Click it and Unblock the Notifications
Directors Report of Swaraj Engines Ltd.
Mar 31, 2025
Your Directors present their 39th Annual Report together with Audited Accounts for the financial year ended 31st March, 2025. A. FINANCIAL RESULTS AND OPERATIONAL REVIEW :
|
Year Ended 31st March, 2025 |
(Rs. in Crores) Year Ended 31st March, 2024 |
|
|
Net Operating Revenue |
1681.89 |
1419.24 |
|
Profit before Other Income, Depreciation, Finance Charges, Exceptional items and Tax |
227.31 |
188.17 |
|
Other Income |
16.41 |
14.36 |
|
Profit before Depreciation, Finance Cost, Exceptional items and Tax |
243.72 |
202.53 |
|
Finance Cost |
0.33 |
0.25 |
|
Depreciation and Amortisation Expense |
20.34 |
17.31 |
|
Profit before Exceptional Items & Tax |
223.05 |
184.97 |
|
Exceptional Items |
- |
- |
|
Profit Before Tax |
223.05 |
184.97 |
|
Tax Provision |
||
|
- Current |
57.56 |
48.45 |
|
- Deferred |
(0.49) |
(135) |
|
Profit After Tax |
165.98 |
137.87 |
|
Other Comprehensive Income (net of Tax) |
(0.19) |
0.05 |
|
Total Comprehensive Income |
165.79 |
137.92 |
Driven by rising domestic demand witnessed in almost all key sectors, the overall picture of Indian economy looks encouraging and well poised to sustain its consistent growth in GDP for fiscal 2025 as well. The Indian tractor industry, to which the Company serves, also grew by 7.3% in FY25 over last year and closed at around 9,39,700 units. In this backdrop, your company also continued its growth trajectory during the financial year 2024-25 and posted an impressive all-around performance marked by significant achievements in sales, margins and profits.
Reflecting a robust demand from our customer - Swaraj Division of M&M - the Company''s engine sales surged substantially and registered its highest ever yearly sale of 1,68,820 engines as compared to 1,38,761 engines sold during the last year - up 21.7%. The net operating revenue for FY25 also moved from Rs.1419.24 crores to Rs. 1681.89 crores, a growth of 18.5%. While the operating profit for the year under review was Rs. 227.31 crores (previous year Rs. 188.17 crores) - up 20.8%, our continued focus to bring operational efficiencies resulted an improvement of 20 basis points at operating margin. The Profit Before Tax was Rs. 223.05 crores (previous year Rs. 184.97 crores) and Profit After Tax stood at Rs.165.98 crores (previous year Rs. 137.87 crores), translated into Basic Earning Per Share of Rs. 136.64 (previous year Rs. 113.50). The total comprehensive income (net of tax) stood at Rs.165.79 crores (previous year Rs.137.92 crores) - up 20.2%. It may also be noted that this was the Company''s fifth successive year of growth both in engines sales volume and profit over respective previous years.
To meet the expected customer demand, the Company during the FY25 completed the capacity enhancement to increase its annual capacity to 1,95,000 engines. Further, taking note of the future demand, the Company has decided to enhance the capacity to 2,40,000 engines per annum from existing capacity of 1,95,000 engines per annum.
No material changes and commitments which could affect your Company''s financial position for FY 2024-25 have occurred between the end of the financial year of your Company and date of this report.
The fund position of the Company remained comfortable throughout the year under review.The Company, after meeting the capital expenditure & working capital requirements to support operations, has earned an income of Rs. 17.08 crores (previous year - Rs. 15.18 crores) on its surplus funds.
Your Directors are pleased to recommend an equity dividend of Rs. 104.50 per share of the face value of Rs. 10.00 for the financial year ended 31st March, 2025 (previous year - Rs. 95.00 per share).
If approved by the Shareholders at the ensuing Annual General Meeting, the above equity dividend will be paid to those shareholders whose names shall appear in the Register of Members as on the Record Date. The total equity dividend outgo for the financial year 2024-25 will absorb a sum of Rs. 126.94 crores (previous year - Rs. 115.40 crores). Further, the Board of your Company has decided not to transfer any amount to the General Reserves for the year under review.
Dividend Distribution Policy
The Board approved Dividend Distribution Policy containing the parameters mentioned in Regulation 43A(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"). The same is attached as "Annexure A" and forms part of this Annual Report.
The same has also been hosted on the website of the Company and can be assessed at the web-link https:// www.swarajenterprise.com/policies
The tractor industry has witnessed good momentum in FY25 on account of favorable weather conditions, good reservoir levels and positive terms of trade for farmers. As Rabi crop outlook is also looking positive, expected improved cash flow in the hands of the farmers, increase in agri credit limit, continued Government support to increase farmer incomes augurs well to boost tractor demand going forward.
Mahindra & Mahindra Limited (M&M) is the holding Company of Swaraj Engines Limited and holds 52.12% of the paid-up equity share capital of the Company as on 31st March, 2025.
C. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Accounts. The transactional controls built into the SAP ERP system also help to strengthen the processes related to segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. Further, as mandated in the recent amendment under Companies (Accounts) Rules, 2014, effective 1st April, 2023, the SAP ERP System also has feature of recording an Audit T rail of each and every transaction, creating an edit log of each change made in books of accounts along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
D. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
All related party transactions that were entered during the financial year 2024-25 were in the ordinary course of the business and were on arm''s length basis. All such related party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the transactions which cannot be foreseen and the same are subsequently shared with Audit Committee on quarterly basis. The policy on materiality of and dealing with related party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is https://www.swarajenterprise.com/policies.The disclosure of material related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed as "Annexure B" to this report.
F. BOARD AND COMMITTEES Directors
Mr. Dileep C. Choksi, Non-Executive Independent Director of the Company, on completion of his second term, ceased to be a Director of the Company with effect from 31 st July, 2024. The Board of Directors placed on record its sincere appreciation of the valuable contributions made by Mr. Choksi during his long association with the Company as Independent Director since July 2014.
Taking note of the retirement of Mr. Choksi, the Board appointed Mr. Rajya Vardhan Kanoria as Additional Director (NonExecutive & Independent) with effect from 31st July, 2024 and subsequently the shareholders of the Company also approved his appointment as Independent Director for a period of 5 years effective 31st July, 2024 through postal ballot.
Consequent to his movement to new role within Mahindra group, Mr. Giju Kurian, Whole Time Director and Chief Executive Officer, also resigned and accordingly, he ceased to be a Director of the Company with effect from 1st September, 2024. The Board of Directors placed on record its appreciation of the contributions made by Mr. Kurian during his association with the Company as Whole Time Director & CEO.
In place of Mr. Giju Kurian, the Board of Director, upon the recommendation of the Nomination and Remuneration Committee, appointed Mr. Devjit Sarkar as Whole Time Director and Chief Executive Officer of the Company with effect from 1 st September, 2024 and subsequently the shareholders of the Company also approved his appointment as Whole Time Director & Chief Executive Officer for a period 2 years effective from 1 st September, 2024 through postal ballot.
In terms of Section 152 of the Companies Act, 2013, Mr. Rajesh Jejurikar and Mr. Harish Chavan shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.
Independent Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). Further, the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test as per the provisions of Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a system has been put in place to carry out an annual performance evaluation of the Board, its Committees and individual Directors. Criteria for performance evaluation is covered in the Corporate Governance Report.
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed policy on appointment of Directors and Senior Management and policy for remuneration of the Directors, KMP and other employees. These policies are available at https://www.swarajenterprise.com/policies.The Remuneration Policy is also covered in the Corporate Governance Report.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, seven meetings of Board and four meetings of the Audit Committee were convened and held. The details are covered in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
The Independent Directors of the Company meet at least once in every financial year without the presence of Non-Independent Directors, Executive Director and any other management personnel. The meeting(s) is conducted in a manner to enable the Independent Directors to discuss matter pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, assess the quality, quantity and timeliness of flow of information between the Company''s management and the Board that is necessary for the Board to effectively and reasonably perform their duties. During the year, one meeting of Independent Directors was held on 27th February, 2025.
The 38th Annual General Meeting of the Company was held on 18th July, 2024.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on representations received from the Operating Management, and after due enquiry, confirm that:
a) in the preparation of Annual Accounts for the financial year ended 31 st March, 2025, the applicable accounting standards have been followed;
b) in the selection of accounting policies, consulted the Statutory Auditors and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2025 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) adequate Internal Financial Controls to be followed by the Company have been laid down and such Internal Financial Controls were operating effectively during the Financial Year ended 31st March, 2025;
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively throughout the Financial Year ended 31 st March, 2025.
The Audit Committee of the Company at the beginning of financial year 2024-25 was comprising of 5 Directors viz. Mr. Dileep C. Choksi (Chairman of the Committee), Mr. S. Nagarajan, Mr. Nikhilesh Panchal, Ms. Smita Mankad, and Mr.Puneet Renjhen. Consequent to the retirement of Mr. Choksi as Independent Director on 31st July, 2024, Mr. Rajya Vardhan Kanoria was inducted as Member and Chairman of the Audit Committee in place of Mr. Choksi with effect from 31st July, 2024. In the current composition of the Audit Committee, except Mr. Puneet Renjhen, all the Members of the Committee are Independent Directors. All the Members of the Committee possess strong accounting and financial management knowledge.
The Company Secretary of the Company is the Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the Board.
G. CORPORATE GOVERNANCE Corporate Governance
A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has put in place anti sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy is gender neutral. Internal Complaints Committee (ICC) has been set up to redress the complaints received, if any, regarding sexual harassment.
During the year, one complaint was received and resolved by the ICC by taking appropriate action as per the provisions of the aforesaid Act.
Risk Management
The Risk Management Committee of the Company at the beginning of financial year 2024-25 was comprising of 3 Directors viz. Mr. Nikhilesh Panchal, Non-Executive Independent Director (Chairman of the Committee), Mr. Harish Chavan, NonExecutive Non-Independent Director and Mr. Giju Kurian, Whole Time Director & CEO. Consequent to the resignation of Mr. Kurian with effect from 1 st September, 2024, Mr. Devjit Sarkar, Whole Time Director & CEO, was inducted as Member of the Risk Management Committee in place of Mr. Kurian with effect from 1st September, 2024.The other details and terms of reference of the Committee are covered under the Corporate Governance Report which forms part of the Annual Report. In accordance with the requirement of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.
H. EMPLOYEES
Key Managerial Personnel (KMP)
During the financial year under review, consequent to his resignation, Mr. Giju Kurian, Whole Time Director & Chief Executive Officer ceased to be Key Managerial Personnel (KMP) of the Company with effect from 1st September, 2024. Further, upon the appointment of Mr. Devjit Sarkar as Whole Time Director & Chief Executive Officer, he also became the KMP with effect from 1 st September, 2024. The Board also appointed Ms. Geeta Kharat as the Compliance Officer of the Company in place of Mr. Rajesh K. Kapila with effect from 17th January, 2025 pursuant to the Listing Regulations and accordingly, she also became the KMP with effect from 17th January, 2025. Mr. Rajesh K. Kapila continues to be Company Secretary and KMP of the Company. At the close of the year, the following have been designated as the KMPs of the Company:
Mr. Devjit Sarkar, Whole Time Director & Chief Executive Officer
Mr. Mahesh Gupta, Chief Financial Officer
Mr. Rajesh K. Kapila, Company Secretary
Ms. Geeta Kharat, Compliance Officer
Employees'' Stock Option Scheme
The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees'' Stock Option Scheme-2015 ("the Scheme") of the Company which get covered under the provisions of SEBI
(Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations 2021"). Pursuant to the said Scheme, the Nomination and Remuneration Committee during FY 2024-25 have granted 1083 options to eligible employee and allotted 211 equity shares against the vesting. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant. Information as required under the SbEb Regulationsis provided in the Annual Accounts which has been uploaded on the Company''s website and can be accessed at the web-link https://www.swarajenterprise.com/annualreports
Industrial relations remained cordial throughout the year under review.
