plant.
In order to meet the ever-increasing demand for its existing business
and for the potential of new business, the Company has identified IMT
Rohtak (Near Delhi/NCR) as new location.
Lands have already been acquired at both the locations.
CORPORATE GOVERNANCE
Your Company is committed to follow the highest standards and
principles of Corporate Governance with all integrity and fairness. The
Company always places major thrust on managing its affairs with
diligence, transparency, responsibility and accountability thereby
upholding the important dictum that an organisation''s corporate
governance philosophy is directly linked to high performance.
Separate detailed chapters on Corporate Governance, Additional
Shareholder information and Management Discussion and Analysis are
attached herewith and form part of this Report. All the board members
and senior managerial personnel have affirmed compliance with the code
of conduct for the Financial Year 2013-14.
A certificate from the Practising Company Secretary regarding the
compliance of the conditions of Corporate Governance by the Company
stipulated under Clause 49 of the Listing Agreement is also attached to
this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, as amended, with respect to the directors'' responsibility
statement, it is hereby confirmed:
(i) That in preparation of accounts for the financial year ended March
31, 2014, the applicable accounting standards have been followed along
with proper explanation relating to the material departures;
(ii) That the directors'' of the company have selected such accounting
policies and applied them consistently and made judgements and
estimates that are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2014
and of the profits of the Company for the year ended March 31, 2014;
(iii) That the directors'' of the company 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; and
(iv) That the directors'' of the company have prepared the accounts of
the company for the financial year ended March 31, 2014 on a going
concern basis.
FIXED DEPOSITS
During the year, the Company has not accepted any fixed deposit.
FINANCE
Your Company was able to raise the short-term/long term funds needed
for its working capital related requirements & term loans for new
capital expenditure at reasonable rates. By efficient management of
working capital, the Company has been able to reduce some interest
cost. During the year under review, the financial position of the
Company was satisfactory.
DIRECTORS
Mrs. Charu Munjal and Dr. Anil Kumar Gupta, Whole Time Directors of the
Company, retire by rotation at the ensuing Annual General Meeting and
being eligible, offer themselves for re-appointment. Brief profile of
the Director, as required by the Listing Agreement provisions, is given
in the Notice / Corporate Governance Report forming part of this Annual
Report.
Further in terms of the provisions of the Companies Act, 2013, Mr.
Sunil Kant Munjal, Mr. Bhagwan Dass Narang, Mr. Surrinder Lal Kapur and
Dr. Vinayshil Gautam, NonExecutive and Independent Directors of the
Company whose office are liable to determination by retirement of
Directors by rotation have been appointed as Independent Directors in
term of Sections 149 and 152 of the Companies Act, 2013 for 5 (five)
consecutive years from the date of the 9th Annual General Meeting for a
term upto the conclusion of the 14th Annual General Meeting of the
Company in the Calendar year 2019.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges. Thus, the Board recommend their appointment
as Independent Directors.
Mr. Satyanand Munjal, Mr. Brijmohan Lal Munjal and Mr. O. P. Munjal
have resigned from the Board of Directors of Company w.e.f August 06,
2014. The Board of Directors places on record their appreciation for
the valuable services and guidance provided by them as Directors of the
Company.
The appointment/re-appointments form part of the Notice of the Ninth
Annual General Meeting and the relevant Resolutions are recommended for
your approval.
HOLDING COMPANY
The promoters of the Company i.e. Dayanand Munjal Investments Private
Limited (DMIPL) hold 74,79,595 equity shares which represents 74.80% of
the paid up equity capital of the Company. Your company continues to be
a subsidiary company of DMIPL.
SUBSIDIARY COMPANIES
The Company has no subsidiary.
INTERNAL CONTROL SYSTEMS
Your company has adequate internal control for its business processes
across departments to ensure efficient operations, compliance with
internal policies, applicable laws and regulations. The internal
controls are complemented, on an on-going basis, by an extensive
program of internal audits being implemented throughout the year. The
internal controls are designed to ensure that the financial and other
records of the company are reliable for preparing financial statement
and other data for maintaining the accountability of assets in
conformity with established accounting principles and that the assets
of the company are adequately safe-guarded against any significant
misuse or loss.
The Company also has an internal audit system which is conducted by an
independent firm of Chartered Accountants. A summary of Internal audit
report and observations thereon are reviewed by the Audit Committee on
regular basis and have been found to be adequate.
AUDIT COMMITTEE RECOMMENDATION
During the year, the Board has accepted all recommendation of Audit
Committee and accordingly no disclosure is required to be made in
respect of no acceptance of the recommendation of the Audit Committee
by the Board.
AUDITORS
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, existing
Statutory Auditors'' will retire at the conclusion of the ensuing Annual
General Meeting and seek reappointment as Statutory Auditors of the
Company at the ensuing Annual General Meeting.
The Company has received letters from them to the effect that their
re-appointment, if made, would be within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that they are not
disqualified for re-appointment.
The Board of Directors recommends to the shareholders the appointment
of M/s. S.S. Kothari Mehta & Co. as Statutory Auditors of the Company
for the financial year 2014-15.
AUDITORS'' REPORT
The comments on statement of accounts referred to in the report of the
auditors are self explanatory.
COST AUDIT
The Directors have appointed M/s Gurdeep Singh & Associates, Cost
Accountants, as Cost Auditors to audit the Cost Records relating to
"Engineering Industries" for the year ending March 31, 2015.
LISTING
The shares of your Company are presently listed on BSE and NSE.
CORPORATE SOCIAL RESPONSIBILITY
During the year, your directors have constituted the Corporate Social
Responsibility Committee comprising with the following members:
Mr. Bhagwan Dass Narang - Chairman
Dr. Anil Kumar Gupta - Member
Mrs. Charu Munjal - Member
The said Committee has been entrusted with the responsibility of
formulating and recommending to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company, monitoring the implementation of the
framework of the CSR Policy and recommending the amount to be spent on
CSR activities.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205A and 205C of the Companies
Act, 2013, the dividend which remained unclaimed for a period of 7
(seven) years shall be transferred by the Company to the Investor
Education and Protection Fund (IEPF).
