DIRECTORS' REPORT Your Directors have pleasure in presenting the Ninety-sixth Annual Report together with the Audited Accounts of your Company for the year ended 31st March 2016. DIVIDEND Your Directors take pleasure in recommending for approval the payment of Dividend of Rs. 2/- (per share) for the year ended 31st March 2016. FINANCIAL PERFORMANCE The Company's gross income for the financial year ended 31st March 2016 stood at Rs.200.71 lacs as against Rs.201.27 lacs in 2014-15. Profit before tax of the Company stood at Rs.84.08 lacs as against Rs.81.68 lacs in 2014-15. Profit after tax of the Company stood at Rs.104.68 lacs against Rs.79.33 lacs in 2014-15. There was a marginal improvement in the performance of the Company's wholly owned subsidiary, Alfred Herbert Limited during the year and the Company made a profit before tax of Rs.18.39 lacs as against a loss of Rs.210.63 lacs in 2014-15. This was achieved despite poor demand in the capital intensive industry and the sluggish demand in the tyre industry. Customers continue to delay taking deliveries on time which have had made an adverse impact on the working capital of the Company. Alfred Herbert Limited is attempting to diversify its product mix and has installed a new machine to optimise a new CNC Machine to optimise its production facilities. DIRECTORS Pursuant to the provisions of the Companies Act, 2013, Mr. A V Lodha, Director, retires by rotation and being eligible, offers himself for re-appointment. All Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. SHARE CAPITAL The paid -up equity share capital of the Company as on 31st March 2016 was Rs.77.14 lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. DEPOSITS The Company had discontinued its fixed deposit scheme in the financial year 2000-2001. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not taken or given any loans or given loans and investments covered under the provisions of Section 186 of the Companies Act, 2013. During the year, the Company has provided a Corporate Guarantee to a Bank at Bangalore for advancing Working Capital facilities to its wholly owned subsidiary, Alfred Herbert Limited. STATUTORY AUDITORS M/s. Ray & Ray, Chartered Accountants, will retire at the Annual General Meeting and they have given their consent to be reappointed for the current year. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs Priyanka Lohia, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as' Annexure A" CORPORATE GOVERNANCE The Company has complied with the Corporate Governance code as stipulated under the Listing Agreement with the Stock Exchange. A separate section on Corporate Governance, along with Certificate from the Auditors confirming the compliance, is annexed and forms part of the Annual Report. SUBSIDIARY COMPANIES In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached with the Balance Sheet of the Company. However, the financial information of the Subsidiary Companies is disclosed in the Annual Report in compliance with the said circular. The consolidated financial statements presented by the Company include financial results of its Subsidiary Companies, Alfred Herbert Limited and Herbert Holdings Limited. MEETINGS OF THE BOARD During the year 5 meetings of the Board of Directors and 1 meeting of Independent Directors were convened and held. Also 4 meetings Of Audit Committee, and 2 meetings of Stakeholders Relationship Committee were held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. BUSINESS RISK MANAGEMENT The main identified risks at the Company are Commercial Risks, Financial Risks, Operational Risks and Legal & Regulatory Risks. Your Company has established a comprehensive Risk Management System to ensure that risk to the Company's continued existence as a going concern and to its development are identified and addressed on timely basis. Risk Management strategy as approved by the Board of Directors is implemented by the Company Management. MANAGERIAL REMUNERATION During the year, the Company paid an aggregate sum of Rs.16.35 lacs to Key Managerial Personnel, Mr. R Radhakrishnan (CEO) and Mr. A K Basu (CFO). VIGIL MECHANISM Pursuant to the provisions of revised Regulation 22 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Section 166 (9)&(10) of the Companies Act, 2013, the Company had established a Vigil Mechanism for Directors and Employees to report concerns of unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Regulation 4(f) and Regulations of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. INTERNAL FINANCIAL CONTROLS Pursuant to Section 134(5) (e) of the Company's Act, 2013, the Directors of the Company had laid down internal financial control policy assuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safe guarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the Accounting records and timely preparation of reliable financial information. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY The Company has an Internal Control System commensurate with the size and scale of its operations. RELATED PARTY TRANSACTIONS All Related Party Transactions that were entered into during the financial year were in the ordinary course of business. None of the Directors has any direct pecuniary relationships or transactions visa-vis the Company. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS 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. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the annual return in Form No. MGT- 9 is annexed herewith as "Annexure B". DIRECTORS' RESPONSIBILITY STATEMENT As stipulated in Section 134(3) (C) of the Companies Act, 2013, your Directors subscribe to the"Directors' Responsibility Statement" and confirm as under: a) that in the preparation of the annual financial statements for the year ended 31st March 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Note No. 1 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2016 and of the profit of the Company for the year ended on that date c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars regarding foreign exchange earnings and expenditure appear as Annexure to Schedule at item No. 13 in the Notes to the Accounts. The other particulars relating to Conservation of Energy and Technology Absorption stipulated under Section 134(3M)of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014,are not applicable. PERSONNEL Your Directors wish to place on record their appreciation for the services rendered by the employees of the Company during the year. On behalf of the Board A.V. Lodha CHAIRMAN Kolkata Date:26th May 2016 |