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Directors Report of Bharat Gears Ltd.
Mar 31, 2024
The Directors are pleased to present the 52nd Annual Report and the Audited Financial Statements for the year ended 31 March, 2024.
|
(Rs. in Crores) |
||
|
Financial Results |
Year ended 31 March, 2024 |
Year ended 31 March, 2023 |
|
Revenue from operations and other income (gross) |
666.67 |
775.12 |
|
Profit before finance costs and depreciation and amortisation expense |
27.16 |
54.75 |
|
Finance costs |
17.49 |
17.08 |
|
Depreciation and amortisation expense |
22.55 |
20.07 |
|
Profit/(loss) before exceptional items and tax |
(12.88) |
17.60 |
|
Exceptional items |
- |
- |
|
Profit/(loss) before tax |
(12.88) |
17.60 |
|
Less: Tax expense/(benefit) |
(3.14) |
4.11 |
|
Profit/(Loss) after tax |
(9.74) |
13.49 |
|
Other comprehensive income |
(0.22) |
(1.12) |
|
Total comprehensive income |
(9.96) |
12.37 |
|
Statement of other equity |
||
|
Opening balance |
105.20 |
97.96 |
|
Add: Profit/(Loss) for the year |
(9.96) |
12.37 |
|
Add: Equity component of Liability |
- |
- |
|
Add: Premium on rights issue of equity shares |
- |
- |
|
Less: capitalization of Capital redemption reserve on bonus issue of equity shares |
- |
(5.13) |
|
Less: Dividend |
- |
- |
|
Closing balance |
95.24 |
105.20 |
DIVIDEND
In view of losses for the year, the directors of the Company have decided not to recommend any dividend on equity shares of the Company for the year ended 31 March, 2024.
FINANCIAL PERFORMANCE
Erratic monsoon affected agriculture output in India. This led to a drop in capital investment by farmers, resulting in a drop in domestic tractor volumes. Accordingly, demand from domestic customers was subdued.
Due to multiple factors such as the Russia-Ukraine & Israel-Hamas war, the El-Nino effect & rising inflation in the USA & European countries. Demand in overseas markets slowed down drastically & off-take from export customers cooled down.
EBITDA margins for the year have been impacted on account of lower absorption of fixed costs due to the drop in volumes. Higher capital investment led to higher depreciation. The Company has been quick to
control the cost wherever possible by various means like reduction in shift working at plants wherever possible, reduction in overtime & casual labour deployment. As a result, the EBITDA improved significantly in the last quarter as compared to the previous quarter and has controlled the loss for the year.
Loss after tax for year ended 31 March, 2024 was '' 9.74 crores against profit after tax of '' 13.49 crores in previous year.
Considering the current subdued market outlook, funding of Capex budget of FY 2023-24 wholly from internal accruals was not feasible. Hence, we have availed a finance lease facility from Siemens Financial Services Private Limited (Siemens) of '' 15 crores. This facility has been primarily used for financing import of Hofler cylindrical generating grinding machine - Speed Viper 300 from Klingelnberg, AG, Germany. Machine has been commissioned in May, 2024.
Considering low earnings for FY 2023-24, capex & repayment of debt obligations have been met by utilization of working capital. There is a need to replenish working capital by long term funds. Hence, we have applied for an additional funding of '' 15 crores by way of a term loan towards reimbursement of capex & augmentation of long-term working capital.
INDIAN ACCOUNTING STANDARDS (âIND ASâ)
The financial statements for the year ended 31 March, 2024 have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as required under the provisions of Section 133 of the Companies Act, 2013 read with rules made there under, as amended.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed analysis of the Company''s operations in terms of performance in markets, manufacturing activities, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of this report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) read with 134(5) of the Companies Act, 2013, your Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) 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 as at 31 March, 2024 and of the Profit and Loss of the Company for the period ended on that date;
(c) 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;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) 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; and
(f) 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.
RELATED PARTY CONTRACTS AND ARRANGEMENTS
The contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Companies Act, 2013 were in the ordinary course of business and on arm''s length basis. During the year, the Company had not entered into the contract/arrangement/transaction with related parties which could be considered ''material'' in accordance with the related party transaction policy of the Company. Thus, there are no transactions which are required to be reported in the prescribed Form AOC-2 of the Companies (Accounts) Rules, 2014.
Further, during the Financial Year 2023-24, there were no materially significant related party transactions entered into by your Company with the Promoters, Directors, Key Managerial Personnel or other designated persons, which might have potential conflict with the interest of the Company at large.
As all the related party transactions are at arm''s length price and in the ordinary course of business, the same are placed before the Audit Committee for its approval. There was no related party transaction which requires approval of the Board. During the Financial Year under review, the Audit Committee has approved the related party transactions through the omnibus mode in accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Regulations"). Related party transactions were disclosed to the Board on regular basis as per Ind AS-24. Details of related party transactions as per Ind AS-24 may be referred to in the Notes forming part of the Financial Statements.
The policy on Related Party transactions as approved by the Board in terms of the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Regulations") is available on the official website of the Company i.e. www.bharatgears. com under the link: http://bharatgears.com/pdf/related party transaction policy.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
During the period under review, the Company has not made any loan, guarantee or investment in terms of the provisions of Section 186 of the Companies Act, 2013.
DIRECTORS
During the Financial Year 2023-24, the members of the Company vide their special resolution passed at the Annual General Meeting held on 20 September, 2023 approved the:
> Re-appointment of Mr. Nagar Venkatraman Srinivasan as a Non-Executive Director on the Board of the Company liable to retire by rotation upto the conclusion of the 52nd AGM of the Company in the Calendar year 2024 in terms of the provisions of Section 152 of the Companies Act, 2013;
in terms of the applicable provisions of the Companies Act, 2013 and the Regulations, in read with Regulation 17 of the Regulations as amended, the age of Mr. Nagar Venkatraman Srinivasan being more than seventy five years at the commencement of his tenure.
The tenure of Mr. Sameer Kanwar as Joint Managing Director of the Company is expiring on 31 May, 2024. The Board of Directors of the Company in its meeting held on 29 May, 2024 has re-appointed Mr. Sameer Kanwar as Joint Managing Director of the Company for a further period of 2 (Two) years w.e.f. 01 June, 2024 subject to the approval of shareholders at the ensuing Annual General Meeting of the Company by way of special resolution in terms of the applicable provisions of the Companies Act, 2013 and the Regulations.
In terms of the provisions of Section 149 of the Companies Act, 2013, Ms. Hiroo Suresh Advani had been re-appointed as a Non Executive Independent Director at the Annual General Meeting (AGM) of the Company held on 06 August, 2019 for second consecutive term for a further period of 5 (Five) Years upto the conclusion of the 52nd AGM of the Company in the Calendar year 2024.
In purview of the same, the tenure of Ms. Hiroo Suresh Advani as Non Executive Independent Director of the Company shall conclude at the ensuing Annual General Meeting (AGM).
Therefore, in terms of the provisions of Section 152 of the Companies Act, 2013, it has been proposed to re-appoint Mr. Nagar Venkatraman Srinivasan as a Non-Executive Director liable to retire by rotation at the ensuing Annual General Meeting (AGM) of the Company upto the conclusion of the next Annual General Meeting (AGM) of the Company in the Calendar Year 2025 by way of special resolution pursuant to the applicable provisions of the Companies Act, 2013 and the Regulations, in read with Regulation 17 of the Regulations as amended, the age of Mr. Nagar Venkatraman Srinivasan being more than seventy five years at the commencement of his proposed tenure.
BOARD''S OPINION REGARDING INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED/RE-APPOINTED DURING THE YEAR
The Board is of the opinion that the Independent Directors appointed/re-appointed during the year under review are
person(s) of integrity and possess core skills/expertise/ competencies (including the proficiency) as identified by the Board of Directors as required in the context of Company''s business(es) and sector(s) for the Company to function effectively.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2023-24, 5 (Five) Board Meetings (including 1 (One) adjourned Board Meeting) were held on the following dates:-
⢠25 May, 2023;
⢠10 August, 2023;
⢠03 November, 20231;
⢠09 November, 20231; and
⢠30 January, 2024.
Board Meeting held on 09 November, 2023 was an adjournment to the Board Meeting held on 03 November, 2023.
The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Regulation 17(2) of the Regulations.
INDEPENDENT DIRECTORS
In terms of the provisions of Section 149(7) of the Companies Act, 2013 read with Regulation 25(8) of the Regulations, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors held on 09 April, 2024 stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 read with Regulation 16(1)(b) of the Regulations, and are not being disqualified to act as an Independent Director. Further, they have declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
In the opinion of the Board, all the Independent Directors fulfill the conditions specified in the Companies Act, 2013 read with the Rules made there under and the Regulations, and are independent of the management.
In terms of Regulation 25(7) of the Regulations, the Company has adopted a familiarization programme for the Independent Directors to familiarize them with working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights, responsibilities and other relevant details. The details of familiarization programme during the Financial Year 2023-24 are available on the official website of the Company i.e. www.bharatgears.com
under the link: http://bharatgears.com/pdf/details-of-familiarization-programme-for-independent-directors-fy23-24.pdf
POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL (KMP) AND SENIOR MANAGEMENT PERSONNEL
In terms of the provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Regulations, the Nomination and Remuneration Committee (''NRC'') has formulated a policy relating to appointment and determination of the remuneration for the Directors, Key Managerial Personnel and Senior Management Personnel which has been adopted by the Board of Directors of the Company. The NRC has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to the Executive and Non-Executive Directors of the Company.
Your Directors affirm that the remuneration paid to the Directors, Key Managerial Personnel, Senior Management Personnel and other employees is as per the Nomination and Remuneration Policy of your Company.
The salient features of the Nomination and Remuneration Policy are as under:
⢠Formulation of the criteria for determining qualifications, positive attributes and independence of a Director.
> For every appointment of an Independent Director, the Nomination and Remuneration Committee evaluates the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an Independent Director. The person recommended to the Board for appointment as an Independent Director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:
a. use the services of an external agencies, if required;
b. consider candidates from a wide range of backgrounds, having due regard to diversity; and
c. consider the time commitments of the candidates. 1
⢠Recommendation to the Board for appointment and removal of Director, KMP and Senior Management Personnel.
⢠Formulation of the criteria for devising a policy on diversity of Board of Directors.
⢠Deciding that whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors.
⢠Recommendation to the Board, all remuneration, in whatever form, payable to senior management.
The said policy is available on the official website of the Company i.e. www.bharatgears.com under the link: https://www.bharatgears.com/pdf/nomination and remuneration policy BGL.pdf
EVALUATION PROCESS
The Nomination and Remuneration Committee has established a framework for the evaluation process of performance of the Board, its Committees and Individual Directors and the same was adopted by the Board.
During the period under review, the Board of Directors at its meeting held on 09 April, 2024 have carried out the evaluation of the performance of Independent Directors and their independence criteria and the Independent Directors in their meeting held on 29 March, 2024 have evaluated the performance of the Chairman, NonIndependent Directors and the Board as a whole and also assessed the quality, quantity and timeliness of flow of information between the Board and Company management.
Further, all the Committees of the Board of Directors have evaluated the performance of their respective Committee in their scheduled meetings.
KEY MANAGERIAL PERSONNEL
The following Directors/Officials of the Company have been designated as Key Managerial Personnel (KMP) of the Company by the Board of Directors in terms of the provisions of Section 203 of the Companies Act, 2013 and the Regulations:
1. Mr. Surinder Paul Kanwar, Chairman and Managing Director
2. Mr. Sameer Kanwar, Joint Managing Director
3. Mr. Hitendra Narain Mishra, Chief Executive Officer
4. Mr. Milind Pujari, Chief Financial Officer
5. Mr. Prashant Khattry, Corporate Head (Legal) and Company Secretary
During the Financial Year 2023-24, Mr. Hitendra Narain Mishra had been appointed as Chief Executive Officer (CEO) of the Company w.e.f. 01 January, 2024. No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31 March, 2024.
DISCLOSURES UNDER THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
Details pertaining to remuneration as required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure -"A" to this report.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 containing particulars of top ten employees in terms of the remuneration drawn and employees drawing remuneration in excess of the limits set out in Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are provided as part of the Board'' Report. However, in terms of provisions of Section 136 of the Companies Act, 2013, the Annual Report is being sent to all the members of the Company and others entitled thereto, excluding the said statement. Any member interested in obtaining such particulars may write at investor@bglindia. com. The said information is also available for inspection at the Registered Office of the Company during working hours till the date of Annual General Meeting.
RISK MANAGEMENT
A robust and integrated enterprise risk management framework is in existence under which the common prevailing risks in the Company are identified, the risks so identified are reviewed on periodic basis by the Audit Committee and the management''s actions to mitigate the risk exposure in a timely manner are assessed.
A risk management policy under the above said enterprise risk management framework as approved by the Board has been adopted by the Company.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee ("CSR Committee") is in existence to monitor the Corporate Social Responsibility Policy of the Company as approved by the Board and the said policy is available on
the official website of the Company i.e. www.bharatgears. com under the link: http://bharatgears.com/pdf/corporate-social-responsibilitv-policv-01072021.pdf
The CSR Committee comprises of Mr. Surinder Paul Kanwar, Mr. Sameer Kanwar and Mr. Rakesh Chopra.
The role of the Corporate Social Responsibility Committee includes:
(a) Formulation and recommendation to the Board, a Corporate Social Responsibility Policy (CSR Policy) and annual action plan in pursuance of CSR Policy consisting of list of approved projects or programs to be undertaken within the purview of Schedule VII of the Companies Act, 2013, manner of execution of such projects, modalities of fund utilization and implementation schedules, monitoring and reporting mechanism for the projects, and details of need and impact assessment, if any, for the projects to be undertaken.
(b) Monitoring the Corporate Social Responsibility Policy and annual action plan of the Company from time to time.
(c) Recommendation of the amount of expenditure to be incurred on the activities referred to in clause (a) above.
(d) Instituting a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the Company.
During the Financial Year 2023-24, the Company was required to spend Rs. 25,87,000/- (Rupees Twenty Five Lakhs Eighty Seven Thousand Only) on the Corporate Social Responsibility (CSR) projects or programmes undertaken in areas or subjects specified in Schedule VII of the Companies Act, 2013 in terms of the provisions of Section 135 of the Companies Act, 2013.
