DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the THIRTY THIRD ANNUAL REPORT and audited accounts for the year ended 31st March 2015 02. REVIEW OF OPERATIONS: During the year under review, Your Company's sales decrease by 22% due to recessionary trend in the tractor industry throughout the year. Increase in depreciation due to revised rates on the basis of useful life as per recently introduced Companies Act, 2013. Company's main Customers in tractor industries were seriously affected and hence our Company also affected in terms of sales to these customers. Also during these two quarters raw material prices increased but not passed on by our customers, which yielded lower contribution towards fixed cost and Company incurred loss of Rs. 48.08 lacs. During FY 2015-16. Company is expecting to increase its sales and production due to good demand and hope to achieve good profit. 03. DIVIDEND: The Board of Directors recommend dividend at the rate of 5% i.e. Rs.0.50 per Equity Share of Rs. 10/- each for the year ended on 31st March, 2015 (Previous year at the rate of 9% i.e. Rs. 0.90/- per Equity Share) in pursuance to the (Declaration & Payment of Dividend) Rules, 2014 subject to the approval of shareholders at the 33rd AGM. 04. PUBLIC DEPOSITS : During the financial year 2014-15, your Company has not accepted or renewed any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. 05. SHARE CAPITAL : The paid up Equity Share Capital as on March 31, 2015 was Rs. 2.88 Crore. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has also not purchased of its own shares by employees or by trustees for the benefit of employees. 06. EXTRACT OF THE ANNUAL RETURN : The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure A". 07. THE DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The Information required to be disclosed in the report of the Board of Directors as per the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of Companies (Accounts), Rule, 2014 is annexed herewith as "Annexure B". 08. DIRECTORS : A) Changes in Directors and Key Managerial Personnel. Mrs. Mandakini P. Bhagwati has been ceased to be a Director of the Company w.e.f. 28th April, 2014 due to her sad demise. At the last AGM held on September 24, 2014, the Members had appointed the existing Independent Directors viz. Mr. Padmin H. Buch and Mr. Rajendraprasad J. Shah as Independent Directors under the Act each for a term of five years with effect from September 24, 2014. Mr. Dinesh K. Sheth has been appointed as Chief Financial Officer (Key Managerial Personnel) of the Company w.e.f. May 23, 2014. Your board of Directors has appointed Mr. Nimish Sakhiya as Company Secretary (Key Managerial Personnel) of the Company in the board meeting held on May 23, 2014. However, he ceased to be a Company Secretary of the Company w.e.f. December 11, 2014 due to his ill health. Mr. Akshit Soni has been appointed as Company Secretary (Key Managerial Personnel) of the Company in the board meeting held on February 10, 2015. As per provision of the Companies Act, 2013, Dr. Pravin N. Bhagwati retires by rotation in the forthcoming Annual General Meeting and being eligible offered himself for re-appointment. The Board of Directors recommends their re-appointment. B) Declaration by an Independent Director(s) and reappointment, if any The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013. An independent director shall hold office for a term up to five consecutive years on the Board of the Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. C) Annual evaluation by the board of its own performance, its committees and individual directors The Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the Company. (D) Policy on Directors' appointment and remuneration (Including criteria for determining qualification, positive attributes, independence of a Director, policy relating to remuneration for Directors, Key Managerial Personnel and other employees) Policy on Directors' appointment Policy on Directors' appointment is to follow the criteria as laid down under the Companies Act, 2013 and the Listing Agreement with Stock Exchanges and good corporate practices. Emphasis is given to persons from diverse fields or professions. Policy on Remuneration Guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is that - i Remuneration to unionised workmen is based on the periodical settlement with the workmen union. ii Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen (non Unionised) is industry driven in which it is operating taking into account the performance leverage and factors such as to attract and retain quality talent. iii For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars and guidelines issued by Central Government and other authorities from time to time. 09. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: The Board of Directors have met 4 times and Independent Directors once during the year ended 31st March, 2015. 10 . AUDIT COMMITTEE: The Composition of Audit Committee of the Company is as under MECHANISM FOR DIRECTORS AND EMPLOYEES : The Company has formulated Vigil Mechanism named Whistle Blower Policy with a view to report concern about unethical behavior, actual or suspected fraud. This policy provide mechanism for employee of the Company of any violation and to approach the chairman of the Audit Committee of the Company who shall investigate into the same and recommend suitable action to the management. 12. NOMINATION AND REMUNERATION COMMITTEE : The Board has on recommendation of nomination and remuneration committee, framed a policy for section and appointment of Director, senior management and their remuneration. 1 3. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 There is no loan given, investment made, guarantee given or security provided by the Company to any entity under Section 186 of the Companies Act, 2013. 14. PARTICULARS OF CONTRACTS ARRANGEMENTS WITH OR The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is disclosed in Form No. AOC -2 is annexed herewith as "Annexure C". 15. PARTICULAR OF SUBSIDIARY/JOINT VENTURE / ASSOCIATE COMPANY : The Company does not have any subsidiary, Joint Venture and Associate Company. 16. RISK MANAGEMNET : Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in its strategy, business and operational plans. Your Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as agreed from time to time with the Board of Directors. There are no risks which in the opinion of the Board threaten the existence of your Company. 17. CORPORATE SOCIAL RESPONSIBILITY: The provision of Corporate Social Responsibility is not applicable to your Company. 20. AUDITORS: 1) STATUTORY AUDITORS M/s. Milin J Jani & Co., Chartered Accountants, Ahmedabad (Firm Registration No.106396W) Statutory Auditor of the Company, hold office until the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment. The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. AUDITORS' REPORT There are no adverse observations, Notes made by the Auditors in their report so there are no comments by Directors on Auditors Notes. 2) SECRETARIAL AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Samdani Shah & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure D". 21. DIRECTORS' RESPONSIBILITY STATEMENT: In terms of Section 134(3) of the Companies Act, 2013, in relation to the Financial Statements for FY 2014-15, the Board of Directors states that: (a) in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors have prepared the annual accounts on a going concern basis; (e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 22. HUMAN RESOURCES : Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement. 23. CHANGE IN THE NATURE OF BUSINESS, IF ANY : No change in the nature of the business of the Company done during the year. 24. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT: No other material changes have taken place after completion of the financial period up to the date of this report which may have substantial effect on business and finances of the company and which are required to be disclosed in this Report. 25. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE: There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 26. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS: The Company has an internal control system, commensurate with the size, scale and complexity of its operations. To maintain its objectives and independence, the internal Audit function reports to the chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficiency and adequacy of Internal Control System in the Company, its compliance with operating system, accounting procedures and policy of the Company. Based on the report of internal audit function, process owners undertake corrective action and thereby strengthen the controls. Significant audit observation and corrective actions thereon are presented to the audit committee of the board. 27. General: 1. Insurance : The assets of the company including Plant and Machineries, Factory Building, Stocks, Stores, Vehicles etc. have been adequately insured. 2. Industrial Relations : During the year under review, your Company enjoyed cordial relationship with the workers and employees at all the levels. 3. Acknowledgement : Your Directors thanks to various Central and State Government Departments, Organizations and Agencies for the continued cooperation and help extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. For and on behalf of the Board of Directors Dr. Pravin N. Bhagwati Chairman Place : Ahmedabad Date : 22/05/ 2015 |