Mar 31, 2018
The Directors present the 73rd Annual Report, together with the audited accounts of the Company for the financial year ended March 31,2018.
Financial Results
The performance of your Company during the financial year ended the 31st March, 2018was as follows.
(Rs. in lacs)
Particulars |
Year ended |
Year ended |
31.03.2018 |
31.03.2017 |
|
Turnover |
13,462.01 |
12,795.63 |
EBIDTA |
(3,806.38) |
(3,422.05) |
Less: Depreciation |
615.79 |
647.41 |
Less: Finance Cost |
1,434.54 |
1,179.22 |
(Loss) before Extra-ordinary Items & Tax |
(1,756.05) |
(1,595.42) |
Add: Exceptional Items |
614.12 |
449.91 |
(Loss) before Taxation |
(2,370.17) |
(2,045.33) |
Tax Expenses including Deferred Tax |
37.73 |
(131.83) |
(Loss) after Taxation |
(2,332.44) |
(1,057.34) |
(Loss) brought forward from previous year |
(11,769.94) |
(12,830.41) |
(Loss) carried to Balance Sheet |
(14,102.38) |
(11,769.94) |
Companyâs Performance and Outlook
Turnover of your Company for the financial year ended March 31, 2018 though improved marginally, EBITA declined by about 11% mainly due to higher input costs and the exceptional item amounting to Rs.614.12 lakhs towards impairment of Plant & Machinery and Intangible assets of the Tractor business acquired through merger ofa fellow subsidiary, added to the loss for theyear under review. Wagons procurement order from Indian Railways (IR), the largest customer, was received in the end of December, 2017, however the production could commence in the first quarter ofthe current financial year after completion ofcertain formalities.
Titagarh Agrico Private Limited, a fellow subsidiary has since been merged with your Company pursuant to sanction of the Scheme of Amalgamation by the Honâble National Company LawTribunal (NCLT) w.e.f. April 01, 2016and became effective from November 14, 2017. Post the said merger, Tractors vertical has been added to your Companyâs business portfolio.
Your Company continues to adhere to the policyofmore efficient utilization of resources and cost optimization, particularly keeping the finance cost under sharp focus, and also pursuing the orders for other products which can be advantageously combined and manufactured at the existing facilities.
With the contract for 1191 Wagons being procured by the Indian Railways (IR) under execution, order book of your Company is healthy and anticipation of further order from IR who has announced its plan to procure 22000 Wagons, as well as aggressive pursuit of orders from private sector during the current year, the outlook for the current year is reasonably optimistic.
Dependence on the Indian Railways
The Company is engaged in the business of manufacturing wagons which is entirely dependent upon the policies of Indian Railways and any change in the policies whether positive or negative directly impacts the business ofthe Company.
Increase in the cost of raw materials and other inputs
The major raw materials required by the Company include steel, specialized components including bogies, coupler sets, air brakes etc. which are exposed to volatility in prices and availability in required specifications.
Risk of performance guarantee, product warranty and liquidated damages
The contracts involve performance guarantee based on contract value and warranty periods within which ifanydefect is detected in the products, the Company may have to incur expenditure for correcting the defects or even replacing the products. Delay in scheduled delivery may attract liquidated damages in the range of 5-10%.
Subsidiary Companies
There is no subsidiary ofyour Company.
Extract ofAnnual Return
The details forming part of the extract of the annual return in the Form MGT-9 are annexed and marked as Annexure DR-1 and also available on the website of the Company at www.cimmco.in/ investors.php.
Number of Board Meetings
The Board of Directors met six (6) times during the financial year ended 31st March, 2018 as per the details provided in the Corporate Governance Report forming part ofthe Annual Report.
Loans, Guarantees and Investments
Particulars of loans, guarantees and investments made by the Company pursuant to the Section 186 ofthe Act are furnished under notes to financial statements.
Significant and material orders
There were no material/significant orders passed by any regulator, tribunal impacting the going concern status and the Companyâs operations in future.
Composition ofAudit Committee
The Board has constituted the Audit Committee comprising Shri J K Shukla as the Chairman, Shri Anil Kumar Agarwal, Shri KS B Sanyal and Shri Nandan Bhattacharya as the members and the details are provided in the Corporate Governance Report annexed hereto.
Related Party Transactions
All Related Party Transactions (RPTs) areentered in compliance with the applicable provisions ofthe Companies Act, 2013 and also in accordance with the policy on the subject adopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated by the Listing Regulations and based thereon final approval ofthe Board is obtained. RPTs as approved by the Board during the financial year 2018 are furnished in the form AOC-2 annexed hereto and marked as Annexure DR-2.
Changes in Share Capital
Pursuant to amalgamation of Titagarh Agrico Private Limited with the Company w.e.f. 14th November, 2017, the authorised share capital ofthe Company was increased from Rs. 75 crores to Rs. 111 crores and the paid up capital of the Company was increased from Rs. 20,14,85,260 to Rs. 27,34,85,260 divided into 2,73,48,526 shares of Rs. 10 each due to allotment of 72,00,000 shares to Titagarh Wagons Limited. Consequent upon such allotment, the total shareholding ofthe promoters has increased to 81.41% from 74.93%. As stipulated by BSE and NSE and permitted by the SEBI, the shareholding of promotersâwill be reduced below the limit prescribed by the applicable Regulations of the SEBI.
Corporate Governance Report
The Company has complied with the corporate governance requirements under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under Listing Regulations along with a certificate from a Company Secretary in practice confirming the compliance, is annexed to and forms part ofthe Annual Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report forms part ofthe Directorsâ Report in compliance ofthe Regulation 34 ofSEBI (LODR) Regulations, 2015.
Internal Control System
The Company has system of internal controls and necessary checks and balances which are being strengthened so as to ensure
a. that its assets are safeguarded
b. that transactions are authorised, recorded and reported properly; and
c. that the accounting records are properly maintained and its financial statements are reliable.
The Company has appointed external firm of Chartered Accountants to conduct internal audit whose periodic reports are reviewed by the Audit Committee and management for bringing about desired improvement wherever necessary.
Vigil Mechanism
A fraud free and corruption free environment as part of work culture ofthe Company cannot be over emphasized and with that objective a Vigil Mechanism policy has been adopted by the Board and is uploaded on the web site ofthe Company at www.cimmco.in. No complaint of this nature was received by the Audit Committee during the year.
Internal Complaints Committee
As per the requirement of Section 4 ofThe Sexual Harassment of Women At Workplace (Prevention, Prohibition and Redressal) Act, 2013 an Internal Complaints Committee has been formed by the Company, the details of which are given in the Corporate Governance Report. No complaint has been lodged with the Committee during the year.
Directors and Key Mangerial Personnel Retirement by rotation
Smt. Vinita Bajoria, Non-Executive Director retires by rotation pursuant to the provisions of Section 152 of the Act and is eligible for reappointment.
Re-appointment
The term ofShri J KShukla, Shi G B Rao,Shri KSB Sanyal and Shri M J Z Mowla as Independent Directors will end on 31st March, 2019. Pursuant to the decision of Nomination & Remuneration Committee, the Board at its meeting held on 10th August, 2018 has recommended for approval ofthe shareholders the reappointment of the aforesaid directors for fiveyears upto 31st March, 2024.
Shri Vineet Mohta was appointed as Chief Financial Officer ofthe Company w.e.f. 14th February, 2018 in placeofShri Lokesh Agarwal who resigned w.e.f. the said date.
Evaluation of the Boardâs performance, Committee and Individual Directors
In compliance with the Act and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board, Committees and Individual Directors was carried out during the year under review as per the details given in Corporate Governance Report.
Declaration by Independent Directors
Declarations pursuant to the Sections 164 and 149(6) of the Act and Listing Regulations and affirmation of compliance with theCode of Conduct as well as the Code for Regulation of InsiderTrading adopted by the Board, by all the Independent Directors of the Company have been made.
Remuneration Policyand remuneration
A policy approved by the Nomination and Remuneration Committee and the Board is followed by the Company on remuneration of Directors and Senior Management Employees, as per the details provided in the Corporate Governance Report.
Particulars of Remuneration of Directors/KMP/Employees
Thedisclosurestipulated by Section 197(12) ofthe CompaniesAct, 2013 read with Rules 5(2) and 5(3) oftheCompanies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed. Disclosure pertaining to Remuneration and other details as required under Section 197 (12) ofthe Act read with Rule 5(1) oftheCompanies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure DR-3.
Directorsâ Responsibility Statement
The Directors state that:
- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31,2018 have been followed in preparation ofthe said accounts and there were no material departures therefrom requiring any explanation;
- The Directors have selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs ofthe Company at the end of financial year and of the profit and loss statement of the Company for that period;
- Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;
- The Annual Accounts have been prepared on a going concern basis; and
- The Directors have laid down Internal Financial Controls (IFC) to be followed by theCompany and thatsuch IFC areadequate and operating effectively.
- The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Statutory Auditors
Price Waterhouse & Co, Chartered Accountants, LLP, Statutory Auditors ofthe Company were appointed at the 72nd Annual General Meeting (AGM) to hold officefor a period offiveyears until theconclusion of 77th AGM.
Pursuant to Section 40 ofthe Companies (Ammendment) Act, 2017 notified w.e.f. 7th May, 2018 the Company has proposed to dispense away with the requirement of ratification of appointment of Price Waterhouse & Co. Chartered Accountants, LLP as the Statutory Auditors ofthe Company.
As regards qualified opinion expressed by the Auditors, the matter of receivables is pending adjudication before the Honâble High Court, Delhi and the next hearing is scheduled shortly. The Company being convinced of the merits of the case, is hopeful of recovering the amount.
The Note No. 41 is self explanatory regarding the compliance of matters opted in the Auditorâs Report and the effect of amalgamation of Titagarh Agrico Private Limited has been given with Appointed Date being 01.04.2016 pursuant to the order dated 16th October, 2017 of the Honâble High Court, Calcutta considering the scheme of amalgamation.
Cost Auditors
M.R. Vyas & Associates, Cost Accountants have been appointed as Cost Auditors to conduct cost audit ofthe accounts maintained by the Company in respect ofthe products manufactured by the Company, for the Financial Year 2018-19 subject to ratification of their remuneration by the shareholders in accordance with the provisions ofSection 148 oftheCompanies Act, 2013and theCompanies (Cost Records and Audit) Rules, 2014.The Cost Audit Report for the previous financial yearended 31st March, 2017has been filed asstipulated by the applicable provisions of law.The Company maintains the accounts and cost records as specified by the Central Government under the provisions of Section 148(1)ofthe Act.
Secretarial Auditor
Secretarial Audit has been conducted by Sumantra Sinha & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4.