Further, the Board of Directors of the Company vide its resolution passed through circulation on 30 March, 2023 based on the recommendation of CSR Committee approved an Annual Action Plan for the Financial Year 2023-24 in pursuance of CSR policy of the Company wherein the Board approved the spending of upto Rs. 20,00,000/- (Rupees Twenty Lakhs Only) during the Financial Year 2023-24 further taking into account the surplus amount of Rs. 10,87,843/- (Rupees Ten Lakhs Eighty Seven Thousand Eight Hundred Forty Three Only) as summarized below already spent during the previous years on the Corporate Social Responsibility (CSR) projects or programmes undertaken in areas or subjects specified in Schedule VII of the Companies Act, 2013.
|
Financial Year |
Amount Required to be Spent (Rs.) |
Cumulative Unspent Amount of Previous Years (Rs.) |
Amount Actually Spent (Rs.) |
Surplus Amount Spent (Rs.) |
|
2018-19 |
1,54,250.00 |
0.00 |
0.00 |
0.00 |
|
2019-20 |
17,97,000.00 |
1,54,250.00 |
0.00 |
0.00 |
|
2020-21 |
2,75,000.00 |
19,51,250.00 |
24,23,083.00 |
1,96,833.00 |
|
2021-22 |
0.00 |
0.00 |
0.00 |
0.00 |
|
2022-23 |
0.00 |
0.00 |
8,91,010.00 |
8,91,010.00 |
|
22,26,250.00 |
33,14,093.00 |
10,87,843.00 |
In purview of the above, the Company was required to spend the following actual amount during the Financial Year 2023-24 on the Corporate Social Responsibility (CSR) projects or programmes undertaken in areas or subjects specified in Schedule VII of the Companies Act, 2013:
|
Financial Year |
Amount Required to be |
Surplus Amount of |
Balance Amount required |
|
Spent |
Previous Years |
to be Spent |
|
|
(Rs.) |
(Rs.) |
(Rs.) |
|
|
2023-24 |
25,87,000.00 |
10,87,843.00 |
14,99,157.00 |
|
25,87,000.00 |
10,87,843.00 |
14,99,157.00 |
Therefore, in pursuance of the above, the Company had spent Rs. 17,00,000/- (Rupees Seventeen Lakhs Only) in the Financial Year 2023-24 on CSR activities in terms of the provisions of Section 135 read with Schedule VII of the Companies Act, 2013 on following CSR activities:
|
AMOUNT SPENT ON CSR ACTIVITIES IN THE FINANCIAL YEAR 2023-24 |
||||||
|
Particulars |
Amount ('' |
|||||
|
Donation to "Akhil Deobag Vikas Mandal, Mumbai" for repairing of school building and purchasing of various necessary items of Dr. Datta Samant English School, Deobag, Tal. Malvan. Dist. Sindhudurg, Maharashtra regulated by "Akhil Deobag Vikas Mandal, Mumbai" which educates children up to the 10th standard in Deobag and Tarkarli at Sindhudurga District, Maharashtra |
10,00,000.00 |
|||||
|
Donation to "The Association of Parents of Mentally Retarded Children ("Adhar")"which provides life time care, training, treatment & rehabilitation to the special children |
2,00,000.00 |
|||||
|
Donated to "Myra Foundation, Faridabad" for education of underprivileged children |
50,000.00 |
|||||
|
Donating food grains viz. Wheat Flour, Rice, Pulses etc. to "Robin Hood Army, Faridabad" for distribution to needy people in local areas |
1,50,000.00 |
|||||
|
Donation to "Aaddit Charitable Trust" which extends support to individuals with Autism and related Disabilities through various programs |
1,00,000.00 |
|||||
|
Donation to "Sarvam Foundation" for the initiatives towards Women Empowerment |
2,00,000.00 |
|||||
|
TOTAL |
17,00,000.00 |
|||||
|
Now therefore, the surplus amount spent on CSR activities during the Financial Year 2023-24 is as summarized below: |
||||||
|
Financial Year |
Amount Required to be Spent (Rs.) |
Surplus Amount of Previous Years (Rs.) |
Balance Amount required to be Spent (Rs.) |
Actual Amount Spent (Rs.) |
Surplus Amount Spent (Rs.) |
|
|
2023-24 |
25,87,000.00 |
10,87,843.00 |
14,99,157.00 |
17,00,000.00 |
2,00,843.00 |
|
|
25,87,000.00 |
10,87,843.00 |
14,99,157.00 |
17,00,000.00 |
2,00,843.00 |
||
The report on CSR activities with other details in terms of the provisions of Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 for the Financial Year 2023-24 is enclosed as Annexure-âB" to this report.
Further, a Certificate issued by Mr. Milind Pujari, Chief Financial Officer of the Company certifying that the funds of CSR have been utilized for the purposes and in the manner as recommended by the CSR Committee and approved by the Board is enclosed as Annexure-âC" to this report.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. Rakesh Chopra, Mr. Virendra Kumar Pargal and Ms. Hiroo Suresh Advani.
Further, the details on the Audit Committee and its terms of reference etc. have been furnished in the Corporate Governance Report forming part of this Report. During the year under review, all recommendations of the Audit Committee were accepted by the Board of Directors of the Company unanimously.
INTERNAL COMPLAINTS COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT
Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee (ICC) at all its Units (i.e. Faridabad, Mumbra and Lonand) where any grievance of sexual harassment at workplace can be reported.
The Company has also adopted a policy on Prevention of Sexual Harassment at workplace. The objective of the policy is to provide its women employees, a workplace free from harassment/discrimination and every employee is treated with dignity and respect. The said policy is available on the official website of the Company i.e. www.bharatgears.com under the link: http://bharatgears. com/pdf/policy-for-prevention-of-sexual-harassment.pdf
During the year under review, ICC of all units of the Company has not received any complaint pertaining to sexual harassment of women at workplace.
SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES
During the year under review, no Company has become or ceased to be subsidiary, joint venture or associate of the Company.
DEPOSITS
During the year under review, the Company did not accept any deposits.
Investor Education and Protection Fund (IEPF)
In terms of the provisions of Section 124(5) of the Companies Act, 2013 read with the lnvestor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and further amendments
thereto, no unclaimed dividend was required to be transferred to the Investor Education and Protection Fund (IEPF) during the Financial Year 2023-24, and there were no equity shares liable to be transferred into IEPF during the Financial Year 2023-24.
AUDITORS
The Statutory Auditors, M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Registration No. 117366W/ W-100018) had been appointed as Statutory Auditors of the Company in the 50th Annual General Meeting held on 20 September, 2022 for a period of 5 (Five) years in terms of the provisions of Section 139 of the Companies Act, 2013 to hold office from the 50th AGM to 55th AGM in the calendar year 2027.
REPORT ON FINANCIAL STATEMENTS
The report of M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Registration No. 117366W/W-100018), the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31 March, 2024 is annexed to the financial statements in terms of the provisions of Section 134(2) of the Companies Act, 2013. The observations of the Auditors in their report are self-explanatory and/or explained suitably in the Notes forming part of the Financial Statements. The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
SECRETARIAL AUDIT
The Board has appointed M/s TVA & Co. LLP, Practicing Company Secretaries as Secretarial Auditor for the Financial Year 2023-24 in terms of the provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the Financial Year ended 31 March, 2024 in the prescribed Form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure -âDâ to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct
of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. During the year, such controls were tested and no material weakness in the design or operations were observed.
COST RECORDS AND AUDIT
During the year under review, the Company had been mandatorily required to maintain the cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and accordingly such accounts and records have been made and maintained.
In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended, M/s M.K. Kulshrestha & Associates, Cost Accountants, Ghaziabad has conducted the audit of the cost records of all the 3 (Three) plants of the Company viz. Mumbra (Maharashtra), Lonand (Maharashtra) and Faridabad (Haryana) for the year ended 31 March, 2023 and submitted their report thereon within the prescribed time limits. Subsequently, M/s M.K. Kulshrestha & Associates, Cost Accountants, Ghaziabad shall conduct the audit of the cost records of all the 3 (Three) plants of the Company viz. Mumbra (Maharashtra), Lonand (Maharashtra) and Faridabad (Haryana) for the year ended 31 March, 2024 and shall submit their report thereon within the prescribed time limits during the Financial Year 2024-25.
Further, on recommendation of the Audit Committee, the Board of Directors of the Company in its meeting held on 29 May, 2024 has approved the appointment of M/s M.K. Kulshrestha & Associates, Cost Accountants, Ghaziabad as Cost Auditors of the Company to conduct the audit of the cost records of all the 3 (Three) plants of the Company viz. Mumbra (Maharashtra), Lonand (Maharashtra) and Faridabad (Haryana) for the year ending 31 March, 2025.
CORPORATE GOVERNANCE
The Company is committed to maintain the quality standards of Corporate Governance. The Report on Corporate Governance as stipulated under Schedule V(C) of the Regulations forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors, M/s Deloitte Haskins & Sells LLP, confirming
compliance with the conditions of Corporate Governance is attached to this Report.
VIGIL MECHANISM/WHISTLE BLOWER MECHANISM
In terms of the provisions of Section 177 of the Companies Act, 2013 and the Regulations, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the Policy has been appropriately communicated within the organisation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees or by any other person who avails such mechanism. It protects employees or any other person who avails such mechanism wishing to raise a concern about serious irregularities, unethical behavior, actual or suspected fraud within the Company by reporting the same to the Audit Committee.
Protected disclosure can be made by the whistle blower in a closed and secured envelope or sent through e-mail to the Compliance Officer.
During the year under review, no complaint has been received and no employee was denied access to the Audit Committee.
The functioning of the Whistle Blower Mechanism/Vigil Mechanism existing in the Company is reviewed by the Audit Committee on Annual basis.
The policy on vigil mechanism is available on the official website of the Company i.e. www.bharatgears.com under the link: http://bharatgears.com/pdf/policy on vigil mechanism.pdf
RECONCILIATION OF SHARE CAPITAL AUDIT
In terms of Regulation 76 of the SEBI (Depositories and Participants) Regulations, 2018, the Reconciliation of Share Capital Audit is undertaken by a firm of Practicing Company Secretaries on quarterly basis. The audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company.
The Reconciliation of Share Capital Audit Report(s) as submitted by the Auditor on quarterly basis were filed with the National Stock Exchange of India Limited (NSE) through NSE Electronic Application Processing System (NEAPS) and with BSE Limited (BSE) through BSE Listing Centre, where the original shares of the Company are listed.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited, Mumbai and the National Stock Exchange of India Limited, Mumbai.
DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure-"E" to this Report.
ANNUAL RETURN
In terms of the provisions of Section 134(3)(a) read with Section 92(3) of the Companies Act, 2013 and the relevant rules made thereunder, a copy of the Annual return as prescribed under Section 92 of the Companies Act, 2013, as amended shall be made available on the official website of the Company www.bharatgears.com under the link: https://www.bharatgears.com/pdf/annual-return-for-2023-24.pdf
COMPLIANCE OF SECRETARIAL STANDARDS
During the period under review, the Company has duly complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
COURT/TRIBUNAL ORDERS
There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.
DETAILS OF APPLICATION/PROCEEDING UNDER THE INSOLVENCY AND BANCRUPTCY CODE, 2016
Neither any application has been made nor any proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016 during the year under review.
INSTANCES OF DIFFERENCE IN VALUATION
There is no such instance where there is difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
INDUSTRIAL RELATIONS
During the year under review, industrial relations in the Company continued to be cordial and peaceful.
ACKNOWLEDGEMENTS
The Board of Directors thank the shareholders for their continued support and they would like to place on record their appreciation for the dedicated services rendered by the Employees at all levels.
The Directors wish to convey their gratitude to the Financial Institutions, Banks, Customers, Suppliers and Collaborators for the assistance and confidence reposed by them in the Company.
Identification of persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in the Nomination and Remuneration policy.
Mar 31, 2018
TO THE MEMBERS
The Directors are pleased to present the 46th Annual Report and the Audited Financial Statements for the year ended 31 March, 2018.
(Rs./Crores) Financial year ended
|
Financial results |
31.03.2018 |
31.03.2017 |
|
Revenue from operations and other income (gross) |
515.42 |
435.51 |
|
Profit before finance costs and depreciation and amortisation expense |
44.36 |
29.22 |
|
Finance costs |
16.84 |
14.81 |
|
Depreciation and amortisation expense |
18.28 |
16.69 |
|
Profit/(loss) before tax |
9.24 |
(2.28) |
|
Less: Tax expense/(benefit) |
2.94 |
(0.82) |
|
Profit/(loss) after tax |
6.30 |
(1.46) |
|
Other comprehensive income |
0.03 |
(0.23) |
|
Total comprehensive income |
6.33 |
(1.23) |
|
statement of other equity |
||
|
Opening balance |
58.66 |
59.89 |
|
Add: Profit/(loss) for the year |
6.33 |
(1.23) |
|
Add: Preferential issue of equity shares (net of share issue expenses) |
4.69 |
- |
|
Closing balance |
69.68 |
58.66 |
DIVIDEND
In order to conserve the resources and make them available for growth initiatives of the Company, the directors of the Company have decided not to recommend any dividend on equity shares of the Company for the year ended 31 March, 2018.
FINANCIAL PERFORMANCE
The continued growth momentum especially in the agricultural sector lead to a steady demand from Domestic OEMâs and Overseas customer(s). This resulted in growth of 18% in revenue from operations during the year ended 31 March, 2018 vis a vis previous year.
Higher volumes led to better absorption of fixed costs and resulted in better EBIDTA margins; which was partially offset due to additional costs incurred to meet customer requirements. Further, employee benefits expense has increased on account of revision in statutory limit of maximum gratuity.
Profit after tax for the year ended 31 March, 2018 was Rs. 6.30 crores against loss of Rs. 1.46 crores in previous year.
During the year, outflow on account of Voluntary Retirement Scheme compensation was Rs. 1.16 crores.
During the year, the Company has availed the term loan of Rs. 80 crores from KKR India Financial Services Private Limited (KKR). This was primarily used for repayment of existing term debts, augmentation of long term working capital and capital expenditure. The Company has repaid Rs. 49.78 crores of existing borrowings to financial institutions and banks.
Interest free unsecured loan of Rs. 5.00 Crores infused by promoter in the previous year was fully repaid during the year.
During the year, 3,25,000 equity shares of face value Rs. 10/- each was allotted to promoter at a price of Rs. 157.32 per share (including a premium of Rs. 147.32 per share), aggregating to Rs. 5.11 crores on Preferential Allotment basis.
In order to support volume growth as a result of increase in offtake by customers across the segments, the Company embarked on capital expenditure program in FY 2017-18. Most of the machines/equipment are in place and thus enabled the Company to register significant increase in turnover. In the coming year, the Company envisages a similar growth in volumes. As a result, the Company has drawn up fresh plans for investment in capex and allied infrastructure. The capex plan shall be financed by way of a mix of equity, debt and internal accruals.