The Company shall transfer the unclaimed / unpaid dividend, declared
for the year 2006-07 to IEPF by November 03, 2014. The amount of Rs.
400,613/-(Rupees Four Lacs Six Hundred and Thirteen only) which was
unclaimed / unpaid shall be transferred to IEPF.
ENVIRONMENT, HEALTH & SAFETY
Regular training is being imparted to the workers and staff to
safeguard the interest of company against the accidents which may occur
in mechanical, electrical, chemical areas. Safe operating procedures,
standards and systems have been laid down at all manufacturing
locations. The Company has an effective policy framework of highest
standard, on safety, health and environment for protecting the safety
health and welfare of its employees and
workers. Regular training of employees regarding safe working
guidelines, audit and review of every accident, mock drills on
emergency are some of the steps that are followed to achieve higher
safety standards. The Company''s policy not only meets all applicable
statutory requirements but also focuses on motivation, learning and
training of employees in these areas.
The Company regularly conducts counselling and safety review meetings
for the employees to appraise and educate them on the adoption of
safety measures and avoidance of unsafe practices. The Company is very
keen on its responsibilities with respect to the clean environment. To
spread the awareness of the subject, and taken numbers of plantation
drives.
The Company provides prompt medical assistances to its employees. The
Company has an internal plant dispensary which operates round the clock
and is managed by the qualified doctors supported by staff who are
available for addressing health issues of employees. The Company
maintains high hygienic and housekeeping standards across the
workplace.
Your company also continues to be a constituent of a very important and
responsible initiative of Hero MotoCorp Limited toward the commitment
to environment, viz. GREEN SUPPLY-CHAIN MANAGEMENT PROGRAMME. Your
company has also entered into an arrangement for recycling of waste
paper and its substitute use. This initiative of the Company has
resulted in to saving of around 250 trees.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988 is given as per Annexure - ''D'' and
forms an integral part of this Report.
PARTICULARS OF EMPLOYEES
The Directors express their appreciation for the contribution made by
the employees to the significant improvement in the operations of the
Company and for the support received from them.
As required under the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are set
out in the Annexure - ''C'' included in this report.
HUMAN RESOURCE DEVELOPMENT
The Company believes that its human capital is the most valuable asset
that helps it remain competitive. Hence, it always nurtures its human
resource pool to build competitive advantage. Human resources being one
of the most important factors of production, the Company is initiating
measures towards competence and overall development of people at all
levels to be future ready. The Company arranges training sessions for
its employees to empower and upgrade them to achieve business motives
and help them build their career.
The Company aims to develop persuasion skills of its employees, which
will enable them to reach the goals set by the organisation and align
them with the ultimate organisational strategies. Performance
measurement and skill upgradation programs are widely deployed within
the Company. This includes skill enhancement, training and soft skills.
Coaching/guidance for selected talent are also included. This
initiative is aimed at preparing the company for high growth in the
coming years.
The Learning and Development Programmes of the organization go beyond
just imparting the basic knowledge needed for performance. They carry a
strategic content and perspective. The effort is rooted in an iterative
relationship with our customer requirements and their growth plans. In
this manner, our marketing and sales efforts are executed in a dynamic
mould which is highly client focused. The approach takes to its logical
conclusion, our manufacturing orientation and product profile. Human
resource management is the linking pin in all this.
The Company encourages long-term commitment by rewarding its people for
the opportunities they create and the value generated for customers and
shareholders. The Directors are pleased to record their appreciation
for the services rendered by the employees and staff at all levels.
ACKNOWLEDGMENTS
The Directors express their appreciation for the sincere co-operation
and assistance of Central and State Government Authorities, Bankers,
Customers, Suppliers and Business Associates. Your Directors also wish
to place on record their deep sense of appreciation for the committed
services by your Company''s employees. Your Directors acknowledge with
gratitude the encouragement and support extended by our valued
shareholders.
For and on behalf of the Board
Sunil Kant Munjal
Chairman
DIN: 00003902
Place: New Delhi
Date: August 06, 2014
Mar 31, 2013
To The Members,
The Directors have pleasure in presenting the 8th Annual Report of the
Company together with its Audited Statement of Profit and Loss Account
for the year ended March 31, 2013 and the Balance Sheet as on that
date:
FINANCIAL RESULTS
The summarized financial results of the Company for the year ended
March 31, 2013 are presented below:
(Rs. In Lacs)
Particulars 2012-13 2011-12
Gross Sales & Other Income 39,208.79 37,908.70
Profit before Depreciation and Interest 8,734.23 8,497.27
Depreciation 3,077.00 2,941.88
Interest 2,482.30 2,705.01
Profit before Taxation 3174.94 2850.38
Provision for Taxation (Deferred & Current) 353.46 987.76
Profit after Taxation 2821.48 1862.63
Profit available for appropriations 2821.48 1862.63
Appropriations
Amount transferred to General Reserve 300.00 300.00
Proposed Dividend on Equity Shares 400.00 320.00
Tax on Dividend 67.98 51.91
Profit after Appropriations 2053.50 1190.72
PERFORMANCE
During the year under review, your Company focused on enhancing
operational efficiencies - improving yields, lowering rejections and
enhancing capacity utilisation
The total income of the Company increased by 3.43% from Rs. 37,908.70
Lacs in 2011-12 to Rs.39,208.79 Lacs in 2012-13. Operating profit
(PBDIT) of the company increased by 2.79% from Rs.8,497.27 Lacs in
2011-12 to Rs. 8,734.23 Lacs in 2012-13.
The overall performance of the company can be termed as satisfactory.
DIVIDEND
The Board of Directors of the Company recommend, for consideration of
shareholders at the 8th Annual General Meeting, payment of dividend of
40% (Rs. 4.00 per share) on equity shares of the face value of Re.10/-
each for the year ended March 31, 2013. The dividend paid during the
previous year was 32% (Rs. 3.20 per share).
BUSINESS OVERVIEW
India''s automobile industry faced significant challenges in 2012-13,
owing to high interest rates, rising fuel prices and spiralling
inflation. Despite these challenges, the Indian automobile industry has
managed to carve a niche for itself in the global auto sector.
The company''s efforts in adding new customers and increased business
from its existing customers have started yielding results.
