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Directors Report of Nelcast Ltd.
Mar 31, 2025
Your Directors are pleased to present the Forty Third Annual Report along with the audited financial statements for the financial year ended 31st March 2025:
|
FINANCIAL HIGHLIGHTS & STATE OF AFFAIRS |
('' in Lakhs) |
|
|
Particulars |
2024-25 |
2023-24 |
|
Total Income |
126878.58 |
128121.60 |
|
PBIDT |
10561.96 |
10653.90 |
|
Profit Before Tax (PBT) |
4930.03 |
6861.63 |
|
Less: Provision for Tax |
1200.84 |
1420.51 |
|
Profit After Tax (PAT) |
3729.19 |
5441.12 |
|
Add: Profit brought forwarded from previous year |
18904.93 |
13825.91 |
|
Other Comprehensive Income |
(10.84) |
(14.09) |
|
Total Comprehensive Income |
||
|
available for Appropriation |
22623.28 |
19252.94 |
|
Appropriations: |
||
|
General Reserve |
- |
- |
|
Dividend on Equity Shares |
(348.01) |
(348.01) |
|
Surplus Carried to Balance Sheet |
22275.27 |
18904.93 |
Your Directors recommend a dividend of 25% (? 0.50/- per share) for the financial year 2024-25. Payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting. The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) and approved by the Board of Directors is available on the Companyâs website and is accessible at https://nelcast.com/policies.
No transfer to the General Reserves has been proposed for the financial year 2024-25.
The paid up equity share capital as on 31st March 2025 was '' 1740.02 Lakhs.
During the year, the Company recorded Revenue from Operations of ? 1251.68 Crores as against ? 1266.94 Crores in 2023-24, with a marginal reduction compared to previous year on account of slowdown in the market. The Export turnover for the year 2024-25 is ? 445.22 Crores which is at the same level compared to previous year and contributes about 36% of the total turnover. Profit After Tax made during the year including exceptional item is ? 37.29 Crores as against ? 54.41 Crores in 2023-24. A reduction of about 10% excluding exceptional item. The sales and profit were affected due to slow down in the market across all sectors. The production during the year was 83,637 MT, compared to the previous yearâs 85,366 MT.
During the year the Company has made a profit of ? 3.76 Crores on account of sale of surplus land available with the Company. This amount has been grouped under exceptional items.
MATERIAL CHANGES & EVENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and events affecting the financial position of the Company occurred between the end of the financial year and the date of this report.
India continues to be the fastest-growing major economy, despite real GDP growth moderating to 6.0% in H1:2024-25 down from the previous year. The Indian Automobile Industry continued its steady performance in FY2024-25, driven by healthy demand, infrastructure investments, supportive Government policies, and continued emphasis on sustainable mobility. Passenger Vehicles, Two-Wheelers and Three Wheelers grew in FY2024-25 compared to FY2023-24, but growth rates have been varied across segments. Commercial Vehicles witnessed a slight de-growth of 1.2% in the FY2024-25, though performance in recent months has been comparatively better. On the exports front, good recovery is seen across all segments, particularly Passenger Vehicles and Two-Wheelers reflecting improved global demand and Indiaâs growing competitiveness. As per the Society of Indian Automobile Manufacturers (SIAM), there was a slight degrowth in overall Commercial Vehicles sales, which has fallen marginally from 968,770 units in FY2023-24 to 956,671 units in FY2024-25. Commercial Vehicle industry expected to grow in the FY2025-26 due to stable macroeconomic conditions, proactive government policies and infrastructure spending by the Government.
In FY2024-25, the Tractor & Mechanization Association (TMA) reported a rebound in the Indian tractor industry, with domestic sales reaching 939,713 units, marking an 7.31% increase from the 875,724 units sold in FY2023-24. While this growth is promising, FY2022-23 still holds the record for the highest sales at 945,000 units. The industry is projected to surpass 1 million sales by 2026, driven by strong rabi and kharif crop seasons, favorable terms of trade, and increased government spending. According to Crisil Ratings, domestic tractor sales are projected to reach an all-time high of approximately 975,000 units in FY2025-26, driven by higher minimum support prices for key cash crops, improved replacement and construction demand, and expectations of an above-normal monsoon.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast Limited and its subsidiary NC Energy Limited as at 31st March 2025, in accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and prepared in accordance with the Indian Accounting Standards prescribed by the Institute of Chartered Accountants of India. As required by the SEBI Listing Regulations, the audited Consolidated Financial Statements are circulated with the Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the financial statements of subsidiary company are set out in the prescribed form AOC-1, which is annexed with this report as Annexure-A. The Company will make available the audited financial statements and related information of its subsidiary, upon request by any of its shareholders and it has also been placed on the website of the Company. The financial statements of the subsidiary company will also be kept for inspection by any member at the Registered Office of the Company and its subsidiary company. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary company.
QUALITY AND CUSTOMER SATISFACTION
The Company adheres to IATF 16949 quality standards and continuously strives to achieve world class quality by strictly adhering to the quality norms. The Company has also been awarded ISO 14001 & ISO 45001 certifications for implementing Health, Safety & Environmental Management Systems.
The Company is a supplier to several leading OEM customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors (TMTL), Volvo-Eicher Commercial Vehicles, SAME Tractors, Escorts Tractors, International Tractors (ITL), Daimler India, Caterpillar, etc., Tier I customers like Automotive Axles, American Axles, Dana, Rane-TRW, ZF India, etc., and Export customers like Meritor, American Axles, Daimler, Dana, Comer, ZF Industries etc., the Company is closely working with several of our customers in terms of new product development, improvement in quality, etc. to improve our products.
The Company has not accepted any public deposits during the year and as such, no amount on account of principal or interest on deposits from public was outstanding as at 31st March 2025.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Composition
The Corporate Governance Report annexed to this Boardâs Report contains the composition of the Board of Directors of the Company.
Ms. Maheswari Mohan (DIN: 07156606) has been recommended to be re-appointed as NonExecutive Independent Director of the Company for the second term of 5 (five) consecutive years not liable to retire by rotation by the Nomination and Remuneration Committee and Board of Directors at their respective meetings held on 14th May 2025, with effect from 30th November 2025 to 29th November 2030 subject approval from the shareholders in the forthcoming Annual General Meeting. In the opinion of the Board, she fulfils the conditions specified in the Act and the Rules made there under for appointment as Independent Director for the second term and is Independent of the Management. Details of the proposal for appointment of independent director are mentioned in the Explanatory statement under sec 102 of the Companies Act, 2013 of the Notice of the 43rd Annual General Meeting. The resolution seeking shareholderâs approval for her appointment forms part of the Notice.
Pursuant to Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended and other applicable provisions, if any, of the Companies Act, 2013 and Rules framed thereunder, and based on the recommendation of Nomination and Remuneration Committee and the Board of Directors, consent of the Members is sought for continuation of Mr. R. Sridharan (DIN: 00868787) as Non-executive Independent Director of the Company, who will be crossing 75 years of age during his tenure to hold office till his current tenure of appointment i.e., up to 22nd May 2027. The resolution seeking shareholderâs approval for continuation of his appointment forms part of the Notice.
Mr. P. Deepak (DIN: 02785326) and Ms. P. Divya (DIN: 05158352), Directors are due to retire by rotation and being eligible offers themself for reappointment.
Mr. P. Deepak, Managing Director & CEO and Mr. S.K. Sivakumar, Chief Financial Officer & Company Secretary hold the office of Key Managerial Personnel.
Independent Directors
The Independent Directors fulfil the criteria of Independence as defined under Section 149(6) and requisite declarations in terms of Section 149(7) of the Companies Act, 2013 have been received. During the year under review a separate meeting of the Independent Directors was held on 30th January 2025.
In compliance with the provisions of Sections 135, 177, 178 of the Act and SEBI Listing Regulations, the Board has constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee. The details of the composition of all the Committees are furnished in the Corporate Governance Report which is attached to this Report.
MEETINGS OF THE BOARD AND COMMITTEES
During the year, four meetings of the Board of Directors were held. The details of the meetings of the Board and its Committees are furnished in the Corporate Governance Report which is attached to this report.
COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) of the Companies Act, 2013 relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence, the Company has devised a policy relating to appointment of Directors, payment of Managerial Remuneration, Directorsâ Qualifications, Positive Attributes, Independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. The said policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
DIRECTORSâ RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations 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 at the end of the financial year ended 31st March 2025 and of the profit of the Company for that period;
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;
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.
The Company has been pro-active in following the principles and practices of good Corporate Governance. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in the SEBI Listing Regulations are complied with letter and spirit. A certificate issued by the auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this report. The matters relating to Corporate Governance as per the SEBI Listing Regulations are attached to this report. The managementâs discussion and analysis report as required by the SEBI Listing Regulations is also annexed which forms part of this report.
CERTIFICATE FROM COMPANY SECRETARY IN PRACTICE
L. Dhanamjaya Reddy, Practicing Company Secretary, has issued a certificate as required under the SEBI Listing Regulations, confirming that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Director of Companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed with this section as Annexure-B.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, the initiatives taken by the Company from an environmental, social and governance perspective for the financial year 2024-25 has been given in the Business Responsibility and Sustainability Report (BRSR) as per the format specified by SEBI Circular is given as Annexure-C to this Report and is also available on the Companyâs website and is accessible at https://nelcast.com/sustainability.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements/transactions entered by the Company during the financial year 2024-25 with related parties were in the ordinary course of the business and at Armâs Length basis and were placed and approved by the Audit Committee. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of the transactions with related parties are given in the financial statements. The Related Party Transaction Policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy in line with the provisions of Section 177(9) and 177(10) of the Act and Regulation 22 of the SEBI Listing Regulations, to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The Whistle Blower Policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
The Company has formulated the policy on dividend distribution with a view to specify the external and internal factors including financial parameters that shall be considered while declaring dividend and the circumstances under which the shareholders of the Company may or may not expect dividend and how the retained earnings be utilised etc. The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) SEBI Regulations, 2015 and approved by the Board of Directors is available on the Companyâs website and is accessible at https://nelcast.com/policies.
REMUNERATION POLICY OF THE COMPANY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to Section 178(3) of the Companies Act, 2013 and as per the SEBI Listing Regulations. The Company affirms remuneration is as per the remuneration policy of the Company. The said policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details 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 given in âAnnexure-Dâ to this Report.
The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company forms part of this report.
However, in terms of Section 136(1) of the Companies Act, 2013, the Annual Report and financial statements are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
In terms of Section 134(5)(e) of the Act, the term Internal Financial Control means the policies and procedures adopted by a Company for ensuring orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. The Internal Audit is in place in the Company and the Internal Auditors are conducting the Internal Audit periodically and the same is reviewed by the Audit Committee. The Company has in place adequate Internal Financial Controls.
At the Annual General Meeting of the Company held on 3rd August 2022, M/s. K. Nagaraju & Associates, Chartered Accountants (Firm Registration No.002270S) were appointed as Statutory Auditors of the Company for a period of 5 (five) years from the conclusion of 40th Annual General Meeting till the conclusion of the 45th Annual General Meeting. They have confirmed that their appointment is in accordance with Section 139 read with Section 141 of the Companies Act, 2013. The Reports given by M/s. K. Nagaraju & Associates, Chartered Accountants on the Financial Statements of the Company for the financial year 2024-25 do not contain any qualifications, reservations or adverse remarks and forms part of the Annual Report.
No frauds have been reported by the Statutory Auditors during the financial year 2024-25 pursuant to the provisions of Section 143(12) of the Act.
Pursuant to the Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014, the Board of Directors had appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries as Secretarial Auditors of the Company to conduct the Secretarial Audit for the financial year 2024-25. The Secretarial Audit Report for the financial year ended 31st March 2025 in Form No. MR-3 is annexed with this report in Annexure-E. The Secretarial Audit report does not contain any qualification, reservation or adverse remark.
Pursuant to Regulation 24(A) of SEBI Listing Regulations, the Company has obtained Annual Secretarial Compliance Report from M/s. L.D. Reddy & Co., Practicing Company Secretaries and the same has been submitted to the stock exchanges within the prescribed time.
Pursuant to the provisions of Section 204 of the Companies Act, 2013, and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, read with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, based on the recommendation of the Audit Committee, the Board of Directors at their meeting held on 14th May 2025 appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries as Secretarial Auditor of the Company for audit period of five consecutive years commencing from financial year 2025-26 till financial year 2029-2030, at such remuneration as may be determined by the Board of Directors of the Company. The resolution seeking shareholdersâ approval for this appointment forms part of the Notice.
COST AUDITORS AND COST RECORDS
Pursuant to the provisions of Section 148(3) of the Act, the Board of Directors had appointed M/s. Jayaram & Associates, Cost Accountants as Cost Auditors of the Company, for conducting the audit of cost records under Companies (Cost Records and Audit) Rules, 2014 for the financial year ended 31st March 2025. The audit is in progress and the report will be filed with the Ministry of Corporate Affairs within the prescribed period.
On the recommendation of the Audit Committee, the Board at its meeting held on 14th May 2025, has appointed M/s. Jayaram & Associates (Firm Registration No. 101077), Cost Accountants as Cost Auditors to audit the cost accounts of the Company for the financial year 2025-26. The Company has also received the necessary certificate under Section 141 of the Act, 2013 from them conveying their eligibility to act as Cost Auditors of the Company. A sum of ? 2.25 lakhs plus applicable taxes have been fixed by the Board as remuneration in addition to reimbursement of all applicable taxes, travelling and out-of-pocket expenses payable to them, which is required to be approved and ratified by the members, at the ensuing AGM as per Section 148(3) of the Act, 2013.
The cost records as specified by the Central Government under Section 148(1) of the Act, as required is maintained by the Company.
The Company has devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.
INVESTOR EDUCATION AND PROTECTION FUND
The details regarding shares and dividend transferred / proposed to be transferred to the Investor Education and Protection Fund (IEPF) and other relevant details in this regard, have been provided in the Corporate Governance Report forms part of this report.
Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended) the Annual Return of the Company is available on the Companyâs website and is accessible at https://nelcast.com/extract-of-annual-return. INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees continued to receive top priority. The Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels towards the performance and growth of the Company. RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report. Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Company has devised its risk management policy commensurate with its size and operations. The Policy provides for identification of risks and mitigation measures. The Risk Management Policy includes identifying types of risks and its assessment, risk handling, monitoring, and reporting. Your Company maintains an adequate and effective Internal Control System commensurate with its size. The internal control system is supplemented through an extensive internal audit program besides periodic review by the Management and the Audit Committee. Risk Management policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the Investments made by Company are given in the financial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility (CSR) Committee and also formulated a Corporate Social Responsibility Policy. The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed as part of this report in Annexure-F. Further details of the composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report. CSR policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant / material orders passed by the regulators or courts or tribunals during the financial year 2024-25, impacting the going concern status and Companyâs operations in future.
CHANGE IN NATURE OF BUSINESS
During the year under review, there has been no change in the Companyâs nature of business. CHANGE IN REGISTERED OFFICE OF THE COMPANY
During the year under review, there has been no change in the Registered Office of the Company.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANY''S SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
No Company has become or ceased to be Companyâs subsidiary, joint venture or associate company during the financial year 2024-25.
THE DETAILS OF 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 ALONG WITH THE REASONS THEREOF DURING THE FINANCIAL YEAR
No onetime settlement was done with any Bank / Financial Institutions during the financial year 2024-25.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE FINANCIAL YEAR
No application was made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2024-25.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has also been constituted for this purpose. All employees of the Company are covered under this policy. During the financial year 2024-25, there were no cases filed pursuant to the above Act.
DETAILS OF ESTABLISHMENT OF CODE OF CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS
The Company has a Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders (âPIT Policyâ) for connected persons, designated persons, and the insiders (collectively âInsidersâ) as defined under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (âPIT Regulationsâ). The Audit Committee reviews the Institutional Mechanism for prevention of insider trading. The aforementioned policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
NON-EXECUTIVE DIRECTORS'' COMPENSATION AND DISCLOSURE
None of the Independent / Non- Executive Directors have any pecuniary relationship or transactions with the Company which in the judgement of the Board may affect the Independence of the Directors.
DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY''S CODE OF CONDUCT
The Code of Conduct of the Company aims at ensuring consistent standards of conduct and ethical business practices across the Company. This Code is available on the website of the Company at https://nelcast.com/policies. Pursuant to the SEBI Listing Regulations, a confirmation from the Managing Director regarding compliance with the Code by all the Directors and senior management of the Company is annexed in the Corporate Governance Report.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED IN THE BOARD
In the opinion of Board of Directors of the Company, Independent Directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized, and respected individuals in their respective fields. Itâs an optimum mix of expertise (including financial expertise), leadership and professionalism.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and under regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year, the Board has carried out an evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure, and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.
Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the Management outside Board/ Committee Meetings.
Areas on which the Committees of the Board were assessed included degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure-G forming part of this Report.
OTHER DISCLOSURES
The electronic copies of the 43rd Annual Report and the Notice convening the 43rd AGM would be sent to all shareholders whose e-mail addresses are registered with the Company or their respective Depository Participants (DP) in accordance with the circulars issued by the Ministry of Corporate Affairs (MCA) read with circulars issued by the SEBI. The full Annual Report is available on the website of the Company and shall also be disseminated to the stock exchanges.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the dedicated efforts of the employees and co-operation of associates, suppliers and customers. We also express our sincere thanks to Companyâs Bankers namely State Bank of India, Standard Chartered Bank, The Hongkong and Shanghai Banking Corporation Ltd., Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for their trust and continued support.
Mar 31, 2024
The Directors are pleased to present the Forty Second Annual Report along with the audited financial statements for the financial year ended 31st March 2024:
|
PERFORMANCE FINANCIAL RESULTS |
2023-24 |
(Rs. in Lakhs) 2022-23 |
|
Total Income |
128121.60 |
128011.84 |
|
PBIDT |
10653.90 |
9550.71 |
|
Profit Before Tax (PBT) |
6861.63 |
4031.70 |
|
Less: Provision for Tax |
1420.51 |
1058.16 |
|
Profit After Tax (PAT) |
5441.12 |
2973.54 |
|
Add: Profit brought forwarded from previous year |
13825.91 |
11153.72 |
|
Other Comprehensive Income Total Comprehensive Income |
(14.09) |
(40.35) |
|
available for Appropriation Appropriations: |
19252.94 |
14086.91 |
|
General Reserve |
- |
- |
|
Dividend on Equity Shares |
(348.01) |
(261.00) |
|
Surplus Carried to Balance Sheet |
18904.93 |
13825.91 |
Your Directors recommend a dividend of 20% (? 0.40/- per share) for the financial year 2023-24. Payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting. The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) and approved by the Board of Directors is available on the Companyâs website and is accessible at https://nelcast.com/policies.
No transfer to the General Reserves has been proposed for the financial year 2023-24.
The paid up equity share capital as on 31st March 2024 was '' 1740.02 Lakhs.
During the year, the Company recorded Revenue from Operations of '' 1266.94 Crores as against '' 1263.97 Crores in 2022-23, a marginal increase compared to previous year. Our Exports business registered a growth of 35% compared with previous year and stood at '' 445.27 Crores. Profit After Tax made during the year including exceptional item is '' 54.41 Crores as against '' 29.73 Crores in 2022-23, an increase of about 83%. The production during the year was 85,366 MT, compared to the previous yearâs 84,238 MT. During the year the sales were affected due to slow down in the tractor sector and profitability improved due to better realization and increased exports.
During the year the Company has made a profit of '' 17.80 Crores on account of sale of surplus land available with the Company. This amount has been grouped under exceptional items.
MATERIAL CHANGES & EVENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and events affecting the financial position of the Company occurred between the end of the financial year and the date of this report.
Amidst a strong economic expansion of 7.6% underpinned by the Indian governmentâs supportive policies, the Indian automobile industry has exhibited a commendable performance, with the domestic market registering a 12.5% increase over the last fiscal year. As per the Society of Indian Automobile Manufacturers (SIAM), there was a slight upturn in overall Commercial Vehicles sales, which rose marginally from 962,468 units in FY2022-23 to 967,878 units in FY2023-24. The segment for Medium and Heavy Commercial Vehicles saw a moderate year-over-year growth of approximately 4%, with sales ascending from 359,003 units in FY2022-23 to 373,194 units in FY2023-24. Conversely, Light Commercial Vehicles observed a small dip in sales, going from 603,465 units in FY2022-23 to 594,684 units in FY2023-24. The Commercial Vehicle sector experienced minimal growth, with certain setbacks in LCVs and SCVs primarily attributed to a downturn in the CNG category. A shift towards trucks with greater tonnage, which offer increased payload capacity, also influenced the growth figures as this trend is not directly captured by unit sales numbers.
As the industry looks forward to the 2025 fiscal year, prospects for advancement appear promising, especially with the anticipation of new launches, notably in the Electric Vehicle (EV) market. The sector maintains a positive outlook, buoyed by the countryâs economic trajectory, proactive government initiatives, and the expectations of a beneficial monsoon season that could further stimulate demand. Nonetheless, the industry recognizes that it faces hurdles, including intensifying competition and the persistent necessity for strategic market engagement, both of which demand vigilant management.
The Indian tractor industry declined by about 7% in quantity terms in FY2023-24, after registering the highest ever annual production and domestic sales in the previous year. Total volume stood at 874,504 compared with 940,985 units. The decline in domestic sales can be majorly attributed to high base effect of the previous fiscal. The Tractor industry expects a moderate growth in the coming years on the back of augmented financial support to farmers through loans and subsidies, growth in agricultural productivity, tremendous potential to grow in the export market, government initiatives regarding rural development and farm mechanization along with various other factors, such as high rural wages and scarcity of farm labour, are likely to increase the tractor volume over the long term. The headroom for growth is immense and given that agriculture has huge weight in the overall economy.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast Limited and its subsidiary NC Energy Limited as at 31st March 2024, in accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and prepared in accordance with the Indian Accounting Standards prescribed by the Institute of Chartered Accountants of India. As required by the Listing Regulations, the audited Consolidated Financial Statements are circulated with the Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the financial statements of subsidiary company is set out in the prescribed form AOC-1, which is annexed with this report as Annexure-A. The Company will make available the audited financial statements and related information of its subsidiary, upon request by any of its shareholders and it has also been placed on the website of the Company. The financial statements of the subsidiary company will also be kept for inspection by any member at the Registered Office of the Company and its subsidiary company. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary company.
QUALITY AND CUSTOMER SATISFACTION
The Company adheres to IATF 16949 quality standards and continuously strives to achieve world class quality by strictly adhering to the quality norms. The Company has also been awarded ISO 14001 & ISO 45001 certifications for implementing Health, Safety & Environmental Management Systems.
The Company is a supplier to several leading OEM customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors (TMTL), Volvo-Eicher Commercial Vehicles, SAME Tractors, Escorts Tractors, International Tractors (ITL), Daimler India, Caterpillar, etc., Tier I customers like Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF India, etc., and Export customers like Meritor, American Axles, Daimler, Dana, Comer, ZF Industries etc. The Company is closely working with several of its customers in terms of new product development, improvement in quality, etc. to improve our products.
The Company has not accepted any public deposits during the year and as such, no amount on account of principal or interest on deposits from public was outstanding as at 31st March 2024.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Composition
The Corporate Governance Report annexed to this Boardâs Report contains the composition of the Board of Directors of the Company.
Mr. Vinod K Dasari (DIN: 00345657) was appointed as an Additional (Non-Executive Independent) Director of the Company with effect from 13th May 2024. On recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed the appointment of Mr. Vinod K Dasari as a Non-Executive Independent Director, not liable to retire by rotation, for a period of five (5) years from 13th May 2024 to 12th May 2029. In the opinion of the Board, Mr. Vinod K Dasari fulfils the conditions specified in the Companies Act, 2013, and Rules made thereunder for appointment as an Independent Director and possesses integrity, necessary expertise, relevant experience and proficiency and is independent of the management of the Company. The resolution seeking shareholderâs approval for his appointment forms part of the Notice.
Mr. A. Balasubramanian (DIN: 00490921) and Mr. D. Sesha Reddy (DIN: 00520448) were appointed as Independent Directors on the Board of the Company for the second term of 5 years with effect from 6th August 2019 to 5th August 2024 by the shareholders in the Annual General Meeting held on 1st August 2019. Their term of office expires on 5th August 2024. On the recommendation of the Nomination and Remuneration Committee, the Board of Directors appointed them as Non-Executive Non-Independent Directors of the Company, liable to retire by rotation, with effect from 6th August 2024 subject to approval of the shareholders in the forthcoming Annual General Meeting. The resolution seeking shareholderâs approval for their appointment forms part of the Notice.
Ms. P. Divya, Director (DIN: 05158352) is due to retire by rotation and being eligible offers herself for reappointment.
Mr. P Deepak, Managing Director & CEO and Mr. S.K. Sivakumar, Chief Financial Officer & Company Secretary hold the office of Key Managerial Personnel.
The Independent Directors have fulfilled the criteria of Independence as defined under Section 149(6) and requisite declarations in terms of Section 149(7) of the Companies Act, 2013 have been received. During the year under review a separate meeting of independent directors was held on 29th January 2024.
In compliance with the provisions of Sections 135, 177, 178 of the Act and Listing Regulations, the Board has constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee. The details of the composition of all the committees are furnished in the Corporate Governance Report which is attached to this report.
MEETINGS OF THE BOARD AND COMMITTEES
During the year, four meetings of the Board of Directors were held. The details of the meetings of the Board and its Committees are furnished in the Corporate Governance Report which is attached to this report.
COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) of the Companies Act, 2013 relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence, the Company has devised a policy relating to appointment of Directors, payment of managerial remuneration, Directorsâ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. The said policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
DIRECTORSâ RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations 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 at the end of the financial year ended 31st March 2024 and of the profit of the Company for that period;
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;
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;
The Company has been pro-active in following the principles and practices of good Corporate Governance. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in the Listing Regulations are complied with letter and spirit. A certificate issued by the auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this report. The matters relating to Corporate Governance as per the Listing Regulations are attached to this report. The managementâs discussion and analysis report as required by the Listing Regulations is also annexed which forms part of this report.
CERTIFICATE FROM COMPANY SECRETARY IN PRACTICE
L. Dhanamjaya Reddy, Practicing Company Secretary, has issued a certificate as required under the Listing Regulations, confirming that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed with this section as Annexure-B.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
Pursuant to Regulation 34(2)(f) of the Listing Regulations and SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, the initiatives taken by the Company from an environmental, social and governance perspective for the financial year 2023-24 has been given in the Business Responsibility and Sustainability Report (BRSR) as per the format specified by SEBI Circular is given as Annexure-C to this Report and is also available on the Companyâs website and is accessible at https://nelcast.com/sustainability.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financial year 2023-24 with related parties were in the ordinary course of the business and at Armâs Length basis. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of the transactions with related parties are given in the financial statements. The Related Party Transaction Policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy in line with the provisions of Section 177(9) and 177(10) of the Act and Regulation 22 of the Listing Regulations, to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The Whistle Blower Policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
The Company has formulated the policy on dividend distribution with a view to specify the external and internal factors including financial parameters that shall be considered while declaring dividend and the circumstances under which the shareholders of the Company may or may not expect dividend and how the retained earnings be utilised etc. The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and approved by the Board of Directors is available on the Companyâs website and is accessible at https://nelcast.com/policies.
REMUNERATION POLICY OF THE COMPANY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to Section 178(3) of the Companies Act, 2013 and as per the Listing Regulations. The Company affirms remuneration is as per the remuneration policy of the Company. The said policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details 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 given in âAnnexure-Dâ to this Report.
The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company forms part of this report.
However, in terms of Section 136(1) of the Companies Act, 2013, the Annual Report and financial statements are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting and any member interested in obtaining such information may write to the company secretary and the same will be furnished.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
In terms of Section 134(5)(e) of the Act, the term Internal Financial Control means the policies and procedures adopted by a company for ensuring orderly and efficient conduct of its business, including adherence to companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. The Internal Audit is in place in the Company and the Internal Auditors are conducting the Internal Audit periodically and the same is reviewed by the Audit Committee. The Company has in place adequate internal financial controls.
At the Annual General Meeting of the Company held on 3rd August 2022, M/s. K. Nagaraju & Associates, Chartered Accountants (Firm Registration No.002270S) were appointed as Statutory Auditors of the Company for a period of 5 (five) years from the conclusion of 40th Annual General Meeting till the conclusion of the 45th Annual General Meeting. They have confirmed that their appointment is in accordance with Section 139 read with Section 141 of the Companies Act, 2013.