ADOPTION OF INDIAN ACCOUNTING STANDARDS (âIND ASâ)
The Company has adopted Indian Accounting Standards (âInd ASâ) and accordingly these financial statements have been prepared in accordance with the same as required under section 133 of the Companies Act, 2013 read with rules made there under. The date of transition to Ind AS is 01 April, 2016. These financial statements for the year ended 31 March, 2018 are the Companyâs first Ind AS financial statements. The impact of transition has been accounted for in the opening reserves and the comparative period figures have been reinstated accordingly.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed analysis of the Companyâs operations in terms of performance in markets, manufacturing activities, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of this report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) read with 134(5) of the Companies Act, 2013, your Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) 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 as at 31 March, 2018 and of the profit and loss of the Company for the period ended on that date;
(c) 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;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) 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; and
(f) 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.
RELATED PARTY CONTRACTS AND ARRANGEMENTS
The contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Companies Act, 2013 were in ordinary course of business and on armâs length basis. During the year, the Company had not entered into the contract/arrangement/transaction with related parties which could be considered material in accordance with the related party transaction policy of the Company. The said policy as approved by the Board in terms of provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe Regulationsâ) is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/related party transaction policy.pdf.
The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure -âAâ to this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
During the period under review, the Company has not made any loan, guarantee or investment in terms of provisions of Section 186 of the Companies Act, 2013.
DIRECTORS
During the year, Mr. S.G. Awasthi ceased to be a Director of the Company pursuant to his resignation w.e.f. 09 August, 2017.
The tenure of Mr. Sameer Kanwar as Joint Managing Director of the Company shall be expiring on 31 May, 2018. The Board of Directors of the Company in its meeting held on 30 May, 2018 has re-appointed Mr. Sameer Kanwar as Joint Managing Director of the Company for a further period of 3 (Three) years w.e.f. 01 June, 2018 subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.
Mr. N.V. Srinivasan had been appointed as an Additional Director of the Company w.e.f. 03 November, 2017 till the conclusion of the ensuing Annual General Meeting.
Therefore, in terms of Section 152 of the Companies Act, 2013, it has been proposed to appoint Mr. N.V. Srinivasan as Non-Executive Director at the ensuing Annual General Meeting (AGM) of the Company upto the conclusion of the next Annual General Meeting (AGM) of the Company in the Calendar year 2019.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2017-18, 5 (Five) Board Meetings were held on the following dates:-
- 23 May, 2017;
- 09 August, 2017;
- 03 November, 2017;
- 31 January, 2018; and
- 26 March, 2018
The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Regulation 17(2) of the Regulations.
INDEPENDENT DIRECTORS
In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors held on 30 May, 2018 stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not being disqualified to act as an Independent Director.
In terms of the Regulation 25(7) of the Regulations, the Company has adopted a familiarization programme for the Independent Directors to familiarize them with working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights, responsibilities and other relevant details. The details of familiarization programme during the Financial Year 2017-18 are available on the official website of the Company i.e. www.bharatgears.com under the link i.e. http://bharatgears.com/documents/ details-of-familiarization-programme-for-independent-director-FY17-18.pdf.
POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
In terms of provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Regulations, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration Committee thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is annexed as Annexure -âBâ to this report and is also available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears. com/documents/company policy on remuneration.pdf .
EVALUATION PROCESS
The Board of Directors of the Company has established a framework for the evaluation of its own performance and individual Directors of the Company in consultation with the engaged consultant and fixed certain parameters covering the evaluation of the Chairman,
Executive Directors, Non-executive Directors and Independent Directors on the basis of which the evaluation is being carried out on annual basis in terms of provisions of the Companies Act, 2013 and the Regulations.
During the year under review, the Board of Directors, at its meeting held on 26 March, 2018 have carried out the evaluation of its own performance and Independent Directors of the Company and the Independent Directors in their separate meeting held on even date have evaluated the performance of the Chairman and Non-Independent Director(s) of the Company respectively in accordance with the framework approved by the Board.
KEY MANAGERIAL PERSONNEL
The following Directors/Officials of the Company have been designated as Key Managerial Personnel (KMP) of the Company by the Board of Directors in terms of provisions of Section 203 of the Companies Act, 2013 and the Regulations:
1. Mr. Surinder Paul Kanwar, Chairman & Managing Director
2. Mr. Sameer Kanwar, Joint Managing Director
3. Mr. Milind Pujari, Chief Financial Officer
4. Mr. Prashant Khattry, Head (Legal) & Company Secretary
No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31 March, 2018.
DISCLOSURES UNDER THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
Details pertaining to remuneration as required 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 enclosed as Annexure -âCâ to this report.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of Rule 5(2) and Rule 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure- âDâ to this Report.
RISK MANAGEMENT
A robust and integrated enterprise risk management framework is in existence under which the common prevailing risks in the Company are identified, the risks so identified are reviewed on periodic basis by the Audit Committee and the managementâs actions to mitigate the risk exposure in a timely manner are assessed.
A risk management policy under the above said enterprise risk management framework as approved by the Board has been adopted by the Company and being reviewed on yearly basis.
CORPORATE SOCIAL RESPONSIBILITY
In terms of provisions of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee (âCSR Committeeâ) is in existence to monitor the Corporate Social Responsibility Policy of the Company as approved by the Board and the said policy is available on website of the Company i.e. www.bharatgears.com.
The CSR Committee comprises of Mr. Surinder Paul Kanwar, Mr. Sameer Kanwar and Mr. Rakesh Chopra.
During the Financial Year 2017-18, the provisions of Section 135 of the Companies Act, 2013 were not applicable on the Company since the Company does not fall under the conditions necessary for complying with CSR provisions. Hence, no amount was required to be spent during the year.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. Rakesh Chopra, Mr. V.K. Pargal and Ms. Hiroo Suresh Advani.
During the year, Mr. S.G. Awasthi (the erstwhile member of Committee) ceased to be a member of the Committee due to his resignation with effect from 09 August, 2017. Pursuant to his resignation, Ms. Hiroo Suresh Advani has been inducted as a member of the Committee on 01 September, 2017, accordingly the Audit Committee had been reconstituted.
INTERNAL COMPLAINTS COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT
Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee (ICC) at all its Units (i.e. Faridabad, Mumbra and Lonand) where any grievance of sexual harassment at workplace can be reported.
The Company has also adopted a policy on Prevention of Sexual Harassment at workplace. The objective of the policy is to provide its women employees, a workplace free from harassment/discrimination and every employee is treated with dignity and respect. The said policy is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears. com/documents/policy-for-prevention-of-sexual-harassment.pdf.
During the year under review, ICC of all units of the Company has not received any complaint pertaining to sexual harassment of women at workplace.
SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES
During the year under review, no Company has become or ceased to be subsidiary, joint venture or associate of the Company.
DEPOSITS
During the year under review, the Company did not accept any deposits.
Investor Education and Protection Fund (IEPF)
In terms of provisions of Section 124(5) of the Companies Act, 2013 read with the lnvestor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, the Unclaimed Final Dividend pertaining to the Financial Year 2009-10 amount aggregating to Rs. 1,24,013.00 (Rupees One Lac Twenty Four Thousand Thirteen Only) had been transferred to the âInvestor Education and Protection Fundâ established by the Central Government.
Further, in terms of provisions of Section 124(6) of the Companies Act, 2013 read with the Investor Education & Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ) and the Investor Education & Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 (âthe Amended Rulesâ), the Company is required to transfer the equity shares in respect of which dividends have remained unclaimed for a period of seven consecutive years to the IEPF Account established by the Central Government and a statement containing such details are required to be filed with the Ministry of Corporate Affairs (MCA).
In pursuance of the above, pursuant to the transfer of the unclaimed dividend for the year 2009-10 to the IEPF on 27 August, 2017 i.e. upon completion of seven years from transfer of dividend into unclaimed dividend account, 43,669 (Forty Three Thousand Six Hundred Sixty Nine) Equity Shares relating to such dividend on which the dividend has not been claimed for the consecutive seven years since 2009-10 have been transferred into demat account of IEPF Authority.
The unclaimed dividend for the year 2010-11 is proposed to be transferred to the Investor Education and Protection Fund (IEPF) on 24 August, 2018 i.e. upon completion of seven years from the transfer of said dividend into unclaimed dividend account. Subsequently, the equity shares relating to such dividend on which the dividend has not been claimed for the consecutive seven years since 2010-11 (net of the shares already transferred) shall also be transferred into IEPF.
In terms of the Rules dated 05 September, 2016 and the Amended Rules dated 28 February, 2017, the necessary communications have been made to the respective shareholders whose shares are required to be transferred to the IEPF during the Financial Year 2018-19 so as to enable them to claim their dividend attached to such shares before such dividend and shares are transferred to IEPF and further, the necessary information in this regard is available on the website of the Company i.e. www.bharatgears.com for the convenience of the shareholders.
The Equity shares once transferred into IEPF can only be claimed by the concerned shareholder from IEPF Authority after complying with the procedure prescribed under the Rules and the Amended Rules.
PREFERENTIAL ISSUE OF EQUITY SHARES
During the year under review, the Company has issued 3,25,000 (Three Lakhs Twenty Five Thousand) Equity Shares to Mr. Surinder Paul Kanwar, Chairman and Managing Director of the Company on preferential basis in terms of provisions of Section 42 & 62 and such other applicable provisions of the Companies Act, 2013 read with the rules framed thereunder and Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
RE-CLASSIFICATION OF SHARE CAPITAL
In terms of provisions of Section 61, 64 and other applicable provisions, if any, of the Companies Act, 2013 (including any amendment thereto or re-enactment thereof) and the rules framed there under, provisions of Articles of Association (AOA), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and such other rules/regulations as applicable, the Board of Directors of the Company in its meeting held on 26 March, 2018 has considered and approved the re-classification of Share Capital of the Company as per the following details, subject to the approval of Shareholders in the ensuing Annual General Meeting:
- Cancellation of 10,00,000 (Ten Lacs) Cumulative Redeemable Convertible or Non-Convertible Preference Shares of Rs. 100/- (Rupees Hundred) each and creation/addition of 1,00,00,000 (One Crore) Equity Shares of Rs. 10/- (Rupees Ten) each in lieu thereof.
Pursuant to said re-classification, the Authorised Share Capital of the Company shall be Rs. 25,00,00,000/-(Rupees Twenty Five Crores) divided into:
- 2,00,00,000 (Two Crores) Equity Shares of Rs. 10/-(Rupees Ten) each; and
- 5,00,000 (Five Lacs) Cumulative Redeemable Convertible or Non-Convertible Preference Shares of Rs. 100/- (Rupees Hundred) each.
AUDITORS
The Statutory Auditors, M/s S R B C & CO LLP (SRBC), Chartered Accountants (ICAI Registration No. 324982E/ E300003) had been appointed as Statutory Auditors of the Company in the 45th Annual General Meeting held on 09 August, 2017 for a period of 5 (Five) years in terms of provisions of Section 139 of the Companies Act, 2013 to hold office from the 45th AGM to the 50th AGM in the calendar year 2022.
REPORT ON FINANCIAL STATEMENTS
The report of M/s S R B C & CO LLP (SRBC), Chartered Accountants (ICAI Registration No. 324982E/E300003), the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31 March, 2018 is annexed to the financial statements in terms of provisions of Section 134(2) of the Companies Act, 2013. The observations of the Auditors in their report are self-explanatory and/or explained suitably in the Notes to the Financial Statements. The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
SECRETARIAL AUDIT
The Board has appointed M/s AGB & Associates, Practicing Company Secretaries as Secretarial Auditor for the Financial Year 2017-18 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the financial year ended 31 March, 2018 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure -âEâ to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. During the year, such controls were tested and no material weakness in the design or operations were observed.
COST AUDIT
During the year under review, the Company had not been mandatorily required to get its Cost Records audited in terms of provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31 December, 2014, as the Industry under which the Company falls has been exempted from the Cost Audit under the said rules.
CORPORATE GOVERNANCE
The Company is committed to maintain the quality standards of Corporate Governance. The Report on Corporate Governance as stipulated under Schedule V(C) of the Regulations forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors, M/s S R B C & CO LLP (SRBC), confirming compliance with the conditions of Corporate Governance is attached to this Report.
VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act, 2013, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the Policy has been appropriately communicated within the organisation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees or by any other person who avails such mechanism. It protects employees or any other person who avails such mechanism wishing to raise a concern about serious irregularities, unethical behavior, actual or suspected fraud within the Company by reporting the same to the Audit Committee.
Protected disclosure can be made by the whistle blower in a closed and secured envelope or sent through e-mail to the Compliance Officer.
During the year under review, no employee was denied access to the Audit Committee.
The policy on vigil mechanism is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/policy on vigil mechanism.pdf.
RECONCILIATION OF SHARE CAPITAL AUDIT
As per the directive of the Securities and Exchange Board of India (SEBI), the Reconciliation of Share Capital Audit is undertaken by a firm of Practicing Company Secretaries on quarterly basis. The audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company.
The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis were filed with the National Stock Exchange of India Limited (NSE) through NSE Electronic Application Processing System (NEAPS) and with BSE Limited (BSE) through BSE Listing Centre, where the original shares of the Company are listed.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.
DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure-âFâ to this Report.
ANNUAL RETURN
In terms of provisions of Section 92(3) of the Companies Act, 2013 read with the Companies (Amendment) Act, 2017 and the relevant rules made thereunder, a copy of the Annual return as prescribed under Section 92 of the Companies Act, 2013, as amended shall be made available on the website of the Company www.bharatgears.com under the link http://bharatgears. com/documents/annual-returns-2017-18.pdf.
COURT/TRIBUNAL ORDERS
There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.
INDUSTRIAL RELATIONS
During the year under review, industrial relations in the Company continued to be cordial and peaceful.
ACKNOWLEDGEMENTS
The Board of Directors thank the shareholders for their continued support and they would like to place on record their appreciation for the dedicated services rendered by the Employees at all levels.
The Directors wish to convey their gratitude to the Financial Institutions, Banks, Customers, Suppliers and Collaborators for the assistance and confidence reposed by them in the Company.
For and on behalf of the Board of Directors
Surinder Paul Kanwar
Place: Mumbai Chairman and Managing Director
Date: 30 May, 2018 DIN: 00033524
Mar 31, 2017
The Directors are pleased to present the 45th Annual Report and the Audited Statement of Accounts for the year ended 31 March, 2017.
(Rs./Crores)
Financial year ended
|
Financial Results |
31.03.2017 |
31.03.2016 |
|
Revenue from operations (gross) and other income |
435.33 |
433.31 |
|
Profit before finance cost and depreciation and amortization expense |
29.52 |
33.18 |
|
Finance Cost |
14.80 |
16.16 |
|
Depreciation and Amortization expense |
16.68 |
16.50 |
|
(Loss)/Profit before tax |
(1.96) |
0.52 |
|
Less: Tax (benefit)/expense |
(0.70) |
0.28 |
|
(Loss)/Profit after tax |
(1.26) |
0.24 |
|
Surplus in Statement of Profit and Loss |
|
|
|
Opening balance |
26.03 |
25.79 |
|
Add: (Loss)/Profit for the year |
(1.26) |
0.24 |
|
Closing Balance |
24.77 |
26.03 |
DIVIDEND
In view of loss for the year, your directors have not recommended any dividend on equity shares of the company for the year ended 31 March, 2017.