Hero MotoCorp Limited (HMCL), the main customer of the company and the
world No. 1 two wheeler manufacturer for 12 consecutive years,
continues to maintain its leadership position in the two wheeler
industry.
CORPORATE GOVERNANCE
Your Company is committed to follow the highest standards and
principles of Corporate Governance with all integrity and fairness. The
Company always places major thrust on managing its affairs with
diligence, transparency, responsibility and accountability thereby
upholding the important dictum that an organisation''s corporate
governance philosophy is directly linked to high performance.
Separate detailed chapters on Corporate Governance, Additional
Shareholder information and Management Discussion and Analysis are
attached herewith and form part of this Report. All the board members
and senior managerial personnel have affirmed compliance with the code
of conduct for the Financial Year 2012-13.
A certificate from the Practising Company Secretary regarding the
compliance of the conditions of Corporate Governance by the Company
stipulated under Clause 49 of the Listing Agreement is also attached to
this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, as amended, with respect to the directors'' responsibility
statement, it is hereby confirmed:
(i) That in preparation of accounts for the financial
year ended March 31, 2013, the applicable accounting standards have
been followed along with proper explanation relating to the material
departures;
(ii) That the directors'' of the company have selected such accounting
policies and applied them consistently and made judgements and
estimates that are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2013
and of the profits of the Company for the year ended March 31, 2013;
(iii) That the directors'' of the company 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; and
(iv) That the directors'' of the company have prepared the accounts of
the company for the financial year ended March 31, 2013 on a going
concern basis.
FIXED DEPOSITS
During the year, the Company has not accepted any deposit under Section
58A and Section 58AA of the Companies Act, 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
FINANCE
By efficient management of working capital, the Company has been able
to reduce some interest cost. During the year under review, the
financial position of the Company was satisfactory.
DIRECTORS
Pursuant to Section 256 of the Companies Act, 1956 and Articles of
Association of the Company, Mr. Sunil Kant Munjal and Mr. Brijmohan Lal
Munjal, Directors of the Company, retire by rotation at the ensuing
Annual General Meeting and being eligible, offer themselves for
reappointment. Profiles of these Directors, as required by the Listing
Agreement provisions, are given in the Notice / Corporate Governance
Report forming part of this Annual Report.
The Board of Directors of the Company have appointed Mrs. Charu Munjal
as an Additional Director of the Company w.e.f. May 28, 2013 and is
appointed as "Whole Time Director" designated as Executive  Director
w.e.f. June 1, 2013. Mrs. Charu Munjal holds office as an Additional
Director till the date of the ensuing Annual General Meeting. A notice
proposing appointment of Mrs. Charu Munjal as Director having been
received, the matter is included in the Notice for the ensuing Annual
General Meeting.
The appointment/re-appointments form part of the Notice of the Eighth
Annual General Meeting and the relevant Resolutions are recommended for
your approval.
HOLDING COMPANY
The promoters of the Company i.e. Dayanand Munjal Investments Private
Limited (DMIPL) hold 74,79,595 equity shares which represents 74.80% of
the paid up equity capital of the Company. Your company continues to be
a subsidiary company of DMIPL.
SUBSIDIARY COMPANIES
The Company has no subsidiary.
INTERNAL CONTROL SYSTEMS
Your company has adequate internal control for its business processes
across departments to ensure efficient operations, compliance with
internal policies, applicable laws and regulations. The internal
controls are complemented, on an on-going basis, by an extensive
program of internal audits being implemented throughout the year. The
internal controls are designed to ensure that the financial and other
records of the company are reliable for preparing financial statement
and other data for maintaining the accountability of assets in
conformity with established accounting principles and that the assets
of the company are adequately safe-guarded against any significant
misuse or loss.
The Company also has an internal audit system which is conducted by an
independent firm of Chartered Accountants. A summary of Internal audit
report and observations thereon are reviewed by the Audit Committee on
regular basis and have been found to be adequate.
AUDITORS
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, existing
Statutory Auditors'' will retire at the conclusion of the ensuing Annual
General Meeting and seek re- appointment as Statutory Auditors of the
Company at the ensuing Annual General Meeting.
The company has received certificate from M/s. S.S. Kothari Mehta. &
Co. to the effect that their appointment, if made, would be within the
limits prescribed under Section 224 (1B) of the Companies Act, 1956.
The Board of Directors recommends to the shareholders the appointment
of M/s. S.S. Kothari Mehta & Co. as Statutory Auditors of the Company.
AUDITORS'' REPORT
The comments on statement of accounts referred to in the report of the
auditors are self explanatory.
COST AUDIT
The Directors have appointed M/s Gurdeep Singh & Associates, Cost
Accountants, as Cost Auditors to audit the Cost Records relating to
"Engineering Industries" for the year ending March 31, 2014.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205A (5) of the Companies Act,
1956, the dividend which remained unclaimed for a period of 7 (seven)
years shall be transferred by the Company to the Investor Education and
Protection Fund (IEPF).
The Company shall transfer the unclaimed / unpaid dividend, declared
for the year 2005-06 to IEPF by November 25, 2013. The amount of Rs.
3,76,137.50 (Rupees Three Lacs Seventy Six Thousand One Hundred Thirty
Seven and Fifty Paise only) which was unclaimed / unpaid shall be
transferred to IEPF.
ENVIRONMENT, HEALTH & SAFETY
The Company has an effective policy framework of highest standard, on
safety, health and environment for protecting the safety health and
welfare of its employees and workers. Safe operating procedures,
standards and systems have been laid down at all manufacturing
locations. Regular training of employees regarding safe working
guidelines, audit and review of every accident, mock drills on
emergency are some of the steps that are followed to achieve higher
safety standards. The Company''s policy not only meets all applicable
statutory requirements but also focuses on motivation, learning and
training of employees in these areas.
The Company is very keen on its responsibilities with respect to the
clean environment. To spread the awareness of the subject the company
has taken numbers of plantation drives. The Company regularly conducts
counselling and safety review meetings for the employees to appraise
and educate them on the adoption of safety measures and avoidance of
unsafe practices.