Deposits
The Company did not accept any deposits during the financial year ended March 31, 2018 in terms of the Companies (Acceptance of Deposits) Rules, 2014.
Personnel/Human Resources
A. Empowering the employees
The Company considers its organizational structure to be evolving consistently over time while continuing with its efforts to follow good HR practices. Adequate efforts ofthe staff and management personnel are directed on imparting continuous training to improve the management practices.
B. Industrial Relations
Industrial relations at all sites ofthe Company remained cordial.
C. No. of Employees:
Manpower employed as at March 31,2018was 155.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
A statement pursuant to Section 134(3) (m) of the Act read with Rule 8 ofthe Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR-5.
Listing with Stock Exchanges
The equity shares ofthe Company are listed at The National Stock Exchange of India Limited (NSE), BSE Limited and Listing fees for the financial year ending the 31st March, 2019 have been duly paid. Whereas the Delhi Stock Exchange Limited (DSE), and the Madhya Pradesh Stock Exchange Limited (MPSE) have been de-recognised, the Company has made an application for voluntary delisting from TheCalcutta Stock Exchange Limited (CSE) which is under process.
Discussion on Financial Performance with respect to Operational Performance
To mitigate the risk factors referred to hereinabove impacting the operations, better manufacturing processes, improved productivity and focus on optimization of resource deployment are undertaken for a reasonable performance, viewed in the backdropofthetrends witnessed in the industries in which the Company operates.
Corporate Social Responsibility
Your Company continues its endeavours to contribute suitably to the society by being involved in a series of Community Welfare Programs, directly or through philanthropic organizations. Bharatpur plant is located close to the Bharatpur Bird Sanctuary amidst vast green area and all care is taken to preserve the environment to allow the natureâs expanse to remain green and grow healthily. Compliancewith Secretarial Standards
The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10)of the Act.
Forward Looking Statement
The statements in this report describing the Companyâs policy, strategy, projections, estimation and expectations may appear forward looking statements within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events and the actual results could materially differ from those expressly mentioned in this Report or implied for various factors including those mentioned in the paragraph âRisks and Concernsâ herein above and subsequent developments, information or events.
Acknowledgements
Your Directors wish to place on record their appreciation for the cooperation and support ofthe Banks and Governments of Rajasthan, Madhya Pradesh and Delhi, local administration (West Bengal)/other Government Departments; for contribution ofthe employees ofthe Company and all other stakeholders.
On behalf of the Board
Kolkata J.P. Chowdhary
August 10,2018 Executive Chairman
Mar 31, 2017
The Directors hereby present their 72nd Annual Report on the business and operations of your Company, together with the audited financial statement for the financial year ended March 31, 2017.
Financial Results
The performance of your Company during the financial year ended the 31st March, 2017 was as follows.
(Rs. in lacs)
Particulars |
Year ended 31.03.2017 |
Year ended 31.03.2016 |
Turnover |
12281.70 |
6870.66 |
EBIDTA |
779.49 |
3.06 |
Less: Depreciation |
363.44 |
398.82 |
Less: Finance Cost |
1149.47 |
946.84 |
(Loss) before Extra-ordinary Items & Tax |
(733.42) |
(1342.60) |
Add: Exceptional Items |
449.91 |
131.54 |
(Loss) before Taxation |
(1183.33) |
(1474.14) |
Tax Expense including Deferred Tax |
(128.49) |
51.20 |
(Loss) after Taxation |
(1054.84) |
(1364.16) |
Company''s Performance and Outlook
Turnover and EBIDTA of your Company for the financial year ended March 31, 2017 improved owing to reasonable quantity of Wagons procurement order awarded by the Indian Railways (IR), the largest customer, as compared to the previous financial year, however the significant finance cost inter alia was a major reason for the loss. Further, the Exceptional Item represents the payment of arrears from the period prior to lock out of the Company''s operations in 2000, pursuant to Sales Tax Amnesty Scheme, 2016 of the State Government, to amicably settle all the past liabilities.
Pursuant to the order of the Hon''ble High Court of Calcutta passed on 11.07.2016 sanctioning the scheme of amalgamation of inter alia Cimco Equity Holdings Private Limited (CEHPL) with Titagarh Wagons Limited (TWL) the Company has become direct subsidiary of TWL. The proposed merger of Titagarh Agrico Private Limited, a fellow subsidiary with your Company pursuant to approval of the Board received clearance from the authorities concerned and as also the shareholders and creditors at the meetings convened by the Hon''ble National Company Law Tribunal (NCLT).The remaining formalities for obtaining the sanction of NCLT to the Scheme of Amalgamation are progressing as per schedule. Post the said merger, Tractors vertical would be added to your Company''s business portfolio and is expected to provide the necessary fillip to the endeavours to mitigate the risk of predominant dependence on business from Indian Railways.
Apart from the measures for more efficient utilization of resources and cost optimization, your Company is pursuing the order for defense products for which your Company has been issued Industrial License by the Government of India.
Uncertainty in procurement of Wagons by the Indian Railways having become a norm and keeping in view the time required for the benefits of diversification to flow into your Company''s performance, the outlook for the current year is cautiously optimistic.
Overall Review
The overall performance of the Company during the financial year ended March 31, 2017 although improved as compared to the previous financial year, was impacted by predominant dependence on the orders from Indian Railways.
Business Segment
Wagons
a) Industry Outlook: Wagons industry is beset by irregular and decremental Wagons procurement orders by Indian Railways. Notwithstanding the Government of India''s budget announcement, and requirement of wagons by the Indian Railways uncertainty and delay continue even as the Wagons industry struggles for survival.
b) Opportunities: Rail is expected to be the preferred mode of movement of cargo being an effective and more economical mode of carrying goods across the country. The Government''s plans to expand the railway network and the project of dedicated freight corridors if implemented in right earnest, Wagon industry offers substantial opportunity which can be seized particularly by the established units to fullest extent.
c) Challenges: Uncertainty in timely placement of wagons procurement orders by Indian Railways and availability of funds coupled with the stressed margins due to unhealthy competition in the industry besides rising cost of inputs are major challenges for Wagon Industry in India. The dependence on one customer i.e. Indian Railways is a serious concern in as much as any change in the Government policy stands to directly impact the industry.
d) Segment Review and Analysis:
Unit |
March 31, 2017 |
March 31, 2016 |
%Change |
|
Production of Wagons |
No. |
792 |
420 |
88.57% |
Sales |
No. |
730 |
466 |
56.65% |
Average Realisation |
Rs. Lacs/No. |
14.76 |
13.32 |
10.81 |
Review of operations: Performance of the Wagons segment has although improved as compared to the previous financial year significant finance cost incurred during the year under review impacted the profitability.
e) In line with the conditions prevailing in the Wagons industry, the outlook for current fiscal is cautiously optimistic.
Material Changes and commitments after the Balance Sheet date
No material changes and commitments have occurred from the date of close of the Financial Year to which the financial statement relates, till the date of this report, which might affect the financial position of the Company.
Dividend
In view of the loss sustained, the Directors do not recommend any dividend for the year under review.
Reserves
Your Directors do not propose to transfer any amount to the General Reserve of the Company.
Internal Financial Controls
Appropriate policies and procedures have been adopted by the Board to ensure effective financial controls, risk assessment and mitigation measures, accuracy and completeness of the accounting records, the prevention and detection of frauds and errors and orderly and efficient conduct of the Company''s business.
The internal financial controls (IFC) have been documented and adequacy of IFC has been evaluated by an external firm of experts and certified by the Statutory Auditors. Based on the aforesaid, the Board has concluded that during the year under review IFC were operating effectively.
Extract of Annual Return
The details forming part of the extract of the annual return in the Form MGT-9 are annexed and marked as Annexure DR-1.
Number of Board Meetings
The Board of Directors met eight (8) times during the financial year ended 31st March, 2017 as per the details provided in the Corporate Governance Report forming part of the Annual Report.
Loans, Guarantees and Investments
Particulars of loans, guarantees and investments made by the Company pursuant to the Section 186 of the Companies Act, 2013 are furnished under notes to financial statements.
Significant and material orders
There were no material/significant orders passed by any regulator/ tribunal, tribunal impacting the going concern status and the Company''s operations in future.
Composition of Audit Committee
The Board has constituted the Audit Committee comprising ShriJK Shukla as the Chairman, Shri Anil Kumar Agarwal, Shri KSB Sanyal and Shri Nandan Bhattacharya as the members and the details are provided in the Corporate Governance Report annexed.
Related Party Transactions
All Related Party Transactions (RPTs) are entered into in compliance with the applicable provisions of the Companies Act, 2013 and also in accordance with the policy on the subject adopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated by the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (''LODR'') and based thereon final approval of the Board is obtained. RPTs as approved by the Board during the financial year ended 2017 are furnished in the Form AOC 2 annexed hereto and marked as Annexure DR-2.
Corporate Governance Report
The Company has complied with the corporate governance requirements under the Act and LODR. A separate section on corporate governance under LODR along with a certificate from a company secretary in practice confirming the compliance, is annexed to and forms part of the Annual Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report is annexed to and forms part of the Annual Report in compliance of the Regulation 34 of LODR.
Internal Control System
The Company has system of internal controls and necessary checks and balances which are being strengthened so as to ensure
a. that its assets are safeguarded
b. that transactions are authorized, recorded and reported properly; and
c. that the accounting records are properly maintained and its financial statements are reliable.
The Company has appointed external firm of Chartered Accountants to conduct internal audit whose periodic reports are reviewed by the Audit Committee and management for bringing about desired improvement wherever necessary.
Vigil Mechanism
A fraud free and corruption free environment as part of work culture of the Company cannot be over emphasized and with that objective a Vigil Mechanism policy has been adopted by the Board and is uploaded on the web site of the Company at www.cimmco.in. No complaint of this nature was received by the Audit Committee during the year.
Internal Complaints Committee
As per the requirement of Section 4 of the Sexual Harassment of Women At Workplace (Prevention, Prohibition and Redressal) Act,
2013 an Internal Complaints Committee has been formed by the Company, the details of which are given in the Corporate Governance Report. No complaint has been lodged with the Committee during the year.
Directors and Key Managerial Personnel Retirement by rotation
Shri R N Tiwari, Director (Works) retires by rotation pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.
Re-Appointment
The term ofShri R N Tiwari, as Director (Works) ended on 25th February, 2017. Pursuant to the decision of Nomination & Remuneration Committee, the Board at its meeting held on December 14, 2016 has subject to approval of the shareholders reappointed him for two years w.e.f. 25th February, 2017.
Re-designation
Shri Anil Kumar Agarwal has been designated as Whole time director of the Company w.e.f. 01/01/2017 by the Board at its meeting held on 14.12.2016 pursuant to the recommendation of the Audit Committee and Nomination & Remuneration Committee, subject to the approval of the shareholders.