The Reports given by M/s. K. Nagaraju & Associates, Chartered Accountants on the Financial Statements of the Company for the financial year 2023-24 do not contain any qualifications, reservations or adverse remarks and forms part of the Annual Report.
No frauds have been reported by the Statutory Auditors during the financial year 2023-24 pursuant to the provisions of Section 143(12) of the Act.
Pursuant to the Section 204 of the Companies Act, 2013 read Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014, the Board of Directors had appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries as Secretarial Auditors of the Company to conduct the Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report for the financial year ended 31st March 2024 in Form No. MR-3 is annexed with this report in Annexure-E. The Secretarial Audit report does not contain any qualification, reservation, adverse remark, or any disclaimer.
Pursuant to Regulation 24(A) of SEBI Listing Regulations, the Company has obtained Annual Secretarial Compliance Report from M/s. L.D. Reddy & Co., Practicing Company Secretaries and the same has been submitted to the stock exchanges within the prescribed time.
COST AUDITORS AND COST RECORDS
Pursuant to the provisions of Section 148(3) of the Act, the Board of Directors had appointed M/s. Jayaram & Associates, Cost Accountants as Cost Auditors of the Company, for conducting the audit of cost records under Companies (Cost Records and Audit) Rules, 2014 for the financial year ended 31st March 2024. The audit is in progress and the report will be filed with the Ministry of Corporate Affairs within the prescribed period.
On recommendation of the Audit Committee, the Board at its meeting held on 13th May 2024, has appointed M/s. Jayaram & Associates (Firm Registration No. 101077), Cost Accountants as Cost Auditors to audit the cost accounts of the Company for the financial year 2024-25. The Company has also received the necessary certificate under Section 141 of the Act, 2013 from them conveying their eligibility to act as a cost auditor. A sum of '' 2 lakhs plus applicable taxes have been fixed by the board as remuneration in addition to reimbursement of all applicable taxes, travelling and out-ofpocket expenses payable to them, which is required to be approved and ratified by the members, at the ensuing AGM as per Section 148(3) of the Act, 2013.
The cost records as specified by the Central Government under subsection (1) of Section 148 of the Act, as required is maintained by the Company.
The Company has devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.
INVESTOR EDUCATION AND PROTECTION FUND
The details regarding shares and dividend transferred / proposed to be transferred to the Investor Education and Protection Fund (IEPF) and other relevant details in this regard, have been provided in the Corporate Governance section of this Annual Report.
Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended) the Annual Return of the Company is available on the Companyâs website and is accessible at https://nelcast.com/extract-of-annual-return.
The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees continued to receive top priority. The Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels towards the performance and growth of the Company.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report. Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The company has devised its risk management policy commensurate with its size and operations. The Policy provides for identification of risks and mitigation measures. The Risk Management Policy includes identifying types of risks and its assessment, risk handling, monitoring, and reporting. Your Company maintains an adequate and effective Internal Control System commensurate with its size. The internal control system is supplemented through an extensive internal audit program besides periodic review by the Management and the Audit Committee. Risk Management policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the financial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility (CSR) Committee and also formulated a Corporate Social Responsibility Policy. The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed as part of this report in Annexure-F. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report. CSR policy is available on the Companyâs website and is accessible at https://nelcast.com/policies.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant / material orders passed by the regulators or courts or tribunals during the financial year 2023-24, impacting the going concern status and Companyâs operations in future.
CHANGE IN NATURE OF BUSINESS
During the year under review, there has been no change in the Companyâs nature of business.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANY''S SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
No Company has become or ceased to be Companyâs subsidiary, joint venture or associate company during the financial year 2023-24.
THE DETAILS OF 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 ALONG WITH THE REASONS THEREOF DURING THE FINANCIAL YEAR
No onetime settlement was done with any Bank / Financial Institutions during the financial year under review.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE FINANCIAL YEAR:
No application was made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2023-24.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has also been constituted for this purpose. During the financial year 2023-24, there were no cases filed pursuant to the above Act.
DETAILS OF ESTABLISHMENT OF CODE OF CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS
The Company has a Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders (âPIT Policyâ) for connected persons, designated persons, and the insiders (collectively âInsidersâ) as defined under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (âPIT Regulationsâ). The Audit Committee reviews the Institutional Mechanism for prevention of insider trading. The aforementioned policy is available on the Companyâs website and is accessible at https://nelcast. com/policies.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED IN THE BOARD
In the opinion of Board of Directors of the Company, Independent Directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized, and respected individuals in their respective fields. Itâs an optimum mix of expertise (including financial expertise), leadership and professionalism.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and under regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year, the Board has carried out an evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure, and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. Directors were evaluated on aspects such as attendance and contribution at Board / Committee Meetings and guidance / support to the management outside Board/ Committee Meetings.
Areas on which the Committees of the Board were assessed included degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure-G forming part of this Report.
OTHER DISCLOSURES
The electronic copies of the 42nd Annual Report and the Notice convening the 42nd AGM would be sent to all shareholders whose e-mail addresses are registered with the Company or their respective Depository Participants (DP) in accordance with the circulars issued by the Ministry of Corporate Affairs (MCA) read with circulars issued by the SEBI. The full Annual Report is available on the website of the Company and shall also be disseminated to the stock exchanges.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the dedicated efforts of the employees and co-operation of associates, suppliers and customers. We also express our sincere thanks to Companyâs Bankers namely State Bank of India, Standard Chartered Bank, The Hongkong and Shanghai Banking Corporation Ltd., Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for their trust and continued support.
Mar 31, 2023
Your Directors are pleased to present the Forty First Annual Report along with the audited financi; statements for the financial year ended 31st March 2023:
PERFORMANCE ('' in Lakhs)
FINANCIAL RESULTS 2022-23 2021-22
|
Total Income |
128011.84 |
93674.35 |
|
PBIDT |
9550.71 |
6749.05 |
|
Profit Before Tax (PBT) |
4031.70 |
1904.99 |
|
Less: Provision for Tax |
1058.16 |
482.52 |
|
Profit After Tax (PAT) |
2973.54 |
1422.47 |
|
Add: Profit brought forwarded from previous year |
11153.72 |
9995.33 |
|
Other Comprehensive Income Total Comprehensive Income |
-40.35 |
-90.08 |
|
available for Appropriation Appropriations: |
14086.91 |
11327.72 |
|
General Reserve |
- |
- |
|
Dividend on Equity Shares |
-261.00 |
-174.00 |
|
Surplus Carried to Balance Sheet |
13825.91 |
11153.72 |
DIVIDEND
Your Directors recommend a dividend of 20% ('' 0.40/- per share) for the financial year 2022-23. Payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting. The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) and approved by the Board of Directors is available on the website of the Company weblink: http://nelcast.com/policies.
TRANSFER TO RESERVES
No transfer to the General Reserves has been proposed for the financial year 2022-23.
SHARE CAPITAL
The paid up equity share capital as on 31st March 2023 was '' 1740.02 Lakhs.
OPERATIONS
During the year, the Company recorded Revenue from Operations by way of Net Sales of '' 1263.97 Crores as against '' 927.34 Crores in 2021-22, an increase of about 36%. Our Exports business registered a growth of 49% compared with previous year and stood at '' 329.41 Crores. Profit After Tax made during the year is '' 29.73 Crores as against '' 14.22 Crores in 2021-22, an increase of about 109%. The production during the year was 84,238 MT, compared to the previous yearâs 74,881 MT. During the year the sales and profitability improved due to better market demand from both Commercial Vehicle & Tractor segment and increased exports.
MATERIAL CHANGES & EVENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and events affecting the financial position of the Company occurred between the end of the financial year and date of this report.
OUTLOOK
Post slowdown witnessed in the past three years, FY23 turned out to be a good year for the automotive industry driven by strong demand. According to SIAM, the overall Commercial Vehicles sales increased from 716,566 to 962,468 units, up 34% YoY. Sales of Medium and Heavy Commercial Vehicles increased from 240,577 to 359,003 units and Light Commercial Vehicles increased from 475,989 in FY22 to 603,465 units in FY23. Moreover, the auto component industry demonstrated a remarkable turn-around in FY23 as well.
The Indian automotive industry is expected to grow strongly in FY24 on the back of increased demand for trucks and tippers driven by rising infrastructure spending by Government. In addition to this, government has also launched Production Linked Incentive scheme (PLI) for automobile and auto component industry for five years, which will help the industries to be cost competitive in the global market. We believe that the commercial vehicle industry has a strong potential upside for growth in FY24 as India emerges as the global pivot for auto component sourcing.
FY23 turned out to be a strong year for the Indian Tractor Industry as the sale volumes touched alltime high of 944,000 units. The industry reported a growth of about 12% in FY23 against previous year, driven by rise in minimum support prices (MSP), which led to an increase in farm income, as well as another year of above-average monsoon. Coupled with this, technological advancements in high HP tractor ranges further contributed to the growth. Government initiatives regarding rural development and farm mechanization and various factors, such as high rural wages and scarcity of farm labor, are likely to increase the tractor volume over the long term.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast Limited and its subsidiary NC Energy Limited as at 31st March 2023, in accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and prepared in accordance with the Indian Accounting Standards prescribed by the Institute of Chartered Accountants of India. As required by the Listing Regulations, the audited Consolidated Financial Statements are circulated with the Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the financial statements of subsidiary company is set out in the prescribed form AOC-1, which is annexed with this report as Annexure-A. The Company will make available the audited annual accounts and related information of its subsidiary, upon request by any of its shareholders and it has also been placed on the website of the Company. The annual accounts of the subsidiary company will also be kept for inspection, by any member at the Registered Office of the Company and its subsidiary company. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary company.
QUALITY AND CUSTOMER SATISFACTION
The Company adheres to IATF 16949 quality standards and continuously strives to achieve world class quality by strictly adhering to the quality norms. The Company has also been awarded ISO 14001 & ISO 45001 certifications for implementing Health, Safety & Environmental Management Systems.
The Company is a supplier to several leading OEM customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors (TMTL), Volvo-Eicher Commercial Vehicles, SAME Tractors, Escorts Tractors, International Tractors (ITL), Daimler India, Caterpillar, etc., Tier I customers like Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF India, etc., and Export customers like Meritor, American Axles, Daimler, Dana, Comer, ZF Industries etc., the Company is closely working with several of our customers in terms of new product development, improvement in quality, etc., to improve our products.
DEPOSITS
The Company has not accepted any public deposits during the year and as such, no amount on account of principal or interest on deposits from public was outstanding as at 31st March 2023.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Composition
The Corporate Governance Report annexed to this Boardâs Report contains the composition of the Board of Directors of the Company.
Directorâs appointment
Mr. P. Deepak, Managing Director (DIN: 02785326) was reappointed as Managing Director by the board of directors at their meeting held on 18th May 2023 for a further period of five years from 1st July 2023 to 30th June 2028 on the recommendation made by the Nomination and Remuneration Committee subject to approval of shareholders. The resolution seeking shareholderâs approval for his reappointment forms part of the Notice.
Mr. P. Deepak, Director (DIN: 02785326) is due to retire by rotation and being eligible offers himself for reappointment.
Mr. P. Deepak, Managing Director and Mr. S.K. Sivakumar, Chief Financial Officer & Company Secretary hold the office of Key Managerial Personnel.
Independent Directors
The Independent Directors have fulfilled the criteria of Independence as defined under Section 149(6) and requisite declarations in terms of Section 149(7) of the Companies Act, 2013 have been received. During the year under review a separate meeting of independent directors was held on 1st February 2023.
COMMITTEES OF THE BOARD
In compliance with the provisions of Sections 135, 177, 178 of the Act and Listing Regulations, the Board constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee. The details of composition of all the committees are furnished in the Corporate Governance Report which is attached to this report.
MEETINGS OF THE BOARD AND COMMITTEES
During the year, four meetings of the Board of Directors were held. The details of the meetings of the Board and its Committees are furnished in the Corporate Governance Report which is attached to this report.
COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) of the Companies Act, 2013 relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence, the Company has devised a policy relating to appointment of Directors, payment of managerial remuneration, Directorsâ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. The said policy is posted on the Companyâs website http://nelcast.com/policies.
DIRECTORSâ RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge and ability, confirm that:
a) in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any;
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 at the end of the financial year ended 31st March 2023 and of the profit of the Company for that period;
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;
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.
CORPORATE GOVERNANCE
The Company has been pro-active in following the principles and practices of good Corporate Governance. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in the Listing Regulations are complied with letter and spirit. A certificate issued by the auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this report. The matters relating to Corporate Governance as per the Listing Regulations are attached to this report. The managementâs discussion and analysis report as required by the Listing Regulations is also annexed which forms part of this report.
CERTIFICATE FROM COMPANY SECRETARY IN PRACTICE
L. Dhanamjaya Reddy, Practicing Company Secretary, has issued a certificate as required under the Listing Regulations, confirming that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed with this section as Annexure-B.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
Pursuant to Regulation 34(2)(f) of the Listing Regulations and SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 w.e.f. 5th May 2021, the Companies are required to file Business Responsibility and Sustainability Report in place of Business Responsibility Report. Accordingly, the Company is pleased to present its 1st Business Responsibility and Sustainability Report (BRSR) for the financial year 2022-23 in the prescribed format is given as Annexure-C to this Report and is also available on the Companyâs website www.nelcast.com.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financial year 2022-23 with related parties were in the ordinary course of the business and at Armâs Length basis. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of the transactions with related parties are given in the financial statements. The Related Party Transaction Policy is posted on the Companyâs website http://nelcast.com/policies.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy in line with the provisions of Section 177(9) and 177(10) of the Act and Regulation 22 of the Listing Regulations, to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The Whistle Blower Policy is posted on the Companyâs website http://nelcast.com/policies.
DIVIDEND DISTRIBUTION POLICY
The Company has formulated the policy on dividend distribution with a view to specify the external and internal factors including financial parameters that shall be considered while declaring dividend and the circumstances under which the shareholders of the Company may or may not expect dividend and how the retained earnings be utilised etc., The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) and approved by the Board of Directors is available on the website of the Company weblink: http://nelcast.com/policies.