The Company provides prompt medical assistances to its employees. The
Company has an internal plant dispensary which operates round the clock
and is managed by the qualified doctors supported by staff who are
available for addressing health issues of employees. The Company
maintains high hygienic and housekeeping standards across the
workplace.
Your company also continues to be a constituent of a very important and
responsible initiative of Hero MotoCorp Limited toward the commitment
to environment, viz. GREEN SUPPLY-CHAIN MANAGEMENT PROGRAMME. Your
company has also entered into an arrangement for recycling of waste
paper and its substitute use. This initiative of the Company has
resulted in to saving of around 130 trees.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988 is given as per Annexure  ''D'' and
forms an integral part of this Report.
PARTICULARS OF EMPLOYEES
The Directors express their appreciation for the contribution made by
the employees to the significant improvement in the operations of the
Company and for the support received from them.
As required under the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are set
out in the Annexure  ''C'' included in this report.
HUMAN RESOURCE DEVELOPMENT
Human resources being one of the most important factors of production,
the Company is initiating measures towards competence and overall
development of people at all levels to be future ready. In doing so,
the Company is organising indoor & outdoor training programs for their
continued learning.
The skills being taught are not merely for the benefit of the Company,
but for overall human development.
The Company continues to maintain its peaceful industrial relations
ever since its inception. Performance measurement and skill up
gradation programs are widely deployed within the Company. This
includes skill enhancement, training and soft skills.
Coaching/guidance for selected talent is also included. This initiative
is aimed at preparing the company for high growth in the coming years.
The Directors are pleased to record their appreciation of the services
rendered by the employees and staff at all levels.
ACKNOWLEDGMENTS
The Directors express their appreciation for the sincere co-operation
and assistance of Central and State Government Authorities, Bankers,
Customers, Suppliers and Business Associates. Your Directors also wish
to place on record their deep sense of appreciation for the committed
services by your Company''s employees. Your Directors acknowledge with
gratitude the encouragement and support extended by our valued
shareholders.
For and on behalf of the Board
Sunil Kant Munjal
Chairman
Place: New Delhi
Date: August 14, 2013
Mar 31, 2012
The Directors have pleasure in presenting the 7th Annual Report of the
Company together with its Audited Statement of Profit and Loss Account
for the year ended March 31, 2012 and the Balance Sheet as on that
date:
FINANCIAL RESULTS
The summarized financial results of the Company for the year ended
March 31, 2012 are presented below:
(Rs. In Lacs)
Particulars 2011-12 2010-11
Gross Sales & Other Income 37,908.70 27,913.42
Profit before Depreciation and Interest 8,497.27 6,136.20
Depreciation 2,941.88 2,365.44
Interest 2,705.01 2,078.81
Profit before Taxation 2850.38 1,687.71
Provision for Taxation (Deferred & Current) 987.76 209.96
Profit after Taxation 1862.63 1,477.75
Profit available for appropriations 1862.63 1,477.75
Appropriations
Amount transferred to General Reserve 300.00 300.00
Proposed Dividend on Equity Shares 320.00 250.00
Tax on Dividend 51.91 40.56
Profit after Appropriations 1190.72 887.19
PERFORMANCE
The company has maintained the earnings at a strong level despite of
rise in price of commodities, inflation & interest rates.We are
committed in bringing the new processes and technological advancements
in order to optimze the utilization of resources and to maximize the
profits.
The total income of the company increased by 35.80% from Rs.27,913.42
Lacs in 2010-11 to Rs.37,908.70 Lacs in 2011-12. Operating profit
(PBDIT) of the company increased by 38.46% from Rs.6,136.20 Lacs in
2010-11 to Rs.8,497.27 Lacs in 2011-12.
The overall performance of the company can be termed as satisfactory.
DIVIDEND
The Board of Directors of the Company recommend, for consideration of
shareholders at the 7th Annual General Meeting, payment of dividend of
32% (Re.3.20 per share) on equity shares of the face value of Re.10/-
each for theyear ended March 31, 2012. The dividend paid during the
previous year was 25%.
BUSINESS OVERVIEW
The global economic recovery is fast losing traction due to the
continuing Euro Zone debt crisis. Domestically, the state of the
economy is a matter of growing concern with slowing economy,
persistently high inflation, uncertain political environment and the
depreciation of the Indian rupee is weakening the overall economic
sentiment of the country.
With the smoothening of operations at its Binola plant and Haridwar
plant, the company expects growth in its top line and bottom line
during the ongoing financial year 2012-
13.The company's efforts in adding new customers and increased business
from its existing customers has started yielding results.
Hero MotoCorp Limited (HMCL), the main customer of the company and the
world No. 1 two wheeler manufacturer for 11 consecutive years,
continues to maintain its leadership position in the two wheeler
industry, and has achieved a growth of 15.00% in the year 2011-12 by
selling 62,35,205 two wheelers.
CORPORATE GOVERNANCE
The Company has followed the principles of Corporate Governance with
all integrity and fairness aimed at building trust among stakeholders,
customers and employees etc., being transparent with regard to all
transactions, making the necessary disclosures and complying with the
laws prevalent and applicable to the industry.
Separate detailed chapters on Corporate Governance, Additional
Shareholder information and Management Discussion and Analysis are
attached herewith and form part of this Report. All the board members
and senior managerial personnel have affirmed compliance with the code
of conduct for the F.Y. 2011-12.
A certificate from the Practising Company Secretary regarding the
compliance of the conditions of Corporate Governance by the Company
stipulated under Clause 49 of the Listing Agreement is also attached to
this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, as amended, with respect to the directors' responsibility
statement, it is hereby confirmed:
(i) That in preparation of accounts for the financial year ended March
31, 2012, the applicable accounting standards have been followed along
with proper explanation relating to the material departures;
(ii) That the directors' of the company have selected such accounting
policies and applied them consistently and made judgements and
estimates that are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2012
and of the profits of the Company for the year ended March 31, 2012;
(iii) That the directors' of the company 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; and
(iv) That the directors' of the company have prepared the accounts of
the company for the financial year ended March 31, 2012 on a going
concern basis.