FINANCIAL PERFORMANCE
Revenue from operations for the year ended 31 March, 2017 were at a similar level vis'' a vis'' previous year. Higher off take from domestic OEMs was partially offset by the impact of demonetization on Automotive Component segment and lower tooling development income.
EBIDTA during the year ended 31 March, 2017 was Rs.29.52 crores, which is lower in comparison with Rs.33.18 crores of EBIDTA in last financial year. This is primarily due to Incremental VRS of Rs.1.34 crores during the current year and net exchange gain of Rs.1.61 crores recorded in the last financial year.
The Company has incurred a net loss of Rs.1.26 crores for the year ended 31 March, 2017 vis'' a vis'' net profit of Rs.0.24 crores in the previous year.
During the year ended 31 March, 2017, the Company availed a term loan of Rs.7.00 crores and has repaid Rs.24.71 crores of existing borrowings to Financial Institutions and Banks.
Further, in order to shore up net working capital position of the Company, an amount of Rs.5.00 crores was infused by way of an unsecured interest free loan by a director
Going ahead in order to ease the pressure on the cash flow position and for investment in growth capex, modernization/ technology up gradation as well as certain long term initiatives of the Company, the Company is in discussion with various lender(s) for raising necessary resources by way of fresh term loan(s).
We remain focused on cost control at all levels. Further, in light of tight liquidity position, control on inventory/receivables is being strengthened.
INDIAN ACCOUNTING STANDARDS (IND AS) IFRS CONVERGED STANDARDS
Pursuant to the notification of the Companies (Indian Accounting Standards) Rules, 2015 by the Ministry of Corporate Affairs (MCA) on 16 February, 2015, the Company has adopted Indian Accounting Standards (IND AS) with effect from 01 April, 2017.
For implementation of IND AS, the Company has established a dedicated team and has allocated necessary resources. The impact of the transition to IND AS has been assessed and the Company is ready to adopt new accounting standards - IND AS.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed analysis of the Company''s operations in terms of performance in markets, manufacturing activities, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of this report
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) 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 as at 31 March, 2017 and of the Profit and Loss of the Company for the period ended on that date;
(c) 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;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) 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; and
(f) 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.
RELATED PARTY CONTRACTS AND ARRANGEMENTS
The contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Companies Act, 2013 were in ordinary course of business and on arm''s length basis. During the year, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the related party transaction policy of the Company. The said policy as approved by the Board in terms of provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Regulationsâ) is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/related party transaction policy.pdf.
The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure -âA" to this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
During the period under review, the Company has not made any loan, guarantee or investment in terms of provisions of Section 186 of the Companies Act, 2013.
DIRECTORS
During the year under review, the members approved the appointment of Mr. W.R. Schilha as an Independent Director. There is no appointment/re-appointment of Directors in the ensuing Annual General Meeting.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2016-17, 5 (Five) Board Meetings were held on the following dates:-
- 24 May, 2016;
- 04 August, 2016;
- 27 October, 2016;
- 31 January, 2017; and
- 24 March, 2017
The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Regulation 17(2) of the Regulations.
INDEPENDENT DIRECTORS
In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors held on 23 May, 2017 stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not being disqualified to act as an Independent Director.
In terms of the Regulation 25(7) of the Regulations, the Company has adopted a familiarization programme for the Independent Directors to familiarize them with working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights, responsibilities and other relevant details. The details of familiarization programme during the Financial Year 2016-17 are available on the official website of the Company i.e. www.bharatgears.com under the link i.e. http://bharatgears. com/documents/details-of-familiarization-programme-for independent-director-FY-16-17.pdf.
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
In terms of provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Regulations, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration Committee thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is annexed as Annexure -âB" to this report and is also available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears. com/documents/company policy on remuneration.pdf.
EVALUATION PROCESS
The Board of Directors of the Company has established a framework for the evaluation of its own performance and that of its committees and individual Directors of the Company in consultation with the engaged consultant and fixed certain parameters covering the evaluation of the Chairman, Executive Directors and Independent Directors on the basis of which the evaluation is being carried on annual basis in terms of provisions of the Companies Act, 2013 and the Regulations.
During the year under review, the Board of Directors, at its meeting held on 24 March, 2017 have carried out the evaluation of its own performance and that of its committees and Independent Directors of the Company and the Independent Directors in their separate meeting held on even date have evaluated the performance of the Chairman and Non-Independent Director(s) of the Company respectively in accordance with the framework approved by the Board.
KEY MANAGERIAL PERSONNEL
The following Directors/Officials of the Company have been designated as Key Managerial Personnel (KMP) of the Company by the Board of Directors in terms of provisions of Section 203 of the Companies Act, 2013 and the Regulations:
1. Mr. Surinder P. Kanwar, Chairman & Managing Director
2. Mr. Sameer Kanwar, Joint Managing Director
3. Mr. Milind Pujari, Chief Financial Officer
4. Mr. Prashant Khattry, Head (Legal) & Company Secretary
No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31 March, 2017.
DISCLOSURES UNDER THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
Details pertaining to remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure-âC" to this report.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of Rule 5(2) and Rule 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure- âD" to this Report.
RISK MANAGEMENT
A robust and integrated enterprise risk management framework is in existence under which the common prevailing risks in the Company are identified, the risks so identified are reviewed on periodic basis by the Audit Committee and the management''s actions to mitigate the risk exposure in a timely manner are assessed.
A risk management policy under the above said enterprise risk management framework as approved by the Board has been adopted by the Company and being reviewed on yearly basis.
CORPORATE SOCIAL RESPONSIBILITY
In terms of provisions of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee ("CSR Committeeâ) is in existence to monitor the Corporate Social Responsibility Policy of the Company as approved by the Board and the said policy is available on website of the Company i.e. www.bharatgears.com.
The CSR Committee comprises of Mr. Surinder P. Kanwar, Mr. Sameer Kanwar, Mr. Rakesh Chopra and Mr. S.G. Awasthi.
During the Financial Year 2016-17, the provisions of Section 135 of the Companies Act, 2013 were not applicable on the Company since the Company does not fall under the conditions necessary for complying with CSR provisions. Hence, no amount was required to be spent during the year.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. Rakesh Chopra, Mr. V.K. Pargal and Mr. S. G. Awasthi. There is no change in the composition of the Committee during the year.
INTERNAL COMPLAINTS COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT
Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee (ICC) at all its Units (i.e. Faridabad, Mumbra and Lonand) where any grievance of sexual harassment at workplace can be reported.
The Company has also adopted a policy on Prevention of Sexual Harassment at workplace. The objective of the policy is to provide its women employees, a workplace, free from harassment/discrimination and every employee is treated with dignity and respect. The said policy is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/policy-for-prevention-of-sexual-harassment.pdf.
During the year under review, ICC of all units of the Company has not received any complaint pertaining to sexual harassment of women at workplace.
SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES
During the year under review, no Company has become or ceased to be subsidiary, joint venture or associate of the Company.
DEPOSITS
During the year under review, the Company did not accept any deposits. However, in terms of provisions of Section 73 of the Companies Act, 2013 read with Rule 2(1)(c) (viii) of the Companies (Acceptance of Deposits) Rules, 2014, the Company has availed an interest free unsecured Loan of Rs. 5.00 Crores (Rupees Five Crores Only) during the Financial Year 2016-17 from Mr. Surinder P. Kanwar, Chairman and Managing Director of the Company for shoring up net working capital position of the Company pursuant to the approval of the Board of Directors in its meeting held on 31 January, 2017.
It has been declared by Mr. Surinder P. Kanwar that the said Loan has not been given out of funds acquired by him by borrowing or accepting loan or deposit from others, therefore the loan so granted is outside the purview of definition of "Depositsâ covered under the Companies (Acceptance of Deposits) Rules, 2014.
In terms of provisions of Section 205C of the Companies Act, 1956, the Unclaimed Final Dividend pertaining to the Financial Year 2008-09 amount aggregating to Rs.1,18,500.00 (Rupees One Lac Eighteen Thousand Five Hundred only) had been transferred to the "Investor Education and Protection Fundâ established by the Central Government.
Further, in terms of Section 124(6) of the Companies Act, 2013 read with the Investor Education S Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rulesâ) and the Investor Education S Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 ("the Amended Rulesâ), the Company is required to transfer the equity shares in respect of which dividends have remained unclaimed for a period of seven consecutive years to the IEPF Account established by the Central Government.
The unclaimed dividend for the year 2009-10 is proposed to be transferred to the Investor Education and Protection Fund (IEPF) on 27 August, 2017 i.e. upon completion of seven years from the transfer of said dividend into unclaimed dividend account. Subsequently, the equity shares relating to such dividend on which the dividend has not been claimed for the consecutive seven years since 2009-10 shall also be transferred into IEPF.
In terms of the Rules dated 05 September, 2016 and the Amended Rules dated 28 February, 2017, the necessary communications have been made to the respective shareholders whose shares are required to be transferred to the IEPF so as to enable them to claim their dividend attached to such shares before such dividend and shares are transferred to IEPF and further, the necessary information in this regard is available on the website of the Company i.e. www.bharatgears.com for the convenience of the shareholders.
The Equity shares once transferred into IEPF can only be claimed by the concerned shareholder from IEPF Authority after complying with the procedure prescribed under the Rules and the Amended Rules.
However, the Ministry of Corporate Affairs (MCA) will issue fresh instructions regarding "Transfer of Shares to IEPF Authorityâ in due course of time.
AUDITORS
The Statutory Auditors, M/s Deloitte Haskins S Sells, Ahmedabad (ICAI Registration No. 117365W), Chartered Accountants (DHS), had been appointed as Statutory Auditors of the Company in the 42nd Annual General Meeting held on 01 August, 2014 for a period of 3 (Three) years in terms of provisions of Section 139 of the Companies Act, 2013 to hold office from the 42nd AGM to the 45th AGM in the calendar year 2017 (subject to ratification by the members at every Annual General Meeting). Accordingly, the tenure of M/s Deloitte Haskins S Sells, Chartered Accountants as Statutory Auditors of the Company upto financial year 2016-17 shall conclude in the ensuing Annual General Meeting.
The Board of Directors place on record their appreciation for the services rendered by M/s Deloitte Haskins S Sells during their tenure as Statutory Auditors of the Company.
Further, the Board recommends the appointment of M/s S R B C S Co. LLP, Chartered Accountants (Regn No. 324982E/E300003) as the Statutory Auditors of the Company in terms of provisions of Section 139 of the Companies Act, 2013 for the approval of members in the ensuing Annual General Meeting, to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the fifth consecutive Annual General Meeting in the year 2022 (subject to the ratification by members at every Annual General Meeting). Certificate from the proposed auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013.
REPORT ON FINANCIAL STATEMENTS
The report of M/s Deloitte Haskins S Sells, Ahmedabad (ICAI Registration No. 117365W), Chartered Accountants (DHS), the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31 March, 2017 is annexed to the financial statements in terms of provisions of Section 134(2) of the Companies Act, 2013. The observations of the Auditors in their report are self-explanatory and/or explained suitably in the Notes forming part of the Financial Statements. The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
SECRETARIAL AUDIT
The Board has appointed M/s AGB S Associates, Practicing Company Secretaries as Secretarial Auditor for the Financial Year 2016-17 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the financial year ended 31 March, 2017 in the prescribed form MR-3 of the Companies (Appointment S Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-âE" to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. During the year, such controls were tested and no material weakness in the design or operations was observed.
COST AUDIT
During the year under review, the Company had not been mandatorily required to get its Cost Records audited in terms of provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31 December, 2014, as the Industry under which the Company falls has been exempted from the Cost Audit under the said rules.
CORPORATE GOVERNANCE
The Company is committed to maintain the quality standards of Corporate Governance. The Report on Corporate Governance as stipulated under Schedule V(C) of the Regulations forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors, M/s Deloitte Haskins S Sells, confirming compliance with the conditions of Corporate Governance is attached to this Report.
VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act, 2013, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the Policy has been appropriately communicated within the organization. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees or by any other person who avails such mechanism. It protects employees or any other person who avails such mechanism wishing to raise a concern about serious irregularities, unethical behavior, actual or suspected fraud within the Company by reporting the same to the Audit Committee.
Protected disclosure can be made by the whistle blower in a closed and secured envelope or sent through e-mail to the Compliance Officer.
During the year under review, no employee was denied access to the Audit Committee.
The policy on vigil mechanism is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/policy on vigil mechanism.pdf.
RECONCILIATION OF SHARE CAPITAL AUDIT
As per the directive of the Securities and Exchange Board of India (SEBI), the Reconciliation of Share Capital Audit is undertaken by a firm of Practicing Company Secretaries on quarterly basis. The audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company.
The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis were filed with the National Stock Exchange of India Limited (NSE) through NSE Electronic Application Processing System (NEAPS) and with BSE Limited (BSE) through BSE Listing Centre, where the original shares of the Company are listed.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.
DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure-âF" to this Report.
EXTRACT OF ANNUAL RETURN
In terms of provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure-âG" to this report.
COURT/TRIBUNAL ORDERS
There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.
INDUSTRIAL RELATIONS
During the year under review, industrial relations in the Company continued to be cordial and peaceful.
ACKNOWLEDGEMENTS
The Board of Directors thank the shareholders for their continued support and they would like to place on record their appreciation for the dedicated services rendered by the Employees at all levels.
The Directors wish to convey their gratitude to the Financial Institutions, Banks, Customers, Suppliers and Collaborators for the assistance and confidence reposed by them in the Company.
For and on behalf of the Board of Directors
Surinder P. Kanwar
Place: Mumbai Chairman and Managing Director
Dated: 23 May, 2017 DIN: 00033524
Mar 31, 2016
To The Members
The Directors have pleasure in submitting 44th Annual Report together with Audited Financial Statements of your Company for the year ended on 31 March, 2016.
(Rs,/Crores) Financial year ended
|
Financial Results |
31.03.2016 |
31.03.2015 |
|
|
Revenue from operations and other income (gross) |
433.31 |
451.90 |
|
|
Profit before finance cost and depreciation and amortization expense |
33.18 |
23.87 |
|
|
Finance Cost |
16.16 |
16.35 |
|
|
Depreciation and Amortization expense |
16.50 |
13.95 |
|
|
Profit/(Loss) before tax |
0.52 |
(6.43) |
|
|
Less: Tax expense/(benefit) |
0.28 |
(2.22) |
|
|
Profit/(Loss) after tax |
0.24 |
(4.21) |
|
|
Surplus in Statement of Profit and Loss |
|||
|
Opening balance |
25.79 |
30.96 |
|
|
Less: Depreciation on transition to Schedule II to the Act on tangible fixed assets with nil remaining useful life (Net of deferred tax) |
0.96 |
||
|
Add: Profit/(Loss) for the year |
0.24 |
(4.21) |
|
|
Closing Balance |
26.03 |
25.79 |
|
DIVIDEND
In view of inadequate profits for the year, your Directors have decided not to recommend any dividend on equity shares of the company for the year ended 31 March, 2016.