REMUNERATION POLICY OF THE COMPANY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to Section 178(3) of the Companies Act, 2013 and as per the Listing Regulations. The Company affirms remuneration is as per the remuneration policy of the Company. The said policy is posted on the Companyâs website http://nelcast.com/policies.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details 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 given in âAnnexure-Dâ to this Report.
The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company forms part of this report.
In terms of Section 136(1) of the Companies Act, 2013, the Annual Report and financial statements are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting and any member interested in obtaining such information may write to the company secretary and the same will be furnished.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
In terms of Section 134(5)(e) of the Act, the term Internal Financial Control means the policies and procedures adopted by a company for ensuring orderly and efficient conduct of its business, including adherence to companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. The Internal Audit is in place in the Company and the Internal Auditors are conducting the Internal Audit periodically and the same is reviewed by the Audit Committee. The Company has in place adequate internal financial controls.
STATUTORY AUDITORS
At the Annual General Meeting of the Company held on 3rd August 2022, M/s. K. Nagaraju & Associates, Chartered Accountants (Firm Registration No.002270S) were appointed as Statutory Auditors of the Company for a period of 5 (five) years from the conclusion of 40th Annual General Meeting till the conclusion of the 45th Annual General Meeting. They have confirmed that their appointment is in accordance with Section 139 read with Section 141 of the Companies Act, 2013.
The Reports given by M/s. K. Nagaraju & Associates, Chartered Accountants on the Financial Statements of the Company for the financial year 2022-23 does not contain any qualifications, reservations or adverse remarks and forms part of the Annual Report.
No frauds have been reported by the Statutory Auditors during the Financial Year 2022-23 pursuant to the provisions of Section 143(12) of the Act.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries as Secretarial Auditors of the Company to conduct the Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the financial year ended 31st March 2023 in Form No. MR-3 is annexed with this report in Annexure-E. The Secretarial Audit report does not contain any qualification, reservation, adverse remark, or any disclaimer.
Pursuant to Regulation 24(A) of SEBI Listing Regulations, the Company has obtained Annual Secretarial Compliance Report from M/s. L.D. Reddy & Co., Practicing Company Secretaries and the same has been submitted to the stock exchanges within the prescribed time.
COST AUDITORS AND COST RECORDS
Pursuant to the provisions of Section 148(3) of the Act, the Board of Directors had appointed M/s. Jayaram & Associates, Cost Accountants as Cost Auditors of the Company, for conducting the audit of cost records under Companies (Cost Records and Audit) Rules, 2014 for the financial year ended 31st March, 2023. The audit is in progress and the report will be filed with the Ministry of Corporate Affairs within the prescribed period.
On recommendation of the Audit Committee, the Board at its meeting held on 18th May, 2023, has appointed M/s. Jayaram & Associates (Firm Registration No. 101077), Cost Accountants as Cost Auditors to audit the cost records of the Company for the Financial Year 2023-24. The Company has also received necessary certificate under Section 141 of the Act, 2013 from them conveying their eligibility to act as cost auditors. A sum of '' 2.00 lakhs plus applicable taxes have been fixed by the board as remuneration in addition to reimbursement of all applicable taxes, travelling and out-of-pocket expenses payable to them, which is required to be approved and ratified by the members, at the ensuing AGM as per Section 148(3) of the Act, 2013.
The cost records as specified by the Central Government under Section 148 (1) of the Act, as required is maintained by the Company.
SECRETARIAL STANDARDS
The Company have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.
INVESTOR EDUCATION AND PROTECTION FUND
The details regarding shares and dividend transferred / proposed to be transferred to the Investor Education and Protection Fund (IEPF) and other relevant details in this regard, have been provided in the Corporate Governance section of this Annual Report.
ANNUAL RETURN
Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended) the Annual Return of the Company is placed on the website of the Company and is accessible at the web-link http://nelcast.com/extract-of-annual-return.
INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees continued to receive top priority. The Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels towards the performance and growth of the Company.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report. Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The company has devised its risk management policy commensurate with its size and operations. The Policy provides for identification of risks and mitigation measures. The Risk Management Policy includes identifying types of risks and its assessment, risk handling, monitoring, and reporting. Your Company maintains an adequate and effective Internal Control System commensurate with its size. The internal control system is supplemented through an extensive internal audit program besides periodic review by the Management and the Audit Committee. Risk Management policy may be accessed on the Companyâs website http://nelcast.com/policies.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the financial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility (CSR) Committee and also formulated a Corporate Social Responsibility Policy. The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed as part of this report in Annexure-F. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report. CSR policy may be accessed on the Companyâs website http://nelcast.com/policies.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant / material orders passed by the regulators or courts or tribunals during the financial year 2022-23, impacting the going concern status and Companyâs operations in future.
CHANGE IN NATURE OF BUSINESS
During the year under review, there has been no change in the Companyâs nature of business.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE FINANCIAL YEAR
No application was made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2022-23.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has also been constituted for this purpose. During the year under review, there were no cases filed pursuant to the above Act.
DETAILS OF ESTABLISHMENT OF CODE OF CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS
The Company has a Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders (âPIT Policyâ) for connected persons, designated persons, and the insiders (collectively âInsidersâ) as defined under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (âPIT Regulationsâ). The Audit Committee reviews the Institutional Mechanism for prevention of insider trading. The aforementioned policy is available on the website of the Company at http://nelcast.com/policies.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED IN THE BOARD
In the opinion of Board of Directors of the Company, Independent Directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized, and respected individuals in their respective fields. Itâs an optimum mix of expertise (including financial expertise), leadership and professionalism.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and under regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year, the Board has carried out an evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure, and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings.
Areas on which the Committees of the Board were assessed included degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure-G forming part of this Report.
OTHER DISCLOSURES
a. There are no instances of 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
b. The electronic copies of the 41st Annual Report and the Notice Convening the 41st AGM would be sent to all shareholders whose e-mail addresses are registered with the Company or their respective Depository Participants (DP) in accordance with the circulars issued by the Ministry of Corporate Affairs (MCA) read with circulars issued by the SEBI. The full Annual Report is available on the website of the Company and shall also be disseminated to the stock exchanges.
c. In compliance with Section 134(3)(a) and 92(3) of the Act, the Annual Return is being uploaded on the website of the Company at www.nelcast.com.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the dedicated efforts of the employees and co-operation of associates, suppliers and customers. We also express our sincere thanks to Companyâs Bankers namely State Bank of India, Standard Chartered Bank, The Hongkong and Shanghai Banking Corporation Ltd., Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for their trust and continued support.
Place: Chennai For and on behalf of the Board
Date : 18th May 2023 D. Sesha Reddy
Chairman
Mar 31, 2022
The Directors are pleased to present the Fortieth Annual Report along with the audited financial statements for the financial year ended 31st March 2022:
|
PERFORMANCE FINANCIAL RESULTS |
2021-22 |
(Rs. in Lakhs) 2020-21 |
|
Total Income |
93674.35 |
61985.13 |
|
PBIDT |
6749.05 |
5127.15 |
|
Profit Before Tax (PBT) |
1904.99 |
1228.79 |
|
Less: Provision for Tax |
482.52 |
324.61 |
|
Profit After Tax (PAT) |
1422.47 |
904.18 |
|
Add: Profit brought forwarded from previous year |
9995.33 |
9004.16 |
|
Other Comprehensive Income |
-90.08 |
86.99 |
|
Total Comprehensive Income available for Appropriation |
11327.72 |
9995.33 |
|
Appropriations: General Reserve |
||
|
Dividend on Equity Shares |
-174.00 |
- |
|
Surplus Carried to Balance Sheet |
11153.72 |
9995.33 |
DIVIDEND
Your Directors recommend a dividend of 15% (''0.30/- per share) for the financial year 2021-22. Payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting. The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) and approved by the Board of Directors is available on the website of the Company weblink: http://nelcast.com/policies.
No transfer to the General Reserves has been proposed for the financial year 2021-22.
The paid up equity share capital as on 31st March 2022 was '' 1740.02 Lakhs.
During the year, the Company recorded Revenue from Operations of '' 927.34 Crores as against '' 614.97 Crores in 2020-21, an increase of about 51%. Our Exports business registered a growth of 75% compared with previous year and stood at '' 221.48 Crores. Profit After Tax made during the year is '' 14.22 Crores as against '' 9.04 Crores in 2020-21, an increase of about 57%. The production during the year was 74,881 MT, compared to previous yearâs 55,706 MT. During the year, the revenue and profitability improved due to better market demand from the domestic commercial vehicle industry and increased exports.
MATERIAL CHANGES & EVENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and events affecting the financial position of the Company occurred between the end of the financial year and the date of this report.
Last year was very challenging for automotive industry due to the impact of COVID, supply chain disruptions, semiconductor shortage, coupled with rising input costs and diesel prices on the back of geopolitical crisis. Despite facing challenges, the Medium & Heavy Commercial Vehicle (M&HCV) segment bounced back in FY2021-22, reporting a growth of over 47% YoY. Rising truck utilization has been crucial in boosting freight rates that has resulted in increased demand for the truck segment. The first quarter was significantly impacted by the second-wave of COVID, however, volumes started to recover slowly in the second & third quarter matching the pre-pandemic levels. As we entered the fourth quarter, we witnessed a complete turnaround with volumes picking up pace setting a very healthy platform for the industry to go back in a healthy growth cycle in the coming years. Subsequent to the introduction of BS-6 vehicle norms, which has set a very good ecosystem in the economy, the operators are now more confident of operating technologically advanced vehicles with lower emissions, longer life and good fuel efficiency. With all these factors in place, we believe that the commercial vehicle industry has a strong potential upside for growth in the current year.
The Indian tractor industry declined by 6% in quantity terms in FY2021-22, after registering the highest ever annual production and domestic sales in the previous year. However, the industry achieved its highest ever export volumes during the year. The decline in domestic sales can be majorly attributed to high base effect of the previous fiscal. The increase in crop production and tractor sales resulted from favourable monsoon rains in the last two years. India has been expanding its tractor portfolio considerably, offering small horse-powered tractors to large capacity ones. Ever since the pandemic affected some crucial global markets, India has been capitalizing on the export opportunity and expanded to different continents with a better supply network. The Tractor industry expects a strong growth in the coming years on the back of augmented financial support to farmers through loans and subsides, growth in agricultural productivity, tremendous potential to grow in the export market, government initiatives regarding rural development and farm mechanization along with various other factors, such as high rural wages and scarcity of farm labour, are likely to increase the tractor volume over the long term.
The ongoing scenario and challenges with respect to the geopolitical uncertainty, war and economic sanctions are expected to persist in the coming year as well. This will further impact input costs and inflation. Despite this, the fundamentals remain strong and long-term outlook remains positive for the Automotive Industry.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast Limited and its subsidiary NC Energy Limited as at 31st March 2022, in accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and prepared in accordance with the Indian Accounting Standards prescribed by the Institute of Chartered Accountants of India. As required by the Listing Regulations, the audited Consolidated Financial Statements are circulated with the Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the financial statements of subsidiary company is set out in the prescribed form AOC-1, which is annexed with this report as Annexure-A. The Company will make available the audited annual accounts and related information of its subsidiary, upon request by any of its shareholders and it has also been placed on the website of the Company. The annual accounts of the subsidiary company will also be kept for inspection, by any member at the Registered Office of the Company and its subsidiary company. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary company.
QUALITY AND CUSTOMER SATISFACTION
The Company adheres to IATF 16949 quality standards and continuously strives to achieve world class quality by strictly adhering to the quality norms. The Company has also been awarded ISO 14001 & ISO 45001 certifications for implementing Health, Safety & Environmental Management Systems.
The Company is a supplier to several leading OEM customers like TAFE, Tata Motors, Ashok Leyland, Eicher Tractors (TMTL), Volvo-Eicher Commercial Vehicles, SAME Tractors, Escorts Tractors, International Tractors (ITL), Daimler India, Caterpillar, etc., Tier I customers like Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF India, etc., and Export customers like Dana, Daimler, Meritor, American Axles, Comer, ZF Industries etc. The Company is closely working with several of its customers in terms of new product development, improvement in quality, etc. to improve its products.
The Company has not accepted any public deposits during the year and as such, no amount on account of principal or interest on deposits from public was outstanding as at 31st March 2022.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Composition
The Corporate Governance Report annexed to this Boardâs Report contains the composition of the Board of Directors of the Company.
Directorâs appointment
Mr. R. Sridharan (DIN: 00868787) was appointed as an Additional (Non-Executive and Independent) Director of the Company with effect from 23rd May 2022. On recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed appointment of Mr. R. Sridharan as a Non-Executive and Independent Director, not liable to retire by rotation, for a period of five (5) consecutive years from 23rd May 2022 to 22nd May 2027. In the opinion of the Board, Mr. R. Sridharan fulfils the conditions specified in the Companies Act, 2013, and Rules made thereunder for appointment as Independent Director, possess integrity, necessary expertise, relevant experience, proficiency and is independent of the management of the Company. The resolution seeking shareholderâs approval for his appointment forms part of the Notice.
Ms. P. Divya, Director (DIN: 05158352) is due to retire by rotation and being eligible offers herself for reappointment.
Your Directors record their profound grief on the sad demise of Mr. R. Mohan Reddy, Non-Executive Independent Director on 20th May 2022. The company wishes to place on record his valuable contribution to the company. The Board further expresses their heartfelt condolences for his untimely death and wishes to put on record their sincere and deep appreciation of his invaluable guidance and contribution to the companyâs growth over the years.
Mr. P. Deepak, Managing Director and Mr. S.K. Sivakumar, Chief Financial Officer & Company Secretary hold the office of Key Managerial Personnel.
The Independent Directors have fulfilled the criteria of Independence as defined under Section 149(6) and requisite declarations in terms of Section 149(7) of the Companies Act, 2013 have been received. During the year under review, a separate meeting of independent directors was held on 1st February 2022.
In compliance with the provisions of Sections 135, 177, 178 of the Act and Listing Regulations, the Board constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, and Risk Management Committee. The details of composition of all the committees are furnished in the Corporate Governance Report which is attached to this report.
MEETINGS OF THE BOARD AND COMMITTEES
During the year, four meetings of the Board of Directors were held. The details of the meetings of the Board and its Committees are furnished in the Corporate Governance Report which is attached to this report.
COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) of the Companies Act, 2013 relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence, the Company has devised a policy relating to appointment of Directors, payment of managerial remuneration, Directorsâ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. The said policy is posted on the Companyâs website www.nelcast.com.