FIXED DEPOSITS
During the year, the Company has not accepted any deposit under Section
58A and Section 58AA of the Companies Act, 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
FINANCE
The company has met with its working capital requirement from a mix of
internal accruals and availing cash credit facilities from its Bankers
during the year. The capital expansion undertaken during the year at
both the Gurgaon and Haridwar Plant have been financed from internal
accruals and term loans from the Banks. The working capital and the
term loans are tied to the base rate of the Banks.
DIRECTORS
Pursuant to Section 256 of the Companies Act, 1956 and Articles of
Association of the Company, Dr. Vinayshil Gautam and Mr. Surrinder Lal
Kapur, Directors of the Company, retire by rotation at the ensuing
Annual General Meeting and being eligible offer themselves for
re-appointment.
Dr. Anil Kumar Gupta was appointed as a Whole Time Director designated
as "Director (Technical)" for a period of three years with effect from
December 20, 2011. Taking into consideration his knowledge and
experience, the Board recommends his appointment as Whole Time Director
of the Company to the Members of the Company. Member's approval for his
appointment as Whole time director has been sought in the Notice
convening the Annual General Meeting of the Company.
The appointments/re-appointments form part of the Notice of the seventh
Annual General Meeting and the relevant Resolutions are recommended for
your approval.
Profiles of these Directors, as required by the Listing Agreement
provisions, are given in the Notice / Corporate Governance Report
forming part of this Annual Report.
HOLDING COMPANY
The promoters of the Company i.e. Dayanand Munjal Investments Private
Limited (DMIPL) hold 74,79,595 equity shares which represents 74.80% of
the paid up equity capital of the Company. Your company continues to be
a subsidiary company of DMIPL.
SUBSIDIARY COMPANIES
The Company has no subsidiary.
INTERNAL CONTROL SYSTEMS
Your company maintains an adequate and effective internal control
system commensurate with its size and complexity. We believe that
these internal control systems provide, among other things a reasonable
assurance that the transactions are executed with management
authorizations and they are recorded in material respects to permit
preparation of the financial statements in conformity with established
accounting principles and that the assets of the company are adequately
safe-guarded against any significant misuse or loss.
The internal audit is done by an independent firm of Chartered
Accountants. Internal audit and other controls are reviewed
periodically by the Audit Committee and have been found to be adequate.
AUDITORS AND AUDITORS' REPORT
M/s. S.S. Kothari Mehta & Co., Chartered Accountants, existing
Statutory Auditors' will retire at the conclusion of the ensuing Annual
General Meeting and seek re- appointment as Statutory Auditors of the
Company at the ensuing Annual General Meeting.
The company has received certificate from M/s. S.S. Kothari Mehta. &
Co. to the effect that their appointment, if made, would be within the
limits prescribed under Section 224 (1B) of the Companies Act, 1956.
The Board of Directors recommends to the shareholders the appointment
of M/s. S.S. Kothari Mehta & Co. as Statutory Auditors of the Company.
The observations and comments given in the report of the Auditors read
together with notes to the accounts are self explanatory. The
observation of the Auditors in the Audit Report under point no. 11 & 17
of the Annexure to the Auditors Report about delay in some instalment
payment of loans and deployment of some of the funds raised on short
term basis as long term investments.
The delay in some instalment payment is on account of some delays in
realisation of amounts used for the payment of instalments, the delay
is minor and the same has been regularised during the year.
The investments have been made in the fixed assets and the company is
in the process of arranging suitable long term funds to replace these
short term funds.
COST AUDIT
The Directors have appointed M/s Gurdeep Singh & Associates, Cost
Accountants, as Cost Auditors to audit the Cost Records relating to
"Engineering Industries" for the year ending 31st March 2013.
ENVIRONMENT, HEALTH & SAFETY
The company is committed for delivering quality with minimum adverse
impact on the environment. A well developed Environment Management
System (EMS) is established in the Company. EMS is adherent to the
highest possible standards of environmental management, health, safety
and compliance with all relevant environmental legislations and
regulations.
Reviews and audits of EMS are carried out on regular basis.
Environment related initiatives are undertaken practically at all
levels and in all functions of the organization. Environmental impacts
are assessed and actions are taken in planned manner. Some of the
environment related initiatives are installation of fume extraction to
mitigate air emission and rain water harvesting.
Safety and health of the employees receives utmost importance at every
workplace of the Company. Safe operating procedures, standards and
systems have been laid down at all manufacturing locations. Regular
training of employees regarding safe working guidelines, audit and
review of every accident, mock drills on emergency are some of the
steps that are followed to achieve higher safety standards. Safety
requirements are also extended to our sub-contractors and visitors.
Your company also continues to be a constituent of a very important and
responsible initiative of Hero MotoCorp Limited toward the commitment
to environment, viz. GREEN SUPPLY-CHAIN MANAGEMENT PROGRAMME.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988 is given as per Annexure à 'D' and
forms an integral part of this Report.
PARTICULARS OF EMPLOYEES
The Directors express their appreciation for the contribution made by
the employees to the significant improvement in the operations of the
Company and for the support received from them.
As required under the provisions of section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are set
out in the Annexure à 'C' included in this report.
HUMAN RESOURCE DEVELOPMENT
Attracting and retaining talent remained a major challenge for the
company in FY 2011-12. Like last few years, the Company has focused on
various people development initiatives such as Learning and
Development, Developing Leadership Culture, Succession Planning,
Employee Engagement and Performance Management.
Learning and development initiatives were more sharpened with the
process of Competency Mapping and Competency Development. The company
continued the structured Leadership Programmes with the focus on Value
Based Leadership Development for all the Managers.
A number of initiatives are being taken for all employees à Operating
Engineers as well as staff for enhancing "employee value". This
includes skill enhancement, training and soft skills. Coaching/guidance
for selected talent is also included. This initiative is aimed at
preparing the company for high growth in the coming years.
The Directors are pleased to record their appreciation of the services
rendered by the employees and staff at all levels.
ACKNOWLEDGMENTS
The Directors express their appreciation for the sincere co- operation
and assistance of Central and State Government Authorities, Bankers,
Customers, Suppliers and Business Associates. Your Directors also wish
to place on record their deep sense of appreciation for the committed
services by your Company's employees. Your Directors acknowledge with
gratitude the encouragement and support extended by our valued
shareholders.