FINANCIAL PERFORMANCE
The slowdown of economy on the back of recessionary trends especially in domestic tractor segment led to marginal drop in turnover for the year ended 31 March, 2016 vis a vis previous year. Further, global slowdown has led to a dip in sales to overseas customer(s).
The operations of the period resulted in higher EBITDA of Rs, 33.18 crores vis a vis Rs, 23.87 crores in the previous year. This was primarily on account of higher realization of export incentives and strict control on overheads especially manpower and energy costs.
During FY 2015-16, the Company has availed Corporate loan of Rs, 25.00 crores for shoring up of Net Working Capital. The Company also repaid Rs, 17.15 crores of existing borrowings to Financial Institutions and Banks.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed analysis of the Company''s operations in terms of performance in markets, manufacturing activities, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of this report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) 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 as at 31 March, 2016 and of the profit and loss of the Company for the period ended on that date;
(c) 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;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) 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; and
(f) 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.
RELATED PARTY CONTRACTS AND ARRANGEMENTS
The contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Companies Act, 2013 were in ordinary course of business and on arm''s length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the related party transaction policy of the Company. The said policy as approved by the Board in terms of provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe Regulationsâ) (Clause 49 of the erstwhile Listing Agreements) is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/related-party-transactions-policy. pdf.
The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure -âAâ to this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT
During the period under review, the Company has not made any loan, guarantee or investment in terms of provisions of Section 186 of the Companies Act, 2013.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Mr. W.R. Schilha, Director of the Company retire by rotation at the ensuing Annual General Meeting. Therefore, in terms of Section 149 of the Companies Act, 2013, it has been proposed to appoint Mr. W.R. Schilha as Non Executive Independent Director for a period of 5 (Five) Years up to the conclusion of the 49th Annual General Meeting (AGM) of the Company in the Calendar Year 2021 at the ensuing AGM of the Company.
The Company has received notice under Section 160 of the Companies Act, 2013 from member of the Company, proposing the candidature for the office of Director for the above Director.
During the year under review, the members approved the appointment of Mr. Rakesh Chopra and Mr. V.K. Pargal as Independent Directors.
The brief resume of the Director proposed to be appointed is given in the notice calling the Annual General Meeting.
During the year under review, Mr. Surinder P. Kanwar has been re-appointed as Chairman and Managing Director of the Company for a further period of 5(Five) years with effect from 01 October, 2015.
Mr. N.J. Kamath and Dr. Ram S. Tarneja resigned from the directorship of the Company on 29 May, 2015 & 31 July, 2015 respectively. The Board expresses its sincere gratitude to Mr. N.J. Kamath and Dr. Ram
S. Tarneja for their valuable contribution to the Company during their tenure.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2015-16, 5 (Five) Board Meetings were held on the following dates:-
- 29 May, 2015;
- 31 July, 2015;
- 29 October, 2015;
- 29 January, 2016; and
- 22 March, 2016
The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Regulation 17(2) of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 (erstwhile Clause 49 of the Listing Agreements).
INDEPENDENT DIRECTORS
In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors held on 24 May, 2016 stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not being disqualified to act as an Independent Director.
In terms of the Regulation 25(7) of the Regulations (Clause 49 of the erstwhile Listing Agreements), the Company has adopted a familiarization programme for the Independent Directors to familiarize them with working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights, responsibilities, and other relevant details. The details of familiarization programme during the Financial Year 2015-16 are available on the official website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/details-of-familarisation-programme-for independent-directors-FY15-16.pdf.
POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
In terms of provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Regulations (Clause 49 of the erstwhile Listing Agreements), a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration Committee thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is annexed as Annexure-âBâ to this report and is also available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/nomination-and-remuneration-policy-bgl.pdf.
EVALUATION PROCESS
The Board of Directors of the Company has established a framework for the evaluation of its own performance and that of its committees and individual Directors of the Company in consultation with the engaged consultant and fixed certain parameters covering the evaluation of the Chairman, Executive Directors and Independent Directors on the basis of which the evaluation is being carried on annual basis in terms of provisions of the Companies Act, 2013 and the Regulations.
During the year under review, the Board of Directors, at its meeting held on 22 March, 2016 has carried out the evaluation of its own performance and that of its committees and Independent Directors of the Company and the Independent Directors in their separate meeting held on even date have evaluated the performance of the Chairman and Non-Independent Directors of the Company respectively in accordance with the framework approved by the Board.
KEY MANAGERIAL PERSONNEL
The following Directors/Officials of the Company have been designated as Key Managerial Personnel (KMP) of the Company by the Board of Directors in terms of provisions of Section 203 of the Companies Act, 2013 and the Regulations (Clause 49 of the erstwhile Listing Agreements):
1. Mr. Surinder P. Kanwar, Chairman & Managing Director
2. Mr. Sameer Kanwar, Joint Managing Director
3. Mr. Milind Pujari, Chief Financial Officer
4. Mr. Prashant Khattry, Head (Legal) & Company Secretary
No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31 March, 2016.
DISCLOSURES UNDER THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
Details pertaining to remuneration as required 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 enclosed as Annexure-âCâ to this report.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of Rule 5(2) and Rule 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-âDâ to this Report.
RISK MANAGEMENT
A robust and integrated enterprise risk management framework is in existence under which the common prevailing risks in the Company are identified, the risks so identified are reviewed on periodic basis by the Audit Committee and the management''s actions to mitigate the risk exposure in a timely manner are assessed.
A risk management policy under the above said enterprise risk management framework as approved by the Board has been adopted by the Company and being reviewed on yearly basis.
CORPORATE SOCIAL RESPONSIBILITY
In terms of provisions of Section 135 of the Companies Act, 2013, the Corporate Social Responsibility Committee (âCSR Committeeâ) is in existence to monitor the Corporate Social Responsibility Policy of the Company as approved by the Board and the said policy is available on website of the Company i.e. www.bharatgears.com.
The CSR Committee comprises of Mr. Surinder P. Kanwar, Mr. Sameer Kanwar, Mr. Rakesh Chopra and Mr. S.G. Awasthi.
During the Financial Year 2015-16, the provisions of Section 135 of the Companies Act, 2013 were not applicable on the Company since the Company does not fall under the conditions necessary for complying with CSR provisions. Hence, nil amount required to be spent during the year.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. Rakesh Chopra, Mr. V.K. Pargal and Mr. S. G. Awasthi.
During the year under review, Mr. N.J. Kamath (the erstwhile member of Committee) and Dr. Ram S. Tarneja (the erstwhile Chairman of Committee) ceased to be a member and the chairman of the Committee respectively due to their resignation with effect from 29 May, 2015 and 31 July, 2015 respectively. Mr. S.G. Awasthi, inducted as a member of the Committee on 31 July, 2015 and Mr. Rakesh Chopra (the erstwhile member of Committee) designated as the Chairman of the Committee on 31 July, 2015, accordingly the Audit Committee had been reconstituted.
INTERNAL COMPLAINTS COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT
Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee (ICC) at all its Units (i.e. Faridabad, Mumbra and Lonand) where any grievance of sexual harassment at workplace can be reported.
The Company has also adopted a policy on Prevention of Sexual Harassment at workplace. The objective of the policy is to provide its women employees, a workplace, free from harassment/discrimination and every employee is treated with dignity and respect. The said policy is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgears.com/documents/policy-for-prevention-of-sexual-harassment.pdf.
During the year under review, ICC of all units of the Company has not received any complaint pertaining to sexual harassment of women at workplace.
SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES
During the year under review, no Company has become or ceased to be subsidiary, joint venture or associate of the Company.
DEPOSITS
During the year under review, the Company did not accept any deposits. However, in terms of provisions of Section 205C of the Companies Act, 1956, the Unclaimed Final Dividend pertaining to the Financial Year 2007-08 amount aggregating to Rs, 1,80,825.00 (Rupees One Lac Eighty Thousand Eight Hundred Twenty Five only) had been transferred to the âInvestor Education and Protection Fundâ established by the Central Government.
Further, the Unclaimed Final Dividend for the Financial Year 2008-09 is proposed to be transferred to the âInvestor Education and Protection Fundâ on 29 August, 2016 upon the completion of seven years from the date of transfer of said Dividend into the Unclaimed Dividend Account.
AUDITORS
The Statutory Auditors, M/s Deloitte Haskins & Sells, Ahmadabad (ICAI Registration No. 117365W) Chartered Accountants (DHS), had been appointed as Statutory Auditors of the Company in the 42nd Annual General Meeting held on 01 August, 2014 for a period of 3 (Three) years in terms of provisions of Section 139 of the Companies Act, 2013 to hold office from the 42nd AGM to the third consecutive Annual General Meeting from the 42nd AGM in the calendar year 2017 (subject to ratification by the members at every Annual General Meeting).
Therefore, the consent of members for ratification of appointment of Statutory Auditors to hold office from the ensuing Annual General Meeting of the Company till the next Annual General Meeting of the Company in calendar year 2017 is being sought in the ensuing Annual General Meeting.
REPORT ON FINANCIAL STATEMENTS
The report of M/s Deloitte Haskins & Sells, Ahmadabad (ICAI Registration No. 1 17365W) Chartered Accountants (DHS), the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31 March, 2016 is annexed to the financial statements in terms of provisions of Section 134(2) of the Companies Act, 2013. The observations of the Auditors in their report are self-explanatory and/or explained suitably in the Notes forming part of the Financial Statements. The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
SECRETARIAL AUDIT
The Board has appointed M/s AGB & Associates, Practicing Company Secretaries as Secretarial Auditor for the Financial Year 2015-16 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the financial year ended 31 March, 2016 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-âEâ to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Bharat Gears has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. During the year, such controls were tested and no material weakness in the design or operations were observed.
COST AUDIT
During the year under review, the Company had not been mandatorily required to get its Cost Records audited in terms of provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31 December, 2014, as the Industry under which the Company falls has been exempted from the Cost Audit under the said rules.
CORPORATE GOVERNANCE
The Company is committed to maintain the quality standards of Corporate Governance. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreements/Schedule V(C) of the Regulations forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors, M/s Deloitte Haskins & Sells, confirming compliance with the conditions of Corporate Governance, is attached to this Report.
VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act, 2013, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the policy has been appropriately communicated within the organization. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees or by any other person who avails such mechanism. It protects employees or any other person who avails such mechanism wishing to raise a concern about serious irregularities, unethical behavior, actual or suspected fraud within the Company by reporting the same to the Audit Committee.
Protected disclosure can be made by the whistle blower in a closed and secured envelope or sent through e-mail to the Compliance Officer.
During the year under review, no employee was denied access to the Audit Committee.
The policy on vigil mechanism is available on the website of the Company i.e. www.bharatgears.com under the link http://bharatgea.rs. com/documents/policy-on-vigil-mechanism.pdf.
RECONCILIATION OF SHARE CAPITAL AUDIT
As per the directive of the Securities and Exchange Board of India (SEBI), the Reconciliation of Share Capital Audit is undertaken by a firm of Practicing Company Secretaries on quarterly basis. The audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company.
The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis was forwarded to the BSE Limited, Mumbai and the National Stock Exchange of India Limited, Mumbai, where the original shares of the Company are listed.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.
Pursuant to the notification of the regulations, your Company has entered into new Listing Agreement with the aforesaid Stock Exchanges respectively on 10 February, 2016 as mandated under the said Regulations.
DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure-âFâ to this Report.
EXTRACT OF ANNUAL RETURN
In terms of provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure-âGâ to this report.
COURT/TRIBUNAL ORDERS
There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.
INDUSTRIAL RELATIONS
During the year under review, industrial relations in the Company continued to be cordial and peaceful.
ACKNOWLEDGEMENTS
The Board of Directors thanks the shareholders for their continued support and they would like to place on record their appreciation for the dedicated services rendered by the Employees at all levels.
The Directors wish to convey their gratitude to the Financial Institutions, Bankers, Customers, Suppliers and Collaborators for the assistance and confidence reposed by them in the Company.
For and on behalf of the Board of Directors
Surinder P. Kanwar
Place: Mumbai Chairman and Managing Director
Dated: 24 May, 2016 DIN: 00033524
Mar 31, 2015
To The Members
The Directors have pleasure in submitting 43rdAnnual Report together
with Audited Financial Statements of your Company for the year ended on
31 March, 2015.
(Rs./Crores)
Financial year ended
Financial Results 31.03.2015 31.03.2014
Revenue from operations and other 451.90 459.71
income (gross)
Profit before finance cost and depreciation 23.87 28.81
and amortisation expense
Finance Cost 16.35 14.49
Depreciation and Amortisation expense 13.95 13.72
(Loss)/Profit before tax (6.43) 0.60
Less: Tax (benefit)/expense (2.22)
(Loss)/Profit after tax (4.21) 0.60
Surplus in Statement of profit and loss
Opening balance 30.96 31.28
Less: Depreciation on transition to 0.96 -
Schedule II to the Act on tangible fixed
assets with nil remaining useful life
(Net of deferred tax)
Add: (Loss)/Profit for the year (4.21) 0.60
Less: Proposed Dividend
- Equity - 0.79
Tax on distributed profits - 0.13
Closing Balance 25.79 30.96
DIVIDEND
In view of loss for the year, your Directors have not recommended any
dividend on equity shares of the Company for the year ended March 31,
2015.
FINANCIAL PERFORMANCE
On account of continuous subdued market conditions, the turnover of the
Company for the year ended March 31, 2015 dropped by 2% vis a vis year
ended March 31, 2014, which had adverse effect on the financial
performance of the Company.
Key financial figures: FY 2014-15
- The EBIDTA margin registered a drop from 6.27% in FY 2013-14 to
5.28% in the current fiscal due to higher fixed costs.
- One time cost of Rs. 2.04 Crores was incurred by the Company towards
Voluntary Retirement Scheme in the FY 2014-15 against Rs. 0.25 Crores in
FY 2013-14.
- The Company, in the current year has incurred a loss (after tax
credit) of Rs. 4.21 Crores compared to Profit after Tax of Rs. 0.60 Crores
in FY 2013 - 14.
During FY 2014-15, the Company has availed Corporate loan of Rs. 5.00
Crores for shoring up of Net Working Capital. The Company also repaid Rs.