Particulars of Employees
The statement of Disclosure of Remuneration 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 is annexed herewith as "Annexure C". Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report and in terms of the provisions of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Shareholders excluding the aforesaid statement. Any Shareholder interested in obtaining such details may write to the Company Secretary of the Company and the same will be made available during 21 days before the Annual General Meeting.
Safety, Health and Environmental Performance
Your Company''s commitment towards Safety, Occupational Health and Environment is being continuously enhanced. The Company encourages involvement of all its employees in activities related to safety, including promotion of safety standards. This is also to ensure sustainable business growth. The Company has a well-established Safety, Occupational Health and Environmental Policy which inter alia ensures safety of public, employees, plant and equipment by ensuring compliance with all statutory rules and regulations on regular basis. During the year, no major accident has occurred. Your Company also imparts training to its employees as per the predefined training calendar, carries out statutory safety audits of its facilities as per legal requirement and promotes eco-friendly activities.
The Company''s plant is certified under OHSAS 45001:2018 and EMS ISO 14001:2015.
Statutory Auditors and Auditors'' Report
M/s B K Khare & Co., Chartered Accountants (ICAI Firm Registration Number 105102W), were reappointed as the Statutory Auditors of the Company for the second term to hold office for another term of 5 years from the conclusion of the 36th Annual General Meeting ("AGM") held on 25th July, 2022 until the conclusion of the 41st AGM of the Company to be held in the year 2027.
The Report given by the Auditors on the financial statements of the Company for the financial year 2024-25 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their Report.
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure D". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer except that only one meeting of Risk Management Committee was held during FY 2024-25.
Further, pursuant to SEBI Circular dated 8th February, 2019, as amended, read with regulation 24A of the Listing Regulations and Circulars issued by Stock Exchanges in this regard, M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) has issued Annual Secretarial Compliance Report for FY 2024-25 and the same is available on the Company''s website on https://www.swarajenterprise.com/DisclosureunderReg30andOthers.
Pursuant to Regulation 24A and other applicable provisions of the Listing Regulations and applicable provisions of the Companies Act, 2013 ("the Act") and Rules made thereunder, the Board of Directors, upon the recommendation of the Audit Committee, have approved and recommended the appointment of M/s A. Arora & Co., Company Secretaries (Certificate of Practice No. 993), having a Peer Review Certificate (2120/2022 valid upto 31.05.2027) as Secretarial Auditors of the Company for a term of 5(Five) consecutive years to hold office from the conclusion of ensuing AGM till the conclusion of 44thAGM of the Company to be held in the Year 2030, for approval of the Members at ensuing AGM of the Company. Brief resume and other details of M/s A. Arora & Co., Company Secretaries, are separately disclosed in the Notice of ensuing AGM. M/s A. Arora & Co., Company Secretaries have given their consent to act as Secretarial Auditors of the Company and confirmed that their aforesaid appointment (if made) would be within the prescribed limits under the Act & Rules made thereunder and the Listing Regulations. They have also confirmed that they are not disqualified to be appointed as Secretarial Auditors in terms of provisions of the Act & Rules made thereunder and the Listing Regulations.
The Company is maintaining cost records as prescribed under the provisions of Section 148(1) of the Companies Act, 2013. The Board, on the recommendation of Audit Committee, had appointed M/s SDM & Associates, Cost Accountants (Firm Registration Number 000281), as Cost Auditor for conducting the audit of cost records of the Company for the Financial Year 2025-26 under Section 148 of the Companies Act, 2013. M/s SDM & Associates have confirmed that their appointment is within the limits of Section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141 (3) and proviso to Section 148(3) read with Section 141 (4) of the Companies Act, 2013.
The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to M/s SDM & Associates, Cost Auditors is included in the Notice convening the Annual General Meeting.
J. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS Corporate Social Responsibility (CSR)
Keeping with Company''s core value of Good Corporate Citizenship, your Company is committed to its social responsibility by taking various initiatives that would benefit our society. In line with the Company''s CSR Policy and CSR thrust areas, your Company''s CSR efforts continue to be directed towards five key areas viz.skill learning, education, public health, environment and women empowerment. Most of the activities, particularly relating to education, skill learning and health, being planned by giving due attention to women as key beneficiaries.
Under education and vocational training initiative, to support the youth to get suitable earning opportunities, your Company imparted training through various short-term courses to about 250 students at Company''s Skill Development Centre and Govt. ITI in association with State Govt. Further, the Company provided engines to the nearby ITIs which benefitted more than 1000 students of mechanical wing for their practical training.
On Public health front, the Company with the support of Homi Bhabha Cancer Hospital and Research Centre covered ~2800 females for Mammography test. Besides this, the Company organized various medical camps and covered more than 3000 people, and also provided medical equipments & material to the premier Govt. Institutions for the welfare of the community.
Women empowerment is also one of the core focus areas for the Company. Under this initiative called "Prerna", various trainings were organized to empower women farmers through integrated rural development program. With a view to provide and promote innovative farm practices, knowledge & technology, the Company extended necessary support to 700 women farmers through 40 Self Help Groups (SHGs). Under Project Nanhi Kali (a M&M group initiative), the Company has contributed to empower underprivileged girls by supporting their education. The Project provides educational support to girls studying in Government schools from Class 1 to 10, enabling them to successfully complete their schooling.
In order to contribute towards a clean environment, the Company continued its Swachh Bharat activity in nearby adopted villages for collection of door-to-door garbage, cleanliness of public utilities, and sapling plantation at various locations.
Other activities include improvement in basic infrastructure at ITIs/Polytechnics, distribution of the sanitary napkin through already installed vending machines, refurbishing of washrooms at nearby Govt. schools, development of sensory garden at Government Rehabilitation Institute for Intellectual Disabilities, celebration of festivals with under privileged, public awareness camps for road safety and pollution etc.
Further, in compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company''s Corporate Social Responsibility (CSR) Committee at the beginning of the year was comprising of Mr. S.Nagarajan (Chairman), Ms. Smita Mankad, Mr. Harish Chavan and Mr. Giju Kurian. During the year, the Committee was reconstituted with effect from 1st September, 2024 by inducting Mr. Devjit Sarkar, Whole Time Director & CEO, as Member of the Committee in place of Mr. Giju Kurian. The Annual Report on CSR activities is annexed as "Annexure E" to this report.
Sustainability Initiative
Your Company is conscious of its responsibility towards preservation of natural resources and continuously taking various initiatives to reduce the consumption of electricity and water. As required under Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report of your Company in the prescribed format is available as a separate section as "Annexure F" and forms part of this Annual Report.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars in respect of the above activities stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure G".
Share Capital
Consequent to allotment of 211 equity shares of Rs. 10/- each to eligible employees during the year against the exercise of the options vested to them under the Company''s Employees'' Stock Option Scheme-2015, the Paid-up Equity Share Capital of the Company as on 31st March, 2025 stood at 1,21,47,466 equity shares of Rs. 10/- each fully paid up (previous year -1,21,47,255).
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on 31 st March, 2025 is available on the Company''s website on https://www.swarajenterprise.com/annualreports
Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not extended any loans, given guarantees or provided securities or made investments which would be covered by Section 186 of the Companies Act, 2013.
Deposits
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has not made any loans / advances and investment in its own shares, associates, etc. during the year. Compliance with Secretarial Standards on Board and General Meetings
During the Financial Year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Change in the Nature of Business
There has been no change in the nature of business of the Company during the year.
The Company is not paying any commission to the Whole Time Director(s). However, Whole Time Director(s) is eligible for grant of Stock Options of the Company, subject to approval of the Nomination and Remuneration Committee. Further, the Whole Time Director of the Company does not draw any commission or remuneration from its Holding Company.
The Company does not have any subsidiary or joint venture company.
There was no revision of financial statements and Board''s Report of the Company during the year under review.
During the year, the Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).
The Company has no borrowings, and hence the requirement of providing 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 is not applicable.
Your Directors further state that no disclosure or reporting is required in respect of the following items as there were no transactions / events happened on these items during the year under review:
1. issue of equity shares with differential voting rights or sweat equity.
2. raising of funds through public issue, rights issue, preferential issue and qualified institutional placement.
3. significant or material orders passed by the Regulators / Courts / T ribunal which impact the going concern status of the Company and its future operations.
4. voting rights which are not directly exercised by the employees in respect of shares for the subscription / purchase for which loan was given by the Company (as there is no scheme pursuant to which such person can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013).
5. fraud reporting by the auditors.
Your Directors take this opportunity to acknowledge the contributions of all the stakeholders and are grateful for the cooperation of various Government Authorities, excellent support received from the Shareholders, Banks and other Business Associates. The Directors also recognise and appreciate the hard work and efforts put in by all the employees and their continued contribution to the Company.
Mar 31, 2024
The Directors present their 38th Annual Report together with Audited Accounts for the financial year ended 31 st March, 2024.
|
A. FINANCIAL RESULTS AND OPERATIONAL REVIEW : |
Year Ended 31st March, 2024 |
(Rs. in Crores) Year Ended 31st March, 2023 |
|
Net Operating Revenue |
1419.24 |
1421.82 |
|
Profit before Other Income, Depreciation, Finance Charges, Exceptional items and Tax |
188.17 |
186.41 |
|
Other Income |
14.36 |
11.95 |
|
Profit before Depreciation, Finance Cost, Exceptional items and Tax |
202.53 |
198.36 |
|
Finance Cost |
0.25 |
0.08 |
|
Depreciation and Amortisation Expense |
17.31 |
18.54 |
|
Profit before Exceptional Items & Tax |
184.97 |
179.74 |
|
Exceptional Items |
- |
- |
|
Profit Before Tax |
184.97 |
179.74 |
|
Tax Provision |
||
|
- Current |
48.45 |
47.50 |
|
- Deferred |
(135) |
(1.37) |
|
Profit After Tax |
137.87 |
133.61 |
|
Other Comprehensive Income (net of Tax) |
0.05 |
(0.09) |
|
Total Comprehensive Income |
137.92 |
133.52 |
As per the current reports on macroeconomics for fiscal 2024, the Indian economy, testifying to the resilience to the postpandemic period, is poised to register another year of consistent growth in its GDP. The Indian tractor industry for FY24, which the Company serves, posted a degrowth of 7% over last year and closed at around 8,75,700 units. The decline was mainly attributed to erratic and uneven rainfall distribution and to some extent also due to a large industry base of FY23. At the same time, your Company, on the strength of good engine demand from its customers, achieved its highest-ever engine sales volume of 1,38,761 units compared to last year''s sales of 1,37,005 units. Benefitted with this higher sale, your Company yet again posted an overall good financial performance for fiscal 2024 - the fourth successive year of growth in engine sales volume and profit over respective previous years.
In the above backdrop, the Company''s net operating revenue for the financial year 2023-24 stood at Rs. 1419.24 crores as against Rs. 1421.82 crores for the previous year. While the Operating profit was Rs. 188.17 crores (previous year Rs. 186.41 crores), Profit before tax at Rs. 184.97 crores (previous year Rs. 179.74 crores) was up by 2.9%. As a result, the Company posted its highest ever Profit after tax of Rs. 137.87 crores (previous year Rs. 133.61 crores), translated into Basic Earning Per Share of Rs. 113.50 (previous year Rs. 110.02). The total comprehensive income (net of tax) stood at Rs. 137.92 crores against the previous year''s Rs. 133.52 crores - up 3.3%.