The information prescribed by LODR in respect of the above said Directors is given in the Notice of Annual General Meeting.
During the year under review, there was no change in the Key Managerial Personnel of the Company.
Evaluation of the Board''s performance, Committee and Individual Directors
In compliance with the Act and LODR, the performance evaluation of the Board, Committees and Individual Directors was carried out during the year under review as per the details given in Corporate Governance Report.
Declaration by Independent Directors
Declarations pursuant to the Sections 164 and 149(6) of the Act and LODR and affirmation of compliance with the Code of Conduct as well as the Code for Regulation of Insider Trading adopted by the Board, by all the Independent Directors of the Company have been made.
Remuneration Policy and remuneration
A policy approved by the Nomination and Remuneration Committee and the Board is followed by the Company on remuneration of Directors and Senior Management Employees, as per the details provided in the Corporate Governance Report.
Particulars of Remuneration of Directors/KMP/Employees
Disclosure pertaining to Remuneration and other details as required under Section 197 (12) of the Act read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the Rules) is annexed and marked as Annexure DR-3. The information pursuant to Rules 5(2) and 5(3) of the Rules not annexed to this Report, is readily available for inspection by the members at the Company''s Registered Office between 10.30 A.M. to 1 P.M. on all working days upto the date of ensuing AGM. Should any member be interested in obtaining a copy including through email ([email protected]), may write to the Company Secretary at the Registered office of the Company.
Directors'' Responsibility Statement The Directors state that:
- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31, 2017had been followed in preparation of the said accounts and there were no material departures there from requiring any explanation;
- The directors had selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;
- The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- The directors had prepared the Annual Accounts on a going concern basis; and
- The directors had laid down internal financial controls (IFC) to be followed by the Company and that such IFC are adequate and operating effectively.
- 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.
Statutory Auditors
S R Batliboi & Co. LLP, Chartered Accountants, Auditors of the Company have expressed their unwillingness to continue as the Statutory Auditors of the Company.
Pursuant to recommendation of the Audit Committee, the Board places before the members the appointment of Price Waterhouse & Co. Chartered Accountants. LLP as the Statutory Auditors of the Company to hold office for a period of 5 years from the conclusion of the ensuing AGM till the conclusion of the 77th AGM and recommends the same for their approval.
As regards the qualified opinion expressed by the Statutory Auditors, the Note No. 5 and emphasis of matter - the Note No. 6 in the relevant notes on the financial statements (the Notes) are self-explanatory requiring no further specific response from the Directors at this stage. The Company is persistently making efforts to recover the entire amount receivable and address the issue in due course.
Cost Auditors
M.R. Vyas & Associates., Cost Accountants have been appointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of the products manufactured by the Company, for the Financial Year 2017-18 subject to ratification of their remuneration by the shareholders in accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014. The Cost Audit Report for the previous financial year ended 31st March, 2016 has been filed as stipulated by the applicable provisions of law.
Secretarial Auditor
Secretarial Audit has been conducted by Sumantra Sinha & Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4.
Fixed Deposits
The Company did not accept any deposits during the financial year ended March 31, 2017.
Personnel/Human Resources
A. Empowering the employees
The Company considers its organizational structure to be evolving consistently over time while continuing with its efforts to follow good HR practices. Adequate efforts of the staff and management personnel are directed on imparting continuous training to improve the management practices.
B. Industrial Relations
Industrial relations at all sites of the Company remained cordial.
C. No. of Employees: Manpower employed as at March 31, 2017 was 108.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
A statement pursuant to Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR-5.
Listing with Stock Exchanges
The equity shares of the Company are listed at The National Stock Exchange of India Limited (NSE), BSE Limited and Listing fees for the financial year ending the 31st March, 2018 have been duly paid. Whereas the Delhi Stock Exchange Limited (DSE), and the Madhya Pradesh Stock Exchange Limited (MPSE) have been de-recognized, the Company has made an application for voluntary delisting from The Calcutta Stock Exchange Limited (CSE) which is under process.
Discussion on Financial Performance with respect to Operational Performance
To mitigate the risk factors referred to hereinabove impacting the operations, better manufacturing processes, improved productivity and focus on optimization of resource deployment are undertaken for a reasonable performance, viewed in the backdrop of the trends witnessed in the industries in which the Company operates.
Corporate Social Responsibility
Your Company continues its endeavours to contribute suitably to the society by being involved in a series of Community Welfare Programs, directly or through philanthropic organizations. Bharatpur plant is located close to the Bharatpur Bird Sanctuary amidst vast green area and all care is taken to preserve the environment to allow the nature''s expanse to remain green and grow healthily.
Acknowledgements
Your Directors wish to place on record their appreciation for the cooperation and support of the Banks and Governments of Rajasthan, Madhya Pradesh and Delhi, local administration (West Bengal)/other Government Departments; for contribution of the employees of the Company and all other stakeholders.
On behalf of the Board Kolkata
J. P. Chowdhary
May18,2017 Executive Chairman
Mar 31, 2016
The Directors present the 71st Annual Report, together with the audited accounts of the Company for the financial year ended March 31, 2016.
Financial Results
The performance of your Company during the financial year ended the31st March, 2016was as follows.
(Rs. in lacs)
Particulars |
Year ended 31.03.2016 |
Year ended 31.03.2015 |
Turnover |
6,870.66 |
3,421.72 |
Profit/(Loss) before Extra-ordinary Items Tax |
(1,000.35) |
(1,473.65) |
Add: Exceptional Items |
131.54 |
1,069.91 |
(Loss) before Taxation |
(1,131.89) |
(2,543.56) |
Tax Expense including Deferred Tax |
51.20 |
34.41 |
(Loss) after Taxation |
(1,183.09) |
(2,577.97) |
(Loss) brought forward from previous year |
(6,496.49) |
(3,831.42) |
(Loss) carried to Balance Sheet |
(7,679.58) |
(6,496.49) |
Reserves& Surplus |
9,846.35 |
11,029.44 |
Earnings per Share (Rs.) |
(5.87) |
(12.79) |
Dividend
In view of the loss sustained, the Directors do not recommend any dividend for the year under review.
Internal Financial Controls
Appropriate policies and procedures have been adopted by the Board to ensure effective financial controls, risk assessment and mitigation measures, accuracy and completeness of the accounting records, the prevention and detection of frauds and errors and orderly and efficient conduct of the Company''s business.
The internal financial controls (IFC) have been documented and adequacy of IFC has been evaluated by an external firm of experts and certified by the Statutory Auditors. Based on the aforesaid, the Board has concluded that during the year IFC were operating effectively.
Composition of Audit Committee
The Board has constituted the Audit Committee comprising Shri J K Shukla as the Chairman, Shri Anil Kumar Agarwal and Shri KS B Sanyal as the members and the details are provided in the Corporate Governance Report annexed hereto.
Related Party Transactions
All Related Party Transactions (RPTs) are entered in compliance with the applicable laws and also in accordance with the policy on the subject adopted by the Board. Audit Committee reviews and approves all the RPTs as stipulated by the Listing Regulations and based thereon final approval of the Board obtained. RPTs as approved by the Board during the financial year 2016 are furnished in the Form AOC 2 annexed hereto and marked as Annexure DR-2.
Corporate Governance Report
The Company has complied with the corporate governance requirements under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under Listing Regulations along with a certificate from a company secretary in practice confirming the compliance, is annexed to and forms part of the Annual Report.
Internal Control System
The Company has system of internal controls and necessary checks and balances which are being strengthened so as to ensure
a. that its assets are safeguarded
b. that transactions are authorized, recorded and reported properly; and
c. that the accounting records are properly maintained and its financial statements are reliable.
The Company has appointed external firm of Chartered Accountants to conduct internal audit whose periodic reports are reviewed by the Audit Committee and management for bringing about desired improvement wherever necessary.
Vigil Mechanism
A fraud free and corruption free environment as part of work culture of the Company cannot be over emphasized and with that objective a Vigil Mechanism policy has been adopted by the Board and is uploaded on the web site of the Company at www.cimmco.in. No complaint of this nature was received by the Audit Committee during the year.
Internal Complaints Committee
As per the requirement of Section 4 of the Sexual Harassment of Women At Workplace (Prevention, Prohibition and Redressal) Act, 2013 an Internal Complaints Committee has been formed by the Company, the details of which are given in the Corporate Governance Report. No complaint has been lodged with the Committee during the year.
Directors
Retirement by rotation
Shri J P Chowdhary, Executive Chairman retires by rotation pursuant to the provisions of Section 152 of the Act and is eligible for re-appointment.
Re-appointment
The terms of appointment of Shri J P Chowdhary, Executive Chairman and Shri Umesh Chowdhary, Vice Chairman & Managing Director ended on 10th May, 2016. Pursuant to the decision of Nomination & Remuneration Committee, the Board at its meeting held on April 29,2016,subject to approval of theshareholders reappointed them for Five years w.e.f. 11th May, 2016.
Shri Umesh Chowdhary has with a view to providing greater focus on the overseas subsidiaries of the holding company been redesignated from Vice Chairman & Managing Director to Vice Chairman as a Non-Executive Director, as approved by the Board at its meeting held on 25th May, 2016.
The information prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the above said Directors is given in the Notice of Annual General Meeting.
Evaluation of the Board''s performance, Committee and Individual Directors
In compliance with the Act and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board, Committees and Individual Directors was carried out during the year under review as per the details given in Corporate Governance Report.
Declaration by Independent Directors
Declarations pursuant to the Sections 164 and 149(6) of the Act and Listing Regulations and affirmation of compliance with the Code of Conduct as well as the Code for Regulation of Insider Trading adopted by the Board, by all the Independent Directors of the Company have been made.
Remuneration Policy and remuneration
A policy approved by the Nomination and Remuneration Committee and the Board is followed by the Company on remuneration of Directors and Senior Management Employees, as per the details provided in the Corporate Governance Report.
Particulars of Remuneration of Directors/KMP/Employees
The disclosure stipulated bisection 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable.
Disclosure pertaining to Remuneration and other details as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and marked as Annexure DR-3.
Directors'' Responsibility Statement
The Directors state that:
- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended March 31,2016 have been followed in preparation of the said accounts and there were no material departures there from requiring any explanation;
- The Directors have selected and followed the accounting policies as described in the Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss statement of the Company for that period;
- Proper and sufficient care has been taken for maintaining adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- The Annual Accounts have been prepared on a going concern basis; and
- The Directors have laid down Internal Financial Controls (IFC) to be followed by the Company and that such IFC are adequate and operating effectively.