For and on behalf of the Board
Place: New Delhi Sunil Kant Munjal
Date: 14th August, 2012 Chairman
Mar 31, 2011
Dear Shareholders,
The Directors have pleasure in presenting their 6th Annual Report and
the Audited Statement of Accounts for the financial year ended
March 31, 2011.
FINANCIAL RESULTS
The summarized financial results of the Company for the
year ended March 31, 2011 are presented below:
(Rs. In Lacs)
Particulars 2010-11 2009-10
Gross Sales & Other Income 27,913.42 20,722.57
Profit before Depreciation and Interest 6,137.03 4,647.75
Depreciation 2,365.44 1,865.93
Interest 2,083.05 1,676.70
Profit before Taxation 1,688.54 1,105.12
Provision for Taxation
(Deferred & Current) 210.79 (50.26)
Profit after Taxation 1,477.75 1,155.38
Profit available for appropriations 1,477.75 1,155.38
Appropriations
Amount transferred to General Reserve 300.00 300.00
Proposed Dividend on Equity Shares 250.00 150.00
Tax on Dividend 40.56 24.91
Profit after Appropriations 887.19 680.47
PERFORMANCE
The rising commodity prices, inflation & high interest rates was a
concern and did impact the business, but we remained committed to
bringing in new processes and technological improvements to keep the
impact to minimal, thus maintaining the earnings at a healthy level.
The total income of the company increased by 34.70% from Rs.20,722.57
Lacs in 2009-10 to Rs.27,913.42 Lacs in 2010-11. Operating profit
(PBDIT) of the company increased by 32.04% from Rs.4,647.75 Lacs in
2009-10 to Rs.6,137.03 Lacs in 2010-11.
The overall performance of the company can be termed as satisfactory.
DIVIDEND
The Board of Directors of the Company recommend, for consideration of
shareholders at the 6th Annual General Meeting, payment of dividend of
25% (Re.2.50 per share) on equity shares of the face value of Re.10/-
each for the year ended March 31, 2011. The dividend paid during the
previous year was 15%.
BUSINESS PROSPECTS
With the stabilizing of operations at its Haridwar plant, the company
expects substantial growth in its top line and bottom line during the
on going financial year 2011-12.The company's efforts in adding new
customers and increased business from its existing customers has
started yielding results. Hero Honda Motors Limited (HHML), the main
customer of the company and the world No. 1 two wheeler manufacturer
for 10 consecutive years, continues to maintain its leadership position
in the two wheeler industry, and has achieved a growth of 17.44% in the
year 2010- 11 by selling 54,02,444 two wheelers.
CORPORATE GOVERNANCE
The Company has vigorously striven to follow the best corporate
governance practices aimed at building trust among the key
stakeholders, shareholders, employees, customers, suppliers and other
stakeholders on four key elements of corporate governance Ã
transparency, fairness, disclosure and accountability.
Separate detailed chapters on Corporate Governance, Additional
Shareholder information and Management Discussion and Analysis are
attached herewith and form part of this Report. All the board members
and senior managerial personnel have affirmed compliance with the code
of conduct for the F.Y. 2010-11.
A certificate from the Practising Company Secretary regarding the
compliance of the conditions of Corporate Governance by the Company
stipulated under Clause 49 of the Listing Agreement is also attached to
this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, as amended, with respect to the directors' responsibility
statement, it is hereby confirmed:
(i) That in preparation of accounts for the financial year ended March
31, 2011, the applicable accounting standards have been followed along
with proper explanation relating to the material departures;
(ii) That the directors' of the company have selected such accounting
policies and applied them consistently and made judgements and
estimates that are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2011
and of the profits of the Company for the year ended March 31, 2011;
(iii) That the directors' of the company 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; and
(iv) That the directors' of the company have prepared the accounts of
the company for the financial year ended March 31, 2011 on a going
concern basis.
FIXED DEPOSITS
During the year, the Company has not accepted any deposit under Section
58A and Section 58AA of the Companies Act, 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
FINANCE
The company has met with its working capital requirement from a mix of
internal accruals and availing cash credit facilities from its Bankers
during the year. The capital expansion undertaken during the year at
both the Gurgaon and Haridwar Plant have been financed from internal
accruals and term loans from the Banks. The working capital and the
term loans are tied to the base rate of the Banks.
DIRECTORS
Pursuant to Section 256 of the Companies Act, 1956 and Articles of
Association of the Company, Mr. Bhagwan Dass Narang and Mr. Anil Kumar
Gupta retire by rotation at the ensuing Annual General Meeting and
being eligible offer themselves for re-appointment.
The re-appointments form part of the Notice of the sixth Annual General
Meeting and the relevant Resolutions are recommended for your approval.
Profiles of these Directors, as required by the Listing Agreement
provisions, are given in the Notice / Corporate Governance Report
forming part of this Annual Report.
Mr. Vijay Munjal has resigned from the directorship of the company with
effect from 28th May, 2011. The Board records its appreciation for the
services rendered by Mr. Vijay Munjal as Director of the company.
INTERNAL CONTROL SYSTEMS
The Company has in place a proper, efficient & adequate system of
internal control. This ensures that all assets of the company are
safeguarded and protected against loss from unauthorized use or
disposition and the transactions are authorized, recorded and reported
correctly.
An extensive programme of internal audit supplements the process of
internal control. The internal control system has been designed so as
to ensure that the financial and other records of the company are
reliable for preparing the financial and other statements and for
maintaining accountability of assets of the Company.
AUDITORS AND AUDITORS' REPORT
M/s. S.S. Kothari Mehta & Co., Chartered Accountants, existing
Statutory Auditors' will retire at the conclusion of the ensuing Annual
General Meeting and seek re- appointment as Statutory Auditors of the
Company at the ensuing Annual General Meeting.
The company has received certificate from M/s. S.S. Kothari Mehta. &
Co. to the effect that their appointment, if made, would be within the
limits prescribed under Section 224 (1B) of the Companies Act, 1956.
The Board of Directors recommends to the shareholders the appointment
of M/s. S.S. Kothari Mehta & Co. as Statutory Auditors of the Company.