To meet the expected customer demand, the Company had earlier announced that it would enhance its capacity to 1,95,000 engines per annum. The new capacity is near completion and will be operational in the first quarter of the current fiscal year 2025. This expansion is fully financed through internal generation/surplus available with the Company.
No material changes and commitments which could affect your Company''s financial position for FY 2023-24 have occurred between the end of the financial year of your Company and date of this report.
The fund position of the Company remained comfortable throughout the year under review. The Company, after meeting the capital expenditure & working capital requirements to support operations, has earned an income of Rs. 15.18 crores (previous year - Rs. 12.56 crores) on its surplus funds.
Your Directors are pleased to recommend an equity dividend of Rs. 95.00 per share of the face value of Rs. 10.00 for the financial year ended 31st March, 2024 (previous year - Rs. 92.00 per share).
If approved by the Shareholders at the ensuing Annual General Meeting, the above equity dividend will be paid to those shareholders whose names shall appear in the Register of Members as on the Book Closure date. The total equity dividend outgo for the financial year 2023-24 will absorb a sum of Rs. 115.40 crores (previous year - Rs. 111.74 crores). Further, the Board of your Company has decided not to transfer any amount to the General Reserves for the year under review.
Dividend Distribution Policy
The Board approved Dividend Distribution Policy containing the parameters mentioned in Regulation 43A(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"). The same is attached as "Annexure A" and forms part of this Annual Report.
The same has also been hosted on the website of the Company and can be assessed at the web-link https://www.swarajenterprise.com/policies
The Government announcement of increased advance estimate of horticulture production and Rabi wheat output higher than last year is expected to bring positive sentiments among farmers. Also, the forecast of above normal monsoon with well spread rainfall in most parts of the country is expected to further boost tractor demand.
Mahindra & Mahindra Limited (M&M) is the holding Company of Swaraj Engines Limited and holds 52.12% of the paid-up capital equity share capital of the Company as on 31st March, 2024.
C. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP system also help to strengthen the processes related to segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. Further, as mandated in the recent amendment under Companies (Accounts) Rules, 2014, effective 1st April, 2023, the SAP ERP System also has feature of recording an Audit Trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
D. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
All related party transactions that were entered during the financial year 2023-24 were in the ordinary course of the business and were on arm''s length basis. All such related party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the transactions which cannot be foreseen and the same are subsequently shared with Audit Committee on quarterly basis. The policy on materiality of and dealing with related party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is https://www.swarajenterprise.com/policies. The disclosure of material related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed as "Annexure B" to this report.
F. BOARD AND COMMITTEES Directors
Mrs. Neera Saggi, Non-Executive Independent Director of the Company, on completion of her second term, ceased to be a Director of the Company with effect from 1 st October, 2023. The Board of Directors placed on record its sincere appreciation of the valuable contributions made by Mrs. Neera Saggi during her long association with the Company as Independent Director since October 2014.
Taking note of the retirement of Mrs. Saggi, the Board appointed Ms. Smita Mankad as Additional Director (Non Executive & Independent) with effect from 1st August, 2023 and subsequently the shareholders of the Company also approved her appointment as Independent Director for a period of 5 years effective 1st August, 2023 through postal ballot.
In terms of Section 152 of the Companies Act, 2013, Mr. Harish Chavan and Mr. Puneet Renjhen shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.
Independent Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). Further, the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test as per the provisions of Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a system has been put in place to carry out an annual performance evaluation of the Board, its Committees and individual Directors. Criteria for performance evaluation is covered in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed policy on appointment of Directors and Senior Management and policy for remuneration of the Directors, KMP and other employees. These policies are available at https://www.swarajenterprise.com/policies. The Remuneration Policy is also covered in the Corporate Governance Report.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, four Meetings of Board and four meetings of the Audit Committee were convened and held. The details are covered in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
The Independent Directors of the Company meet at least once in every financial year without the presence of Non-Independent Directors, Executive Director and any other management personnel. The meeting(s) is conducted in a manner to enable the Independent Directors to discuss matter pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, assess the quality, quantity and timeliness of flow of information between the Company''s management and the Board that is necessary for the Board to effectively and reasonably perform their duties. During the year, one meeting of Independent Directors was held on 27th February, 2024.
The 37th Annual General Meeting of the Company was held on 28th July, 2023.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on representations received from the Operating Management, and after due enquiry, confirm that:
a) in the preparation of Annual Accounts for the financial year ended 31 st March, 2024, the applicable accounting standards have been followed;
b) in the selection of accounting policies, consulted the Statutory Auditors and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2024 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) adequate Internal Financial Controls to be followed by the Company have been laid down and such Internal Financial Controls were operating effectively during the Financial Year ended 31st March, 2024;
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively throughout the Financial Year ended 31 st March, 2024.
The Audit Committee of the Company at the beginning of financial year 2023-24 was comprising 5 Directors viz. Mr. Dileep C. Choksi (Chairman of the Committee), Mrs. Neera Saggi, Mr. S. Nagarajan, Mr. Nikhilesh Panchal and Mr. Puneet Renjhen. Consequent to the retirement of Mrs. Saggi as Independent Director on 30th September, 2023, Ms. Smita Mankad was inducted as Member of the Audit Committee in place of Mrs. Saggi with effect from 1st October, 2023. In the current composition of the Audit Committee, except Mr. Puneet Renjhen, all the Members of the Committee are Independent Directors. All the Members of the Committee possess strong accounting and financial management knowledge.
The Company Secretary of the Company is the Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the Board.
Corporate Governance
A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has put in place anti sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy is gender neutral. Internal Complaints Committee (ICC) has been set up to redress the complaints received, if any, regarding sexual harassment.
During the year, one complaint was received and resolved by the ICC by taking appropriate action as per the provisions of the aforesaid Act.
Risk Management
The Risk Management Committee of the Company at the beginning of financial year 2023-24 was comprising 3 Directors viz. Mrs. Neera Saggi, Non-Executive Independent Director (Chairperson of the Committee), Mr. Harish Chavan, Non-Executive Non-Independent Director and Mr. Giju Kurian, Whole Time Director & CEO. Consequent to the retirement of Mrs. Saggi as Independent Director on 30th September, 2023, Mr. Nikhilesh Panchal, Non-Executive Independent Director, was inducted as Member & Chairman of the Risk Management Committee in place of Mrs. Saggi with effect from 1 st October, 2023. The other details and terms of reference of the Committee are covered under the Corporate Governance Report which forms part of the Annual Report. In accordance with the requirement of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.
Key Managerial Personnel (KMP)
During the financial year under review, there was no change in Key Managerial Personnel (KMP) of the Company and the following have been designated as the KMPs of the Company in accordance with Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Mr. Giju Kurian, Whole Time Director & Chief Executive Officer
Mr. Mahesh Gupta, Chief Financial Officer
Mr. Rajesh K. Kapila, Company Secretary
Employees'' Stock Option Scheme
The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees'' Stock Option Scheme-2015 ("the Scheme") of the Company which gets covered under the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations 2021"). Pursuant to the said Scheme, the Nomination and Remuneration Committee during FY 2023-24 have granted 1409 options to eligible employee and allotted 1339 equity shares against the vesting. No employee has been issued stock options during the year, equal to or exceeding 1 % of the issued capital of the Company at the time of grant. Information as required under the SBEB Regulations is provided in the Annual Accounts which has been uploaded on the Company''s website and can be accessed at the web-link https://www.swarajenterprise.com/annualreports
Industrial Relations
Industrial relations remained cordial throughout the year under review.
Particulars of Employees
The statement of Disclosure of Remuneration 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 is annexed herewith as "Annexure C". Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report and in terms of the provisions of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Shareholders excluding the aforesaid statement. Any Shareholder interested in obtaining such details may write to the Company Secretary of the Company and the same will be made available during 21 days before the Annual General Meeting.
Safety, Health and Environmental Performance
Your Company''s commitment towards Safety, Occupational Health and Environment is being continuously enhanced. The Company encourages involvement of all its employees in activities related to safety, including promotion of safety standards. This is also to ensure sustainable business growth. The Company has a well-established Safety, Occupational Health and Environmental Policy which inter alia ensures safety of public, employees, plant and equipment by ensuring compliance with all statutory rules and regulations on regular basis. During the year, no major accident has occurred. Your Company also imparts training to its employees as per the predefined training calendar, carries out statutory safety audits of its facilities as per legal requirement and promotes eco-friendly activities.
The Company''s plant is certified under OHSAS 45001:2018 and EMS ISO 14001:2015.
Statutory Auditors and Auditors'' Report
M/s B.K. Khare & Co., Chartered Accountants (ICAI Firm Registration Number 105102W), were reappointed as the Statutory Auditors of the Company for the second term to hold office for another term of 5 years from the conclusion of the 36th Annual General Meeting ("AGM") held on 25th July, 2022 until the conclusion of the 41st AGM of the Company to be held in the year 2027.
The Report given by the Auditors on the financial statements of the Company for the financial year 2023-24 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their Report.
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure D". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.
Further, pursuant to SEBI Circular dated 8th February 2019, as amended, read with regulation 24A of the Listing Regulations and Circulars issued by Stock Exchanges in this regard, M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) has issued the Annual Secretarial Compliance Report for FY 2023-24 confirming compliance with all applicable SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report is available on the Company''s website on https://www.swarajenterprise.com/DisclosureunderReg30andOthers.
The Company is maintaining cost records as prescribed under the provisions of Section 148(1) of the Companies Act, 2013. The Board, on the recommendation of Audit Committee, had appointed M/s SDM & Associates, Cost Accountants (Firm Registration Number 000281), as Cost Auditor for conducting the audit of cost records of the Company for the Financial Year 2024-25 under Section 148 of the Companies Act, 2013. M/s SDM & Associates have confirmed that their appointment is within the limits of Section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141 (3) and proviso to Section 148(3) read with Section 141 (4) of the Companies Act, 2013.
The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to M/s SDM & Associates, Cost Auditors is included in the Notice convening the Annual General Meeting.
J. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS Corporate Social Responsibility (CSR)
Keeping with Company''s core value of Good Corporate Citizenship, your Company is committed to its social responsibility by taking various initiatives that would benefit society. In line with the Company''s CSR Policy and CSR thrust areas, your Company''s CSR efforts continue to be directed towards education, including vocational skills training, public health, environment and community welfare. Most of the activities, particularly relating to education, skill learning and health, being planned by giving due attention to women as key beneficiaries.
Under education and vocational training initiative to support the youth to get suitable earning opportunities, your Company imparted training through various short-term courses to more than 250 students at Company''s Skill Development Centre and Govt. ITI in association with State Govt. Further, the Company provided 31 engines to the nearby ITIs which benefitted more than 1000 students of mechanical wing for their practical training.
On Public health front, the Company with the support of Homi Bhabha Cancer Hospital and Research Centre covered ~2600 females for Mammography test. Besides this, Company organized various medical camps and covered around 3000 people and also provided medical equipments & material to the premier Govt. Institutions for the welfare of the community.
Women empowerment is also one of the core focus areas for the Company. Under this initiative called "Prerna", various trainings were organized to empower women farmers through integrated rural development programme. With a view to provide and promote innovative farm practice knowledge & technology, the Company extended necessary support to 600 women farmers through 40 Self Help Groups (SHGs). Your Company was also awarded with the prestigious "Economic Times (ET) Ascent National Award in CSR initiative on women empowerment & making special children earn their livelihood".
In order to contribute towards a clean environment, the Company continued its Swachh Bharat activity in nearby adopted villages for collection of door-to-door garbage, cleanliness of public utilities, and sapling plantation at various locations. Other activities include improvement in basic infrastructure at ITIs/Polytechnics, distribution of the sanitary napkin through already installed vending machines, refurbishing of washrooms at nearby Govt. schools, development of sensory garden at Government Rehabilitation Institute for Intellectual Disabilities, celebration of festivals with under privileged, public awareness camps for road safety and pollution etc.