Statutory Auditors
Messrs S R Batliboi &Co. LLP, Chartered Accountants, Auditors of the Company were appointed at the 69th AGM until the conclusion of 71st AGM. It is proposed to re-appoint them as statutory auditors from this AGM till the conclusion of 72nd AGM.
As regards the qualified opinion expressed by the Statutory Auditors, the Note No. 13 (i) and emphasis of matter, the note no. 29(A) in the relevant notes on the financial statement (the Notes) are self-explanatory requiring no further specific response from the Directors at this stage. The Company with its persistently diligent efforts is reasonably confident of recovering the entire amount receivable and address the issue in due course.
Cost Auditors
Messrs M. R. Vyas & Associates, Cost Accountants have been appointed as Cost Auditors to conduct cost audit of the accounts maintained by the Company in respect of the products manufactured by the Company, for the Financial Year 2016-17 subject to ratification of their remuneration by the shareholders in accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014. The Cost Audit Report for the financial year ended 31st March, 2015 has been filed as stipulated by the applicable provisions of law.
Secretarial Auditor
Secretarial Audit has been conducted by Messrs R B Mandal and Associates, Practicing Company Secretaries appointed by the Board and their report is annexed hereto and marked as Annexure DR-4.
Fixed Deposits
The Company did not accept any deposits during the financial year ended March 31,2016.
Personnel Human Resources
A. Empowering the employees
The Company considers its organizational structure to be evolving consistently over time while continuing with its efforts to follow good HR practices. Adequate efforts of the staff and management personnel are directed on imparting continuous training to improve the management practices.
B. Industrial Relations
Industrial relations at all sites of the Company remained cordial.
C. No. of Employees : Manpower employed as at March 31, 2016 was 123.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
A statement pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and marked as Annexure DR-5.
Listing with Stock Exchanges
The equity shares of the Company are listed at The National Stock Exchange of India Limited (NSE),The BSE Limited (BSE),The Delhi Stock Exchange Limited (DSE), The Calcutta Stock Exchange Limited (CSE) and The Madhya Pradesh Stock Exchange Limited (MPSE) and Listing fees for the financial year ending the 31st March, 2017have been duly paid.
The Board has approved submission of applications for delisting of Equity Shares of the Company from DSE, CSE and MPSE since the cost of continued listing at the said stock exchanges is not commensurate with the benefits to the shareholders. Your Company''s Equity Shares shall continue to be listed at BSE and NSE which have nationwide terminals.
Discussion on Financial Performance with respect to Operational Performance
To mitigate the risk factors referred to hereinabove impacting the operations, better manufacturing processes, improved productivity and focus on optimization of resource deployment are undertaken for a reasonable performance, viewed in the backdrop of the trends witnessed in the industries in which the Company operates.
Corporate Social Responsibility
Your Company continues its endeavors to contribute suitably to the society by being involved in a series of Community Welfare Programs, directly or through philanthropic organizations. Bharatpur plant is located close to the Bharatpur Bird Sanctuary amidst vast green area and all care is taken to preserve the environment to allow the nature''s expanse to remain green and grow healthily.
Forward Looking Statement
The statements in this report describing the Companyâs policy, strategy, projections, estimation and expectations may appear forward looking statements within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events and the actual results could materially differ from those expressly mentioned in this Report or implied for various factors including those mentioned in the paragraph "Risks and Concerns" herein above and subsequent developments, information or events.
Acknowledgements
Your Directors wish to place on record their appreciation for the cooperation and support of the Banks, Governments of Rajasthan, and Madhya Pradesh, local administration (West Bengal)/other Government Departments; for contribution of the employees of the Company and all other stakeholders.
On behalf of the Board
Place: Kolkata J.P. Chowdhary
Date : August 22, 2016 Executive Chairman
Mar 31, 2015
The Directors present the 70th Annual Report, together with the
audited accounts of the Company for the financial year ended March 31,
2015.
Financial Results
The performance of your Company during the financial year ended the
31st March, 2015 was as follows.
(Rs. in lacs)
Particulars Year ended Year ended
31.03.2015 31.03.2014
Turnover 3,421.72 13,236.27
Profit/(Loss) before
Extra-ordinary Items &Tax (1,473.65) 450.64
Less/Add: Exceptional Items 1,069.91 1,250.00
(Loss) before Taxation (2,543.56) (799.36)
Tax Expense including
Deferred Tax 34.41 439.34
(Loss) after Taxation (2,577.97) (1,238.70)
(Loss) brought forward
from previous year (3,831.42) (2,592.72)
(Loss) carried to Balance Sheet (6,496.49) (3,831.42)
Reserves & Surplus 11,029.44 13,694.51
Earnings per Share (Rs.) (12.79) (6.15)
Company's Performance
Your Company's financial performance was affected adversely due to
non-remunerative order for wagons procurement placed by the Indian
Railways resulting in loss of Rs.549.28 lacs incurred during the
financial year ended the 31 st March, 2015.
In the last tender opened for wagons procurement by the Indian Railways
prices offered were even lower than the cost of materials making the
contract entirely a loss making proposition and hence your Company had
no option but to decline the order. This situation appears to have
arisen out of predatory pricing resorted to by some of the Wagon
manufacturers who have quoted absurdly low prices. Marketing efforts
have been stepped up for securing orders for wagons from private sector
customers.
As part of your Company's endeavor to mitigate the risk of predominant
dependence on business from Indian Railways, a joint venture has been
entered into with two group companies for manufacture of
tractors/agriculture implements at Bhagalpur plant which is under
implementation while development of other products within the core
competencies of your Company is receiving consistently focused
attention. Active efforts are also being made to pursue orders for
custom designed wagons from private sector customers.
Further, your Company has been issued Industrial License by the
Government of India for manufacture of various products for defense
sector of the country and steps are being taken in this direction.
With uncertainty in wagons procurement by the Indian Railways
persisting, the outlook for the current year is cautious.
OVERALL REVIEW
The overall performance of the Company during the financial year ended
the 31st March, 2015 declined due to non-remunerative contract from the
Indian Railways.
BUSINESS SEGMENT
Wagons
a) Industry Outlook: Wagons industry is beset with irregular and
detrimental Wagons procurement orders by Indian Railways compounded by
predatory pricing being resorted to by some of the wagon manufacturers.
Though the Government of India has announced various steps viz. focus
on safety and environment protection through Green initiatives,
strengthening of Railway Tariff Regulatory Authority etc. to improve
the infrastructure of Indian Railways, however, procurement policy has
to improve to provide the much needed impetus to the industry.
b) Opportunities: Rail is expected to be the preferred mode of movement
of cargo being an effective and more economical mode of carrying goods
across the country. The Government's plans to expand the railway
network and the project of dedicated freight corridors if implemented
in right earnest, Wagon industry offers substantial opportunity which
can be seized particularly by the established units to fullest extent.
c) Challenges: Uncertainty in timely placement of wagons procurement
orders by Indian Railways and availability of funds coupled with the
stressed margins due to unhealthy competition in the industry besides
rising cost of inputs are major challenges for Wagon Industry in India.
The dependence on one customer i.e. Indian Railways is a serious
concern in as much as any change in the Government policy stands to
directly impact the industry.
d) Segment Review and Analysis:
Unit March31,2015 March31,2014 %Change
Production of Wagons No. 187 644 (70.96)
Sales No 141 652 (78.37)
Average Realisation Rs. Lacs
/No. 16.07 16.041 0.18
Review of operations: Performance of the Wagons segment has been
affected adversely due to unremunerative contract placed by the Indian
Railways for substantially lower quantity during the year under review.
e) Uncertainty persists with regard to placement of wagons procurement
order by the Indian Railways even as development of markets for other
products takes substantial time and hence the outlook for current
fiscal is cautious.
Dividend
In view of the loss sustained, the Directors do not recommend any
dividend for the year under review.
Risks and Concerns
The Company has laid down a risk management mechanism which is reviewed
periodically. A Risk Management Policy to identify and assess the key
risk areas, monitor mitigation measures and report compliance has been
adopted. Based on the review, the following key risks have been
identified:
Dependence on the Indian Railways
The Company is engaged in the business of manufacturing wagons which is
entirely dependent upon the policies of Indian Railways and any change
in the policies whether positive or negative directly impacts the
business of the Company.
Increase in the cost of raw materials and other inputs
(i) The major raw materials required by the Company include steel,
specialized components including bogies, coupler sets, air brakes etc.
which are exposed to volatility in prices and availability in required
specifications.
(ii) Steel based raw materials being the principal inputs in
manufacturing wagons and heavy engineering equipment, cost of finished
goods totally depends on the prices of steel prevalent in both National
and International markets which are highly volatile and cyclical in
nature. However the risk is mitigated to some extent as the most of the
contracts have price variation clause.
Risk of performance guarantee, product warranty and liquidated damages
The contracts involve performance guarantee based on contract value and
warranty periods within which if any defect is detected in the
products, the Company may have to incur expenditure for correcting the
defects or even replacing the products. Delay in scheduled delivery may
attract liquidated damages.
Subsidiary Companies
There is no subsidiary of your Company.
Extract of Annual Return
The details forming part of the extract of the annual return in the
Form MGT-9 is annexed and marked as Annexure DR-1.
Number of Board Meetings
The Board of Directors met eight (8) times during the financial year
ended 31 st March, 2015 as per the details provided in the Corporate
Governance Report forming part of the Annual Report.
Authorized Capital and Issue of Preference Shares
In June, 2014 your Company's authorized capital has been reclassified
and then increased from Rs.50 crore of equity to Rs.50 crore of
Preference Shares and Rs.25 crore of equity divided into 2,50,00,000
equity shares and 5,00,00,000 preference shares of Rs.10/- each to
facilitate issue and allotment of 8% Non Convertible Non Cumulative
Preference Shares of Rs.10/- each aggregating Rs.40 crore to the
promoter group entities.
Loans, Guarantees and Investments
Particulars of loans, guarantees and investments made by the Company
pursuant to the Section 186 of the Act are furnished under notes to
financial statements.
Significant and material orders
There were not material/significant orders passed by any regulator,
tribunal impacting the going concern status and the Company's
operations in future.
Composition of Audit Committee
The Board has constituted the Audit Committee comprising Shri J K
Shukla as the Chairman, Shri Anil Kumar Agarwal and Shri K S B Sanyal
as the members and the details are provided in the Corporate Governance
Report annexed. Shri D N Davar has resigned from the Board of the
Company w.e.f. 13th February, 2015 and may attend the Audit Committee
Meeting as Special Invitee.
Related Party Transactions
All Related Party Transactions (RPTs) are entered in compliance with
the applicable laws and also in accordance with the policy on the
subject adopted by the Board. Audit Committee reviews and approves all
the RPTs as stipulated by the Listing Agreement and based thereon final
approval of the Board obtained. RPTs as approved by the Board during
the financial year 2015 are furnished in the form AOC 2 annexed hereto
and marked as Annexure DR-2.