The observations and comments given in the report of the Auditors read
together with notes to the accounts are self explanatory. The
observation of the Auditors in the Audit Report under point no. 17 of
the Annexure to the Auditors Report about deployment of some of the
funds raised on short term basis as long term investments. These
investments have been made in the fixed assets and the company is in
the process of arranging suitable long term funds to replace these
short term funds.
COST AUDIT
The Directors have appointed M/s Gurdeep Singh & Associates, Cost
Accountants, as Cost Auditors to audit the accounts relating to
"Engineering Industries" for the year ending 31st March 2012.
ENVIRONMENT, HEALTH & SAFETY
Your company continues to give priority in the field of Safety, Health
and Environment. Considering the emerging need of addressing the
climate change initiatives your company has taken a two step process in
the organization viz. a) Awareness across its stakeholders including
its community; b) Process improvements by introducing energy efficient
operations. Your company takes efforts to minimize generation of waste
for the protection of the environment. Efforts are also made to
minimize generation of liquid effluent and save precious natural
resources like water.
The company gives priority to the health and safety of its employees.
The following activities are implemented continually:- - Imparting
basic safety training to all the employees.
- Work place inspections by Senior Executives and Managers at all
levels.
- Reduce waste generation and improve environment management by
collection, treatment and disposal of all waste in an environment
friendly manner.
- Waste water management and recycling and recharging the ground water.
- Development of green cover by tree plantation across premises and
factory.
- Audit by outside agencies regularly to address any inadequacies in
the system.
Your company also continues to be a constituent of a very important and
responsible initiative of Hero Honda Motors Limited toward the
commitment to environment, viz.
GREEN SUPPLY-CHAIN MANAGEMENT PROGRAMME.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988 is given as per Annexure à ÃD' and
forms an integral part of this Report.
PARTICULARS OF EMPLOYEES
As required under the provisions of section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are set
out in the Annexure à ÃC' included in this report.
HUMAN RESOURCE DEVELOPMENT
Our Associates are our most valued assets and we shall continue to
invest in enhancing their skill set as we strongly believe that a
highly engaged, inspired and disciplined workforce will bring the best
results and help us reach our objectives.
The employer-employee relations throughout the year remained cordial.
Measures for training, development, safety of the employees and
environmental awareness received the top priority of the Management.
The company has in place well-established Performance Management
Systems and the Talent Review Mechanisms for providing due recognition
to the performance of the employees and rewarding them suitably.
Training needs are identified with two pronged approach. Firstly, a
structured questionnaire indicating the key result areas of various key
functions is circulated among employees to seek training needs of
individuals. Secondly, a committee consisting of Heads of Departments
examines the individual needs in terms of competencies and the gaps
thereof. After a detailed discussion with key functionaries of various
departments, individual training needs are determined after
verification of the same with their Annual Appraisal Reports.
An effective work culture has been established in the organization
through empowerment, transparency, decentralization, practice of
participative management, etc.
ACKNOWLEDGMENTS
The Directors express their appreciation for the sincere co-operation
and assistance of Central and State Government Authorities, Bankers,
Customers, Suppliers and Business Associates. Your Directors also wish
to place on record their deep sense of appreciation for the committed
services by your Company's employees. Your Directors acknowledge with
gratitude the encouragement and support extended by our valued
shareholders.
For and on behalf of the Board
NEERAJ MUNJAL SURRINDER LAL KAPUR
MANAGING DIRECTOR DIRECTOR
Place: New Delhi
Date: August 08, 2011
Mar 31, 2010
The Directors have pleasure in presenting the 5th Annual Report
together with the audited accounts for the year ended March 31, 2010.
Motors Limited (HHML), the main customer of the company continues to
maintain its leadership position in the two wheeler industry, and has
achieved a growth of 24% in the year 2009-10. The company is at
advanced stage of development of various other components for its
existing customersHHML,BOSCHandothernewcustomers.
FINANCIALRESULTS
The highlights of the financial performance of the Company areasunder:
Particulars 2009-10 2008-09
Gross Sales & Other Income 20,722.57 16,148.68
Profit before Depreciation and Interest 4,647.75 3,241.52
Depreciation 1,865.93 1,179.65
Interest 1,676.70 513.16
Profit before Taxation 1,105.12 1,548.71
Provision for Taxation (Deferred & Current) (50.26) 585.45
Profit after Taxation 1,155.38 963.26
Profit available for appropriations 1,155.38 963.26
Appropriations
Amount transferred to General Reserve 300.00 300.00
Proposed Dividend on Equity Shares 150.00 150.00
Tax on Dividend 24.91 25.49
Profit after Appropriations 680.47 487.77
PERFORMANCE
The total income of the company increased by 28.32% from Rs.16,148.68
Lacsin2008-09toRs.20,722.57 Lacsin2009- 10. Operating profit (PBDIT) of
the company increased by 43.38% from Rs.3,241.52 Lacs in 2008-09 to
Rs.4,647.75 Lacs in 2009-10. Profit after tax increased by 19.94% from
Rs.963.26 Lacsin2008-09toRs.1,155.38 Lacsin2009-10.
The overall performance of the company can be termed as satisfactory.
DIVIDEND
The Directors recommend a Dividend of Rs.1.50 per equity share for the
year (previous year Rs. 1.50 per share). If approved by the
shareholders in the forthcoming Annual General Meeting, the Dividend
will absorb Rs.150.00 Lacs. The Dividend Distribution Tax borne by the
Company will amounttoRs.24.91 Lacs.
BUSINESSPROSPECTS
With the commissioning of operations at its Haridwar plant, the company
expects further improvement in its top line and bottom line during the
on going financial year 2010-11.The company is concentrating on adding
new customers and increased business from its existing customers. Hero
Honda
CORPORATEGOVERNANCE
Separate detailed chapters on Corporate Governance, Additional
Shareholder information and Management Discussion andAnalysis are
attached herewith and form part of this Report. All the board members
and senior managerial personnel have affirmed compliance with the code
of conduct for the F.Y. 2009-10.
A certificate from the Statutory Auditors of the Company regarding the
compliance of the conditions of Corporate Governance by the Company
stipulated under Clause 49 of the ListingAgreement is also attached to
this Report.
