Directors' Report
To The Members
The directors present herewith the 70th Annual Report and the audited accounts for the financial year ended 31st March, 2016.
1. Financial Results
The financial performance of the Company for the financial year ended 31st March, 2016, is summarized below:
(Rs. Cr.)
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Particulars
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2015-16
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2014-15
|
|
Profit/(Loss) before Depreciation, Interest & Tax
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(10.34)
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33.06
|
|
Less: Interest
|
57.02
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61.72
|
|
Depreciation and Amortization
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31.58
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40.65
|
|
Profit/(Loss) before exceptional items and Tax
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(98.94)
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(69.31)
|
|
Less: Exceptional Items Net : Income / (Expenditure)
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73.75
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(3.90)
|
|
Profit before tax / (Loss)
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(25.19)
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(73.21)
|
|
Less: Provision for Current Taxation
|
0.00
|
0.00
|
|
Add: Deferred Tax Credit
|
0.00
|
27.38
|
|
Profit after tax / (Loss)
|
(25.19)
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(45.83)
|
|
Add: Balance in Profit and Loss Account
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50.46
|
96.29
|
|
Amount Available for Appropriation
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25.27
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50.46
|
|
Appropriations:
Dividend on Equity Shares
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0.00
|
0.00
|
|
Tax on dividend
|
0.00
|
0.00
|
|
General Reserve
|
0.00
|
0.00
|
|
Balance carried to Balance Sheet
|
25.27
|
50.46
|
During the year under review, the Company has achieved Net sales of Rs. 99.96 Cr (Rs.166.23 Cr. in the previous year). The Company incurred loss of Rs. 10.34 Cr before depreciation, interest and tax as against profit of Rs. 33.06 Cr in the previous year. The year under review had been extremely difficult on account of paucity of working capital, labour absenteeism and slower off-take by customers, particularly from windmill sector. The business situation for capital goods industry was adverse during the year.
The Company has undertaken various measures to rectify the situation, including change in product-mix. The company has already received orders for Metro bogie chassis from Hyundai, Alstom and BEML. The execution of these orders has already commenced from the current financial year.
2. Dividend
The Board has not recommended any dividend on equity shares
3. Operations & Management Discussion and Analysis
The current year's operations are covered in the Management Discussion and Analysis Report. This Report, as stipulated under Schedule V to the SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015, is presented in a separate section forming part of this annual report.
4. Corporate Governance
The Report on Corporate Governance, as stipulated in Schedule V to the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, forms part of this Report. Further, it is stated that:
i. Four Board Meetings were held during the year ended 31.3.2016. The details are given in Item No. 3 of the Corporate Governance Report.
ii. The composition of Audit Committee and other particulars are given in item No. 4 of the Corporate Governance Report
iii. The Company has established a vigil mechanism for directors and employees to report their genuine concern and grievances. No personnel has been denied access to the Audit Committee.
iv. The Company has adopted Risk Assessment Procedure which provides an approach by the Management to identify potential events that may affect the Company, to manage the risk within its risk appetite and to provide reasonable assurance regarding the achievement of the objectives of the Company. The Management prioritizes the risk and finalizes the action plan for mitigation of the key risks. The Board is of the opinion that there are no elements of risk which may threaten the existence of the Company.
v. The number of shares held by non-executive directors as on 31.03.2016 have been disclosed in Para-7 of the Corporate Governance Report.
5. Directors
Mrs. Rohita M. Doshi is retiring by rotation in accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company and being eligible, offers herself for re-appointment.
Each of the Independent Directors of the Company has given a declaration under Section 149(7) of the Companies Act, 2013, to the effect that each of them meets the criteria of independence as provided in Sub-section 6 of Section 149 of the Companies Act, 2013. The Board confirms that each of these Independent Directors is independent of the management of the Company and has requisite qualification and experience to act as Independent Directors for the Company and further that in the Board's opinion each of them is a person of integrity and possess relevant expertise and experience in the fields related to the Company's business.
6. Directors' Responsibility Statement as required under Section 134(5) of the Companies Act, 2013
The Directors state that -
i. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year;
iii. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. The directors had prepared the annual accounts on a going concern basis.
v. the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
vi. 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.
7. Conservation of energy, technology absorption and foreign exchange earnings and outgo
The details as required under Clause-3 of Rule 8 of the Companies (Accounts) Rules, 2014, are provided in Annexure-I to the Directors' Report.
8. Fixed Deposits
The Company has not either invited or accepted or renewed deposits from the members and public during the financial year ended 31st March, 2016, under Chapter-V of the Companies Act, 2013.