DIRECTORSâ RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge and ability, confirm that:
a) in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any;
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 at the end of the financial year ended 31st March 2022 and of the profit of the Company for that period;
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;
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.
The Company has been pro-active in following the principles and practices of good Corporate Governance. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in the Listing Regulations are complied with letter and spirit. A certificate issued by the auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this report. The matters relating to Corporate Governance as per the Listing Regulations are attached to this report. The managementâs discussion and analysis report as required by the Listing Regulations is also annexed which forms part of this report.
CERTIFICATE FROM COMPANY SECRETARY IN PRATICE
L. Dhanamjaya Reddy, Practicing Company Secretary, has issued a certificate as required under the Listing Regulations, confirming that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed with this section as Annexure-B.
BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34 of the Listing Regulations, the Business Responsibility Report for the year 2021-22 describing the initiatives taken from an environment, social and governance perspectives, in the prescribed format is given as Annexure-C to this Report and is also available on the Companyâs website viz., www.nelcast.com.
All transactions entered by the Company with related parties were in the ordinary course of the business and at Armâs Length basis. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of the transactions with related parties are given in the financial statements. The Related Party Transaction Policy is posted on the Companyâs website www.nelcast.com.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.
The Company has formulated the policy on dividend distribution with a view to specify the external and internal factors including financial parameters that shall be considered while declaring dividend and the circumstances under which the shareholders of the Company may or may not expect dividend and how the retained earnings be utilised etc. The dividend distribution policy framed by the Company in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR) and approved by the Board of Directors is available on the website of the Company weblink: http://nelcast.com/policies/.
REMUNERATION POLICY OF THE COMPANY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to Section 178(3) of the Companies Act, 2013 and as per the Listing Regulations. The Company affirms remuneration is as per the remuneration policy of the Company. The said policy is posted on the Companyâs website www.nelcast.com.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company forms part of this report.
Disclosures pertaining to remuneration and other details 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 forms part of this Report.
In terms of Section 136(1) of the Companies Act, 2013, the Annual Report and financial statements are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting and any member interested in obtaining such information may write to the company secretary and the same will be furnished.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
In terms of Section 134(5)(e) of the Act, the term Internal Financial Control means the policies and procedures adopted by a company for ensuring orderly and efficient conduct of its business, including adherence to companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. The Company has in place adequate internal financial controls.
At the Annual General Meeting of the Company held on 3rd August 2017, M/s. K. Nagaraju & Associates, Chartered Accountants (Firm Registration No.002270S) were appointed as Statutory Auditors of the Company for a term of 5 (five) consecutive years from conclusion of 35th Annual General Meeting till the conclusion of the 40th Annual General Meeting. The term of office of M/s. K. Nagaraju & Associates as Statutory Auditors of the Company will conclude from the close of the forthcoming Annual General Meeting of the Company.
On the recommendation of Audit Committee, the Board of Directors at their meeting held on 23rd May 2022 approved the re-appointment of M/s.K.Nagaraju & Associates, Chartered Accountants (Firm Registration No.002270S) as statutory auditors for a second term of five (5) consecutive years from the conclusion of the 40th Annual General Meeting till the conclusion of 45th Annual General Meeting to be held in the year 2027.
The necessary resolution seeking your approval for their appointment as statutory auditors is included in the notice of the ensuing annual general meeting along with brief credentials and other necessary disclosures required under the Act and the Regulations.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries to conduct Secretarial Audit for the year 2021-22. The Secretarial Audit Report for the financial year ended 31st March 2022 in Form No. MR-3 is annexed with this report in Annexure-D. Pursuant to Regulation 24(A) of SEBI Listing Regulations, the Company has obtained annual secretarial compliance report and the same will be submitted to the stock exchanges within the prescribed time.
As per Section 148 and other applicable provisions, if any, of the Companies Act, 2013, read with Companies (Audit & Auditors) Rules, 2014, the Board of Directors of your Company has appointed M/s. Jayaram & Associates, Cost Accountants as the Cost Auditors of the Company for the year 2022-23 on the recommendations made by the Audit Committee. The cost records as specified by the Central Government under subsection (1) of Section 148 of the Act, as required is maintained by the Company.
The Company have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and such systems were adequate and operating effectively.
EXTRACT OF ANNUAL RETURN
As required under Section 92(3) and 134(3)(a) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), an extract of Annual Return in Form MGT-9 is available on the Companyâs website www.nelcast.com.
INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees continued to receive top priority. The Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels towards the performance and growth of the Company.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report. Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The company has devised its risk management policy commensurate with its size and operations. The Policy provides for identification of risks and mitigation measures. The Risk Management Policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting. Your Company maintains an adequate and effective Internal Control System commensurate with its size. The internal control system is supplemented through an extensive internal audit program besides periodic review by the Management and the Audit Committee. Risk Management policy may be accessed on the Companyâs website www.nelcast.com.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the financial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed as part of this report in Annexure-E. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has also been constituted for this purpose. During the year under review, there were no cases filed pursuant to the above Act.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and under regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year, the Board has carried out an evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure, and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.
Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings.
Areas on which the Committees of the Board were assessed included degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure-F forming part of this Report.
OTHER DISCLOSURES
a. There are no instances of 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.
b. The details regarding shares and dividend transferred / proposed to be transferred to the Investor Education and Protection Fund (IEPF) and other relevant details in this regard, have been provided in the Corporate Governance section of this Annual Report.
c. The electronic copies of the 40th Annual Report and the Notice Convening the 40th AGM would be sent to all shareholders whose e-mail addresses are registered with the Company or their respective Depository Participants (DP) in accordance with the circulars issued by the Ministry of Corporate Affairs (MCA) read with circulars issued by the SEBI. The full Annual Report is available on the website of the Company and shall also be disseminated to the stock exchanges.
d. In compliance with Section 134(3)(a) and 92(3) of the Act, the Annual Return is being uploaded on the website of the Company at www.nelcast.com.
e. The Company has neither filed an application during the year under review nor are any proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at 31st March 2022.
f. During the financial year, there was no change in the nature of business of the Company.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the dedicated efforts of the employees and cooperation of associates, suppliers and customers. We also express our sincere thanks to Companyâs Bankers namely State Bank of India, Standard Chartered Bank, The Hongkong and Shanghai Banking Corporation Ltd., Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for their trust and continued support.
Mar 31, 2018
The Directors are pleased to present the Thirty Sixth Annual Report along with the audited financial statements for the financial year ended 31st March 2018:
PERFORMANCE (Rs. in Lakhs)
|
FINANCIAL RESULTS |
2017-18 |
2016-17 |
|
Total Income |
76438.16 |
64219.01 |
|
PBIDT |
7588.35 |
6877.73 |
|
Profit Before Tax (PBT) |
5703.07 |
4920.20 |
|
Less: Provision for Tax |
1876.84 |
1508.82 |
|
Profit After Tax (PAT) |
3826.23 |
3411.38 |
|
Add: Profit brought forwarded from previous year |
5893.00 |
4913.46 |
|
Other Comprehensive Income |
-46.19 |
-12.99 |
|
Total Comprehensive Income available for Appropriation |
9673.04 |
8311.85 |
|
Appropriations: |
||
|
General Reserve |
2500.00 |
2000.00 |
|
Dividend on Equity Shares |
783.01 |
348.00 |
|
Distribution Tax on Dividend |
159.40 |
70.85 |
|
Surplus Carried to Balance Sheet |
6230.63 |
5893.00 |
The Company has adopted âInd ASâ with effect from 1st April 2017. Financial statements for the year ended and as at 31st March 2017 have been re-stated to conform to Ind AS.
DIVIDEND
Your Directors recommend a dividend of 50% (Rs. 1/- per share) for the financial year 2017-18. Payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting.
OPERATIONS
During the year, the Company recorded Net Sales of Rs. 744.54 Crores as against Rs. 574.56 Crores in 2016-17, an increase of about 29.58%. Profit After Tax made during the year is Rs. 37.80 Crores compared with Rs. 33.98 Crores in 2016-17, an increase of about 11.24% compared with previous year. The production during the year was 86,098 MT, compared to the previous yearâs 73,088 MT.
During the year, the sales of the Company has increased substantially due to increased demand from both Medium and Heavy Commercial Vehicle Industry and Tractor Industry.
OUTLOOK
Most sectors of the Indian Automotive industry have registered strong growth for the last two years which has driven demand for the Auto-Component sector. Given the expected pickup in economy, the growth prospects for the Commercial Vehicle sector looks encouraging. Construction sector saw a healthy pickup in the year 2017-18 and is expected to continue to grow in the upcoming years. The Tractor industry is also likely to grow in the coming year with the indication of normal monsoon. Long term outlook remains positive for the Automotive Industry with most major global players having a base in India for manufacturing, global sourcing and engineering. Increase in Government expenditure on road building, infrastructure and smart cities is likely to lead to an overall growth in demand for the Automotive Industries.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast Limited and its subsidiary NC Energy Limited as at 31st March 2018, in accordance with the provisions of Section 129(3) of the Companies Act, 2013 and SEBI Listing Regulations and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India. As required by the Listing Regulations, the audited Consolidated Financial Statements are circulated with the Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the financial statements of subsidiary company is set out in the prescribed form AOC-1, which is annexed with this report as Annexure-B. The Company will make available the audited annual accounts and related information of its subsidiary, upon request by any of its shareholders. The annual accounts of the subsidiary company will also be kept for inspection, by any member at the Registered Office of the Company and its subsidiary company. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary company.
QUALITY AND CUSTOMER SATISFACTION
The Company is glad to have upgraded its quality systems to the latest IATF 16949 quality standards. The Company has also been awarded ISO 14001 & OSHAS 18001 certifications for implementing Health, Safety & Environmental Management Systems.
The Company is a supplier to several leading OEM customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors (TMTL), Mahindra & Mahindra, Volvo-Eicher Commercial Vehicles, SAME Tractors, Escorts Tractors, Daimler India, Caterpillar, etc., Tier I customers like Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF India, Simpson & Co., etc., and Export customers like Meritor, American Axles, Daimler, Dana, Comer, ZF Industries etc., the Company is closely working with several of our customers in terms of new product development, improvement in quality, etc. to improve our products.
DEPOSITS
The Company has not accepted any public deposits during the year and as such, no amount on account of principal or interest on deposits from public was outstanding as at 31st March 2018.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms. P. Divya, Director is due to retire by rotation and being eligible offers herself for reappointment.
Mr. P. Deepak, Managing Director was reappointed as Managing Director by the board of directors at their meeting held on 18th May 2018 for a further period of five years subject to your approval.
Mr. P. Deepak, Managing Director, Mr. P. Vijaya Bhaskar Reddy, Dy. Managing Director & CFO and Mr. S.K. Sivakumar, Group - Chief Financial Officer & Company Secretary hold the office of Key Managerial Personnel.
Declaration of Independent Directors
The Independent Directors have fulfilled the criteria of Independence as defined under Section 149(6) and requisite declarations in terms of Section 149(7) of the Companies Act, 2013 have been received.
COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) of the Companies Act, 2013 relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence, the Company has devised a policy relating to appointment of Directors, payment of managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. The said policy is posted in the Companyâs website www.nelcast.com
DIRECTORSâ RESPONSIBILITY STATEMENT
In accordance with the provisions of Section134(5) of the Companies Act, 2013 the Board of Directors, to the best of their knowledge and ability, confirm that :
a) in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations 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 at the end of the financial year ended 31st March 2018 and of the profit of the Company for that period;
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;
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.
CORPORATE GOVERNANCE
The Company has been pro-active in following the principles and practices of good Corporate Governance. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in the Listing Regulations are complied with letter and spirit. A certificate issued by the auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this report. The matters relating to Corporate Governance as per the Listing Regulations are attached to this report. The managementâs discussion and analysis report as required by the Listing Regulations is also annexed which forms part of this report.
RELATED PARTY TRANSACTIONS
All transactions entered by the Company with related parties were in the ordinary course of the business and at Armâs Length basis. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of the transactions with related parties are given in the financial statements. The Related Party Transaction Policy is posted in the website of the Company.
BOARD MEETINGS
During the year, four meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached to this report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.
REMUNERATION POLICY OF THE COMPANY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to Section 178(3) of the Companies Act, 2013 and as per the Listing Regulations. The Company affirms remuneration is as per the remuneration policy of the Company. The said policy is posted in the website www.nelcast.com of the Company.
PARTICULARS OF EMPLOYEES RELATED DISCLOSURES
The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the members at the Registered office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting.
Disclosures pertaining to remuneration and other details as required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of the Annual Report.
Having regard to the provisions of Section 136(1) read with its relevant provision of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost.
AUDITORS
At the Annual General Meeting of the Company held on 3rd August 2017, M/s.K.Nagaraju & Associates, Chartered Accountants (Firm Registration No.002270S) were appointed as Statutory Auditors of the Company for a term of 5 (five) consecutive years from conclusion of 35th Annual General Meeting till the conclusion of the 40th Annual General Meeting. They have confirmed that their appointment is in accordance with Section 139 read with Section 141 of the Companies Act, 2013.
SECRETARIAL AUDITOR
The Company has appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries to conduct Secretarial Audit for the year 2017-18. The Secretarial Audit Report for the financial year ended 31st March 2018 is annexed with this report in Annexure-D.
COST AUDITORS
As per Section 148 and other applicable provisions, if any, of the Companies Act, 2013, read with Companies (Audit & Auditors) Rules, 2014, the Board of Directors of your Company has appointed M/s. Jayaram & Associates, Cost Accountants as the Cost Auditors of the Company for the year 2018-19 on the recommendations made by the Audit Committee.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details are provided in the Management Discussion and Analysis Report attached to this report.
The Internal Auditors reviews the efficiency and effectiveness of the systems and procedures. The Audit Committee approves and reviews the internal audit plan for the year.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed with this report in Annexure-E.
INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees continued to receive top priority. The Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels towards the performance and growth of the Company.
RISK MANAGEMENT POLICY
The Company has an adequate Risk Management Policy commensurate with its size and operations. Risk Management is an essential element in achieving business goals and deriving benefits from market opportunities. The Risk Management includes identifying types of risks and its assessment, risk handling, monitoring and reporting.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the financial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed as part of this report in Annexure-C. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and under regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings.
Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure-A forming part of this Report.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the dedicated efforts of the employees and co-operation of associates, suppliers and customers. We also express our sincere thanks to Companyâs Bankers namely State Bank of India, Standard Chartered Bank, The Hongkong and Shanghai Banking Corporation Ltd., Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for their trust and continued support.
For and on behalf of the Board
Place: Chennai D. Sesha Reddy
Date : 18th May 2018 Chairman
Mar 31, 2017
DIRECTORSâ REPORT
The Directors are pleased to present the Thirty Fifth Annual Report along with the Audited Accounts for the financial year ended 31st March 2017:
|
PERFORMANCE |
(Rs, in Lakhs) |
|
|
FINANCIAL RESULTS |
2016-17 |
2015-16 |
|
Total Revenue |
57,910.44 |
56,278.61 |
|
PBIDT |
6,857.87 |
6,601.43 |
|
Profit Before Tax (PBT) |
4,900.34 |
4,619.23 |
|
Less: Provision for Tax |
1,501.95 |
1,432.30 |
|
Profit After Tax (PAT) |
3,398.39 |
3,186.93 |
|
Add: Profit brought forwarded from previous years |
4,494.59 |
4,145.36 |
|
Profit Available for Appropriation |
7,892.98 |
7,332.29 |
|
Less: Appropriations |
||
|
Interim Dividend on Equity Shares |
- |
348.00 |
|
Distribution Tax on Interim Dividend |
- |
70.85 |
|
Final Dividend on Equity Shares |
783.01 |
348.00 |
|
Distribution Tax on Final Dividend |
159.40 |
70.85 |
|
General Reserve |
2,000.00 |
2,000.00 |
|
Surplus Carried to Balance Sheet |
4,950.57 |
4,494.59 |
DIVIDEND
Your Directors recommend a final dividend of 45% (Rs, 0.90 per share) for the financial year 2016-17. Payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting.
OPERATIONS
During the year, the Company recorded Net Sales of Rs, 574.56 crores as against Rs, 560.70 crores in 2015-16, an increase of about 2.47%. Profit After Tax made during the year is Rs, 33.98 crores compared with Rs, 31.87 crores in 2015-16, an increase of about 6.62% compared with previous year. The production during the year was 73088 MT, compared to the previous yearâs 73592 MT.
During the year, the sales of the Company has increased marginally due to moderate improvement in Medium and Heavy Commercial Vehicle Industry. However, there was no significant increase in total sales due to slow down in the Tractor Industry during second half of the year.
OUTLOOK
Indian automotive industry has registered a moderate growth in the last few years and showing signs of revival in the coming years. OEMs are launching new models with additional functionalities and features to attract customers. Long term outlook remains positive for the automotive industry with all major global players having base in India for manufacturing, global sourcing as well as engineering. Regular product launches planned by OEMs will keep customer excitement levels and create demand and is favourable for overall industry growth. India is now a supplier of a range of high value and critical automobile components to global auto market.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast Limited and its subsidiary NC Energy Limited as at 31st March 2017, in accordance with Accounting Standard 21 on âConsolidated Financial Statementsâ issued by the Institute of Chartered Accountants of India. As required by the Listing Regulations, the audited Consolidated Financial Statements are circulated with the Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
In terms of Section 129(3) of the Companies Act, 2013 read with rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the financial statements of subsidiary company is set out in the prescribed form AOC-1, which is annexed with this report as Annexure-B. The Company will make available the audited annual accounts and related information of its subsidiary, upon request by any of its shareholders. The annual accounts of the subsidiary company will also be kept for inspection, by any member at the Registered Office of the Company and its subsidiary company. The consolidated financial statements presented by the Company, which form part of this annual report, include financial results of its subsidiary company.
QUALITY AND CUSTOMER SATISFACTION
The Company adheres to the TS 16949 norms, and continuously strives to achieve world class quality by strictly adhering to the quality standards. The Company has been awarded ISO 14001 & 18001 for Environmental Management Systems.
The Company has been receiving continuous support from its OEM customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors (TMTL), Mahindra & Mahindra, Volvo-Eicher Commercial Vehicles, SAME Tractors, Escorts Tractors, Daimler India, Caterpillar, etc., from Tier I customers like Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF India, Simpson & Co., etc., and export customers like Meritor, American Axles, Daimler, Dana, Comer, ZF Industries etc., The Company is closely working with all customers in terms of new product development, improvement in quality and delivery performance etc., to meet their expectations.
DEPOSITS
The Company has not accepted any public deposits during the year and as such, no amount on account of principal or interest on deposits from public was outstanding as at 31st March 2017.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. P. Vijaya Bhaskar Reddy, Director is due to retire by rotation and being eligible offers himself for re-appointment. He was reappointed as Deputy Managing Director by the board of directors at their meeting held on 13th February 2017 for a further period of five years subject to your approval.
Mr. P. Deepak, Managing Director, Mr. P. Vijaya Bhaskar Reddy, Dy. Managing Director & CFO and Mr. S.K. Sivakumar, Head - Group Finance & Company Secretary hold the office of Key Managerial Personnel.
Declaration of Independent Directors
The Independent Directors have fulfilled the criteria of Independence as defined under Section 149(6) of the Companies Act, 2013 and requisite declarations in terms of Section 149(7) of the Act have been received.
COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence the Company has devised a policy relating to appointment of Directors, payment of managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. The said policy is posted in the website of the Company.
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors hereby make the following statement in terms of Section 134(3)(c) and 134(5) of the Companies Act, 2013 with respect to Directorsâ Responsibility.
We confirm that:
a) in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations 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 at the end of the financial year ended 31st March 2017 and of the profit of the Company for that period;
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;
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.
CORPORATE GOVERNANCE
The Company has been pro-active in following the principles and practices of good Corporate Governance. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in the Listing Regulations are complied within letter and spirit. A certificate issued by the auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed. The matters relating to Corporate Governance as per the Listing Regulations are attached to this report. A management discussion and analysis report as required by the Listing Regulations is also annexed which forms part of this report.
RELATED PARTY TRANSACTIONS
All transactions entered by the Company with related parties were in the ordinary course of the business and at Armâs Length basis. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of the transactions with related parties are given in the financial statements. The Related Party Transaction Policy is posted in the website of the Company.
BOARD MEETINGS
During the year, four meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached to this report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
REMUNERATION POLICY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and as per the Listing Regulations. The Company affirms remuneration is as per the remuneration policy of the Company. The said policy is posted in the website of the Company.
PARTICULARS OF EMPLOYEES RELATED DISCLOSURES
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting.
Disclosures pertaining to remuneration and other details as required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of the Annual Report.
Having regard to the provisions of Section 136(1) read with its relevant provision of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost.
AUDITORS
The Companyâs auditors M/s. Reddy A V & Co, Chartered Accountants (Firm Registration No. 003256S) have already completed more than ten years as Statutory Auditors of the Company. In view of the mandatory requirement of rotation of auditor under Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, it is proposed to appoint M/s. K. Nagaraju & Associates, Chartered Accountants (Firm Registration No.002270S) as Statutory Auditors of the Company from conclusion of this Annual General Meeting till the conclusion of the 40th Annual General Meeting. The Company has received a letter from M/s. K. Nagaraju & Associates, Chartered Accountants stating that their appointment as Statutory Auditors, if made, would be in accordance with Section 139 read with Section 141 of the Companies Act, 2013.
SECRETARIAL AUDITOR
The Company has appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries to conduct Secretarial Audit for the year 2016-17. The Secretarial Audit Report for the financial year ended 31st March 2017 is annexed with this report in Annexure-D.
COST AUDITORS
As per Section 148 and other applicable provisions, if any, of the Companies Act, 2013, read with Companies (Audit & Auditors) Rules, 2014, the Board of Directors of your Company has appointed M/s. Jayaram & Associates, Cost Accountants as the Cost Auditors of the Company for the year 2017-18 on the recommendations made by the Audit Committee.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details are provided in the Management Discussion and Analysis Report attached to this report.
The Internal Auditors reviews the efficiency and effectiveness of the systems and procedures. The Audit Committee approves and reviews the internal audit plan for the year.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed with this report in Annexure-E.
INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees continued to receive top priority. The Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels towards the performance and growth of the Company.
RISK MANAGEMENT POLICY
The Company has an adequate Risk Management Policy commensurate with its size and operations. Risk Management is an essential element in achieving business goals and deriving benefits from market opportunities. The Risk Management includes identifying types of risks and its assessment, risk handling, monitoring and reporting.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the financial statements.
CORPORATE SOCIAL RESPONSIBILITIES (CSR)
The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed as part of this report in Annexure-C. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and under regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.
Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings.
Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 is given in the Annexure-A forming part of this Report.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the dedicated efforts of the employees and cooperation of associates, suppliers and customers. We also express our sincere thanks to Companyâs Bankers namely State Bank of India, Standard Chartered Bank, The Hongkong and Shanghai Banking Corporation Ltd., Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for their trust and continued support.
For and on behalf of the Board
Place: Chennai D. Sesha Reddy
Date : 24th May 2017 Chairman
Mar 31, 2015
DEAR MEMBERS,
The Directors are pleased to present the Thirty Third Annual Report
along with the Audited Accounts for the financial year ended 31st
March, 2015:
PERFORMANCE (Rs. in Lakhs)
FINANCIAL RESULTS 2014-15 2013-14
Net Sales 54,488.65 51,516.08
PBIDT 4,688.17 5,099.03
Profit Before Tax (PBT) 2,954.74 3,629.44
Less: Provision for Tax 760.41 1,379.89
Profit After Tax (PAT) 2,194.33 2,249.55
Add: Profit brought forwarded 4,181.81 4,144.77
from previous years
Profit Available for Appropriation 6,376.14 6,394.32
Less: Appropriations
Final Dividend on Equity Shares 609.01 609.01
Distribution Tax on Final Dividend 121.77 103.50
General Reserve 1500.00 1500.00
Surplus Carried to Balance Sheet 4,145.36 4,181.81
DIVIDEND
Your Directors recommend a final dividend of 35% (Rs. 0.70 per share)
for the financial year 2014-15. Payment of dividend is subject to the
approval of shareholders at the ensuing Annual General Meeting.
OPERATIONS
During the year, the Company recorded Net Sales of Rs. 544.89 crores as
against Rs. 515.16 crores in 2013-14, an increase of about 5.77%.
Profit After Tax made during the year is Rs. 21.94 crores compared with
Rs. 22.50 crores in 2013-14, a marginal reduction compared with
previous year. The production during the year was 71875 MT, compared to
the previous year's 70025 MT.
During the year, the Company has increased its sales marginally due to
moderate increase in Medium and Heavy Commercial Vehicle industry.
However, there was no significant increase in total sales due to slow
down in the Tractor sector during the second half of the year.
OUTLOOK
The automotive industry was growing consistently over the past decade,
but with Indian GDP slowing over the couple of years, the auto industry
has been going through challenging times with both production and
domestic sales declining due to weakening economic sentiments caused by
slowing economy. However the outlook for the Indian automobile sector
is positive. The sector is expected to resurge in the coming years on
the back of revival in demand both from domestic and export markets.
Driven by a renewed confidence in the economy and general improvement
in sentiments, the demand is expected to rise. India is now a supplier
of a range of high value and critical automobile components to global
auto market.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast
Limited and its subsidiary NC Energy Limited as at 31st March, 2015, in
accordance with Accounting Standard 21 on "Consolidated Financial
Statements" issued by the Institute of Chartered Accountants of
India. As required by Clause 41 of the Listing Agreement with Stock
Exchanges, the audited Consolidated Financial Statements are circulated
with the Annual Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
In terms of proviso to sub section (3) of Section 129 of the Companies
Act, 2013 the salient features of the financial statement of subsidiary
company is set out in the prescribed form AOC-1, which is annexed with
this report as Annexure-B. The Company will make available the audited
annual accounts and related information of its subsidiary, upon request
by any of its shareholders. The annual accounts of the subsidiary
company will also be kept for inspection, by any member at the
Registered Office of the Company and its subsidiary company. The
consolidated financial statements presented by the Company, which form
part of this annual report, include financial results of its subsidiary
company.
QUALITY AND CUSTOMER SATISFACTION
The Company adheres to the TS 16949 norms, and continuously strives to
achieve world class quality by strictly adhering to the quality
standards. The Company has been awarded ISO 14001 & 18001 for
Environmental Management Systems.
The Company has been receiving continuous support from its OEM
customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors
(TMTL), Mahindra & Mahindra, Volvo-Eicher Commercial Vehicles, SAME
Tractors, Escorts Tractors, Sonalika Tractors (ITL), Daimler India,
Ashok Leyland John Deere, Caterpillar, etc., from Tier I customers like
Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF
India, Simpson & Co., etc., and export customers like Meritor and ZF
Industries. The Company is closely working with all customers in terms
of new product development, improvement in quality & delivery
performance etc., to meet their expectations.
DEPOSITS
The Company has not accepted any public deposits during the year and as
such, no amount on account of principal or interest on deposits from
public was outstanding as at 31st March, 2015.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Ms. P. Divya, Director is due to retire by rotation and being eligible
offers herself for re-appointment.
Mr. P. Deepak, Managing Director was re-appointed as Managing Director
by the board of directors at their meeting held on 29th May 2015 for a
further period of three years. Your approval is sought for his
re-appointment.
Mr. P. Deepak, Managing Director, Mr. P. Vijaya Bhaskar Reddy, Dy.
Managing Director & CFO and Mr. S.K. Sivakumar, Head - Group Finance &
Company Secretary hold the office of Key Managerial Personnel.
Declaration of Independent Directors
The Independent Directors have fulfilled the criteria of Independence
as defined under Section 149(6) of the Companies Act, 2013 and
requisite declarations in terms of Section 149(7) of the Act have been
received.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF
REMUNERATION AND DISCHARGE OF THEIR DUTIES
The provisions of Section 178(1) relating to constitution of Nomination
and Remuneration Committee are applicable to the Company and hence the
Company has devised a policy relating to appointment of Directors,
payment of managerial remuneration, Directors qualifications, positive
attributes, independence of Directors and other related matters as
provided under Section 178(3) of the Companies Act, 2013. The said
policy is posted in the website of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors hereby make the following statement in terms of Section
134 (3)(c) and 134 (5) of the Companies Act, 2013 with respect to
Directors' Responsibility.