8.20 Crores of existing borrowings to Financial Institutions and Banks.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed analysis of the Company's operations in terms of
performance in markets, manufacturing activities, business outlook,
risks and concerns forms part of the Management Discussion and
Analysis, a separate section of this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your
Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) 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 as at 31 March, 2015 and of the profit and loss of the
Company for the period ended on that date;
(c) 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;
(d) the directors had prepared the annual accounts on a going concern
basis;
(e) 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; and
(f) 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.
RELATED PARTY CONTRACTS AND ARRANGEMENTS
The particulars of the undergoing contracts or arrangements of the
Company with related parties during the period under review referred to
in Section 188(1) of the Company Act, 2013 were in ordinary course of
business and on arm's length basis. During the year, the Company had
not entered into any contract/ arrangement/ transaction with related
parties which could be considered material in accordance with the
related party transaction policy of the Company. The said policy as
approved by the Board in terms of provisions of Clause 49 of the
Listing Agreement is available on the website of the Company i.e.
www.bharatgears.com under the link http://bharatgears.com/
documents/related-partv-transactions-policv.pdf.
The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is
enclosed as Annexure -'A' to this report.
During the period under review, the Company has not made any loan,
guarantee or investment in terms of provisions of Section 186 of the
Companies Act, 2013.
DIRECTORS
In accordance with the provisions of the Act and the Articles of
Association of your Company, Mr. Rakesh Chopra and Mr. V.K. Pargal,
Directors retire by rotation at the ensuing Annual General Meeting.
Therefore, in terms of Section 149 of the Companies Act, 2013, it has
been proposed to appoint Mr. Rakesh Chopra and Mr. V.K. Pargal as Non
Executive Independent Directors for a period of 5 (Five) Years upto the
conclusion of the 48th Annual General Meeting (AGM) of the Company in
the Calendar Year 2020 at the ensuing AGM of the Company.
The Company has received notice under Section 160 of the Companies Act,
2013 from member(s) of the Company, proposing the candidature for the
office of Director for the above Directors.
During the year under review, the members approved the appointment of
Dr. Ram S. Tarneja, Mr. S.G. Awasthi and Ms. Hiroo Suresh Advani as
Independent Directors.
The brief resume of the Directors proposed to be appointed is given in
the notice calling the Annual General Meeting.
The tenure of Mr. Surinder P. Kanwar as Managing Director of the
Company is expiring on 30 September, 2015. Further to his willingness
to be re-appointed, the Board of Directors accordingly proposed the
re-appointment of Mr. Surinder P. Kanwar as Managing Director and
designate him as Chairman cum Managing Director for a further period of
5(Five) years w.e.f. 01 October, 2015 alongwith proposed remuneration.
The brief resume of Mr. Surinder P. Kanwar is given in the notice
calling Annual General Meeting.
Mr. N.J. Kamath resigned from the directorship of the Company on 29
May, 2015. The Board expresses its sincere gratitude to Mr. N.J.
Kamath for his valuable contribution to the Company during his tenure.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2014-15, Five (5) Board Meetings were held on
the following dates. The gap between any two meetings was not more than
one hundred twenty days as mandated under the provisions of Section 173
of the Companies Act, 2013 and Clause 49 of the Listing Agreement with
the Stock Exchanges:-
- May 28, 2014;
- August 01,2014;
- November 06, 2014;
- January 28, 2015; and
- March 27, 2015 INDEPENDENT DIRECTORS
In terms of provisions of Section 149(7) of the Companies Act, 2013,
all the Independent Directors of the Company have furnished a
declaration to the Compliance Officer of the Company at the meeting of
the Board of
Directors held on 29 May, 2015 stating that they fulfill the criteria
of Independent Director as prescribed under Section 149(6) of the
Companies Act, 2013 and are not being disqualified to act as an
Independent Director.
In terms of Clause 49 of the Listing Agreement, the Company has adopted
a familiarization programme for Independent Directors. The details of
the said programme is available on the website of the Company
i.e. www.bharatgears.com under the link http://bharatgears.com/
documents/familarisation-programmme-independent-directors.pdf.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
In terms of provisions of Section 178 of the Companies Act, 2013 read
with revised Clause 49 of the Listing Agreement, a policy relating to
remuneration for the Directors, Key Managerial Personnel and other
employees has been adopted by the Board of Directors of the Company in
pursuance of its formulation and recommendation by the Nomination and
Remuneration Committee thereby analyzing the criteria for determining
qualifications, positive attributes and independence of a Director. The
said policy is annexed as Annexure -"B" to this report and is also
available on the website of the Company i.e. www.bharatgears.com under
the link http://bharatgears.com/documents/nomination-and-
remuneration-policy-bgl.pdf.
EVALUATION PROCESS
The Board of Directors of the Company has established a framework for
the evaluation of its own performance and that of its committees and
individual Directors of the Company in consultation with the engaged
consultant.
The certain parameters covering the evaluation of the Chairman,
Executive Directors and Independent Directors have been fixed by the
Board on the basis of which the evaluation is being carried out on
annual basis in terms of provisions of the Companies Act, 2013.
KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company has designated following
Directors/Officials of the Company as Key Managerial Personnel (KMP) of
the Company w.e.f. 28 May, 2014 in terms of provisions of Section 203
of the Companies Act, 2013 and Clause 49 of the Listing Agreement with
the Stock Exchanges:
1. Mr. Surinder P. Kanwar, Chairman & Managing Director
2. Mr. Sameer Kanwar, Joint Managing Director
3. Mr. Milind Pujari, Chief Financial Officer
4. Mr. Prashant Khattry, Head (Legal) & Company Secretary
No Key Managerial Personnel (KMP) of the Company has resigned during
the financial year ended 31 March, 2015.
DISCLOSURES UNDER COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL
PERSONNEL) RULES, 2014
Details pertaining to remuneration as required 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
enclosed as Annexure - "C" to this report.
Information regarding employees in accordance with the provisions of
Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is given in Annexure -"D" to
this Report.
RISK MANAGEMENT
During the year, a robust improvement has been made in the existing
integrated enterprise risk management system in order to identify the
common prevailing risks in the Company to be reviewed on periodically
basis by the Audit Committee and assess the management's actions to
mitigate the risk exposure in a timely manner. A risk management policy
has been duly approved by the Board on recommendation of the Audit
Committee on 29 May, 2015.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the approval of the Board of Directors of the Company, a
Corporate Social Responsibility (CSR) Committee has been constituted in
terms of provisions of Section 135 of the Companies Act, 2013. The CSR
Committee of the Company has also formulated a CSR policy containing
the areas wherein the Company proposes to spend the share of its
profits as prescribed under Section 135 of the Companies Act, 2013 and
the said policy has been approved by the Board of Directors of the
Company thereby directing the CSR Committee to execute the CSR
initiatives.
As per the provisions of the said Section, the amount of Rs. 0.22 Crore
was required to be spent on CSR activities by the Company during the
year, however, considering the performance for the year, the Company
has not spent the required funds on CSR activities.
The report on CSR activities in terms of provisions of Rule 8 of the
Companies (Corporate Social Responsibility) Rules, 2014 is enclosed as
Annexure -"E" to this report.
CSR COMMITTEE
The CSR Committee comprises of Mr. Surinder P. Kanwar, Mr. Sameer
Kanwar, Mr. Rakesh Chopra and Mr. S.G. Awasthi.
AUDIT COMMITTEE
The Audit Committee comprises of Dr. Ram S. Tarneja, Mr. V.K. Pargal,
Mr. N.J. Kamath and Mr. Rakesh Chopra.
Pursuant to the resignation of Mr. N.J. Kamath on 29 May, 2015, the
Audit Committee shall be re-constituted accordingly as may be required.
INTERNAL COMPLAINTS COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT
Pursuant to Section 21 of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Rules, 2013, the Company has constituted Internal Complaints
Committee at all its Units (i.e. Faridabad, Mumbra and Lonand) where
any grievance of sexual harassment at workplace can be reported.
The Company has also adopted a policy on Prevention of Sexual
Harassment at workplace. The objective of the policy is to provide its
women employees, a workplace, free from harassment/discrimination and
every employee is treated with dignity and respect. The said policy is
available on the website of the Company i.e. www.bharatgears.com under
the link http://bharatgears.com/documents/policy-for-prevention-
of-sexual-harassment.pdf.
SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES
During the year under review, no Company has become or ceased to be
subsidiary, joint venture or associate of the Company.
DEPOSITS
During the year under review, the Company did not accept any deposits.
However, the Unclaimed Final Dividend for the Financial Year 2007-08 is
proposed to be transferred into the "Investor Education and
Protection Fund" on 29 August, 2015 upon completion of seven years from
the date of transfer of said Dividend into the Unclaimed Dividend
Account.
AUDITORS
The Statutory Auditors, M/s Deloitte Haskins & Sells-Ahmedabad (ICAI
Registration No. 117365W) Chartered Accountants (DHS), had been
appointed as Statutory Auditors of the Company in the 42nd Annual
General Meeting held on 01 August, 2014 for a period of 3 (Three) years
in terms of provisions of Section 139 of the Companies Act, 2013 to
hold office from the 42nd AGM to the third consecutive Annual General
Meeting from the 42nd AGM in the Calendar year 2017 (subject to
ratification by the members at every Annual General Meeting).
Therefore, the consent of members for ratification of appointment of
Statutory Auditors to hold office from the ensuing Annual General
Meeting of the Company till the next Annual General Meeting of the
Company in calendar year 2016 is being sought in the ensuing Annual
General Meeting.
REPORT ON FINANCIAL STATEMENTS
The report of M/s Deloitte Haskins & Sells, Ahmedabad (ICAI
Registration No. 117365W) Chartered Accountants (DHS), the Statutory
Auditors of the Company on the financial statements of the Company for
the year ended 31 March, 2015 is annexed to the financial statements in
terms of provisions of Section 134(2) of the Companies Act, 2013. The
observations of the Auditors in their report are self-explanatory
and/or explained suitably in the Notes forming part of the Financial
Statements. The report of the Statutory Auditors does not contain any
qualification, reservation or adverse remark which needs any
explanation or comment of the Board.
SECRETARIALAUDIT
The Board has appointed M/s AGB & Associates, Practicing Company
Secretaries as Secretarial Auditor for the Financial Year 2014-15 in
terms of provisions of Section 204 of the Companies Act, 2013. The
Secretarial Audit Report of the Company for the financial year ended 31
March, 2015 in the prescribed form MR-3 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as
Annexure -"F" to this report. The Secretarial Audit Report does not
contain any qualification, reservation or adverse remark which needs
any explanation or comment of the Board.
COST AUDIT
In pursuant to Companies (Cost Records and Audit) Amendment Rules, 2014
notified by the Ministry of Corporate Affairs (MCA) on 31 December,
2014, the Company shall not be mandatorily required to get its Cost
Records for the financial year 2014-15 audited in terms of provisions
of Section 148 of the Companies Act, 2013 as the Industry under which
the Company falls has been exempted from the Cost Audit by MCA vide
Companies (Cost Records and Audit) Amendment Rules, 2014.
Therefore, the audit of cost records for the financial year ended on 31
March, 2015 has not been undertaken by M/s M.K. Kulshrestha &
Associates, Cost Accountants in terms of the Companies (Cost Records
and Audit) Amendment Rules, 2014.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Bharat Gears has a proper and adequate system of internal financial
controls which includes the policies and procedures for ensuring the
orderly and efficient conduct of its business, including adherence to
Company's policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of
the accounting records, and the timely preparation of reliable
financial information.
CORPORATE GOVERNANCE
The Company is committed to maintain the quality standards of Corporate
Governance. The Report on Corporate Governance as stipulated under
Clause 49 of the Listing Agreement forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors, M/s
Deloitte Haskins & Sells, confirming compliance with the conditions of
Corporate Governance, is attached to this Report.
VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act, 2013, the
Company has established an effective mechanism called Vigil Mechanism
(Whistle Blower Mechanism). The mechanism under the Policy has been
appropriately communicated within the organisation. The purpose of
this policy is to provide a framework to promote responsible whistle
blowing by employees. It protects employees wishing to raise a concern
about serious irregularities, unethical behavior, actual or suspected
fraud within the Company by reporting the same to the Audit Committee.
Protected disclosure can be made by the whistle blower in a closed and
secured envelope or send through e-mail to the Compliance Officer.
During the year under review, no employee was denied access to the
Audit Committee.
The policy on vigil mechanism is available on the website of the
Company i.e. www.bharatgears.com under the link http://bharatgears.com/
documents/policy-on-vigil-mechanism.pdf.
RECONCILIATION OF SHARE CAPITAL AUDIT
As per the directive of the Securities and Exchange Board of India
(SEBI), the Reconciliation of Share Capital Audit is undertaken by a
firm of
Practicing Company Secretaries on quarterly basis. The audit is aimed
at reconciliation of total shares held in CDSL, NSDL and in physical
form with the admitted, issued and listed capital of the Company.
The Reconciliation of Share Capital Audit Reports as submitted by the
Auditor on quarterly basis was forwarded to the BSE Limited, Mumbai and
the National Stock Exchange of India Limited, Mumbai, where the
original shares of the Company are listed.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited, Mumbai
and National Stock Exchange of India Limited, Mumbai.
DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Except as disclosed elsewhere in the Annual Report, there have been no
material changes and commitments, which can affect the financial
position of the Company between the end of financial year and the date
of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
The information in accordance with the provisions of Section 134(3)(m)
of the Companies Act, 2013 read with the Rule 8 of the Companies
(Accounts) Rules, 2014 is given in Annexure-"G" to this Report.
EXTRACT OFANNUAL RETURN
In terms of provisions of Section 92(3) of the Companies Act, 2013 read
with Rule 12 of the Companies (Management and Administration) Rules,
2014, the extract of the Annual Return of the Company in Form MGT-9 of
the Companies (Management and Administration) Rules, 2014 is enclosed
as Annexure-"H" to this report.
COURT/TRIBUNAL ORDERS
There were no instances of any significant and material orders passed
by the regulators or courts or tribunals impacting the going concern
status and company's operations in future.
INDUSTRIAL RELATIONS
During the year under review, industrial relations in the Company
continued to be cordial and peaceful.
ACKNOWLEDGEMENTS
The Board of Directors thanks the shareholders for their continued
support and they would like to place on record their appreciation for
the dedicated services rendered by the Employees at all levels.
The Directors wish to convey their gratitude to the Financial
Institutions, Bankers, Customers, Suppliers and Collaborators for the
assistance and confidence reposed by them in the Company.
For and on behalf of the Board of Directors
Place: Mumbai Surinder P Kanwar
Dated: 29 May, 2015 Chairman and Managing Director
Mar 31, 2013
To The Members
The Directors have pleasure in submitting 41st Annual Report together
with Audited Accounts of your Company for the year ended on 31st March''
2013.