Corporate Governance Report
The Company has complied with the corporate governance requirements
under the Act and Listing Agreement. A separate section on corporate
governance under Listing Agreement along with a certificate from a
company secretary in practice confirming the compliance, is annexed to
and forms part of the Annual Report.
Internal Control System
The Company has system of internal controls and necessary checks and
balances which are being strengthened so as to ensure
a. that its assets are safeguarded
b. that transactions are authorized, recorded and reported properly;
and
c. that the accounting records are properly maintained and its
financial statements are reliable.
The Company has appointed external firm of Chartered Accountants to
conduct internal audit whose periodic reports are reviewed by the Audit
Committee and management for bringing about desired improvement
wherever necessary.
Vigil Mechanism
A fraud free and corruption free environment as part of work culture of
the Company cannot be over emphasized and with that objective a Vigil
Mechanism policy has been adopted by the Board and is uploaded on the
web site of the Company at www.cimmco.in. No complaint of this nature
was received by the Audit Committee during the year.
Internal Complaints Committee
As per the requirement of Section 4 of The Sexual Harassment of Women
At Workplace (Prevention, Prohibition and Redressal) Act,
2013 an Internal Complaints Committee has been formed by the Company,
the details of which are given in the Corporate Governance Report. No
complaint has been lodged with the Committee during the year.
Directors
Cessation
Shri D N Davar, Independent Director resigned from the Board w.e.f.
13th February, 2015.
Retirement by rotation
Shri Umesh Chowdhary, Vice-Chairman & Managing Director retires by
rotation pursuant to the provisions of Section 152 of the Act and is
eligible for re-appointment.
Appointment
Shri R N Tiwari's term as Director (Works) ended on 25th February, 201
S.The Board at its meeting held on February 13,2015 has subject to
approval of the shareholders reappointed him for two years w.e.f.
February 25,2015 at the remuneration approved by the Nomination and
Remuneration Committee.
Shri Nandan Bhattacharya is proposed to be appointed as an Independent
Director in accordance with the provisions of Sections 149 and 152 of
the Act read with the rules made there under and the Clause 49 of the
Listing Agreement with the Stock Exchanges concerned. He was appointed
as an Additional Director w.e.f. February 28,2015.
Smt. Vinita Bajoria is proposed to be appointed as Non-Executive
Director in accordance with the provisions of Section 152 of the
Companies Act, 2013 read with the rules made there under and the Clause
49 of the Listing Agreement with the Stock Exchanges concerned. She was
appointed as an Additional Director w.e.f. 11th September, 2014 in
conformity with the Clause 49 stipulating appointment of woman
director.
The information prescribed by Clause 49 of the Listing Agreement in
respect of the above said Directors is given in the Notice of Annual
General Meeting.
Evaluation of the Board's performance. Committee and Individual
Directors
In compliance with the Act and Clause 49 of the Listing Agreement, the
performance evaluation of the Board, Committees and Individual
Directors was carried out during the year under review as per the
details given in Corporate Governance Report.
Declaration by Independent Directors
Declarations pursuant to the Sections 164 and 149(6) of the Act and
Listing Agreement and affirmation of compliance with the Code of
Conduct as well as the Code for Regulation of Insider Trading adopted
by the Board, by all the Independent Directors of the Company have been
made.
Remuneration Policy and remuneration
A policy approved by the Nomination and Remuneration Committee and the
Board is followed by the Company on remuneration of Directors and
Senior Management Employees, as per the details provided in the
Corporate Governance Report.
Particulars of Remuneration of Directors/KMP/Employees
The disclosure stipulated by Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is not applicable.
Disclosure pertaining to Remuneration and other details as required
under Section 197 (12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules,
2014 is annexed and marked as Annexure DR-3.
Directors ,Responsibility Statement
The Directors state that:
- Appropriate Accounting Standards as are applicable to the Annual
Statement of Accounts for the financial year ended March 31, 2015 have
been followed in preparation of the said accounts and there were no
material departures there from requiring any explanation;
- The Directors have selected and followed the accounting policies as
described in the Notes on Accounts and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to
give true and fair view of the state of affairs of the Company at the
end of financial year and of the profit and loss statement of the
Company for that period;
- Proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
- The Annual Accounts have been prepared on a going concern basis; and
- The Directors have laid down Internal Financial Controls (IFC) to be
followed by the Company and that such IFC are adequate and operating
effectively.
Statutory Auditors
Messrs S R Batliboi & Co. LLP, Chartered Accountants, Auditors of the
Company were appointed at the 69th AGM until the conclusion of 71st AGM
subject to ratification of their appointment at the AGM every year and
the Board recommends the same.
As regards the qualified opinion expressed by the Statutory Auditors,
the Note 12.2 in the relevant notes on the financial statement (the
Notes) is self explanatory requiring no further specific response from
the Directors at this stage. The Company with its persistently diligent
efforts is reasonably confident of recovering the entire amount
receivable and address the issue in due course.
Cost Auditors
Messrs D. Radhakrishnan & Co., Cost Accountants have been re- appointed
as Cost Auditors to conduct cost audit of the accounts maintained by
the Company in respect of the products manufactured by the Company, for
the Financial Year 2015-16 subject to ratification of their
remuneration by the shareholders in accordance with the provisions of
Section 148 of the Companies Act, 2013 and the Companies (Cost Records
and Audit) Rules, 2014. The Cost Audit Report for the financial year
ended 31st March, 2014 has been filed as stipulated by the applicable
provisions of law.
Secretarial Auditor
Secretarial Audit has been conducted by Messrs M Rathi & Co, Practicing
Company Secretaries appointed by the Board and their report is annexed
hereto and marked as Annexure DR-4.
Fixed Deposits
The Company did not accept any deposits during the financial year ended
March 31, 2015.
Personnel Human Resources
A. Empowering the employees
The Company considers its organizational structure to be evolving
consistently over time while continuing with its efforts to follow good
HRpractices. Adequate efforts of the staff and management personnel are
directed on imparting continuous training to improve the management
practices.
B. Industrial Relations
Industrial relations at all sites of the Company remained cordial.
C. No. of Employees:
Manpower employed as at March 31, 2015 was 146
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
A statement pursuant to Section 134(3)(m) of the Act read with Rule 8
of the Companies (Accounts) Rules, 2014 on conservation of energy,
technology absorption, foreign exchange earnings and outgo is annexed
to and marked as Annexure DR-5.
Listing with Stock Exchanges
The equity shares of the Company are listed at The National Stock
Exchange of India Limited (NSE),The Bombay Stock Exchange Limited
(BSE), The Delhi Stock Exchange Limited (DSE),The Calcutta Stock
Exchange Limited (CSE) and The Madhya Pradesh Stock Exchange Limited
(MPSE) and Listing fees for the financial year ending the 31 st March,
2016 have been duly paid.
Discussion on Financial Performance with respect to Operational
Performance
To mitigate the risk factors referred to hereinabove impacting the
operations, better manufacturing processes, improved productivity and
focus on optimization of resource deployment are undertaken for a
reasonable performance, viewed in the backdrop of the trends witnessed
in the industries in which the Company operates.
Corporate Social Responsibility
Your Company continues its endeavors to contribute suitably to the
society by being involved in a series of Community Welfare Programs,
directly or through philanthropic organizations. Bharatpur plant is
located close to the Bharatpur Bird Sanctuary amidst vast green area
and all care is taken to preserve the environment to allow the nature's
expanse to remain green and grow healthily.
Forward Looking Statement
The statements in this report describing the Company's policy,
strategy, projections, estimation and expectations may appear forward
looking statements within the meaning of applicable securities laws or
regulations. These statements are based on certain assumptions and
expectations of future events and the actual results could materially
differ from those expressly mentioned in this Report or implied for
various factors including those mentioned in the paragraph "Risks and
Concerns" herein above and subsequent developments, information or
events.
Acknowledgements
Your Directors wish to place on record their appreciation for the
cooperation and support of the Banks and Governments of Rajasthan,
Madhya Pradesh and Delhi, local administration (West Bengal)/other
Government Departments; for contribution of the employees of the
Company and all other stakeholders.
On behalf of the Board
Place :Kolkata J. P. Chowdhary
Date: August 12,2015 Executive Chairmen
Mar 31, 2014
Dear Members,
The Directors present the 69th Annual Report, together with the
audited accounts of the Company for the financial year ended March 31,
2014.
Financial Results
The performance of your Company during the financial year ended the
31st March, 2014 was as follows.
(Rs. in lacs)
Particulars Year ended Year ended
31.03.2014 31.03.2013
Turnover 13,236.27 10,276.19
Profit/(Loss) before Extra-ordinary 450.64 (1,195.25)
Items &Tax
Less/Add: Exceptional Items 1,250.00 (235.95)
(Loss) before Taxation (799.36) (959.30)
Deferred Tax Assets Reversed/Charge 439.34 40.97
(Loss) after Taxation (1,238.70) (1,000.27)
(Loss) brought forward from previous year (2,592.72) (1,592.45)
(Loss) carried to Balance Sheet (3,831.42) (2,592.72)
Reserves & Surplus 13,694.51 15,046.76
Earnings per Share (Rs.) (6.15) (4.96)
Dividend
In view of the loss sustained, the Directors do not recommend any
dividend for the year under review.
Review of Operations and Future Outlook
During the financial year ended the 31st March, 2014 Wagon production
at 644 Wagons was higher by about 21 % as compared to 532 units and
sales volume of 652 against 524 in the previous financial year was up
by about 24%. Revenue from operations at Rs.10,456.24 lacs during the
fiscal under review increased by about 12% as compared to Rs.9301.61
lacs in the FY 2012-13. However, your Company requires substantially
larger quantity of wagons procurement order than that placed by the
Indian Railways during the financial year ended March 31, 2014 to
achieve reasonably sustainable financial results. Exceptional item of
Rs.1250 lacs representing the settlement of all dues of an institution
which participated as the then largest secured lender in the Scheme of
Rehabilitation of the Company, charged to Profit before tax of
Rs.450.64 lacs for the FY 2013-14 resulted in loss before tax of
Rs.799.36 lacs.
As part of your Company''s endeavor to mitigate the risk of predominant
dependence on business from Indian Railways, a joint
venture has been entered into with two group companies for manufacture
of tractors/agriculture implements at Bharatpur plant which is under
implementation while development of other products within the core
competencies of your Company is receiving consistently focused
attention.
With uncertainty in wagons procurement by the Indian Railways
persisting, the outlook for the current year is cautious.