Further, in compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company''s Corporate Social Responsibility (CSR) Committee at the beginning of the year was comprising of Mr. S. Nagarajan (Chairman), Mr. Nikhilesh Panchal, Mr. Harish Chavan and Mr. Giju Kurian. During the year, the Committee was reconstituted with effect from 1st October, 2023 by inducting Ms. Smita Mankad, an Independent Director, as Member of the Committee in place of Mr. Nikhilesh Panchal. The Annual Report on CSR activities is annexed as "Annexure E" to this report.
Sustainability Initiative
Your Company is conscious of its responsibility towards preservation of natural resources and continuously taking various initiatives to reduce the consumption of electricity and water. As required under Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report of your Company in the prescribed format is available as a separate section as "Annexure F" and forms part of this Annual Report.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars in respect of the above activities stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure G".
K. SECRETARIAL Share Capital
Consequent to allotment of 1339 equity shares of Rs. 10/- each to eligible employees during the year against the exercise of the options vested to them under the Company''s Employees'' Stock Option Scheme-2015, the Paid-up Equity Share Capital of the Company as on 31st March, 2024 stood at 1,21,47,255 equity shares of Rs. 10/- each fully paid up (previous year -1,21,45,916).
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on 31 st March, 2024 is available on the Company''s website on https://www.swarajenterprise.com/annualreports
Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not extended any loans, given guarantees or provided securities or made investments which would be covered by Section 186 of the Companies Act, 2013.
Deposits
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has not made any loans / advances and investment in its own shares, associates, etc. during the year. Compliance with Secretarial Standards on Board and General Meetings
During the Financial Year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Change in the Nature of Business
There has been no change in the nature of business of the Company during the year.
The Company is not paying any commission to the Whole Time Director(s). However, Whole Time Director(s) is eligible for grant of Stock Options of the Company, subject to approval of the Nomination and Remuneration Committee. Further, the Whole Time Director of the Company does not draw any commission or remuneration from its Holding Company.
The Company does not have any subsidiary or joint venture company.
There was no revision of financial statements and Board''s Report of the Company during the year under review.
During the year, the Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).
The Company has no borrowings, and hence the requirement of providing 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 is not applicable.
Your Directors further state that no disclosure or reporting is required in respect of the following items as there were no transactions / events happened on these items during the year under review:
1. issue of equity shares with differential voting rights or sweat equity.
2. raising of funds through public issue, rights issue, preferential issue and qualified institutional placement.
3. significant or material orders passed by the Regulators / Courts / T ribunal which impact the going concern status of the Company and its future operations.
4. voting rights which are not directly exercised by the employees in respect of shares for the subscription / purchase for which loan was given by the Company (as there is no scheme pursuant to which such person can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013).
5. fraud reporting by the auditors.
Your Directors take this opportunity to acknowledge the contributions of all the stakeholders and are grateful for the cooperation of various Government Authorities, excellent support received from the Shareholders, Banks and other Business Associates. The Directors also recognise and appreciate the hard work and efforts put in by all the employees and their continued contribution to the Company.
Mar 31, 2023
The Directors present their 37th Annual Report together with Audited Accounts for the financial year ended 31st March, 2023.
A. FINANCIAL RESULTS AND OPERATIONAL REVIEW :
(Rs. in Crores)
|
Year Ended 31st March, 2023 |
Year Ended 31st March, 2022 |
|
|
Net Operating Revenue |
1421.82 |
1138.15 |
|
Profit before Other Income, Depreciation, Finance Charges, Exceptional items and Tax |
186.41 |
155.38 |
|
Other Income |
11.95 |
9.66 |
|
Profit before Depreciation, Finance Cost, Exceptional items and Tax |
198.36 |
165.04 |
|
Finance Cost |
0.08 |
0.08 |
|
Depreciation and Amortisation Expense |
18.54 |
18.10 |
|
Profit before Exceptional Items & Tax |
179.74 |
146.86 |
|
Exceptional Items |
- |
- |
|
Profit Before Tax |
179.74 |
146.86 |
|
Tax Provision |
||
|
- Current |
47.50 |
37.89 |
|
- Deferred |
(1.37) |
(0.50) |
|
Profit After Tax |
133.61 |
109.47 |
|
Other Comprehensive Income (net of Tax) |
(0.09) |
(0.84) |
|
Total Comprehensive Income |
133.52 |
108.63 |
After facing the challenges that emerged from the COVID-19 pandemic for two consecutive years, fiscal 2023 though was free from the pandemic, but the Russia-Ukraine conflict posed another threat to the world, which led to a worldwide surge in inflation and a hike in interest rates. At the same time, as the country dealt effectively with the pandemic and related issues, the Indian economy remained in a growth trajectory during fiscal 2023. The agricultural sector continued to perform well, and the Indian tractor industry, which the Company serves, touched its new peak of 9,45,300 units in FY 2023 by crossing the 9 lakh mark for the first time. This has also facilitated the Company to achieve its ever best all-round performance by posting the highest ever engine sales volume, revenue and profit during the financial year 2022-23.
In the above backdrop, the Company''s engine sales volume grew by 17.3% over the previous year, which stood at 1,37,005 units (previous year 1,16,811 units). Reflecting the same, net operating revenue reached Rs. 1421.82 crores as against Rs. 1138.15 crores of previous year. While the Operating profit at Rs. 186.41 crores as against the previous year''s Rs. 155.38 crores grew by 20.0%, Profit before tax at Rs. 179.74 crores registered a growth of 22.4% over the previous year''s Rs. 146.86 crores. As a result, the Company posted its highest ever Profit after tax of Rs. 133.61 crores (previous year Rs. 109.47 crores), translated into Basic Earning Per Share of Rs. 110.02 (previous year - Rs. 90.17). The total comprehensive income (net of tax) stood at Rs. 133.52 crores against previous year''s Rs. 108.63 crores - up 22.9%.
During the year, the Company has announced its plan to enhance the capacity to 1,80,000 engines per annum, which has now been further revised to 1,95,000 engines annually, to cater the expected customer demand in near future. The total projected outlay for the same would be financed through internal generations/surplus available with the Company.
On 27th September, 2022, Kirloskar Industries Limited (KIL), one of the promoters of the Company, sold its entire equity stake of 21,14,349 shares, representing 17.41 % of the paid-up equity share capital of the Company to Mahindra & Mahindra Limited (M&M) through inter-se transfer amongst the promoters. With this additional acquisition, M&M equity stake in the Company now stands at 52.13%. Consequently, the Company also became the subsidiary of M&M. The association of Kirloskar Industries Limited, then Kirloskar Oil Engines Limited, with the Company was from the very inception and the Directors acknowledged the role of Kirloskar in this long and remarkable journey of the Company.
No material changes and commitments which could affect your Company''s financial position for FY 2022-23 have occurred between the end of the financial year of your Company and date of this report.
The fund position of the Company remained comfortable throughout the year under review. The Company, after meeting the capital expenditure & working capital requirements to support operations, has earned an income of Rs. 12.56 crores (previous year - Rs. 9.29 crores) on its surplus funds.
Your Directors are pleased to recommend an equity dividend of Rs. 92.00 per share of the face value of Rs. 10.00 for the financial year ended 31st March, 2023 (previous year - Rs. 80.00 per share).
If approved by the Shareholders at the ensuing Annual General Meeting, the above equity dividend will be paid to those shareholders whose names shall appear in the Register of Members as on the Book Closure date. The total equity dividend outgo for the financial year 2022-23 will absorb a sum of Rs. 111.74 crores (previous year - Rs. 97.16 crores). Further, the Board of your Company has decided not to transfer any amount to the General Reserves for the year under review.
Dividend Distribution Policy
The Board approved Dividend Distribution Policy containing the parameters mentioned in Regulation 43A(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same is attached as "Annexure A" and forms part of this Annual Report.
The same has also been hosted on the website of the Company and can be assessed at the web-link https:// swarajenterprise.com/policies
With the increase in crop output, Government support for increase in MSP for major crops, good water reservoir levels and increase in wages under MGNREGA scheme which will help improve the financial security of rural households, it is expected that these factors augur well to sustain the tractor demand.
B. HOLDING / ASSOCIATE COMPANY
Consequent to the acquisition of additional 21,14,349 equity shares, representing 17.41 % of the paid-up equity share capital of the Company, by Mahindra & Mahindra Limited (M&M) from Kirloskar Industries Limited on 27th September, 2022, M&M became the Holding Company of Swaraj Engines Limited from the aforesaid date. With this additional acquisition, M&M now holds 63,31,141 equity shares representing 52.13% of the paid-up equity share capital of the Company.
Prior to the above additional acquisition of equity shares, the Company was an Associate Company of M&M.
C. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP system also help to strengthen the processes related to segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records.
D. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms part of this Annual Report.
All related party transactions that were entered during the financial year 2022-23 were in the ordinary course of the business and were on arm''s length basis. All such related party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the transactions which cannot be foreseen and the same are subsequently shared with Audit Committee on quarterly basis. The policy on materiality of and dealing with related party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is https://www.swarajenterprise.com/policies. The disclosure of material related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed as "Annexure B" to this report.
F. BOARD AND COMMITTEES Directors
Mr. Sudhir Mankad, Non-Executive Independent Director and Chairman of the Board of Directors of the Company, on completion of his second term, ceased to be a Director of the Company from the closing business hours on 30th July, 2022. The Board of Directors placed on record its deep sense of gratitude for Mr. Sudhir Mankad for his inspirational leadership and valuable guidance for nurturing the organization to its present position of eminence. Taking note of the completion of Mr. Mankad''s tenure, Mr. Rajesh Jejurikar was appointed as the Chairman of the Company effective 31 st July, 2022.
In view of the organizational changes at Mahindra & Mahindra (M&M), Mr. S. Durgashankar decided to step down from his position as Non-Executive Non-Independent Director of the Company with effect from the closing business hours of 27th April, 2022. The Board placed on record its sincere appreciation of the significant contributions made by Mr. Durgashankar during his association with the Company as Director.
In the backdrop of selling its entire equity stake in the Company by Kirloskar Industries Limited, Mr. R.R. Deshpande and Mr. Vijay Varma also stepped down from the Directorship of the Company with effect from 3rd October, 2022. The Board of Directors placed on record its sincere appreciation of the significant contributions made by them during their long association with the Company.
Upon completing his tenure as Whole Time Director & Chief Executive Officer on 31st July, 2022, Mr. M.S. Grewal also ceased to be a Director of the Company, effective from 1 st August, 2022. Your Board has placed on record its appreciation of the notable contributions made by Mr. Grewal during his tenure as Director & CEO of the Company. Mr. Giju Kurian, who was appointed as Chief Executive Officer-Designate with effect from 1st May, 2022, was then appointed as Whole Time Director & Chief Executive Officer of the Company for a period of 3 years effective 1st August, 2022.
Further, the Members of the Company in the Annual General Meeting held on 25th July, 2022 have also accorded their approval to the appointments of Mr. S. Nagarajan and Mr. Nikhilesh Panchal as Independent Directors of the Company for a period of 5 years effective 31st July, 2022.
Mr. Harish Chavan, who earlier in view of the reconstitution of the Company''s Board and to enable maintaining an optimal and requisite balance of Executive, Non-Executive and Independent Directors, stepped down from the Directorship of the Company with effect from 31st July, 2022, was re-inducted as Non-Executive Non-Independent Director effective 3rd October, 2022. Further, Mr. Puneet Renjhen was also inducted as Non-Executive Non-Independent Director of the Company with effect from 3rd October, 2022.