We 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 at the end of the financial year ended 31st March, 2015
and of the profit of the Company for that period;
(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;
(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.
CORPORATE GOVERNANCE
The Company has been pro-active in following the principles and
practices of good Corporate Governance. The Company has taken adequate
steps to ensure that the conditions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement with the Stock
Exchanges are complied within letter and spirit. A certificate issued
by the auditors of the Company regarding compliance of conditions of
Corporate Governance is also annexed. The matters relating to Corporate
Governance as per the Listing Agreement are attached to this report. A
management discussion and analysis report as required by Listing
Agreement is also annexed which forms part of this report.
RELATED PARTY TRANSACTIONS
All transactions entered by the Company with related parties were in
the ordinary course of business and at Arm's Length basis. There are
no materially significant related party transactions made by the
Company with Promoters, Key Managerial Personnel or other designated
persons which may have potential conflict with interest of the Company
at large. The details of the transactions with related parties are
given in the financial statements.
BOARD MEETINGS
During the year, five meetings of the Board of Directors were held. The
details of the meetings are furnished in the Corporate Governance
Report which is attached to this report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal
mechanism to the Directors and employees to report their concerns about
unethical behaviour, actual or suspected fraud or violation of the
Company's Code of Conduct or ethics policy. The Policy provides for
adequate safeguards against victimization of employees who avail of the
mechanism and also provides for direct access to the Chairman of the
Audit Committee. It is affirmed that no personnel of the Company has
been denied access to the Audit Committee.
REMUNERATION POLICY
The Company has adopted a Remuneration Policy for the Directors, Key
Managerial Personnel and other employees, pursuant to the provisions of
the Act and Clause 49 of the Listing Agreement. The said policy is
posted in the website of the Company
PARTICULARS OF EMPLOYEES AND REMUNERATION AND RELATED DISCLOSURES
The information required pursuant to Section 197 read with rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company, will be provided
upon request. In terms of Section 136 of the Act, the reports and
accounts are being sent to the members and others entitled thereto,
excluding the information on employees' particulars which is
available for inspection by the members at the Registered office of the
Company during business hours on working days of the Company up to the
date of ensuing Annual General Meeting.
In terms of the provisions of Section 197 of the Companies Act, 2013
read with Rules 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and
other particulars of the employees drawing remuneration in excess of
the limits set out in the said Rules are provided in the Annexure
forming part of the Annual Report.
Disclosures pertaining to remuneration and other details as required
under Section 197 of the Companies Act, 2013 read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 are provided in the Annexure forming part of the Annual Report.
Having regard to the provisions of Section 136(1) read with its
relevant provisio of the Companies Act, 2013, the Annual Report
excluding the aforesaid information is being sent to the members of the
Company. The said information is available for inspection at the
Registered Office of the Company during working hours and any member
interested in obtaining such information may write to the Company
Secretary and the same will be furnished without any fee and free of
cost.
AUDITORS
Your Company's Auditors, M/s. REDDY A V & CO (Formerly J.B.REDDY &
CO.,) Chartered Accountants, will retire at the conclusion of the
forthcoming Annual General Meeting and they have consented to be
re-appointed for the further term of two years i.e, till the conclusion
of the Thirty Fifth Annual General Meeting subject to ratification of
their appointment at every AGM. The Company has received a letter from
M/s. REDDY A V & CO stating that their re-appointment as auditors, if
made, would be in accordance with Section 139 read with Section 141 of
the Companies Act, 2013.
SECRETARIAL AUDITOR
The Company has appointed M/s. L.D.Reddy & Co, Company Secretaries to
conduct Secretarial Audit for the financial year 2014-15. The
Secretarial Audit Report for the financial year ended 31st March, 2015
is annexed with this report in Annexure-D.
COST AUDITORS
As per Section 148 read with Companies (Audit & Auditors) Rules, 2014
and other applicable provisions, if any, of the Companies Act, 2013,
the Board of Directors of your Company has appointed M/s. Jayaram &
Associates, Cost Accountants as the Cost Auditors of the Company for
the financial year 2015-16 on the recommendations made by the Audit
Committee.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Details of the same are provided in the Management Discussion and
Analysis Report attached to this report.
The Internal Auditors reviews the efficiency and effectiveness of the
systems and procedures. The Audit Committee approves and reviews the
internal audit plan for the year.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form
MGT-9 is annexed with this report in Annexure-E.
INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and
industrial harmony was maintained. Measures for the safety, training
and development of the employees continued to receive top priority. The
Directors wish to place on record their appreciation of the valuable
contribution made by the employees of the Company at all levels towards
the performance and growth of the Company.
RISK MANAGEMENT POLICY
The Company has an adequate Risk Management Policy Commensurating with
its size and operations. The risk management includes identifying
types of risks and its assessment, risk handling, monitoring and
reporting.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186
OF THE COMPANIES ACT, 2013
The company has not given any loans or guarantees covered under the
provisions of Section 186 of the Companies Act, 2013. The details of
the investments made by Company are given in the financial statements.
CORPORATE SOCIAL RESPONSIBILITIES (CSR)
The CSR Policy of the Company and details about the initiatives taken
by the Company on CSR during the year as per the Companies (Corporate
Social Responsibility Policy) Rules, 2014 have been disclosed as part
of this report in Annexure-C. Further details of composition of the
Corporate Social Responsibility Committee and other details are
provided in the Corporate Governance Report which forms part of this
report.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual evaluation
of its own performance, performance of the Directors as well as the
evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation
criteria, procedure and time schedule for the Performance Evaluation
process for the Board, its Committees and Directors. Directors were
evaluated on aspects such as attendance and contribution at Board/
Committee Meetings and guidance/ support to the management outside
Board/ Committee Meetings.
Areas on which the Committees of the Board were assessed included
degree of fulfillment of key responsibilities, adequacy of Committee
composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out
by the entire Board, excluding the Director being evaluated. The
performance evaluation of Non Independent Directors was carried out by
the Independent Directors who also reviewed the performance of the
Board as a whole. The Nomination and Remuneration Committee also
reviewed the performance of the Board, its Committees and of the
Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND
DEVELOPMENT, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology
absorption, research and development, foreign exchange earnings and
outgo as required under Section 134(3)(m) of the Companies Act, 2013
read with Rule 8(3) of The Companies (Accounts) Rules, 2014 is given in
the Annexure-A forming part of this Report.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the
dedicated efforts of the employees and co-operation of associates,
suppliers and customers. We also express our sincere thanks to
Company's Bankers namely State Bank of India, Standard Chartered
Bank, HSBC Ltd., Kotak Mahindra Bank Ltd. and HDFC Bank Ltd. for their
trust and continued support.
For and on behalf of the Board
Place: Chennai D. Sesha Reddy
Date: 29th May 2015 Chairman
Mar 31, 2014
Dear members,
The Directors are pleased to present the Thirty Second Annual Report
along with the Audited Accounts for the financial year ended 31st March
2014:
PERFORMANCE (Rs. in Lakhs)
FINANCIAL RESULTS 2013-14 2012-13
Net Sales 51,516.08 50,759.82
PBIDT 5,099.03 3,486.30
Profit Before Tax (PBT) 3,629.44 2,070.19
Less: Provision for Tax 1,379.89 679.04
Profit After Tax (PAT) 2,249.55 1,391.15
Add: Profit brought forwarded from
previous years 4,144.77 3,759.20
Profit Available for Appropriation 6,394.32 5,150.35
Less: Appropriations Final Dividend
on Equity Shares 609.01 435.01
Distribution Tax on Final Dividend 103.50 70.57
General Reserve 1500.00 500.00
Surplus Carried to Balance Sheet 4,181.81 4,144.77
DIVIDEND
Your Directors recommend a final dividend of 35% (Rs. 0.70 per share)
for the financial year 2013-14 against 25% for the previous year.
OPERATIONS
During the year, the Company recorded Net Sales of Rs. 515.16 crores as
against Rs. 507.60 crores in 2012-13, a marginal increase of about
1.50%. Profit Before Tax made during the year is Rs. 36.29 crores
compared with Rs. 20.70 crores in 2012-13, a significant increase of
about 75% compared with previous year. The production during the year
was 70025 MT, compared to the previous year''s 67953 MT.
During the year, the Company has increased its sales from Tractor
industry compared with Commercial Vehicle segment. This has resulted in
marginal increase in sales. However, there was no significant increase
in total sales due to slow down in the economy especially in the auto
sector.
The automotive industry was growing consistently over the past decade,
but with Indian GDP slowing over the couple of years, the auto industry
growth also witnessed a corresponding slow down. However, the long term
prospects for the industry remain strong and the industry expects
moderate growth in the coming year. The entry and growth of new
generation commercial vehicles where the Company enjoys a strong
position will further aid the CompanyÂs growth. Our entry in to this
new generation of vehicles with MNC OEMs will also increase the
opportunities for exports. India is now a supplier of a range of high
value and critical automobile components to global auto market.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast
Limited and its subsidiary NC Energy Limited as at 31st March 2014, in
accordance with Accounting Standard 21 on "Consolidated Financial
Statements" issued by the Institute of Chartered Accountants of India.
As required by Clause 41 of the Listing Agreement with Stock Exchanges,
the audited Consolidated Financial Statements are circulated with the
Annual Report.
In accordance with the general exemption granted by Ministry of
Corporate Affairs vide circular No. 2/2011 dated February 8, 2011, the
Company has not attached the financial statements of the subsidiary
company. However, the financial information of the subsidiary company,
duly audited by the auditors is disclosed in the annual report. The
Company will make available the audited annual accounts and related
information of its subsidiary, upon request by any of its shareholders.
The annual accounts of the subsidiary company will also be kept for
inspection, by any member at the Registered Office of the Company and
its subsidiary company. The consolidated financial statements presented
by the Company, which form part of this annual report, include
financial results of its subsidiary company.
QUALITY AND CUSTOMER SATISFACTION
The Company adheres to the TS 16949 norms, and continuously strives to
achieve world class quality by strictly adhering to the quality
standards. The Company has been awarded ISO 14001 & 18001 for
Environmental Management Systems.
The Company has been receiving continuous support from its OEM
customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors
(TMTL), Mahindra & Mahindra, Volvo-Eicher Commercial Vehicles, SAME
Tractors, Escorts Tractors, Sonalika Tractors (ITL), Daimler India,
Ashok Leyland John Deere, Caterpillar, etc., from Tier I customers like
Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF
India, Simpson & Co., etc., and export customers like Meritor, Bauer
Gears and ZF Industries. The Company is closely working with all
customers in terms of new product development, improvement in quality &
delivery performance etc., to meet their expectations.
DEPOSITS
The Company has accepted public deposits during the year. Its deposits
as at 31st March 2014 stand at Rs. 177.64 lakhs. There are no overdue
of deposits as on 31st March 2014.
DIRECTORS
As per the provisions of Section 149 of the Companies Act, 2013, which
has come into force with effect from 1st April, 2014, an Independent
Director shall hold office for a term up to five consecutive years on
the Board of a company and is not liable to retire by rotation. In
compliance with the provisions of Section 149 read with Schedule IV of
the Act, Mr. D. Sesha Reddy, Mr. R. Mohan Reddy and Mr. A.
Balasubramanian have been recommended to be appointed as Independent
Directors of the Company for a term of five years by the Nomination and
Remuneration Committee and Board of Directors at their respective
meetings held on 24th May 2014 with effect from the date of the
forthcoming Annual General Meeting. In the opinion of the Board, they
fulfill the conditions specified in the Act and the Rules made there
under for appointment as Independent Directors and are Independent of
the Management. Details of the proposal for appointment of Independent
Directors are mentioned in the Explanatory statement under Section 102
of the Companies Act, 2013 of the Notice of the 32nd Annual General
Meeting.
The Independent Directors have fulfilled the criteria of Independence
as defined under Section 149(6) of the Companies Act, 2013 and
requisite declarations in terms of Section 149(7) of the Act have been
received.
Mr. P. Vijaya Bhaskar Reddy is due to retire by rotation and being
eligible offers himself for re-appointment. He was reappointed as
Deputy Managing Director by the board of directors at their meeting
held on 10th February 2014 for a further period of three years. Your
approval is sought for his re-appointment.
Consequent to appointment of Ms. P. Divya as Managing Director of our
subsidiary "NC Energy Limited", she has resigned as Whole-Time Director
of the Company and will continue as Director of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors hereby make the following statement in terms of Section
217 (2AA) of the Companies Act, 1956 with respect to DirectorsÂ
Responsibility.
We confirm that:
* The Annual Accounts for the year ended 31st March 2014, have been
prepared with the Revised Schedule VI applicable to the Company with
all the applicable Accounting Standards.
* Such Accounting Policies have been selected and applied consistently
supported by management judgments and estimates, that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the Profit and
Loss of the Company for that period.
* Proper and sufficient care had been taken for the maintenance of
adequate Accounting Records, in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
* The Accounts for the year ended 31st March 2014 have been prepared on
a "going concern" basis.
CORPORATE GOVERNANCE
The Company has been pro-active in following the principles and
practices of good Corporate Governance. The Company has taken adequate
steps to ensure that the conditions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement with the Stock
Exchanges are complied within letter and spirit. A certificate issued
by the auditors of the Company regarding compliance of conditions of
Corporate Governance is also annexed. The matters relating to Corporate
Governance as per the Listing Agreement are attached to this report. A
management discussion and analysis report as required by Listing
Agreement is also annexed which forms part of this report.
AUDITORS
Your Company''s Auditors, M/s. J.B. REDDY & CO., Chartered Accountants,
will retire at the conclusion of the forthcoming Annual General Meeting
and they have consented to be re-appointed for the financial year
2014-15. The Company has received a letter from M/s. J.B. REDDY & CO.,
stating that their appointment as auditors, if made, would be within
the limits specified under the Companies Act, 2013.
As per Section 148 read with Companies (Audit & Auditors) Rules, 2014
and other applicable provisions, if any, of the Companies Act, 2013,
the Board of Directors of your Company has appointed M/s. Jayaram &
Associates, Cost Accountants as the Cost Auditors of the Company for
the financial year 2014-15 on the recommendations made by the Audit
Committee.
INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and
industrial harmony was maintained. Measures for the safety, training
and development of the employees continued to receive top priority. The
Directors wish to place on record their appreciation of the valuable
contribution made by the employees of the Company at all levels towards
the performance and growth of the Company.