Authorised Capital and Issue of Preference Shares
In June, 2014 your Company''s authorised capital has been reclassified
and then increased from Rs.50 crore of equity to Rs.50 crore of
Preference Shares and Rs.25 crore of equity divided into 2,50,00,000
equity shares and 5,00,00,000 preference shares of Rs.10/- each to
facilitate issue and allotment of 8% Non Convertible Non Cumulative
Preference Shares of Rs.10/- each aggregating Rs.40 crore to the
promoter group entities.
Consequent to conversion of securities held by Titagarh Wagons Limited
(TWL) in the Company''s holding company: Cimco Equity Holdings Private
Limited, your Company has become a step down subsidiary of TWL on and
from April 15, 2014.
Management Discussion and Analysis
The Management Discussion and Analysis Report as stipulated under
Clause 49 of the Listing Agreement with Stock Exchanges, forming part
of Directors'' Report for the year under review, is given in a separate
section of this Annual Report.
Directors
Shri Anil Kumar Agarwal and Shri J. K. Shukla, Directors retire by
rotation pursuant to the provisions of the Companies Act, 2013 (''the
Act'') and are eligible for reappointment. Messrs J K Shukla, K S B
Sanyal, M J Z Mowla and G B Rao are proposed to be reappointed as
Independent Directors at the ensuing Annual General Meeting (AGM) in
accordance with the provisions of Sections 149 and 152 of the Act read
with the rules made thereunder and the Clause 49 of the Listing
Agreement with the Stock Exchanges concerned.
The information prescribed by Clause 49 of the Listing Agreement in
respect of the above said Directors is given in the Notice of AGM.
Directors''Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
(a) in preparation of the annual accounts for the financial year ended
March 31,2014 the applicable accounting standards have been followed
and proper explanations relating to material departures, if any, have
been provided;
(b) the accounting policies selected and applied are consistent and the
judgments and estimates made 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 Loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
(d) the annual accounts have been prepared on a going concern basis.
Statutory Auditors & Auditor''s Report
Messrs S R Batliboi & Co. LLP, Chartered Accountants, Auditors of the
Company retire at the conclusion of ensuing 69th AGM and willing to
continue, they have issued a certificate about their eligibility for
reappointment until the conclusion of 71st AGM pursuant to the
provisions of Section 139 of the Companies Act, 2013.
As regards the qualified opinion expressed by the Statutory Auditors,
the Note 13.2 in the relevant notes on the financial statement (the
Notes) is self explanatory requiring no further specific response from
the Directors at this stage.The Company with its persistently diligent
efforts is reasonably confident of recovering the entire amount
receivable and address the issue in due course. The observation in the
Annexure to the Auditor''s Report regarding the Company''s accumulated
losses and cash losses has since been redressed by infusion of funds by
the promoters through subscription to the capital of your Company (the
Note 35 in the Notes).
Cost Auditors
Messrs D. Radhakrishnan & Co., Cost Accountants have been re- appointed
as Cost Auditors to conduct cost audit of the accounts maintained by
the Company in respect of the products manufactured by the Company, for
the Financial Year 2014-15 subject to ratification of their
remuneration by the shareholders in accordance with the provisions of
Section 148 of the Companies Act, 2013 and the Companies (Cost Records
and Audit) Rules, 2014. The Cost Audit Report for the financial year
ended 31 st March, 2013 have been filed as stipulated by the applicable
provisions of law.
Public Deposits
During the year under review, no public deposits were accepted by the
Company.
Corporate Governance
A separate section on Corporate Governance as prescribed under
Clause49of the Listing Agreement along with the Certificate obtained
from a Practising Company Secretary regarding compliance with
conditions of Corporate Governance is included in the Annual Report.
Listing with Stock Exchanges
The equity shares of the Company are listed at The National Stock
Exchange of India Limited (NSE),The Bombay Stock Exchange Limited
(BSE), The Delhi Stock Exchange Limited (DSE),The Calcutta Stock
Exchange Limited (CSE) and The Madhya Pradesh Stock Exchange Limited
(MPSE) and Listing fees for the financial year ending the 31 st March,
2015 have been duly paid.
Disclosures
1. Under Section 217(2A) of the Companies Act, 1956readwith the
Companies (Particulars of Employees) Amendment Rules, 2011, as amended
Particulars of employee(s) drawing remuneration to the extent
applicable as per the aforesaid Section are disclosed in the Annexure A
to this Report.
2. Under Section 217(1)(e) of the Companies Act, 1956readwith
theCompanies(DisclosureofParticularsintheReportofBoard of Directors)
Rules, 1988, as amended
The disclosure required under the aforesaid provision has been attached
separately and marked as Annexure B to this Directors'' Report and forms
part of this Report.
Corporate Social Responsibility
Your Company continues its endeavors to contribute suitably to the
society by being involved in a series of Community Welfare Programs,
directly or through philanthropic organizations. Bharatpur plant is
located close to the Bharatpur Bird Sanctuary amidst vast green area
and all care is taken to preserve the environment to allow the nature''s
expanse to remain green and grow healthily.
Acknowledgements
Your Directors wish to place on record their appreciation for the
cooperation and support of the Banks and Governments of Rajasthan,
Madhya Pradesh and Delhi, local administration (West Bengal)/other
Government Departments; for contribution of the employees of the
Company and all other stakeholders.
On behalf of the Board
Place :Kolkata J. P. Chowdhary
Date: August 7,2014 Executive Chairmen
Mar 31, 2013
The Directors present the 68th Annual Report, together with the
audited accounts of the Company for the financial year ended March 31,
2013.
Financial Results
The performance of the Company was adversely affected mainly due to non
receipt of regular order for procurement of Wagons by Indian Railway
during the financial year ended the 31 st March, 2013.
(Rs. in lacs)
Particulars Year ended Year ended
31.03.2013 31.03.2012
Turnover 10,276.19 23,651.30
(Loss)/Profit before
Extra-ordinary Items & Tax (1,195.25) 3,279.09
Add/(Less): Exceptional Items (235.95) 2,475.99
(Loss)/Profit before Taxation (959.30) 803.10
Add/(Less): Deferred Tax Credits/(Charge) 40.97 (384.47)
(Loss)/Profit after Taxation (1,000.27) 418.63
Loss brought forward
from previous year (1,592.45) (2,011.08)
Loss carried to Balance Sheet (2,592.72) (1,592.45)
Reserves & Surplus 15,046.76 16,160.58
Earnings per Share (Rs.) (4.96) 2.08
Dividend
In view of the loss sustained, your Directors do not recommend any
dividend for the year under review.
Review of Operations and Future Outlook
As against the order for 1760 Wagons placed by Indian Railway (IR)
during FY 2011 -12, IR, contrary to the directions of the Board for
Industrial & Financial Reconstruction (BIFR) placed order for 353
Wagons only during the year under review. Subsequently, order for 354
Wagons was released during the FY 2012-13 as a part of the optional
procurement program against the order for previous financial year.
When the requests of your Company to reconsider were not acceded by IR,
your Company moved BIFR and finally the matter went to the Hon''ble
Supreme Court, where the decision went in your Company''s favour.
Following it, IR has recently placed an order of 514 Wagons; however,
without the option to procure 30% quantity, which aspect as well is
being pursued by your Company.
During the year, your Company produced 532 Wagons and dispatched 524
units against 1299 and 1302 units in the previous financial year i.e. a
decline of 59.04% and 59.75% respectively.
Revenue at Rs. 9,018 lacs from sale of Wagons for FY 2012-13 vis-a- vis
Rs. 21,010 lacs in the FY 2011 -12 was down by 57.08% affecting
sustainability of your Company operations achieved in the last 2-3
years.
Your Company is focused on realizing the potential of other products
viz. Cement Plant Equipment, Hydro Mechanical Equipment, Pressure
Vessel Equipment for which the facilities at Bharatpur are adequate;
these could also enable undertaking manufacture of heavy earth moving
and mining equipments which is contemplated subject to the applicable
approvals in this regard.
The outlook for current year is cautious as the performance of your
Company would depend on inter-alia placing by IR of the order for
optional 30% quantity which is being pursued effectively even as
execution of the order in hand has been taken up in right earnest and
focus on securing of orders for the products in other segments is being
maintained.
Management Discussion and Analysis
The Management Discussion and Analysis Report as stipulated under
Clause 49 of the Listing Agreement with Stock Exchanges, forming part
of Directors'' Report for the year under review, is given in a separate
section of this Annual Report.
Directors
Shri D N Davar and Shri R M Agarwal, Directors retire by rotation and
being eligible, offer themselves for re-appointment at the ensuing AGM.
Shri R K Goel appointed as Additional Director by the Board w.e.f. 15th
September, 2012 resigned on the 30th January, 2013.
Shri R N Tiwari inducted as Additional Director and appointed Director
(Works) w.e.f. the 25th February, 2013 holds office upto the date of
ensuing Annual General Meeting (AGM) and is eligible for appointment.
Notice pursuant to Section 257 proposing the candidature of Shri Tiwari
has been received from a member of the Company for such appointment.
Directors''Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
(a) in preparation of the annual accounts for the financial year ended
March 31,2013 the applicable accounting standards have been followed
and proper explanations relating to material departures, if any, have
been provided;
(b) the accounting policies selected and applied are consistent and the
judgments and estimates made 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 Loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
(d) the annual accounts have been prepared on a going concern basis.
Auditors and Auditor''s Report
Messrs S. R. Batliboi & Co. LLP, Chartered Accountants, Auditors of the
Company retire at the conclusion of ensuing Annual General Meeting and
willing to continue, they have submitted the certificate pursuant to
Section 224(1 B) of the Companies Act, 1956 about their eligibility for
reappointment.
As regards the qualified opinion in Auditor''s Report, in addition to
Notes No. 11, 13.2 & 33 being self explanatory and requiring no further
clarification from the Directors at this stage, a gist of management
response is as follows:
(i) Demand made by ARCIL against the Company was not in consonance with
the understanding i. e. the alleged amount will stand repaid upon
invocation of the pledge of shares being the exclusive security in its
favour and therefore, the Company denied such additional demand and
thus no provision has been considered necessary. Subsequently in an
application filed by ARCIL before the BIFR on the subject it has been
held that ARCIL''s prayers are not maintainable.
(ii) The amount comprised of three separate claims has been considered
good of recovery based on the facts of the each matter and progress
witnessed therein including the ruling of the apex court having a
direct (positive) bearing on the grounds taken in one of the
proceedings filed by the Company.
Whereas arbitration has resumed in one of the matters, a part of the
amount has already been received against guarantee given in compliance
with the Hon''ble High Court''s order in favour of the Company in the
other matter. Therefore, the management is pursuing the proceedings and
is hopeful of recovering the said amounts.