In terms of Section 152 of the Companies Act, 2013, Mr. Rajesh Jejurikar and Mr. Giju Kurian shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.
Independent Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). Further, the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test as per the provisions of Rule 6(4) of Companies (Appointment and Qualification of Directors) Rules, 2014.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a system has been put in place to carry out an annual performance evaluation of the Board, its Committees and individual Directors. Criteria for performance evaluation is covered in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on appointment of Directors and Senior Management and their remuneration. The Remuneration Policy is covered in the Corporate Governance Report.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, five Meetings of Board and four meetings of the Audit Committee were convened and held. The details are covered in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
The Independent Directors of the Company meet at least once in every financial year without the presence of Non-Independent Directors, Executive Director and any other management personnel. The meeting(s) is conducted in a manner to enable the Independent Directors to discuss matter pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, assess the quality, quantity and timeliness of flow of information between the Company''s management and the Board that is necessary for the Board to effectively and reasonably perform their duties. During the year, one meeting of Independent Directors was held on 20th February, 2023.
The 36th Annual General Meeting of the Company was held on 25th July, 2022.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on representations received from the Operating Management, and after due enquiry, confirm that:
a) in the preparation of Annual Accounts for the financial year ended 31 st March, 2023, the applicable accounting standards have been followed;
b) in the selection of accounting policies, consulted the Statutory Auditors and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2023 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) adequate Internal Financial Controls to be followed by the Company have been laid down and such Internal Financial Controls were operating effectively during the Financial Year ended 31st March, 2023;
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively throughout the Financial Year ended 31 st March, 2023.
The Audit Committee of the Company at the beginning of financial year 2022-23 was comprising 4 Directors viz. Mr. Dileep C. Choksi (Chairman of the Committee), Mr. Sudhir Mankad, Mr. S. Durgashankar and Mrs. Neera Saggi. Consequent to his resignation from the Directorship, Mr. Durgashankar also ceased to be a Member of the Audit Committee with effect from 28th April, 2022. Further, due to the changes in the Board during the year, the Audit Committee was reconstituted with effect from 31st July, 2022 with Mr. Dileep C. Choksi, Chairman, Mrs. Neera Saggi, Mr. S. Nagarajan, Mr. Nikhilesh Panchal and Mr. Rajesh Jejurikar as its Members. Thereafter, with effect from 3rd October, 2022, Mr. Puneet Renjhen became the member of the Audit Committee in place of Mr. Rajesh Jejurikar. In the current composition of the Audit Committee, except Mr. Puneet Renjhen, all the Members of the Committee are Independent Directors. All the Members of the Committee possess strong accounting and financial management knowledge.
The Company Secretary of the Company is the Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the Board.
G. CORPORATE GOVERNANCE Corporate Governance
A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has put in place anti-sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy is gender neutral. Internal Complaints Committee has been set up to redress the complaints received, if any, regarding sexual harassment. During the year, no complaint was received.
Risk Management
The Risk Management Committee of the Company currently comprises 3 Directors viz. Mrs. Neera Saggi - Non-Executive Independent Director (Chairperson of the Committee), Mr. Harish Chavan - Non-Executive Non-Independent Director and Mr. Giju Kurian, Whole Time Director & CEO. Prior to this, till 31st July, 2022, the Committee was comprised of Mrs. Neera Saggi - Non-Executive Independent Director (Chairperson of the Committee), Mr. Vijay Varma - Non-Executive Non-Independent Director and Mr. M.S. Grewal, Whole Time Director & CEO. Mr. Giju Kurian became the member of the Risk Management Committee with effect from 1 st August, 2022 in place of Mr. M.S. Grewal and Mr. Harish Chavan with effect from 3rd October, 2022 in place of Mr. Vijay Varma. The other details and terms of reference of the Committee are covered under the Corporate Governance Report which forms part of the Annual Report. In accordance with the requirement of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.
Key Managerial Personnel (KMP)
During the financial year under review, the following officers of the Company have been designated as the Key Managerial Personnel (KMP) in accordance with Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Mr. M.S. Grewal, Whole Time Director & Chief Executive Officer (upto 31st July, 2022)
Mr. Giju Kurian, Whole Time Director & Chief Executive Officer (w.e.f. 1st August, 2022)
Mr. Mahesh Gupta, Chief Financial Officer Mr. Rajesh K. Kapila, Company Secretary
There was no change in the KMPs during FY 2022-23, except that Mr. M.S. Grewal, who upon completion of his tenure on 31st July, 2022, ceased to be the Whole Time Director & Chief Executive Officer of the Company from 1st August, 2022 and in his place, Mr. Giju Kurian, who was earlier appointed as Chief Executive Officer-Designate with effect from 1st May, 2022, was appointed as Whole Time Director & Chief Executive Officer of the Company from 1 st August, 2022.
Employees'' Stock Option Scheme
The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees'' Stock Option Scheme-2015 ("the Scheme") of the Company which gets covered under the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations 2021"). Pursuant to the said Scheme, the Nomination and Remuneration Committee during FY 2022-23 have granted 1647 options to eligible employee and allotted 1920 equity shares against the vesting. No employee has been issued stock options during the year, equal to or exceeding 1 % of the issued capital of the Company at the time of grant. Information as required under the SBEB Regulations is provided in the Annual Accounts which has been uploaded on the Company''s website and can be accessed at the web-link https://swarajenterprise.com/annualreports
Industrial relations remained cordial throughout the year under review.
Particulars of Employees
The statement of Disclosure of Remuneration 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 is annexed herewith as "Annexure C". Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report and in terms of the provisions of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Shareholders excluding the aforesaid statement. Any Shareholder interested in obtaining such details may write to the Company Secretary of the Company and same will be made available during 21 days before the Annual General Meeting.
Safety, Health and Environmental Performance
Your Company''s commitment towards Safety, Occupational Health and Environment is being continuously enhanced. The Company encourages involvement of all its employees in activities related to safety, including promotion of safety standards. This is also to ensure sustainable business growth. The Company has a well-established Safety, Occupational Health and Environmental Policy which inter alia ensures safety of public, employees, plant and equipment by ensuring compliance with all statutory rules and regulations on regular basis. During the year, no major accident has occurred. Your Company also imparts training to its employees as per the predefined training calendar, carries out statutory safety audits of its facilities as per legal requirement and promotes eco-friendly activities.
The Company''s plant is certified under OHSAS 45001:2018 and EMS ISO 14001:2015.
Statutory Auditors and Auditors'' Report
M/s B.K. Khare & Co., Chartered Accountants (ICAI Firm Registration Number 105102W), upon completion of their first term of 5 years, were reappointed as the Statutory Auditors of the Company to hold office for another term of 5 years from the conclusion of the 36th Annual General Meeting ("AGM") held on 25th July, 2022 until the conclusion of the 41st AGM of the Company to be held in the year 2027.
The Report given by the Auditors on the financial statements of the Company for the financial year 2022-23 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their Report.
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure D". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.
The Company is maintaining cost records as prescribed under the provisions of Section 148(1) of the Companies Act, 2013. The Board, on the recommendation of Audit Committee, had appointed M/s SDM & Associates, Cost Accountants (Firm Registration Number 000281), as Cost Auditor for conducting the audit of cost records of the Company for the Financial Year 2023-24 under Section 148 of the Companies Act, 2013. M/s SDM & Associates have confirmed that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141 (3) and proviso to Section 148(3) read with Section 141 (4) of the Companies Act, 2013.
The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to M/s SDM & Associates, Cost Auditors is included in the Notice convening the Annual General Meeting.
J. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS Corporate Social Responsibility (CSR)
Keeping with Company''s core value of Good Corporate Citizenship, your Company is committed to its social responsibility by taking various initiatives that would benefit society. In line with the Company''s CSR Policy and CSR thrust areas, your Company''s CSR efforts continue to be directed towards education, including vocational skills training, public health, environment and community welfare.
Under education and vocational training initiative to support the youth to get suitable earning opportunities, your Company provided necessary training at Company''s Skill Development Centre and Govt. ITI in association with State Govt.
On Public health front, the Company continued the facility of Mobile Medical Care in collaboration with GVK EMRI (MMU) and conducted 214 OPDs in the nearby villages covering around 10,700 people, out of which 60% were female patients. Besides this, Company also provided medical equipment & material to the premier Govt. Institutions and local authorities.
Women empowerment is also one of the core focus areas for the Company and under the initiative called "Prerna", various trainings were organized to empower rural agriculture farming women through integrated rural development programme to provide and promote innovative farm practice knowledge & technology and also extended necessary support to start of Self Help Groups (SHGs). Recognizing the efforts, your Company was also awarded with the prestigious "Economic Times (ET) Ascent National Award in CSR initiative - Women Empowerment".
In order to contribute towards a clean environment, the Company continued its Swachh Bharat activity in nearby adopted villages for collection of door-to-door garbage, cleanliness of public utilities, and sapling plantation at various locations. Other activities include improvement in basic infrastructure at ITIs/Polytechnics and providing engines for the on-job training, distribution of the sanitary napkin through already installed vending machines, playground development at nearby schools, organizing medical and blood donation camps, celebration of festivals with under-privileged, public awareness camps for road safety and pollution etc.
Further, in compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company''s Corporate Social Responsibility (CSR) Committee at the beginning of the year was comprising of Mr. Sudhir Mankad (Chairman), Mr. Vijay Varma, Mr. Harish Chavan and Mr. M.S. Grewal. During the year, while Mr. Sudhir Mankad, Mr. Vijay Varma and Mr. Harish Chavan ceased to be Members of CSR Committee with effect from 31st July, 2022, Mr. M.S. Grewal ceased to be its Member with effect from 1st August, 2022. In their places, Mr. S. Nagarajan, Mr. R.R. Deshpande and Mr. Nikhilesh Panchal became Members of the Committee with effect from 31st July, 2022 and Mr. Giju Kurian from 1st August, 2022. Thereafter, Mr. R.R. Deshpande also ceased to be a Member of CSR Committee with effect from 3rd October, 2022 and in his place, Mr. Harish Chavan rejoined as Director and Member of the Committee from the said date. Currently, Mr. S. Nagarajan (Chairman), Mr. Nikhilesh Panchal, Mr. Harish Chavan and Mr. Giju Kurian are the Members of the CSR Committee of the Company. The Annual Report on CSR activities is annexed as "Annexure E" to this report.
Sustainability Initiative
Your Company is conscious of its responsibility towards preservation of natural resources and continuously taking various initiatives to reduce the consumption of electricity and water. As required under Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report of your Company in the prescribed format is available as a separate section as "Annexure F" and forms part of this Annual Report.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars in respect of the above activities stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure G".
Share Capital
Consequent to allotment of 1920 equity shares of Rs. 10/- each to eligible employees during the year against the exercise of the options vested to them under the Company''s Employees'' Stock Option Scheme-2015, the Paid-up Equity Share Capital of the Company as on 31st March, 2023 stood at 1,21,45,916 equity shares of Rs. 10/- each fully paid up (previous year -1,21,43,996).
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on 31 st March, 2023 is available on the Company''s website on https://swarajenterprise.com/annualreports
Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not extended any loans, given guarantees or provided securities and made investments except placing corporate deposits as shown in Note 2.5 to the Financial Statements.
Deposits
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has not made any loans / advances and investment in its own shares, associates, etc. during the year. Compliance with Secretarial Standards on Board and General Meetings
During the Financial Year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Change in the Nature of Business
There has been no change in the nature of business of the Company during the year.
The Company is not paying any commission to the Whole Time Director(s). However, Whole Time Director(s) is eligible for grant of Stock Options of the Company, subject to approval of the Nomination and Remuneration Committee. Further, the Whole Time Director of the Company does not draw any commission or remuneration from its Holding Company.