CORPORATE SOCIAL RESPONSIBILITIES
The Company believes in sharing its prosperity with the society. The
Company has been doing CSR activities by providing books and other
necessary things for the nearby schools, which covers mostly weaker
sections of the society. The Company offers medical facilities free of
cost to villagers near to the factory. Health education programmes
being conducted to create awareness among the employees.
DISCLOSURE OF PARTICULARS
The information required as per Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosures of particulars in the Report of
the Board of Directors'') Rules, 1988 is given in the Annexure - I
forming part of this report.
PARTICULARS OF EMPLOYEES
Particulars of employees pursuant to Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, are set out in Annexure II and form part of this
report. However, pursuant to Section 219(1)(b)(iv) of the Companies
Act, 1956, the report and accounts are being sent to shareholders
excluding the aforesaid annexure. The said particulars will be made
available to a member upon request and also made available for
inspection at the Registered Office of the Company. Any Member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
ACKNOWLEDGEMENTS
The Directors place on record their sincere appreciation for the
dedicated efforts of the employees and co-operation of associates,
suppliers and customers. We also express our sincere thanks to
CompanyÂs Bankers namely State Bank of India, Kotak Mahindra Bank
Ltd., Standard Chartered Bank and HSBC Ltd. for their trust and
continued support.
For and on behalf of the Board
Place : Chennai D. Sesha Reddy
Date : 24th May 2014 Chairman
Mar 31, 2011
The Directors are pleased to present the Twenty Ninth Annual Report
along with the Audited Accounts for the financial year ended 31st March
2011:
PERFORMANCE
FINANCIAL RESULTS 2010-11 2009-10
(Rupees in Lakhs)
Net Sales 50,740.71 31,960.79
PBIDT 14,381.33 2,311.01
Profit Before Taxes (PBT) 12,920.12 999.01
Less: Provision for Taxes 4,228.55 309.32
Profit After Taxes (PAT) 8,691.57 689.69
Less: Prior Year Adjustments 2.19 0.63
Add: Profit brought forward from
previous years 2,149.07 1,825.37
Profit Available for appropriation 10,838.45 2,514.43
Special Dividend on Equity Shares 2,088.03 -
Dividend Tax on Special Dividend 346.80 -
Final Dividend on Equity Shares 522.00 261.00
Dividend Tax on Final Dividend 86.70 44.36
Transfer to General Reserve 5,000.00 60.00
Surplus Carried to Balance Sheet 2,794.92 2,149.07
DIVIDEND
Your Directors recommend a dividend of 30% (Rs.3.00 per share) for the
financial year 2010-11 against 15% (Rs. 1.50 per share) of previous
year. During the year, the Company has already declared and paid a
special silver jubilee dividend of Rs. 12.00 per share, thereby the
total dividend for the year amounts to Rs. 15/- per share.
OPERATIONS
During the year, the Company recorded Net Sales of Rs.507.40 crores as
against Rs.319.61 crores in 2009-10 registering a growth of 59%. Profit
Before Tax (excluding extra-ordinary items) increased to Rs. 20.43
crores during the year 2010-11 from Rs. 9.99 crores in 2009-10
representing an increase of 104%. The production during the year was
76734 MT, compared to the previous years 60761 MT.
Buoyancy in the domestic market especially in the Automobile sector
helped the Company to achieve this excellent growth. The Company has
utilized the full opportunity available in the market and registered
substantial growth both in Turnover & Profit.
EXTRA-ORDINARY ITEM
During the year the company has made a substantial profit after tax of
Rs. 75.09 Cr due to sale of shares held in Nelcast Energy Corporation
Ltd. This extra-ordinary item has helped the Company to increase its
net worth substantially.
OUTLOOK
The Indian economy is strongly on track and expected to grow
continuously. The Company is expected to maintain a steady growth and
use the opportunity available in the Automobile industry. The
combination of effective manufacturing costs with good quality systems
would give an edge to the Company in terms of pricing and quality.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an Audit Committee to oversee the Companys financial
reporting process, disclosure of financial information, related party
transactions, and internal control system etc. The Company has well
defined internal control systems which aim at better efficiency of
operations, compliances with legal obligations and Companys policies
and procedures.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast
Ltd and its subsidiary Nelcast USA Inc as at March 31, 2011, in
accordance with Accounting Standard 21 (AS 21) on "Consolidated
Financial Statements", issued by the Institute of Chartered Accountants
of India. As required by Clause 41 of the Listing Agreement with the
Stock Exchanges, the audited Consolidated Financial Statements are
circulated with the Annual Report.
QUALITY AND CUSTOMER SATISFACTION
The Company totally adheres to the TS 16949 norms, and continuously
strives to achieve world class quality by strictly adhering to the
quality standards. During the year the Company has been awarded ISO
14001 & 18001 for Environmental Management Systems.
The Company has been receiving continuous support from its customers
like Tata Motors, Ashok Leyland, TAFE, Mahindra & Mahindra, VE
Commercial, ITL etc., and in exports Arvin Meritor, Dobbie Dico,
Danfoss and ZF Industries. The Company is closely working with all
customers in terms of new product development, improvement in quality
levels etc. to meet the expectation of customers.
DEPOSITS
The Company has accepted public deposits during the year. Its deposits
as at 31st March 2011 stand at Rs.115.31 lakhs.
DIRECTORS
Mr. D. Sesha Reddy, is due to retire by rotation and being eligible
offers himself for re-appointment.
During the year Mr. S. Radhakrishnan has been appointed as Additional
Director of the Company and he would hold office till the date of the
ensuing Annual General Meeting. The Company has received a notice from
a shareholder signifying his intention to propose the appointment of
Mr. S. Radhakrishnan as Director of the Company at the ensuing Annual
General Meeting. He has also been appointed as Managing Director of the
Company in the Board Meeting held on 17.01.2011.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors hereby make the following statement in terms of Section
217 (2AA) of the Companies Act, 1956 with respect to Directors
Responsibility.
We confirm that:
In the preparation of the Annual Accounts for the year ended 31st March
2011, all the applicable Accounting Standards had been followed.
Such Accounting Policies have been selected and applied consistently
supported by management judgments and estimates, that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the Profit and
Loss of the Company for that period.
Proper and sufficient care had been taken for the maintenance of
adequate Accounting Records, in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
The Accounts for the year ended 31st March 2011 have been prepared on
a going concern basis".
CORPORATE GOVERNANCE
The Company has been pro-active in following the principles and
practices of good Corporate Governance. The Company has taken adequate
steps to ensure that the conditions of Corporate Governance as
stipulated in Clause 49 of the Listing agreements with the Stock
Exchanges are complied in its letter and spirit. The matters relating
to Corporate Governance as per the Listing Agreement are attached to
this report. A management discussion and analysis report as required by
listing agreement is also enclosed which forms part of this report.
AUDITORS
Your Companys Auditors, M/s. J.B.REDDY & CO., Chartered Accountants,
will retire at the conclusion of the forthcoming Annual General Meeting
and they have consented to be re-appointed for the financial year
2011-12. The Company has received a letter from M/s. J.B.REDDY & CO.,
stating that their appointment as auditors, if made, would be within
the limits specified under Section 224 (1-B) of the Companies Act,
1956.
INDUSTRIAL RELATIONS
The employee relations have remained cordial through out the year and
industrial harmony was maintained. Measures for the safety, training
and development of the employees continued to receive top priority. The
Directors place on record their appreciation of the valuable
contribution made by the employees of the Company at all levels towards
the performance and growth of the Company.
PARTICULARS OF EMPLOYEES
Information required as per Section 217 (2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees), Rule 197, as
amended from time to time is given in the Annexure.
DISCLOSURE OF PARTICULARS
The information required under Section 217 (1) (e) of the Companies
Act, 1956 read with Companies (Disclosures of particulars in the Report
of the Board of Directors) Rules, 1988 is given in the Annexure forming
part of this Report.
ACKNOWLEDGEMENTS
The Directors again would like to express their sincere appreciation
for the dedicated efforts of the employees and co-operation of
associates, suppliers and customers. We also express our sincere thanks
to Companys Bankers namely State Bank of India, IDBI Bank Ltd and
Kotak Mahindra Bank Ltd for their trust and continued support.
For and on behalf of the Board
P. Radhakrishna Reddy
Chairman
Date : 13th May 2011
Place: Chennai
Mar 31, 2010
The Directors are pleased to present the Twenty - Eighth Annual Report
along with the Audited Accounts for the financial year ended 31 st
March 2010:
PERFORMANCE
FINANCIAL RESULTS 2009-10 2008-09
(Rupees in Lakhs)
Net Sales 31960.79^ 29031.03
PBIDT 2311.01 2297.07
Profit before Taxes (PBT) 999.01 593.29
Less: Provision for Taxes 309.32 203.48
Profit After Taxes (PAT) 689.69 389.81
Less: Prior Year Adjustments 0.63 12.03
Add: Profit brought forward from
previous years 1825.37 1751.16
Profit Available for appropriation 2514.43 2128.94
Dividend on Equity Shares 261.00 174.00
Provision for Tax on Dividend 44.36 29.57
Transfer to General Reserve 60.00 100.00
Surplus Carried to Balance Sheet 2149.07 1825.37
DIVIDEND
Your Directors recommend a dividend of 15% (Rs. 1.50 per share) for the
financial year 2009-10 against 10% (Re. 1.00 per share) of previous
year.
OPERATIONS
During the year, the Company recorded Net Sales of Rs.319.61 crores as
against Rs.290.31 crores in 2008-09 registering a growth of 10%. Profit
Before Tax increased to Rs. 9.99 crores during the year 2009-10 from
Rs. 5.93 crores in 2008-09 representing an increase of 68%. The
production during the year was 60761 MT, compared to the previous
years 48961 MT.
Subsequent to the economic recession in 2008-09, the economy has picked
up in 2009-10; especially in automobile sector we could see some
recovery. Due to this improved economy the Company registered growth
both in Turnover and Profit.
OUTLOOK
During the year 2009-10 the automobile industry in India started
showing recovery. We expect this momentum to continue and lead to
overall growth during the current year. Your Company will utilize every
opportunity to its best and will be part of this growth.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has proper and adequate internal controls to ensure all the
assets are protected and transactions are recorded and reported
expeditiously. The Audit Committee reviews the Internal Audit Report
submitted by the Internal Auditors and implementation of suggestions
and measures arising therefrom.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements of Nelcast
Ltd and its subsidiary Nelcast USA Inc as at March 31. 2010, in
accordance with Accounting Standard 21 (AS 21) on "Consolidated
Financial Statements", issued by the Institute of Chartered Accountants
of India. As required by Clause 41 of the Listing Agreement with the
Stock Exchanges, the audited Consolidated Financial Statements are
circulated with the Annual Report.
QUALITY AND CUSTOMER SATISFACTION
The Company totally adheres to the TS16949 norms, and continuously
strives to achieve world class quality by strictly adhering to the
quality standards.
The Company has been receiving continuous support from its customers
like Tata Motors, Ashok Leyland, TAFE, Mahindra & Mahindra, Eicher
Motors, ITL, Eicher Tractors etc., and in exports Arvin Meritor, Dobbie
Dico and Wartsila. The growing association with Commercial Vehicle and
Tractor majors and the widening spread of the customer base, both in
India and abroad, are encouraging the Company to increase its
manufacturing facilities and intensify its quality thrust while moving
its products up the value chain.
DEPOSITS
The Company has accepted public deposits during the year. Its deposits
as at 31st March 2010 is Rs.129.83 lakhs.
DIRECTORS
Mr. R. Mohan Reddy, is due to retire by rotation and being eligible
offers himself for re-appointment.
During the year Mr. A. Balasubramanian has been appointed as Additional
Director of Company and he would hold office till the date of the
ensuing Annual General Meeting. The Company has received a notice from
a shareholder signifying his intention to propose the appointment of
Mr. A. Balasubramanian as Director of the Company at the ensuing Annual
General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors hereby make the following statement in terms of Section
217 (2AA) of the Companies Act, 1956 with respect to Directors
Responsibility.
We confirm that:
In the preparation of the Annual Accounts for the year ended 31st March
2010, all the applicable Accounting Standards had been followed.
Such Accounting Policies have been selected and applied consistently
supported by management judgments and estimates, that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the Profit and
Loss of the Company for that period.
Proper and sufficient care had been taken for the maintenance of
adequate Accounting Records, in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
The Accounts for the year ended 31 st March 2010 have been prepared on
a "going concern basis".
The Company has been pro-active in following the principles and
practices of good Corporate Governance. The Company has taken adequate
steps to ensure that the conditions of Corporate Governance as
stipulated in Clause 49 of the Listing agreements with the Stock
Exchanges are complied in its letter and spirit. The matters relating
to Corporate Governance as per the Listing Agreement are attached to
this report. A management discussion and analysis report as required by
listing agreement is also enclosed which forms part of this report.
AUDITORS
Your Companys Auditors, M/s. J.B.REDDY & CO., Chartered Accountants,
will retire at the conclusion of the forthcoming Annual General Meeting
and they have consented to be re-appointed for the financial year
2010-11. The Company has received a ietter from M/s. J.B.Reddy & Co.,
stating that their appointment as auditors, if made, would be within
the limits specified under Section 224 (1 -B) of the Companies Act,
1956.
INDUSTRIAL RELATIONS
Overall industrial relations during the year were cordial. The
Directors place on record their appreciation of the valuable
contribution made by the employees of the Company at all levels towards
the performance and growth of the Company.
PARTICULARS OF EMPLOYEES
Information required as per Section 217 (2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees), Rule 1975, as
amended from time to time is given in the Annexure.
DISCLOSURE OF PARTICULARS
The information required under Section 217 (1) (e) of the Companies
Act, 1956 read with Companies (Disclosures of particulars in the Report
of the Board of Directors) Rules, 1988 is given in the Annexure forming
part of this Report.
ACKNOWLEDGEMENTS
The Directors again would like to express their sincere appreciation
for the dedicated efforts of the employees and co-operation of
associates, suppliers and customers. We also express our sincere thanks
to Companys Bankers namely State Bank of India, IDBI Bank Ltd. and
Kotak Mahindra Bank Ltd for their trust and continued support.
For and on behalf of the Board
Date : 30th May 2010 P. Radhakrishna Reddy
Place : Chennai
Chairman & Managing Director
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