(Rs.Crore)
Financial year ended
Financial Results 31.03.2013 31.03.2012
Revenue from operations and
other income (gross) 432.72 473.47
Profit before finance cost and
depreciation and amortisation expense 30.65 50.23
Finance Cost 11.65 12.69
Depreciation and Amortisation expense 11.55 10.78
Profit before tax 7.45 26.76
Less: Tax Expense 2.48 8.17
Profit after tax 4.97 18.59
Surplus in Statement of Profit
and Loss Opening balance 28.70 14.91
Add: Profit for the year 4.97 18.59
Less: Interim dividend
Preference 0.10
Less: Proposed Dividend
Equity 1.41 1.41
Tax on distributed profits 0.23 0.25
Transferred to General Reserve 0.75 2.00
Transferred to capital redemption
reserve 1.04
Closing Balance 32.92 28.70
DIVIDEND
Considering the Company''s financial performance'' the Directors have
recommended a dividend of '' 1.80/- per equity share on 7817833 equity
shares of the company'' subject to the approval of the shareholders at
the ensuing Annual General Meeting'' for the year under review.
This will involve a cash outflow of '' 1.64 crore including dividend
distribution tax of '' 0.23 crore.
FINANCIAL PERFORMANCE
The Company''s financial performance was affected by a drop in sales due
to overall slowdown in the Indian economy and the related fall in
demand from domestic customers in the automotive and construction and
mining sectors in India.
Key financial figures: FY 2012-2013
- In view of the fall in demand in the domestic markets'' the
Company''s revenue from operations and other income (gross) declined by
8.61% to '' 432.72 crore in FY 2013.
- The drop in sales volumes resulted in lower absorption of fixed
costs resulting in EBIDTA margin reducing to 7.08 % in FY 2012 - 2013
from 10.61% in FY 2011 - 2012.
- Consequently'' PAT was lower at '' 4.97 crore in FY 2012 - 2013
compared to ''18.59 crore in FY 2011 - 2012.
- It should be noted that the profits for FY 2012 included a net
positive impact of '' 3 crore'' on account of profit on sale /transfer of
leasehold rights in respect of part of Company''s leasehold land. This
was a one-time gain that should be removed from year on year financial
comparisons.
During FY 2013'' with a view to augment long-term funds to part- finance
the Company''s existing capital expenditure programme'' BGL has raised ''
6.33 crore through cost-effective borrowings. The Company has also
raised long term financial resources of '' 11.66 crore in FY 2013 to
fund the resource requirement(s) for setting up a new gear
manufacturing unit at Lonand'' in the district of Satara'' Maharashtra.
The Company also repaid '' 5.15 Crore of existing borrowings to
Financial Institutions and Banks.
The Company has made necessary arrangement for raising long term funds
for investments in capacity expansion and technology up gradation in FY
2013-14.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed analysis of the Company''s operations in terms of performance
in markets'' manufacturing activities'' business outlook'' risks and
concerns forms part of the Management Discussion and Analysis'' a
separate section of this report.
FIXED DEPOSITS
During the year under review'' the Company did not accept any fixed
deposits. In terms of Section 205C of the Companies Act'' 1956'' the
deposit and interest thereon'' which remains unclaimed for a period of
seven years from the date when it became due is required to be
deposited with the Investor Education and Protection Fund established
under the Companies Act'' 1956. During the year'' there was no amount
required to be transferred to Investor Education and Protection Fund.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance. The Report on Corporate Governance as stipulated under
Clause 49 of the Listing Agreement forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors''
Deloitte Haskins & Sells'' confirming compliance with the conditions of
Corporate Governance'' is attached to this Report.
DIRECTORS
In accordance with Section 256 of the Companies Act'' 1956 and the
Articles of Association of your Company'' Mr. Rakesh Chopra and Mr. W.R.
Schilha'' Directors retire by rotation and being eligible offer
themselves for re-appointment at the ensuing Annual General Meeting.
The brief resume of the Directors proposed to be re-appointed is given
in the Corporate Governance Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act'' 1956'' the Directors
confirm that'' -
i) in the preparation of the annual accounts'' the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently'' and have 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 as at 31March'' 2013 and of the profits of the Company
for the period ended on that date;
iii) 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 fraud and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT'' 1956
Except as disclosed elsewhere in the Annual Report'' there have been no
material changes and commitments'' which can affect the financial
position of the Company between the end of financial year and the date
of this report.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of
Section 217 (2A) of the Companies Act'' 1956 read with the Companies
(Particulars of Employees) Rules'' 1975 as amended is given in Annexure
''A'' to the Directors'' Report.
CONSERVATION OF ENERGY'' TECHNOLOGY ABSORPTION'' FOREIGN EXCHANGE
EARNINGS & OUTGO
The information in accordance with the provisions of 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 is given
in Annexure ''B'' to the Directors'' Report.
AUDITORS
The Statutory Auditors'' M/s Deloitte Haskins & Sells-Ahmedabad (ICAI
Registration No. 117365W) Chartered Accountants (DHS)'' hold office
until the conclusion of the forthcoming Annual General Meeting. The
Board recommends for their re-appointment as Statutory Auditors of the
Company for the year 2013-2014. Certificate from the Auditors has been
received to the effect that their re-appointment'' if made'' would be
within the limits prescribed under Section 224 (1B) of the Companies
Act'' 1956.
AUDITORS'' REPORT
The observations of the Auditors in their report are self-Explanatory
and/or explained suitably in the Notes forming part of the Financial
Statements.
COST AUDIT
M/s M.K. Kulshrestha & Associates'' Cost Accountants'' conducted the
audit of the cost records of both the plants of the Company for the
year ended 31st March'' 2012. Further'' the Company has proposed their
appointment subject to the Central Government approval'' as Cost
Auditors for auditing the cost records of both the plants of the
Company for the year ended 31st March'' 2013.
RECONCILIATION OF SHARE CAPITAL AUDIT
As per the directive of the Securities and Exchange Board of India
(SEBI)'' M/s AGB & Associates'' Company Secretaries'' Faridabad undertakes
a Reconciliation of Share Capital Audit on quarterly basis. The audit
is aimed at reconciliation of total shares held in CDSL'' NSDL and in
physical form with the admitted'' issued and listed capital of the
Company.
The Reconciliation of Share Capital Audit Reports as submitted by the
Auditor on quarterly basis was forwarded to the Bombay Stock Exchange''
Mumbai and the National Stock Exchange of India Limited'' where the
original shares of the Company are listed.
LISTING OF SHARES
The equity shares of the Company are listed on the Bombay Stock
Exchange'' Mumbai and National Stock Exchange of India Limited'' Mumbai.
INDUSTRIAL RELATIONS
During the year under review'' industrial relations in the Company
continued to be cordial and peaceful.
ACKNOWLEDGEMENTS
The Board of Directors thanks the shareholders for their continued
support and they would like to place on record their appreciation for
the dedicated services rendered by the Employees at all levels.
The Directors wish to convey their gratitude to the Financial
Institutions'' Bankers'' Customers'' Suppliers and Collaborators for the
assistance and confidence reposed by them in the Company.
For and on behalf of the Board of Directors
Place: Mumbai Surinder P. Kanwar
Dated: 29 May'' 2013 Chairman and Managing Director
Mar 31, 2012
The Directors have pleasure in submitting 40th Annual Report together
with Audited Accounts of your Company for the year ended on 31st March,
2012.
Crores
Financial Year Ended Ended
Financial Results 31.03.2012 31.03.2011
Revenue from Operations 473.47 359.67
& Other Income (Gross)
Profit Before Finance Cost 50.23 32.11
& Depreciation and
Amortisation Expense
Finance Cost 12.69 8.56
Depreciation and Amortisation 10.78 9.09
Expense
Profit Before Tax 26.76 14.46
Less: Tax Expense 8.17 4.75
Profit After Tax 18.59 9.71
Crores
Financial Year Ended
Surplus Statement of profit & loss 31.03.2012 31.03.2011
Opening Balance 14.91 8.85
Add: Profit for the Year 18.59 9.71
Less: Interim Dividend
Preference 0.10 0.21
Less: Proposed Dividend
Equity 1.41 1.17
Tax on Distributed Profits 0.25 0.23
Transferred to General Reserve 2.00 1.00
Transferred to Capital Redemption 1.04 1.04
Reserve
Closing Balance 28.70 14.91
DIVIDEND
(i) Series VI, VII and VIII of 10% Cumulative Redeemable
Non-Convertible Preference Shares (CRNPS): The Board is pleased to
recommend final dividend of Rs. 10/- per Share on 10% 104250 CRNPS of
Rs. 100/- each for the year ended 31st March, 2012 amounting to Rs.
0.10 crores which has already been paid as Interim Dividend since the
Preference Shares in Series VI, VII and VIII as per the terms, had been
redeemed on 31st March, 2012. This attracted Dividend Tax of Rs. 0.02
crores, which has also been paid.
(ii) Equity Shares: The Board also recommend Dividend of Rs. 1.80/- per
Equity Share on 7817833 Equity Shares of Rs. 10/- each of the Company
for the year ended 31st March, 2012. This amounts to Rs. 1.41 crores
and Rs. 0.23 crores towards Dividend Tax.
Total payout of the Company works out to Rs. 1.51 crores for Dividend
and Rs. 0.25 crores for Dividend Tax for the Company.
FINANCIAL AND OPERATIONAL PERFORMANCE
While the Fiscal 2011-12 commenced on an optimistic note ushering in an
impressive growth in exports and foreign exchange inflows; yet the
economy experienced slowdown as the year progressed. However, the
Company has maintained satisfactory progress in all business segments
notwithstanding economic upheavals in International Markets.
Particular crores growth over
Previous
Turnover 473.47 32%
EBITDA 50.23 56%
PBT 26.76 85%
PAT 18.59 91%
- Increase in turnover is mainly driven by growth in demand from OE
Customers - both Domestic and Overseas in FY 2011 - 2012.
- Improvement in EBITDA margin to 10.61% in FY 2011 - 2012 against
8.93% in FY 2010 - 2011 is on account of volume growth and profit on
sale of land.
- PAT was higher at Rs. 18.59 crores in FY 2011 - 2012 compared to
Rs. 9.71 crores in FY2010 - 2011.
- Current year profit includes a net positive impact of Rs. 3.00
crores, on account of Profit on Sale/ Transfer of leasehold rights in
respect of part of Company's leasehold land.
During the year, the company continued to make investments for capacity
expansion and technology upgradation. Besides using internal accruals,
the company focused on augmenting resources through cost-effective
borrowings. Accordingly, the company availed long term borrowing of Rs.
13.19 crores to part finance acquisition of Plant and Machinery. The
Company also repaid Rs. 11.54 crores of existing borrowings to
Financial Institutions and Banks.
The Company has undertaken suitable steps for raising long term
financial resources in FY 2012-13 to match the Company's resource
requirement(s) for investing in technology improvement and balancing
equipments in existing plants. The Company is also setting up a new
power train components manufacturing facility at Lonand, in the
district of Satara, Maharashtra.
REDEMPTION OF PREFERENCE SHARES
During the year under review, the company has redeemed balance 50% of
Series VI, VII & VIII 10% Cumulative Redeemable Non-Convertible
Preference Shares, 1,04,250 in Nos., issued under the Corporate Debt
Restructuring at par comprising out of the profits for the year and the
payment of Rs. 1.04 crores has been made to the respective Preference
Shareholders on redemption.
FIXED DEPOSITS
During the year under review, the company did not accept any fixed
deposits. In terms of section 205C of the Companies Act, 1956, the
deposit and interest thereon, which remains unclaimed for a period of
seven years from the date when it became due is required to be
deposited with the Investor Education and Protection Fund established
under the Companies Act, 1956. During the year, there was no amount
required to be transferred to Investor Education and Protection Fund.
CORPORATE GOVERNANCE
The company is committed to maintain the highest standards of corporate
governance. The report on corporate governance as stipulated under
clause 49 of the Listing Agreement forms part of this report.
The requisite certificate of compliance from Statutory Auditors,
Deloitte Haskins & Sells, confirming compliance with the conditions of
corporate governance, is attached to this report.
DIRECTORS
In accordance with section 256 of the Companies Act, 1956 and the
Articles of Association of your company, Mr. N.J. Kamath and Mr. V.K.
Pargal, directors retire by rotation and being eligible offer
themselves for re-appointment at the ensuing Annual General Meeting.
The brief resume of the directors proposed to be re-appointed is given
in the corporate governance report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors
confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently, and have 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 as at 31st March, 2012 and of the profits of the company
for the period ended on that date;
iii) 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 fraud and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the Annual Report, there have been no
material changes and commitments, which can affect the financial
position of the company between the end of financial year and the date
of this report.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of
section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended is given in Annexure
'A' to the Directors' Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
The information in accordance with the provisions of 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 is given in
Annexure 'B' to the Directors' Report.
AUDITORS
The Statutory Auditors, M/s Deloitte Haskins & Sells- Ahmedabad (ICAI
Registration No. 117365W) Chartered Accountants (DHS), hold office
until the conclusion of the forthcoming Annual General Meeting. The
Board recommends for their re-appointment as Statutory Auditors of the
company for the year 2012-2013. Certificate from the auditors has been
received to the effect that their re-appointment, if made, would be
within the limits prescribed under section 224(1B) of the Companies
Act, 1956.
AUDITORS' REPORT
The observations of the auditors in their report are self- explanatory
and/or explained suitably in the notes forming part of the financial
statements.
COST AUDIT
M/s M.K. Kulshrestha & Associates, Cost Accountants, conducted the
audit of the cost records of both the plants ofthe company for the year
ended 31s March, 2011. Further, the company has proposed their
appointment subject to the Central Government approval, as Cost
Auditors for auditing the cost records of both the plants of the
company for the year ended 31st March, 2012.
RECONCILIATION OF SHARE CAPITAL AUDIT
As per the directive of the Securities and Exchange Board of India
(SEBI), M/s AGB & Associates, Company Secretaries, Faridabad undertakes
a reconciliation of Share Capital Audit on quarterly basis. The Audit
is aimed at reconciliation of total shares held in CDSL, NSDL and in
physical form with the admitted, issued and listed capital of the
company.
The reconciliation of Share Capital Audit reports as submitted by the
auditor on quarterly basis was forwarded to the Bombay Stock Exchange,
Mumbai and the National Stock Exchange of India Limited, Mumbai where
the original shares of the company are listed.
LISTING OF SHARES
The Equity Shares of the company are listed on the Bombay Stock
Exchange, Mumbai and National Stock Exchange of India Limited, Mumbai.
ACKNOWLEDGEMENTS
The Board of Directors thanks the shareholders for their continued
support and they would like to place on record their appreciation for
the dedicated services rendered by the employees at all levels.