The Company does not have any subsidiary or joint venture company.
There was no revision of financial statements and Board''s Report of the Company during the year under review.
During the year, the Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).
The Company has no borrowings, and hence the requirement of providing 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 is not applicable.
Your Directors further state that no disclosure or reporting is required in respect of the following items as there were no transactions / events happened on these items during the year under review:
1. issue of equity shares with differential voting rights or sweat equity.
2. raising of funds through public issue, rights issue, preferential issue and qualified institutional placement.
3. significant or material orders passed by the Regulators / Courts / T ribunal which impact the going concern status of the Company and its future operations.
4. voting rights which are not directly exercised by the employees in respect of shares for the subscription / purchase for which loan was given by the Company (as there is no scheme pursuant to which such person can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013).
5. fraud reporting by the auditors.
Your Directors take this opportunity to acknowledge the contributions of all the stakeholders and are grateful for the cooperation of various Government Authorities, excellent support received from the Shareholders, Banks and other Business Associates. The Directors also recognise and appreciate the hard work and efforts put in by all the employees and their continued contribution to the Company.
Mar 31, 2022
Your Directors present their 36th Annual Report together with Audited Accounts for the financial year ended 31st March, 2022. A. FINANCIAL RESULTS AND OPERATIONAL REVIEW :
|
Net Operating Revenue |
Year Ended 31st March, 2022 1138.15 |
(Rs. in Crores) Year Ended 31st March, 2021 986.57 |
|
Profit before Other Income, Depreciation, Finance Charges, Exceptional items and Tax |
155.38 |
135.66 |
|
Other Income |
9.66 |
8.59 |
|
Profit before Depreciation, Finance Cost, Exceptional items and Tax |
165.04 |
144.25 |
|
Finance Cost |
0.08 |
- |
|
Depreciation and Amortisation Expense |
18.10 |
19.77 |
|
Profit before Exceptional Items & Tax |
146.86 |
124.48 |
|
Exceptional Items |
- |
- |
|
Profit Before Tax |
146.86 |
124.48 |
|
Tax Provision |
||
|
- Current |
37.89 |
35.95 |
|
- Deferred |
(0.50) |
(4.01) |
|
Profit After Tax |
109.47 |
92.54 |
|
Other Comprehensive Income (net of Tax) |
(0.84) |
0.05 |
|
Total Comprehensive Income |
108.63 |
92.59 |
The financial year 2021 -22 remained a challenging year as the nation faced the severe second wave of COVID-19, followed by a third wave though its intensity was not that grave. The overall scenario intermittently has posed different challenges like supply chain related issues in few pockets, timely availability of required manpower, etc. However, the Company by effectively managing all related matters, yet again able to post its highest ever yearly engines sale of 1,16,811 units and surpassed its previous best of 1,13,269 units achieved during last fiscal. The tractor industry to which the Company serves, after registering a growth during H1 of fiscal 2022, posted a sharp decline in H2 due to higher base during the corresponding period of last fiscal and ended the year with degrowth. The Company''s performance also witnessed almost the similar trend in two halves of the fiscal 2022 but was able to sustain its growth trajectory by posting an overall growth of 3% in its annual engine sales volume for FY 2021-22.
In the above backdrop, the net operating revenue for FY 2021 -22 stood at Rs. 1138.15 crores as against Rs. 986.57 crores of previous year. While the Operating profit at Rs. 155.38 crores grew by 14.5% over last year, Profit before tax at Rs. 146.86 crores registered a growth of 18.0% over last year. In the process, the Company posted its highest ever Profit after tax (before other comprehensive income) of Rs. 109.47 crores (last year Rs. 92.54 crores) translated into Basic Earning Per Share of Rs. 90.17 (previous year - Rs. 76.27).
During the year, the Company also completed its capacity expansion programme as approved by the Board and the enhanced capacity can now cater the demand of 1,50,000 engines per annum.
No material changes and commitments which could affect your Company''s financial position for FY 2021 -22 have occurred between the end of the financial year of your Company and date of this report.
The fund position of the Company remained comfortable throughout the year under review. The Company, after meeting the capital expenditure & working capital requirements to support operations, has earned an income of Rs. 9.29 crores (previous year - Rs. 8.47 crores) on its surplus funds.
Your Directors are pleased to recommend an equity dividend of Rs. 80.00 per share of the face value of Rs. 10.00 for the financial year ended 31st March, 2022 (previous year - Rs. 69.00 per share).
If approved by the Shareholders at the ensuing Annual General Meeting, the above equity dividend will be paid to those shareholders whose names shall appear in the Register of Members as on the Book Closure date. The total equity dividend outgo for the financial year 2021-22 will absorb a sum of Rs. 97.15 crores (previous year - Rs. 83.77 crores). Further, the Board of your Company has decided not to transfer any amount to the General Reserves for the year under review.
Dividend Distribution Policy
The Board of your Company in its Meeting held on 20th April, 2021 has also approved the Dividend Distribution Policy containing the parameters mentioned in Regulation 43A(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same is attached as "Annexure A" and forms part of this Annual Report.
The same has also been hosted on the website of the Company and can be assessed at the web-link https:// swarajenterprise.com/policies
With good rabi crop harvesting, increase in export of agri products and resultant better cash flow in the rural market, adequate financing availability, initial positive forecast of normal monsoon and government continued thrust on agri sector, it is expected that all these factors augur well for the tractor demand.
B. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP system also help to strengthen the processes related to segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records.
C. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms part of this Annual Report.
All related party transactions that were entered during the financial year 2021-22 were in the ordinary course of the business and were on arm''s length basis. All such related party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the transactions which cannot be foreseen and the same are subsequently shared with Audit Committee on quarterly basis. The policy on materiality of and dealing with related party
transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is https://www.swarajenterprise.com/policies. The disclosure of material related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed as "Annexure B" to this report.
E. BOARD AND COMMITTEESDirectors
In view of the organizational changes at Mahindra & Mahindra (M&M), Mr. S.Durgashankar decided to step down from his position as Non-Executive Director of the Company with effect from the closing business hours of 27th April, 2022.
In terms of Section 152 of the Companies Act, 2013, Mr. Rajesh Jejurikar and Mr. R.R.Deshpande shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.
Independent Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a system has been put in place to carry out an annual performance evaluation of the Board, its Committees and individual Directors. Criteria for performance evaluation is covered in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on appointment of Directors and Senior Management and their remuneration. The Remuneration Policy is covered in the Corporate Governance Report.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, four Meetings of Board and four meetings of the Audit Committee were convened and held. The details are covered in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
The Independent Directors of the Company meet at least once in every financial year without the presence of Non-Independent Directors, Executive Director and any other management personnel. The meeting(s) is conducted in a manner to enable the Independent Directors to discuss matter pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, assess the quality, quantity and timeliness of flow of information between the Company''s management and the Board that is necessary for the Board to effectively and reasonably perform their duties. During the year, one meeting of Independent Directors was held on 14th February, 2022.
The 35th Annual General Meeting of the Company was held on 19th July, 2021.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on representations received from the Operating Management, and after due enquiry, confirm that:
a) in the preparation of Annual Accounts for the financial year ended 31 st March, 2022, the applicable accounting standards have been followed;
b) in the selection of accounting policies, consulted the Statutory Auditors and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2022 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) adequate Internal Financial Controls to be followed by the Company have been laid down and such Internal Financial Controls were operating effectively during the Financial Year ended 31st March, 2022;
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively throughout the Financial Year ended 31 st March, 2022.
During the year ended 31 st March, 2022, the Audit Committee comprising 4 Directors viz. Mr. Dileep C. Choksi (Chairman of the Committee), Mr. Sudhir Mankad, Mr. S.Durgashankar and Mrs. Neera Saggi. Except Mr. S.Durgashankar, all the Members are Independent Directors. All the Members of the Committee possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the Board.
F. CORPORATE GOVERNANCE Corporate Governance
A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has put in place anti sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy is gender neutral. Internal Complaints Committee has been set up to redress the complaints received, if any, regarding sexual harassment. During the year, no complaint was received.
Risk Management
The Board has constituted a Risk Management Committee on 20th April, 2021 comprising 3 Directors viz. Mrs. Neera Saggi - Non Executive & Independent Director (Chairperson of the Committee), Mr. Vijay Varma - Non Executive Director and Mr. M.S.Grewal, Whole Time Director & CEO. The other details and terms of reference of the Committee are covered under the Corporate Governance report which forms part of the Annual Report. In accordance with the requirement of Regulation 17 of SeBi (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.
Key Managerial Personnel (KMP)
During the financial year under review, the following officers of the Company have been designated as the Key Managerial Personnel (KMP) in accordance with Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Mr. M.S.Grewal, Whole Time Director & Chief Executive Officer Mr. Rajinder Arora, Chief Financial Officer (upto 31 st October, 2021)
Mr. Mahesh Gupta, Chief Financial Officer (w.e.f. 1st November, 2021)
Mr. Rajesh K. Kapila, Company Secretary
There was no change in the KMPs during FY 2021-22, except that Mr. Rajinder Arora, upon his superannuation on 31st October, 2021, ceased to be Chief Financial Officer of the Company from 1 st November, 2021 and in his place, Mr. Mahesh Gupta was appointed as Chief Financial Officer of the Company with effect from 1 st November, 2021. Further, Mr. M.S.Grewal, who was earlier the Chief Executive Officer, was appointed as Whole Time Director of the Company designated as Whole Time Director & Chief Executive Officer with effect from 20th April, 2021 and continued as KMP of the Company.
Employees'' Stock Option Scheme
The Nomination and Remuneration Committee of the Board of the Directors of the Company, inter alia, administers and monitors the Employees'' Stock Option Scheme-2015 ("the Scheme") of the Company. The Scheme is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"). Pursuant to the said Scheme, the Nomination and Remuneration Committee during FY 2021 -22 have granted 633 options to eligible employees and allotted 5621 equity shares against the vesting. No employee has been issued stock options during the year, equal to or exceeding 1 % of the issued capital of the Company at the time of grant. Information as required under the SBEB Regulations is provided in the Annual Accounts which has been uploaded on the Company''s website and can be accessed at the web-link https:// swarajenterprise.com/annualreports
Industrial relations remained cordial throughout the year under review.
Particulars of Employees
The statement of Disclosure of Remuneration 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 is annexed herewith as "Annexure C". The Company had no employee who was in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31st March, 2022 or not less than Rs. 8,50,000 per month during any part of the year.
Safety, Health and Environmental Performance
Your Company''s commitment towards Safety, Occupational Health and Environment is being continuously enhanced. The Company encourages involvement of all its employees in activities related to safety, including promotion of safety standards. This is also to ensure sustainable business growth. The Company has a well-established Safety, Occupational Health and Environmental Policy which inter alia ensures safety of public, employees, plant and equipment by ensuring compliance with all statutory rules and regulations on regular basis. During the year, no major accident has occurred. Your Company also imparts training to its employees as per the predefined training calendar, carries out statutory safety audits of its facilities as per legal requirement and promotes eco-friendly activities.
The Company''s plant is certified under OHSAS 45001:2018 and EMS ISO 14001:2015.
Statutory Auditors and Auditors'' Report
The members of the Company at the 31st Annual General Meeting (AGM) held on 24th July, 2017 had appointed M/s B.K.Khare & Co., Chartered Accountants (ICAI Firm Registration Number 105102W) as the Statutory Auditors of the Company to hold office from the conclusion of 31 st AGM for the period of 5 years until the conclusion of the 36th AGM of the Company to be held in the year 2022. Accordingly, the present term of M/s B.K.Khare & Co., Chartered Accountants as Statutory Auditors is ending at the conclusion of the ensuing AGM.