As regards the deposits accepted by the Company under the provisions of the Companies Act, 1956 and outstanding as on 31.3.2016, the attention is invited to Note No. 7(d) of the Notes forming part of the financial statements.
9. Particulars of Employees
The particulars of employees, who were in receipt of remuneration not less than Rs.60 lacs for the financial year ended on 31st March, 2016, are given below:
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Name of the employee
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Mr. Maitreya V. Doshi
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|
Designation of employee
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Chairman & Managing Director
|
|
Remuneration received
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Rs.97 Lacs
|
|
Nature of employment
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Contractual
|
|
Date of commencement of employment
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16.12.1985
|
|
Qualification of the employee
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MBA, BA(Eco)
|
|
Experience of the employee
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31 years
|
|
Age of the employee
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53 years
|
|
Last employment --
|
Mr. Maitreya V. Doshi is related to Mrs. Rohita M. Doshi, Director of the Company.
The other disclosures under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014, are given in Annexure-II to the Directors' Report
10. Auditors
M/s K.S. Aiyar &Co., Statutory Auditors, retire at the ensuing annual general meeting and are eligible for reappointment. The Audit Committee of the Board has recommended their reappointment. M/s K.S. Aiyar & Co. have, under Rule-4 of the Companies (Audit & Auditors) Rules, 2014, furnished the certificate of their eligibility for reappointment. Requisite resolution is being placed for the shareholders' approval.
11. Cost Audit
The Central Government, vide Notification dated 31st December, 2014, has prescribed cost audit for engineering machinery industry with effect from the financial year 2015-16. Accordingly, the Board has appointed ABK & Associates, Cost Accountants (Regn.No.000036) to conduct audit of cost records for the Company's engineering machinery activities for the financial year 2016-17, on a remuneration Rs.1.65 lacs, apart from reimbursement of out-of-pocket expenses, as recommended by the Audit Committee. As required under Section 148(3) read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration approved by the Board is being placed for ratification by the shareholders at the ensuing Annual General Meeting.
12. Other disclosures
The particulars as required under Section 134(3) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, are given below:
(i) The Company has in place adequate internal financial controls with reference to financial statements and such controls are adequate and are operating effectively.
(ii) The extract of the Annual Return made as on 31.3.2016 under Section 92(3) of the Companies Act, 2013, in Form MGT-9, is given in Annexure - III to the Directors' Report.
(iii) The Nomination and Remuneration Policy under Section 178(3) of the Companies Act, 2013, is given in Annexure-IV to the Directors' Report.
(iv) The report on the Corporate Social Responsibility under Companies (Corporate Social Responsibility Policy) Rules, 2014, is given in Annexure-V to the Directors' Report.
(v) The Secretarial Audit Report in Form MR3 prescribed under Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, read with Section 204(1) of the Companies Act, 2013, is given in Annexure-VI to the Directors' Report.
(vi) There are no adverse remarks made by the Auditors or the Company Secretary in practice in their respective reports.
(vii) The Nomination & Remuneration Committee of the Board has laid down the policy on Director's appointment, remuneration and criteria for determining qualifications, independence of directors, etc.Para-7 of the Corporate Governance Report discloses the criteria for payment of remuneration to non-executive directors and details of remuneration paid to the Directors and that the Company does not have Stock Option Scheme.
(viii)The formal annual evaluation of the Board and individual directors has been carried out as contemplated under the code for Independent Directors in Schedule VI to the Companies Act, 2013, as per the criteria laid down by the Nomination & Remuneration Committee of the Board.
(ix) The Company has not entered into contract with related parties within the meaning of Section 188(1) of the Companies Act, 2013, read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014.
(x) The Company is not a subsidiary of any other company nor it has a subsidiary company. The Company has existing associate company namely, PAL Credit & Capital Ltd. The consolidated financial statements presented herewith include the financials of PAL Credit & Capital Ltd.
During the year, Premier Auto Ltd ceased to be associate of the Company.
(xi) No regulator or court or tribunal has passed any adverse significant and material order impacting the going concern status and the Company's operations in future.
(xii) The Company has given Rs 10.77 lacs as the loan to PAL Credit & Capital Ltd. for its business purpose during the year.
(xiii) The Company has adopted policy under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has constituted a Committee as required under the Act and the Rules thereunder. No complaints were received during the year.
13. Acknowledgement
The Directors wish to express their appreciation of the continued support of the Company's customers, suppliers and bankers. The Directors also wish to thank employees, at all levels, for their contribution and co-operation throughout the year.
On behalf of the Board of Directors
Maitreya V. Doshi
Chairman & Managing Director
Date: 20th May, 2016
Place: Mumbai
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