DIRECTORSRESPONSIBILITYSTATEMENT
The Directors confirm that:
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) They have selected such accounting policies and applied them
consistently and made judgements 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 profits of the
Company for the year;
(iii) 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; and
(iv) They have prepared the annual accounts on a going concern basis.
FIXEDDEPOSITS
During the year, the Company has not accepted any deposit under Section
58A and Section 58AA of the Companies Act, 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
FINANCE
The company has met with its working capital requirement from a mix of
internal accruals and availing cash credit facilities from its Bankers
during the year. The Companys Haridwar Plant in Uttarakhand, set up at
a total cost of Rs.180.00 Crores has been funded from a mix of internal
accruals, ECB and Rupee loans. The ECB loans have fully been hedged for
both principal and interest.
HARIDWARPLANT
The Companys state of the art Haridwar plant commissioned in April,
2009 has now become fully operational. The production capacity
utilization at the new plant is on the increase now and operations have
stabilized. The company hopes to get the benefit of the increased
capacity utilization during the ongoing financial year 2010- 11.
DIRECTORS
Pursuant to Section 256 of the Companies Act, 1956 and Articles of
Association of the Company, Mr. Brijmohan Lall Munjal, Mr. Om Prakash
Munjal & Mr. Satyanand Munjal retire by rotation at the ensuingAnnual
General Meeting and being eligible offer themselves for re-appointment.
The above appointments and re-appointments form part of the Notice of
the fifth Annual General Meeting and the relevant Resolutions are
recommended for your approval.
Profiles of these Directors, as required by the Listing Agreement
provisions, are given in the Notice / Corporate Governance Report
forming partofthisAnnual Report.
INTERNALCONTROLSYSTEMS
The Company has in place adequate systems of internal control to ensure
compliance with policies and procedures. Internal Audits of all the
units of the Company are regularly carried out to review the internal
control systems. The internal Audit Reports along with implementation
and recommendations contained therein are constantly reviewedbytheAudit
Committeeofthe Board.
AUDITORS
Shareholders are requested to re-appoint M/s S. S. Kothari Mehta & Co.,
Chartered Accountants as the Auditors of the Company and authorize the
Audit Committee to fix their remuneration. They have furnished to the
Company requisite Certificate under Section 224(1B) of the Companies
Act, 1956 and are therefore eligible for re- appointmentasAuditorsofthe
Company.
AUDITORSREPORT
The observations of Auditors in their Report, read with the relevant
notes to the accounts are self-explanatory. The observation of the
Auditors in the Audit Report under point no. 17 of the Annexure to the
Auditors Report about deployment of some of the funds raised on short
term basis as long term investments. These investments have been madein
the fixed assets and the companyis inthe process of arranging suitable
long term funds to replace these short term funds.
COSTAUDIT
The Directors have appointed M/s Gurdeep Singh & Associates, Cost
Accountants, as Cost Auditors to audit the accounts relating to
ÃEngineering Industriesà for the year ending 31st March 2011.
ENVIRONMENT,HEALTH&SAFETY
Environment, Health & Safety (EHS) is given high importanceat SHIVAM.
Equal importanceis giventoEHS on par with the quality and Good
Manufacturing Practices (GMP) to ensure utmost care of the environment,
safety of operations and protection of employee health. SHIVAM conducts
its EHS management that reflects the best industry practices .We are
committed toward reducing the harmful impact on the environment around
us. Our efforts do not stop at re-engineering our processes to align
with green goals, but extend to any product / service / process that is
new and displaces traditional ways of doing business while optimizing
resource utilization. The Company has ensured complete compliance with
all applicable environmental regulations and practices.
The company has a well developed high standard environment management
system (EMS) The company continuestomake investmentsinupgrading
pollution control equipment at all the factories, regular reviews and
audits are carried out to ensure compliance with statutory
requirements.
The company gives priority to the health and safety of its employees.
The following activities are implemented continually:- - Imparting
basic safety training to all Personnel at the manufacturing facilities.
- Conducting Safety and technical competency development programs to
improve competencies of employees for safety critical jobs.
- Work place inspections by executives and managers at all levels.
Senior management team members involve in the process and show
commitment through work place inspections.
- Reduce waste generation and improve environment management by
collection, treatment and disposal of all wasteinanenvironment friendly
manner.
- Waste water management and recycling and recharging the ground water.
- Development of green cover by tree plantation across premises and
factory.
- Audit by outside agencies regularly to address any inadequaciesinthe
system.
- Continual Energy audits are made to minimize energy losses.
- Risks are analysed in detail and minimized, if not eliminated, at
each stage.
Your company also continues to be a constituent of a very important and
responsible initiative of Hero Honda Motors Limited toward the
commitment to environment, viz. GREEN SUPPLY-CHAINMANAGEMENTPROGRAMME.
During the year, Company has received necessary environmental
consents/approvals for air, water and hazardous waste discharge from
the Pollution Control Authority.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988is givenas perAnnexureà D and
formsanintegral part of this Report.
PARTICULARSOFEMPLOYEES
As required under the provisions of section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are set
out in the Annexure à C included in this report.
HUMANRESOURCEDEVELOPMENT
We strongly believe that it is Ãthe peopleà who make Ãthe differenceÃ.
Hence, every employee is encouraged to optimize his/her full potential
by availing of opportunities that exist across multiple functions,
disciplines as well as geographies. Employees are our vital and most
valuable assets. We understand the significance of learning and
continual education in providing our employees with latest skills and
technologies. Training plays a vital role in enhancing the efficiency,
productivity and performance of all our employees. We believe this will
help in creating a challenging, entrepreneurial and empowering work
environment that rewards dedication and a strong work ethic for our
employees.
In the present environment, the main challenge will be to bridge the
human resource gap in terms of capabilities, deployment, systems and
processes. At SHIVAM HR focus is on developing HR systems designed to
unlock the full potential of the employees at all locations, develop
the leaders and provide opportunities for continuous skill development.
ACKNOWLEDGMENTS
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by our employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, cooperation
and support.
For andonbehalfofthe Board
NEERAJMUNJAL SURRINDERLALKAPUR
MANAGINGDIRECTOR DIRECTOR
Place: New Delhi
Date:31st July,2010
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