The directors wish to convey their gratitude to the financial
institutions, bankers, customers, suppliers and collaborators for the
assistance and confidence reposed by them in the company.
For and on behalf of the Board of Directors
Place: Mumbai Surinder P. Kanwar
Dated: 30th May, 2012 Chairman and Managing Director
Mar 31, 2011
The Directors have pleasure in submitting 39th Annual Report together
with Audited Accounts of your Company for the year ended on 31st March
2011.
(Rupees/Crores)
Financial year ended
Financial Results 31.03.2011 31.03.2010
Sales and other income (gross) 359.67 268.50
Profit before interest & other financing 32.11 27.75
charges and Depreciation/ Amortisation
Interest & other financing charges 8.46 8.57
Depreciation / Amortisation 9.09 9.55
Profit before tax 14.56 9.63
Less: Tax Expense 4.85 3.49
Profit after tax 9.71 6.14
Add: Balance brought forward 8.85 4.54
from previous year
Profit available for appropriation 18.56 10.68
Appropriations :
Proposed Dividend
- Preference 0.21 0.21
(including interim dividend paid)
- Equity 1.17 0.93
Tax on distributed profits 0.23 0.19
Transferred to General Reserve 1.00 0.50
Transferred to Capital Redemption Reserve 1.04 -
Balance carried to Balance Sheet 14.91 8.85
DIVIDEND
The Directors are pleased to recommend final dividend of Rs. 10 per
share on 2,08,500 10% Cumulative Redeemable Non- Convertible Preference
Shares comprising of Series I,II and III, amounting to Rs. 0.21 crores
for the year ended 31st March, 2011 already been paid as interim
dividend on 31st March, 2011, since 50% of the Preference Shares in
Series I,II and III as per the terms, had been redeemed on 31st March,
2011, which attracted Dividend Tax of Rs.0.03 crores.
The Directors also recommend dividend of Rs.1.50 per equity share on
7817833 Equity Shares of the Company, which will attract dividend tax
of Rs. 0.20 crores. The total payout will be Rs. 1.17 crores and tax
thereon Rs. 0.20 crores.
FINANCIAL AND OPERATIONAL PERFORMANCE
During the year under review, the Company has made scheduled repayments
of Rs.13.61 Crores of term loans to Financial Institutions and Banks.
Further disbursements from the banks of Rs.12.12 Crores have been
received to part-finance acquisition of additional plant and machinery.
Turnover of the Company has grown by 34% as compared to previous year.
However EBIDTA was lower at 8.93% vis-ÃÂ -vis 10.34% of previous year,
mainly on account of pressure on margins due to rising costs of raw
materials and petroleum products. Profit before tax was higher at Rs.
14.56 Crores as against Rs. 9.63 Crores in the previous year. After
provision for tax (net) of Rs. 4.85 Crores, net profit after tax is at
Rs. 9.71 Crores as against Rs. 6.14 Crores for the previous year.
In view of higher demand from both Domestic and Overseas customers, the
Company is planning necessary investments in expanding capacities by
investing in additional machines and balancing equipments. Additional
capex for FY2011-12 shall be financed by way of a mix of internal
accruals and debt. Further,
the Company has also drawn up a plan for setting up a greenfield unit
in the state of Maharashtra to take care of future expansion in
business.
While the Company is well positioned to meet higher offtake from the
market, it is also focused on improvement in margins by efficient
utilization of working capital and achieving higher operating
efficiencies.
REDEMPTION OF PREFERENCE SHARES
During the year under review, the Company has redeemed 50 % of Series
VI, VII & VIII 10% Cumulative Redeemable Non- Convertible Preference
Shares (104250 Nos) of Rs. 1.04 crores at par, out of the profits for
the year.
22 Employees under the Voluntary Retirement Scheme separated from the
Company at the cost of Rs. 0.95 crores.
Employees headcount at the end of the year was 1275.
A Statement required under Section 217(2A) of the Companies Act, 1956
is annexed.
FIXED DEPOSITS
During the year under review, the Company did not accept any fixed
deposits. In terms of Section 205C of the Companies Act 1956, the
deposit and interest thereon, which remains unclaimed for a period of
seven years from the date when it became due is required to be
deposited with the Investor Education and Protection Fund established
under the Companies Act, 1956. During the year, there was no amount
required to be transferred to Investor Education and Protection Fund.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance. The Report on Corporate Governance as stipulated under
Clause 49 of the Listing Agreement forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors,
Deloitte Haskins & Sells, confirming compliance with the conditions of
Corporate Governance, is attached to this Report.
DIRECTORS
In accordance with Section 256 of the Companies Act, 1956 and the
Articles of Association of your Company, Dr. Ram S. Tarneja and Mr.
S.G. Awasthi, Directors retire by rotation and being eligible offer
themselves for re-appointment at the ensuing Annual General Meeting.
The brief resume of the Directors proposed to be re-appointed is given
in the Corporate Governance Report.
The tenure of Mr. Surinder P. Kanwar, Chairman & Managing Director
expired on 30th September, 2010. He has been re-appointed as Chairman &
Managing Director of the Company for a further period of 5(five) years
w.e.f 1st October, 2010 and the requisite approvals for such
re-appointment have been obtained by the Company except for the
additional remuneration pending with the Ministry of Corporate Affairs,
Govt. of India approval.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that, -
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently, and have made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2011 and of the profits of
the Company for the period ended on that date;
iii) 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 fraud and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the Annual Report, there have been no
material changes and commitments, which can affect the financial
position of the Company between the end of financial year and the date
of this report.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of
Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended is given in Annexure
A to the Directors Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
The information in accordance with the provisions of 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 is given
in Annexure B to the Directors Report.
AUDITORS
The Statutory Auditors, M/s Deloitte Haskins & Sells (ICAI Registration
No. 117365W), Chartered Accountants (DHS), hold office until the
conclusion of the forthcoming Annual General Meeting. The Board
recommends for their re-appointment as Statutory Auditors of the
Company for the year 2011-2012. Certificate from the Auditors has been
received to the effect that their re-appointment, if made, would be
within the limits prescribed under Section 224 (1B) of the Companies
Act, 1956.
AUDITORS REPORT
The observations of the Auditors in their report are self- explanatory
and/or explained suitably in the Notes to the Accounts.
COST AUDIT
M/s. M.K. Kulshrestha & Associates, Cost Accountants, conducted the
audit of the cost records of both the plants of the Company for the
year ended 31st March, 2010. Further, the Company has proposed their
appointment subject to the Central Government approval, as Cost
Auditors for auditing the Cost records of both the plants of the
Company for the year ended 31st March 2011.
RECONCILIATION OF SHARE CAPITAL AUDIT
As per the directive of the Securities and Exchange Board of India
(SEBI), M/s AGB & Associates, Company Secretaries, Faridabad undertakes
a Reconciliation of Share Capital Audit on quarterly basis. The audit
is aimed at reconciliation of total shares held in CSDL, NSDL and in
physical form with the admitted, issued and listed capital of the
Company.
The Reconciliation of Share Capital Audit Reports as submitted by the
Auditor on quarterly basis was forwarded to the Bombay Stock Exchange,
Mumbai and the National Stock Exchange of I ndia Limited, Mumbai, where
the original shares of the Company are listed.
LISTING OF SHARES
The equity shares of the Company are listed on the Bombay Stock
Exchange, Mumbai and National Stock Exchange of India Limited, Mumbai.
PROMOTERS
List of Promoters of Bharat Gears Limited belonging to the Group of
Company, pursuant to Regulation 3(e) of SEBI (Substantial Acquisition
of Shares & Takeovers) Regulations, 1997 is as follows;
1. Raunaq International Limited
2. Clip Lok Simpak India Private Limited
3. Ultra Consultants Private Limited
4. Future Consultants Private Limited
5. Vibrant Finance & Investment Private Limited
6. Samreet Investment & Management Consultancy Private Limited
7. Raunaq ABM India Limited
8. Gulab Merchandise Private Limited
9. Surinder P. Kanwar & Family
10. Sameer Kanwar & Family
11. Sachit Kanwar & Family
Family for the above purpose includes the spouse, dependent children
and parents.
ACKNOWLEDGEMENTS
The Board of Directors admiringly recognize the continued teamwork,
reliance and support of our shareholders and would like to place on
record its appreciation for the dedicated services rendered by the
Employees at all levels. The Directors further articulate their
gratitude to the Financial Institutions, Bankers, Customers, Suppliers
and Collaborators as well for the assistance and confidence reposed by
them in the Company.
For and on behalf of the Board of Directors
Place: Mumbai Surinder P. Kanwar
Date : 27 May,2011 Chairman and Managing Director
Mar 31, 2010
The Directors have pleasure in submitting 38th Annual Report together
with Audited Accounts of your Company for the year ended on 31st March
2010.
(Rupees/Crores)
Financial year ended
Financial Results 31.03.2010 31.03.2009
Sales and other income (gross) 268.50 267.45
Profit before interest other 27.75 23.07
finance charges and depreciation
Finance Interest & other finance charges 8.56 7.74
Depreciation 9.55 9.83
Profit before tax 9.64 5.50
Less: Current tax/deferred 3.49 1.46
tax/fringe benefit tax(net)
Profit after tax 6.15 4.04
Add: Balance brought forward from 4.54 2.16
previous year
Profit available for appropriation 10.69 6.20
Appropriations
Proposed Dividend
- Preference 0.21 0.21
- Equity 0.94 0.78
Tax on distributed profits 0.19 0.17
Transferred to General Reserve 0.50 0.50
Balance carried to Balance Sheet 8.85 4.54
DIVIDEND
The Directors recommended dividend of Rs. 10 per share on preference
shares for the year ended 31s" March 2010, which will attract dividend
tax of Rs.0.03 crores. The Directors also recommended dividend of
Rs.1.20 per equity share on 7817833 equity shares of the Company, which
will attract dividend tax of Rs.0.16 crores. The total payout will be
Rs. 1.15 crores and tax thereon Rs.0.19 crores.
FINANCE
During the year under review, the Company has made scheduled repayments
of Rs.9.49 Crores of term loans to Financial Institutions and Banks.
Further disbursements from the banks, of Rs.1.85 Crores have been
received to finance acquisition of additional plant and machinery.
Adequate provisions are being made to part finance capital expenditure
planned in FY 2010-11 by way of term loans/leasing, in order to add
further manufacturing capacity and also to induct new technology to
meet quality parameters as required by the customers for their
products.
Notwithstanding recessionary conditions in first half of the year,
there was a modest growth of 1% in our sales as compared to previous
year in last six months.
EBIDTA was higher at 10.33% vis-a-vis 8.62% compared to previous year,
mainly on account of improved operating efficiencies and cost control
measures. Profit before tax was higher at Rs. 9.64 Crores as against
Rs. 5.50 Crores in the previous year. After provision for tax (net of
deferred tax credit of Rs. 0.80 Crores) of Rs. 3.49 Crores, net profit
after tax is at Rs. 6.15 Crores as against Rs. 4.04 Crores for the
previous year.
Your Company is well positioned to meet the higher demand from OEMs as
well as meet the stringent quality requirements. Tighter control on
inventories and receivables in coming months shall result in optimum
utilization of working capital facilities.
FIXED DEPOSITS
During the year under review, the Company did not accept any fixed
deposits. In terms of Section, 205C of the Companies Act 1956, the
deposit and interest thereon, which remains unclaimed for a period of
seven years from the date when it became due is required to be
deposited with the Investor Education and Protection Fund established
under the Companies Act, 1956. During the year, there was no amount
required to be transferred to Investor Education and Protection Fund.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance. The Report on Corporate Governance as stipulated under
Clause 49 of the Listing Agreement forms part of this Report.
The requisite Certificate of Compliance from Statutory Auditors, M/s
Deloitte Haskins & Sells, confirming compliance with the conditions of
Corporate Governance, is attached to this Report.
DIRECTORS
In accordance with Section 256 of the Companies Act, 1956 and the
Articles of Association of your Company Mr. W.R.Schilha and Mr. Rakesh
Chopra, Directors retire by rotation and being eligible; offer
themselves for re-appointment at the ensuing Annual General Meeting.
The brief resumes of the Directors proposed to be re-appointed are
given in the Corporate Governance Report.
DIRECTORSRESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that, -
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently, and have 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 as at 31st March, 2010 and of the profits of the Company
for the period ended on that date;
iii) 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 fraud and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
PARTICULARS OF EMPLOYEES
Information regarding employees in accordance with the provisions of
Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended is given in Annexure
A to the Directors Report.
CONSERVATION OF ENERGY.TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
& OUTGO
The information in accordance with the provisions of 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 is given
in Annexure B to the Directors Report.
AUDITORS
The Statutory Auditors, M/s Deloitte Haskins & Sells, Chartered
Accountants (DHS), hold office until the conclusion of the forthcoming
Annual General Meeting. The Board recommends for their re-appointment
as Statutory Auditors of the Company for the year 2010-11. Certificate
from the Auditors has been received to the effect that their
re-appointment, if made, would be within the limits prescribed under
Section 224 (IB) of the Companies Act, 1956.
AUDITORSREPORT
The observations of the Auditors in their report are self-Explanatory
and/or explained suitably in the Notes to the Accounts.
COST AUDIT
M/s. M.K. Kulshrestha & Associates, Cost Accountants, conducted the
audit of the cost records of both the plants of the Company for the
year ended 31st March 2009. Further, the Company has proposed their
appointment subject to the Central Government approval, as Cost
Auditors for auditing the Cost records of both the plants of the
Company for the year ended 31st March 2010.
SECRETARIAL AUDIT
As per the directive of the Securities and Exchange Board of India
(SEBI), M/s Ajay Garg & Associates, Company Secretaries, Faridabad,
undertakes a Secretarial Audit on quarterly basis. The audit is aimed
at reconciliation of total shares held in CDSL, NSDL and in physical
form with the admitted, issued and listed capital of the company.
The Secretarial Audit Reports as submitted by the Auditor on quarterly
basis were forwarded to the Bombay Stock Exchange, Mumbai and the
National Stock Exchange of India Limited, Mumbai, where the original
shares of the Company are listed.
LISTING OF SHARES
The equity shares of the Company are listed on the Bombay Stock
Exchange, Mumbai and National Stock Exchange of India Limited, Mumbai.
ACKNOWLEDGEMENTS
The Board of Directors admiringly recognize the continued teamwork,
reliance and support of our shareholders and would like to place on
record its appreciation for the dedicated services rendered by the
Employees at all levels. The Directors further articulate their
gratitude to the Financial Institutions, Bankers, Customers, Suppliers
and Collaborators as well for the assistance and confidence reposed by
them in the Company.
For and on behalf of the Board of Directors
Place : Mumbai SurinderP.Kanwar
Dated : May 27,2010 Chairman and Managing Director
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