(iii) Order for Wagons procurement having been placed by the customer,
the Company has taken steps to execute the same in right earnest and is
virtually certain of earning reasonable taxable profit to claim entire
Deferred Tax Asset in near future.
Cost Auditors
Pursuant to the recent order by Government of India, audit has become
applicable to your Company. Messrs. D. Radhakrishnan & Co., Cost
Accountants were appointed as Cost Auditors to conduct cost audit for
the Financial Year 2013-14,The Certificate of Compliance in respect of
maintenance of cost records for the financial year 31 st March, 2013
would be filed with the authority concerned within the time stipulated
by law.
Public Deposits
During the year under review, no public deposits had been accepted by
the Company.
Corporate Governance
A separate section on Corporate Governance as prescribed under Clause
49 of the Listing Agreement along with the Certificate obtained from a
Practising Company Secretary regarding compliance with conditions of
Corporate Governance is included in the Annual Report.
Listing with Stock Exchanges
The equity shares of the Company are listed at The National Stock
Exchange of India Limited (NSE), The Bombay Stock Exchange Limited
(BSE), The Delhi Stock Exchange Limited (DSE), The Calcutta Stock
Exchange Limited (CSE) and The Madhya Pradesh Stock Exchange Limited
(MPSE) and Listing fees for the financial year ending the 31 st March,
2014 have been duly paid.
Disclosures
1. Under Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Amendment Rules, 2011, as amended
Particulars of employee(s) drawing remuneration to the extent
applicable as per the aforesaid Section are disclosed in the Annexure A
to this Report.
2. Under Section 217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, as amended
The disclosure required under the aforesaid provision has been attached
separately and marked as Annexure B to this Directors'' Report and forms
part of this Report.
Corporate Social Responsibility
Your Company''s endeavors to contribute suitably to the society by being
involved in a series of Community Welfare Programs, directly or through
philanthropic organizations would continue. Bharatpur plant is located
close to the Bharatpur Bird Sanctuary amidst vast green area and all
care is taken to preserve the environment to allow the nature''s expanse
to remain green and grow healthily.
Acknowledgements
Your Directors wish to place on record their appreciation of the
cooperation and support of the secured lenders viz. ICICI Bank and
Syndicate Bank and Governments of Rajasthan, Madhya Pradesh and Delhi,
local administration (West BengaD/other Government Departments; for
contribution of the employees of the Company and all other
stakeholders.
On behalf of the Board
Place :Kolkata J. P. Chowdhary
Date: May 20,2013 Executive Chairman
Mar 31, 2012
The Directors present the 67th Annual Report, together with the
audited accounts of the Company for the financial year ended March 31,
2012. Financial Results
The performance of the Company has been satisfactory during the
financial year ended the 31st March, 2012.
(Rs. in lacs)
Particulars Year ended Year ended
31.03.2012 31.03.2011
(12 Months) (9 Months)
Turnover 23,651.30 11,782.02
Profit/(Loss) before Extra-ordinary
Items &Tax 3,279.09 1,002.96
Less: Exceptional Items 2,475.99 635.95
Profit before Taxation 803.10 367.01
Add/(Less):Deferred Tax
Credits/(Charge) (384.47) 726.70
Less :Wealth Tax& Fringe Benefit Tax - 1.22
Profit after Taxation 418.63 1,093.71
Loss brought forward from
previous period 2,011.08 3,104.79
Loss carried to Balance Sheet 1,592.45 2,011.08
Reserves & Surplus 16,160.58 15,855.50
Earnings per Share (Rs.) 2.08 5.43
As the previous financial year comprised of nine months, performance
For the financial year ended the 31st March,2012is not comparable with
that of the preceding financial year. Adjustment of exceptional items
against the Profit before Tax has resulted in lower Profit after Taxation,
despite improvement in revenue and top line for the financial year
under review.
Dividend
In the absence of adequate profit available for appropriation and
accumulated loss being carried forward, your Directors do not recommend
any dividend for the year under review.
Review of Operations and Future Outlook
During the year ended the 31st March, 2012 your Company successfully
executed the order for Wagons secured from the Indian Railways and
produced 1299 and sold 1302 wagons from its plant at Bharatpur.
Facilities of your Company have been streamlined for operational
efficiency and are capable of manufacturing large volume of rolling
stock. However, order for the number of Wagons entitled to be allocated
to the Company is yet to be released by the Indian Railways (IR).The
execution of first tranche of the quantity ordered by IR as per its
decision based on a change in complete reversal of its stand in
non-compliance with the Order passed by the Hon'ble Board for
Industrial & Financial Reconstruction (BIFR), has been progressing as
per schedule. Your Company's facilities at Bharat pure real so
equipped to manufacture various products viz. Cement/Mineral Plant
Equipment, Hydro Mechanical Equipment, Pressure Vessel Equipment and
orders for the said verticals are being aggressively pursued. Overall
the outlook for current year is cautiously optimistic.
Management Discussion and Analysis
The Management Discussion and Analysis Report as stipulated under
Clause 49 of the Listing Agreement with Stock Exchanges, forming part
of Directors' Report for the year under review, is given in a separate
section of this Annual Report.
Directors
Shri J K Shukla and Dr. G B Rao, Directors retire by rotation and being
eligible, offer themselves for re-appointment at the ensuing AGM. Shri
Manoj Jha inducted as an Additional Director was appointed as Managing
Directorw.e.f.the24th March,2012.ShriMJZMowla and Shri K S B Sanyal
appointed as Additional Directors by the Board w.e.f. 8th November,
2011 and 24th March, 2012 respectively, hold office up to the dateof
ensuing Annual General Meeting and in accordance with Section 260 of
the Act are eligible for appointment. Notice(s) pursuant to Section 257
proposing the candidature of the Directors named hereinabove have been
received from the members of the Company proposing their appointment.
During the year under review, the term of Shri J P Gupta as Executive
Director ended on the 31st July, 2011 and he continued as a Non
Executive Director till the 5th December, 2011 before retiring at the
last Annual General Meeting held on the said date. Shri Jamil Ashraf,
Shri Ravi Kumar, Directors and Dr. Vinay Mohan, Director (Corporate
Affairs) & Officiating CFO resigned from the Board w.e.f. the 17th
October, 2011, 5th December, 2011 and the 31st March, 2012
respectively. Shri Manoj Jha's resignation from the office of Director
& Managing Director has been accepted w.e.f. 30.07.2012.
Directors' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
(a) in preparation of the annual accounts for the financial year ended
March 31, 2012 the applicable accounting standards have been followed
and proper explanations relating to material departures, if any, have
been provided;
(b) the accounting policies selected and applied are consistent and the
judgments and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company at the end
of the financial year, and of the Profit of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
(d) the annual accounts have been prepared on a going concern basis.
Auditors:
Statutory Auditors
The Statutory Auditors of the Company, M/s. S. R. Batliboi & Co.,
Chartered Accountants, retire at the conclusion of the forthcoming
Annual General Meeting and are eligible for re-appointment. The Audit
Committee and Board recommend the reappointment of M/s. S. R. Batliboi
& Co., Chartered Accountants as Statutory Auditors of your Company.
They have intimated their willingness to continue and submitted the
certificate pursuant to Section 224(1B) of the Companies
Act,1956 about their eligibility for reappointment.
Cost Auditors
Pursuant to the provisions of Sections 224,226 & 233B of the Companies
Act, 1956 and read with the Order No F. No 52/26/CAB/2010 dated
24.01.2012 issued by Cost Audit Branch, Ministry of Company Affairs,
Government of Company classified under industry head Engineering
Machinery, M/s Sinha Chaudhuri & Associates, Cost Accountants, were
appointed as Cost Auditors of the Company for the Financial Year ended
31th March, 2013.
Auditors' Report
Notes 13.2A and 32 when read together with the relevant notes on
accounts and accounting policies are self explanatory. The observation
of Statutory Auditors regarding no internal audit having been carried
out has been addressed by the management and the outgoing Internal
Auditors have completed their report. M/s. L B Jha & Co., Chartered
Accountants have been appointed as Internal Auditors of the Company to
strengthen and stream line the internal audit system.
Public Deposits
During the year under review, no public deposits were accepted by the
Company.
Promoter Group
In accordance with the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997, details of Promoters, Promoter Group and
its constituents are disclosed in a statement annexed to this Report.
None of the Promoters have pledged any Shares held by them in the
Company.
Corporate Governance
A separate section on Corporate Governance as prescribed under Clause
49 of the Listing Agreement along with the Certificate obtained from a
Practicing Company Secretary regarding compliance with conditions of
Corporate Governance is in cluded in the Annual Report.
Listing with Stock Exchanges
The equity shares of the Company are listed at The National Stock
Exchange of India Limited (NSE), The Bombay Stock Exchange Limited
(BSE), The Delhi Stock Exchange Limited (DSE), The Calcutta Stock
Exchange Limited (CSE) and The Madhya Pradesh Stock Exchange Limited
(MPSE) and Listing fees for the financial year ending the 31st March,
2013 have also been duly paid.
Disclosures
1. Under Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Amendment Rules, 2011, as amended:
Particulars of employee(s) drawing remuneration to the extent
applicable as per the aforesaid Section are disclosed in the Annexure A
to this Report.
2. Under Section 217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors)Rules,1988,as amended:
The disclosure required under the aforesaid provision has been attached
separately and marked as Annexure B to this Directors' Report and forms
part of this Report.
Corporate Social Responsibility
Your Company' endeavors to contribute suitably to the society by being
involved in a series of community welfare programmes, directly or
through philanthropic organizations would continue. Bharatpur plant is
located close to the Bharat pur Bird Sanctuary amidst vast green area
and all care is taken to preserve the environment to allow the nature's
expanse to remain healthy and grow healthily.
Acknowledgements
Your Directors wish to place on record their appreciation for the
cooperation and support of the secured lenders viz. ICICI Bank,
Syndicate Bank and Governments of Rajasthan, Madhya Pradesh and Delhi,
local administration/other Government Departments; for contribution of
the employees/ex-employees of the Company and all other stakeholders.
On behalf of the Board
Place : Kolkata J. P. Chowdhary
Date: July 30,2012 Executive Chairman
Jun 30, 2010
The Directors have pleasure in presenting the 65th Annual Report,
together with the audited accounts of the Company for the financial
year ended June 30, 2010.
Financial Results:
The Company was referred to Honble BIFR in the year 2000, declared
Sick Industrial Company within the meaning of Section 3(1 )(o) of the
Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) by the
Honble BIFR in the year 2002 and registered with Reference No.