In accordance with provision of Section 139 of the Companies Act, 2013 read with Rules framed thereunder, the Board of Directors of the Company on the recommendation of the Audit Committee, proposed re-appointment of M/s B.K.Khare & Co., Chartered Accountants (ICAI Firm Registration Number 105102W) as Statutory Auditors of the Company to hold office from the conclusion of ensuing 36th AGM for a term of 5 (five) consecutive years till the conclusion of 41 st aGm to be held in the year 2027. The appointment of M/s B.K.Khare & Co as the statutory auditors of the Company forms part of Notice of ensuing AGM for the approval of the Shareholders. As required under provision of Section 139(1) of the Companies Act, 2013, the Company has received consent from M/s B.K.Khare & Co for their appointment and a certificate to the effect that their reappointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Companies Act, 2013 read with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014 and that they are not disqualified for appointment as statutory auditors of the Company. The members are requested to consider the appointment of statutory auditors as aforesaid and fix their remuneration.
The Report given by the Auditors on the financial statements of the Company for the financial year 2021-22 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their Report.
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure D". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.
The Company is maintaining cost records as prescribed under the provisions of Section 148(1) of the Companies Act, 2013. The Board had appointed M/s V.Kumar & Associates, Cost Accountants (Firm Registration Number 100137), as Cost Auditor for conducting the audit of cost records of the Company for the Financial Year 2021 -22.
The Board of Directors on the recommendation of the Audit Committee, appointed M/s SDM & Associates, Cost Accountants (Firm Registration Number 000281), as the Cost Auditors of the Company for the Financial Year 2022-23 under Section 148 of the Companies Act, 2013. M/s SDM & Associates have confirmed that their appointment is within the limits of Section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141 (3) and proviso to Section 148(3) read with Section 141 (4) of the Companies Act, 2013.
The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to M/s SDM & Associates, Cost Auditors is included in the Notice convening the Annual General Meeting.
I. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS Corporate Social Responsibility (CSR)
Keeping with Company''s core value of Good Corporate Citizenship, your Company is committed to its social responsibility by taking various initiatives which would benefit the society at large. In line with the Company''s CSR Policy and CSR thrust areas, your Company''s CSR efforts continue to be directed towards education including vocational skills training, public health, environment and community welfare. Your Company continued its CSR initiative of running the Skill Development Centre in the adopted villages (Kambala & Kambali) in association with State Govt. which help the local youth for starting own venture or getting suitable placement. The coverage of the Mobile Medical Care initiative in collaboration with GVK EMRI (MMU) has increased during the year and served 11 villages covering around 22000 people, out of which 60% were the female patients. Under the Company''s initiative called "Prerna", various trainings were organized to empower rural agriculture farming women through integrated rural development programme to provide and promote innovative farm practice knowledge & technology
including training for tractor driving and start of Self Help Groups (SHGs). The Company also supported the premier Govt. Institutions and local authorities by providing medical equipment & material including to fight COVID-19 pandemic. Other activities include training and skill enhancement of the students of various Govt. ITIs/Polytechnics by supporting to improve the basic infrastructure and also provided engines for on job training. The Company also dispersed the sanitary napkin through already installed vending machines and also distributed in public at large in the nearby areas. Cleanliness work of one more pond at a local village was undertaken during the year to improve its water quality. The Company also continued its efforts towards Swachh Bharat in adopted villages, sapling plantation, organizing medical and blood donation camps, celebration of festivals with under privileged, public awareness camps for road safety and pollution etc.
Further, in compliance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company''s Corporate Social Responsibility (CSR) Committee currently comprises of Mr. Sudhir Mankad (Chairman) and Mr. Vijay Varma, Mr. Harish Chavan and Mr. M.S.Grewal as its members. During the year, in place of Mr. Rajesh Jejurikar, Mr. M.S.Grewal became the Member of the CSR Committee with effect from 20th July, 2021. The Annual Report on CSR activities is annexed as "Annexure E" to this report.
Sustainability Initiative
Your Company is conscious of its responsibility towards preservation of natural resources and continuously taking various initiatives to reduce the consumption of electricity and water. As required under Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Report of your Company in the prescribed format is available as a separate section as "Annexure F" and forms part of this Annual Report.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars in respect of the above activities stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure G".
Share Capital
Consequent to allotment of 5621 equity shares of Rs. 10/- each to eligible employees during the year against the exercise of the options vested to them under the Company''s Employees'' Stock Option Scheme-2015, the Paid-up Equity Share Capital of the Company as on 31st March, 2022 stood at 1,21,43,996 equity shares of Rs. 10/- fully paid up (previous year - 1,21,38,375).
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on 31 st March, 2022 is available on the Company''s website on https://swarajenterprise.com/annualreports
Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not extended any loans, given guarantees or provided securities and made investments except placing corporate deposits as shown in Note 2.11 to the Financial Statements.
Deposits
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has not made any loans / advances and investment in its own shares, associates, etc. during the year. Compliance with Secretarial Standards on Board and General Meetings
During the Financial Year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Change in the Nature of Business
There has been no change in the nature of business of the Company during the year.
The Company is not paying any commission to the Whole Time Director(s). However, Whole Time Director(s) is eligible for grant of Stock Options of the Company, subject to approval of the Nomination and Remuneration Committee.
The Company has no holding / subsidiary company.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions / events happened on these items during the year under review:
1. issue of equity shares with differential voting rights or sweat equity.
2. significant or material orders passed by the Regulators / Courts / T ribunal which impact the going concern status of the Company and its future operations.
3. voting rights which are not directly exercised by the employees in respect of shares for the subscription / purchase for which loan was given by the Company (as there is no scheme pursuant to which such person can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013).
4. fraud reporting by the auditors.
Your Directors take this opportunity to acknowledge the contributions of all the stakeholders and are grateful for the cooperation of various Government Authorities, excellent support received from the Shareholders, Banks and other Business Associates. The Directors also recognise and appreciate the hard work and efforts put in by all the employees and their continued contribution to the Company.
FOR AND ON BEHALF OF THE BOARD
Place : S.A.S. Nagar (Mohali) (SUDHIR MANKAD)
Date : 27th April, 2022 Chairman
Mar 31, 2018
REPORT OF THE DIRECTORS TO THE MEMBERS
The Directors present their 32nd Annual Report together with Audited Accounts for the financial year ended 31 st March, 2018.
A. FINANCIAL RESULTS AND OPERATIONAL REVIEW :
(Rs. in Crores)
|
Year Ended |
Year Ended |
|
|
31st March, 2018 |
31st March, 2017 |
|
|
Net Operating Revenue |
771.16 |
666.14 |
|
Profit before Other Income, Depreciation, Finance Charges, |
121.59 |
104.54 |
|
Exceptional items and Tax |
||
|
Other Income |
18.96 |
17.21 |
|
Profit before Depreciation, Finance Cost, Exceptional items and Tax |
140.55 |
121.75 |
|
Finance Cost |
1.01 |
0.01 |
|
Depreciation and Amortisation Expense |
16.82 |
16.28 |
|
Profit before Exceptional Items & Tax |
122.72 |
105.46 |
|
Exceptional Items |
- |
- |
|
Profit Before Tax |
122.72 |
105.46 |
|
Tax Provision |
||
|
- Current |
43.26 |
37.96 |
|
- Deferred |
(0.64) |
(133) |
|
Profit After Tax |
80.10 |
68.83 |
|
Other Comprehensive Income (net of Tax) |
(0.29) |
0.20 |
|
Total Comprehensive Income |
79.81 |
69.03 |
Performance Review
The tractor industry continued its growth journey in fiscal 2018 as well. Riding on the overall growing tractor industry scenario and resultant enhanced engine demand from its key customer - Swaraj Division of Mahindra & Mahindra Limited, FY 2017-18 was a splendid year for your Company and it has posted its highest ever engine sales volume, revenue and profit.
On the strength of higher engines sale volume of 92,022 units during FY 2017-18 (previous year - 82,297 units) - up by 11.8%, net operating revenue grew by 15.8% and reached to Rs. 771.16 crores as against Rs. 666.14 crores of previous year. With better product mix and its continued focus on cost control initiatives, the Company''s operating profit stood at Rs. 121.59 crores as against previous year''s Rs. 104.54 crores - an improvement of 16.3%. While profit before tax for the year stood at Rs. 122.72 crores (previous year - Rs. 105.46 crores), profit after tax (before other comprehensive income) of Rs. 80.10 crores (previous year - Rs. 68.83 crores) translated into Basic Earnings Per Share of Rs. 64.62 (previous year - Rs. 55.42). Total comprehensive income (net of tax) for the year stood at Rs. 79.81 crores as against Rs. 69.03 crores of previous year.
Your Company has also successfully implemented and migrated to new indirect tax regime - Goods & Services Tax (GST) -with effect from 1st July, 2017. The transition to GST was seamless by carrying out timely changes in the key systems/ processes.
Finance
The fund position of the Company remained comfortable throughout the year under review. Further, after meeting the capital expenditure & working capital requirements to support operations and also the funds utilised for buyback offer, the Company has earned an income of Rs. 18.63 crores (previous year - Rs. 16.90 crores) on surplus funds.
Dividend
Your Directors are pleased to recommend an equity dividend of Rs. 25.00 per share of the face value of Rs. 10.00 for the financial year ended 31st March, 2018. Further, keeping in view the overall fund position of the Company, the Board, over and above the said normal dividend, has also recommended a special dividend of Rs. 25.00 per share, taking the total dividend to Rs. 50.00 per share for the financial year 2017-18 (previous year - Rs. 43.00 per share).
If approved by the Shareholders at the ensuing Annual General Meeting, the above equity dividend will be paid to those shareholders whose names shall appear in the Register of Members as on the Book Closure date. The total equity dividend outgo for the financial year 2017-18, including dividend distribution tax, surcharge and education cess will absorb a sum of Rs. 73.10 crores (previous year - Rs. 64.28 crores). Further, the Board of your Company has decided not to transfer any amount to the General Reserves for the year under review.
Current Year''s Review
In the backdrop of normal monsoon forecast and Government''s thrust on agricultural and rural segments, the tractor industry is expected to maintain its growth trajectory in the current fiscal as well. With the overall positive sentiments, the engine business of your Company is also expected to move in tandem with the tractor industry.
To timely cater the customer requirements, the Company''s on-going capacity expansion programme for increasing its engine manufacturing capacity to 1,20,000 engines per annum is near completion. Considering the upcoming expected demand, the Board of Directors of your Company has approved a further capacity expansion to 1,35,000 engines per annum which like the earlier expansion programmes, will also be fully financed through the internal resources.
B. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
C. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms part of this Annual Report.
D. RELATED PARTY TRANSACTIONS
All related party transactions that were entered during the financial year 2017-18 were in the ordinary course of the business and were on arm''s length basis. All such related party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the transactions which cannot be foreseen and the same are subsequently shared with Audit Committee on quarterly basis. The policy on materiality of and dealing with related party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is (http://www.swarajenterprise.com/policies). The disclosure of material related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed herewith as "Annexure A".
E. BOARD AND COMMITTEES Directors
Shri Rajesh Jejurikar and Shri Subhash Mago joined the Company''s Board with effect from 25th April, 2017. Further, the Board also appointed Shri Subhash Mago as Whole Time Director of the Company designated as Whole Time Director & Chief Executive Officer for a period from 25th April, 2017 to 31st March, 2020. The appointments of Shri Jejurikar and Shri Mago were approved by the Members in the last Annual General Meeting held on 24th July, 2017.