372/2000. The operations of the Company were stalled following the
lockout at its Bharatpur Plant w.e.f. 13.11.2000, and could be resumed
only after lifting of the lockout w.e.f. 14.09.2008. After
deliberations and examining the Companys revival proposal over
considerable period, the Honble BIFR has sanctioned the Rehabilitation
Scheme for the Company by its order dated 11.03.2010 under the
provisions of SICA, which is in the process of implementation in right
earnest. In this backdrop, your Directors were of the opinion that
post-sanction of the Scheme, the first audited Balance Sheet of the
Company should incorporate the immediate
adjustments/set-off/repayments, etc. arising out of the Sanctioned
Scheme of the Honble BIFR to reflect its true financial status in a
prudent manner, and as such, the financial year of the Company under
review has been extended by three months so as to end on 30.06.2010 in
place of the usual closure on 31.03.2010 and accordingly the figures
given below for the current year are not comparable with that for the
previous accounting year.
[Rs./Lacs]
Particulars Year ended Year ended
30.06.2010 31.03.2009
(15 Months) (12 Months)
Profit/(Loss) before Extra-ordinary
Items & Tax 338.66 (10,346.62)
Extra-ordinary Items (arising out of
the sanctioned Scheme of BIFR) 55,208.23 (287.11)
Profif(Loss) before Taxation 55,546,89 (10,633.73)
Profit/(Loss) after Taxation 55,682.65 (10,637.99)
Balance carried to Balance Sheet (3,104.79) (59,010.13)
Reserves & Surplus 3,220.32 222.69
Net Worth 2,130.37 (57,357.00)
Earnings per Share
(before Extra-ordinary Items) (Rs.) 3.05 (72.58)
Dividend:
In view of the restrictions imposed under the Scheme sanctioned by the
Honble BIFR, your Directors regret their inability to recommend any
dividend for the year.
Developments at BIFR:
As stated in our last Report, the Company had submitted the draft .
revival scheme which, inter a//a, envisages strengthening the
management by joining of Titagarh Wagons Limited as Co-Promoter;
infusion of the requisite funds and further to contribute towards the
business development as well as the settlement of dues of the financial
institutions and the banks, rationalization of operating costs and
financial re-engineering, thereby enabling the faster turnaround and a
healthy balance sheet for the Company. The draft revival scheme of the
Company received the support and consent of all the major stakeholders,
based on which, the Honble BIFR has sanctioned the Rehabilitation
Scheme for the Company by order dated 11.03.2010. The rehabilitation
strategy envisages reliefs and concessions from various agencies
including Central and State Governments, and also induction of fresh
funds by the Promoter and Co-Promoter for revival of the Companys
operations. Pursuant to and in compliance with this Sanctioned Scheme,
the Company has already complied with most of the directions of the
Honble BIFR, which include re-organization of share capital by
reduction and consolidation, infusion of funds and issue of fresh
shares, settlement of labour dues, repayment of the secured and
unsecured loans of the Company.
Review of Operations and Future Outlook:
The operations of the Company at its Plant at Bharatpur resumed after
having remained closed for almost eight years, following withdrawal of
the lock-out on 14.09.2008. The Company, with its glorious history in
the fields of manufacture of railway wagons and other heavy engineering
products, has again started participating in the tenders floated by the
Ministry of Railways and other Public/Private Sector Units to pursue
and regain its prominence in the industry in due course. It gives
pleasure to your Directors to inform you that the Company has
successfully rolled out 123 wagons from its factory during the period
under review. The Railway Board has recently placed an order on your
Company valued at more than Rs. 250 Crores.which has been partly
released for execution. This apart, the Company has received number of
other orders from Private/Public Sector units, being under execution.
To meet the operational requirements, ICICI Bank Limited has since
sanctioned financial assistance by way of term loan and working capital
facilities aggregating Rs.130 Crores.
Management Discussion and Analysis:
The Management Discussion and Analysis Report as stipulated under
Clause 49 of the Listing Agreement with Stock Exchanges, forming part
of Directors Report for the year under review, is given in a separate
section of this Annual Report.
Directors :
Shri Sanjiv K. Jha and Shri Rakesh Khandelwal, Directors of the
Company, have resigned w.e.f. 22.10.2010 and 14.11.2010 recpectively.
The Directors place on record their appreciation for the valuable
services rendered by Shri Jha and Shri Khandelwal during their tenure
as Directors.
The nomination of Shri R. K. Goel, as Nominee Director was withdrawn by
Asset Reconstruction Company (India) Limited (Arcil) vide its letter
dated 27.01.2010 and in his place, Shri Sanjoy Gupta has joined the
Board of Directors of the Company as Nominee Director of Arcil, with
effect from the same date.
Pursuant to the Sanctioned Scheme of the Honble BIFR, Shri Umesh
Chowdhary and Shri Anil Kumar Agarwal were nominated by the joint
promoters and co-opted as Additional Directors of the Company w.e.f.
14.03.2010. In terms of the provisions of Section 260 of the Companies
Act, 1956, read with Article 137 of the
Articles of Association of the Company, Shri Umesh Cbowdhary and Shri
Anil Kumar Agarwal will hold office as Directors upto the date of the
forthcoming Annual General Meeting. The Company has received notices
under the provisions of Section 257 of the Companies Act, 1956,
proposing the candidatures of Shri Umesh Chowdhary and Shri Anil Kumar
Agarwal for the office of Nominee Directors of the Company.
Subsequent to the sanction of the Scheme by the Honble BIFR, in
exercise of the powers conferred under Section 16(4) of SICA the
Honble BIFR by its Order dated 19.07.2010 has appointed Shri Ashok
Gupta as Special Director in the Board of Directors of the Company.
The appointment shall remain valid until further order of the Honble
BIFR or for a period of three years from the date of appointment or
till the date on which Shri Gupta attains the age of 65 years,
whichever is earlier.
The term of office of Shri J. P. Gupta as Executive Director of the
Company expired on 31.07.2010. Considering his long association with
the Company and valued contribution, the Board of Directors has again
re-appointed Shri Gupta as Whole-time Director of the Company
(designated as Executive Director) for a period of one yearw.e.f.
01.08.2010. His appointment and remuneration payable to him requires
consent of the Shareholders at the ensuing Annual General Meeting of
the Company.
In accordance with the provisions of the Companies Act, 1956 read with
the Articles of Association, Shri Ravi Kumar and Shri J. K. Shukla,
Directors of the Company retire by rotation and being eligible, offer
themselves for re-appointment.
Directors Responsibility Statement:
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
(a) in preparation of the annual accounts for the financial year ended
June 30, 2010 the applicable accounting standards have been followed
and proper explanations relating.to material departures, if any, have
been provided;
(b) the accounting policies selected and applied are consistent and the
judgments and estimates made are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the end of
the financial year, and of the Profit of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
(d) the annual accounts have been prepared on a going concern basis.
Auditors:
M/s. L. B. Jha & Co., Chartered Accountants, Statutory Auditors of the
Company shall retire at the conclusion of the ensuing Annual General
Meeting and intimated their un-willingness to be re- appointed due to
unavoidable circumstances. As such, it is proposed to appoint M/s. S.
R. BatliboiS Co. Chartered Accountants, as the Statutory Auditors of
the Company to hold office until the conclusion of the next Annual
General Meeting, for which, the Company has received the statutory
confirmation that the proposed appointment, if made, will be in
accordance with the limit prescribed under Section 224(1B) of the
Companies Act, 1956.
Auditors Report:
Observations of the Auditors, when read together with the relevant
notes to accounts and accounting policies, are self explanatory.
The Company is taking all action necessary in a time bound manner in
regard to the observations made by the Auditors in the Annexture to
their Report and therefore, the same require no further clarification.
Corporate Governance:
A separate section on Corporate Governance as prescribed under Clause
49 of the Listing Agreement along with the Certificate obtained from
the Auditors of the Company regarding compliance of conditions of
Corporate Governance is included in the Annual Report.
Listing with Stock Exchanges:
The equity shares of the Company are listed at National Stock Exchange
of India Limited (NSE), Bombay Stock Exchange Limited (BSE), Delhi
Stock Exchange Limited (DSE), The Calcutta Stock Exchange Limited (CSE)
and the Madhya Pradesh Stock Exchange Limited (MPSE). The Company is
regular in payment of Listing Fee to the Stock Exchanges, as well as,
the Annual Custodial Fee payable to the Depositories, i.e. National
Securities Depository Limited (NSDL) and Central Depository Services
(India) Limited (CDSL).
The trading in equity shares of the Company was under suspension at BSE
with effect from 07.01.2002. As communicated in the last years report,
based on the. application submitted by the Company and on compliance of
the stipulations prescribed by BSE, the ongoing suspension at BSE has
been revoked and trading in equity shares of the Company has resumed
w.e.f. 26.10.2010. However, the suspension in trading of equity shares
of the Company at NSE is continuing w.e.f. 07.05.2009, for revocation
of which, the application submitted by the Company is under
consideration.
Unpaid/Unclaimed Fixed Deposits & Dividend:
As stated in the last years report, the balances in the unpaid/
unclaimed dividend accounts, debenture redemption and interest on
debenture accounts of the Company pertaining to financial years
1996-97,1997-98,1998-99 and 1999-2000 have since been transferred to
the credit of the Investor Education and Protection Fund (IEPF), as
required under Section 205C of the Companies Act, 1956. The unpaid
fixed deposits shall be repaid in accordance with the Sanctioned Scheme
of the Honble BIFR.
Disclosures:
1. Under Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975, as amended:
During the year under review, none of the employees of the Company was
in receipt of the remuneration requiring statutory disclosure.
2. Under Section 217(1 )(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, as amended:
The Plant of the Company at Bharatpur was under management lockout
since November 2000. The lockout was withdrawn on 14.09. 2008 and
thereafter, power connection was restored in October 2008 followed by
revamping of Plant & Machinery which were lying in un-used/ rundown
condition. Due to the circumstances beyond control of the Company,
there was no scope for undertaking any measures during the year under
review towards conservation of energy and/or -technology absorption,
adaptation and/or innovation. The Company did not have any foreign
exchange earnings and outgo during the year under review.
Acknowledgement:
Your Directors wish to place on record their sincere gratitude to the
IDBI Bank Limited (Monitoring Agency appointed by Honble BIFR) for
their continuous guidance and support, the secured lenders including
Arcil, creditors, deposit-holders for their support and understanding
in bearing with the Company. Your Directors are also thankful for the
understanding of the employees/ex-employees of the Company who have
been affected by the disruption of work and of the dedicated services
being put in by them. Your Directors also place on record their deep
appreciation and gratitude to the Governments of Rajasthan and Madhya
Pradesh, local administration and other Government Departments for
their kind support and cooperation at all times.
For and on behalf of the Board
Place: Noida Umesh Chowdhary
Date: November 14, 2010 Chairman