Consequent upon his resignation, Shri Rajan Wadhera ceased to be a Director of the Company with effect from 24th April, 2017. Further, Shri M.N. Kaushal, upon completion of his tenure as Whole Time Director on 31st March, 2017, also ceased to be a Director of the Company with effect from 1st April, 2017. Your Board has placed on record its sincere appreciation of the significant and notable contributions made by Shri Wadhera and Shri Kaushal during their tenure as Directors of the Company.
All the Independent Directors of the Company have submitted declaration under Section 149(7) of the Companies Act, 2013 that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year.
In terms of Section 152 of the Companies Act, 2013, Shri R.R. Deshpande and Shri Vijay Varma shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a system has been put in place to carry out performance evaluation of the Board, its Committees and individual Directors. Criteria for performance evaluation is covered in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on appointment of Directors and Senior Management and their remuneration. The Remuneration Policy is covered in the Corporate Governance Report.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, five Meetings of Board and five meetings of the Audit Committee were convened and held. The details are covered in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
The Independent Directors of the Company meet at least once in every financial year without the presence of Non-Independent Directors, Executive Director and any other management personnel. The meeting(s) is conducted in a manner to enable the Independent Directors to discuss matter pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, assess the quality, quantity and timeliness of flow of information between the Company''s management and the Board that is necessary for the Board to effectively and reasonably perform their duties. During the year, one meeting of Independent Directors was held on 13th December, 2017.
The 31 st Annual General Meeting of the Company was held on 24th July, 2017.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on representations received from the Operating Management, and after due enquiry, confirm that:
a) in the preparation of Annual Accounts for the financial year ended 31 st March, 2018, the applicable accounting standards have been followed;
b) in the selection of accounting policies, consulted the Statutory Auditors and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2018 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for 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 irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) internal financial controls to be followed by the Company have been laid down, which are adequate and operating effectively;
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
Audit Committee
The Audit Committee currently comprises of the following Directors viz. Shri Dileep C. Choksi (Chairman of the Committee), Dr. T.N. Kapoor, Shri S. Durgashankar and Smt. Neera Saggi. Except Shri S. Durgashankar, all the Members are Independent Directors. All the Members of the Committee possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the Board.
F. CORPORATE GOVERNANCE Corporate Governance
A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has put in place anti-sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy is gender neutral. Internal complaints committee has been set up to redress complaints received, if any, regarding sexual harassment. During the year, no complaint was received.
Risk Management
Pursuant to the requirement of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.
G. EMPLOYEES
Key Managerial Personnel (KMP)
The following have been designated as the Key Managerial Personnel (KMP) of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Shri Subhash Mago, Whole Time Director & Chief Executive Officer Shri M.S. Grewal, Company Secretary Shri Rajinder Arora, Chief Financial Officer
Shri M.N. Kaushal, Whole Time Director ceased to be a KMP of the Company with effect from 1st April, 2017.
Employees'' Stock Option Scheme
The Nomination and Remuneration Committee of the Board of the Directors of the Company, inter alia, administers and monitors the Employees'' Stock Option Scheme-2015 ("the Scheme") of the Company. The Scheme is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations") and there have been no change in the said Scheme during the year. Pursuant to the said Scheme, the Nomination and Remuneration Committee during FY 2017-18 have granted 3571 options to eligible employee(s) and allotted 1610 shares against the vesting. No employee has been issued stock options during the year, equal to or exceeding 1 % of the issued capital of the Company at the time of grant. Information as required under the SBEB Regulations is provided in the Annual Accounts which has been uploaded on the Company''s website and can be accessed at the web-link www.swarajenterprise.com/annualrep.aspx.
Industrial Relations
Industrial relations remained cordial throughout the year under review and four year wage agreement with the workers'' union was also concluded.
Particulars of Employees
The statement of Disclosure of Remuneration 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 is annexed herewith as "Annexure B". The Company had one employee who was in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31 st
March, 2018 or not less than Rs. 8,50,000 per month during any part of the year. Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any Shareholder on request.
Safety, Health and Environmental Performance
Your Company''s commitment towards Safety, Occupational Health and Environment is being continuously enhanced. The Company encourages involvement of all its employees in activities related to safety, including promotion of safety standards. This is also to ensure sustainable business growth. The Company has a well-established Safety, Occupational Health and Environmental Policy which inter alia ensures safety of public, employees, plant and equipment by ensuring compliance with all statutory rules and regulations on regular basis. During the year, no major accident has occurred. Your Company also imparts training to its employees as per the predefined training calendar, carries out statutory safety audits of its facilities as per legal requirement and promotes eco-friendly activities.
The Company''s plant is certified under OHSAS 18001:2007 and EMS ISO 14001:2004.
H. AUDITORS
Statutory Auditors and Auditors'' Report
M/s B.K. Khare & Co., Chartered Accountants (ICAI FRN 105102W), were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 24th July, 2017, for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. Resolution for the said ratification is being moved at the ensuing Annual General Meeting.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their Report.
Secretarial Auditors
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure C". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.
Cost Auditors
Pursuant to Section 148(3) of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors on the recommendation of Audit Committee has appointed M/s V. Kumar & Associates, Cost Accountants, as the Cost Auditors of the Company for the financial year ending on 31st March, 2019. M/s V. Kumar & Associates have confirmed that their appointment, if approved, will be within the limits of Section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from disqualification specified under Section 141(3) of the Companies Act, 2013. The Audit Committee has also received a certificate from the Cost Auditors certifying their independence and armâs length relationship with the Company. As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s V. Kumar & Associates, Cost Accountants is included in the Notice convening the Annual General Meeting.
I. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS Corporate Social Responsibility
Keeping with Company''s core value of Good Corporate Citizenship, your Company is committed to its social responsibility by taking various initiatives which would benefit the society at large. During the year, your Company upgraded infrastructure and provided medical equipment at Paediatric Intensive Care Centre and Yoga Room in Advance Cardiac Centre at PGIMER, Chandigarh. Further, a Skill Development Centre was also started in the adopted villages (Kambala & Kambali) in collaboration with Govt. Industrial Training Institute, Patiala. With a purpose to provide medical care at the door step, a Mobile Medical Care facilities was also initiated and about 18 camps being organised every month since July, 2017. Further, your Company continued
its efforts towards tree plantation at various locations, organizing medical camps, celebration of festivals with under-privileged, public awareness camps for road safety and pollution etc. Your Company continued its support to the two nearby villages adopted under Swaraj Engines Swachh Bharat Integrated Sanitation Programme.
Further, in compliance of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company''s Corporate Social Responsibility (CSR) Committee currently comprises of Shri Sudhir Mankad (Chairman) and Shri Vijay Varma, Shri Rajesh Jejurikar and Shri Subhash Mago as other members. Consequent to changes in the Board of Directors during the year, the Committee was reconstituted with effect from 25th April, 2017 by inducting Shri Rajesh Jejurikar and Shri Subhash Mago as Members in place of Shri Rajan Wadhera and Shri M.N. Kaushal. The Annual Report on CSR activities is annexed herewith as "Annexure D".
Sustainability Initiative
Your Company is conscious of its responsibility towards preservation of natural resources and continuously taking various initiatives to reduce the consumption of electricity and water.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars in respect of the above activities stipulated under Section 134(3)(m) of the Companies Act 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure E".
J. SECRETARIAL
Share Capital
During the year, the Company made an offer for buyback of up to 2,94,746 fully paid-up equity shares of face value of Rs. 10/each at a price of Rs. 2,400/- per fully paid-up equity share on a proportionate basis through the tender offer process, for an aggregate amount not exceeding Rs. 70.74 crores. The buyback offer process was concluded on 26th February, 2018.
Consequent to the above buyback of its 2,94,746 equity shares by the Company, the Issued and Paid-up Share Capital of the Company as on 31st March, 2018 stood at Rs. 12.13 crores (previous year - Rs.12.42 crores).
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as "Annexure F". Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not extended any loans, given guarantees or provided securities and made investment pursuant to Section 186 of the Companies Act, 2013 except placing a deposit of Rs. 20.00 crores with Housing Development Finance Corporation Ltd.
Deposits
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has not made any loans / advances and investment in its own shares, associates, etc. during the year. Compliance with Secretarial Standards on Board and General Meetings
To ensure compliance with the provisions of applicable Secretarial Standards, proper systems have been devised by the Company and such systems are adequate and operating effectively.
General
The Company is not paying any commission to the Whole Time Director(s). However, Whole Time Director(s) is eligible for grant of Stock Options of the Company, subject to approval of the Nomination and Remuneration Committee.
The Company has no holding / subsidiary company.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions / events happened on these items during the year under review:
1. issue of equity shares with differential voting rights or sweat equity.
2. significant or material orders passed by the Regulators / Courts / Tribunal which impact the going concern status of the Company and its future operations.
3. voting rights which are not directly exercised by the employees in respect of shares for the subscription / purchase for which loan was given by the Company (as there is no scheme pursuant to which such person can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013).
4. fraud reporting by the auditors.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to acknowledge the contributions of all the stakeholders and are grateful for the cooperation of various Government Authorities, excellent support received from the Shareholders, Banks and other Business Associates. The Directors also recognise and appreciate the hard work and efforts put in by all the employees and their continued contribution to the Company.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai (SUDHIR MANKAD)
Date : 23rd April, 2018 Chairman
Mar 31, 2017
REPORT OF THE DIRECTORS TO THE MEMBERS
The Directors present their 31st Annual Report together with Audited Accounts for the financial year ended 31st March, 2017.
A. FINANCIAL RESULTS AND OPERATIONAL REVIEW :
(Rs. in Crores)
|
Year Ended |
Year Ended |
|
|
31st March, 2017 |
31st March, 2016 |
|
|
Net Operating Revenue |
666.14 |
525.91 |
|
Profit before Other Income, Depreciation, Finance Charges, |
||
|
Exceptional items and Tax |
104.68 |
73.76 |
|
Other Income |
17.18 |
16.30 |
|
Profit before Depreciation, Finance Charges, Exceptional items and Tax |
121.86 |
90.06 |
|
Finance Cost |
0.12 |
0.05 |
|
Depreciation and Amortization Expense |
16.28 |
13.80 |
|
Profit before Exceptional Items & Tax |
105.46 |
76.21 |
|
Exceptional Items |
- |
- |
|
Profit Before Tax |
105.46 |
76.21 |
|
Tax Provision |
||
|
- Current |
37.96 |
23.30 |
|
- Deferred |
(1.33) |
1.60 |
|
Profit After Tax |
68.83 |
51.31 |
|
Other Comprehensive Income (net of Tax) |
0.20 |
(0.11) |
|
Total Comprehensive Income |
69.03 |
51.20 |
Performance Review
Financial year 2016-17 turned out to be an overall good year for the Company. The tractor industry with which your Company''s business has direct linkage, posted a decent growth of 18% after witnessing de-growth in last two consecutive years. This has in turn facilitated your Company to achieve its all-time high engine sales volume of 82,297 units with a growth of 28% over last year''s sale of 64,088 units. Based on this solid increase in engine sales volume, SEL, for the first time has crossed the milestone of achieving Rs. 100 crores profit by posting a pre-tax profit of Rs. 105.46 crores.
With the increased engines sale volume, net operating revenue of your Company for the financial year 2016-17 reached Rs. 666.14 crores as against Rs. 525.91 crores for the last year. The higher sales coupled with continued focus on cost control initiatives, your Company was able to improve its operating margin by 170 basis points over last year - from 14.0% to 15.7%. Consequently, operating profit for the year stood at Rs. 104.68 crores (last year - Rs. 73.76 crores) - an improvement of 42%. Profit before tax for the year stood at Rs. 105.46 crores (previous year - Rs. 76.21 crores). While Profit after tax (before other comprehensive income) of Rs. 68.83 crores (previous year - Rs. 51.31 crores) translates into Basic Earnings Per Share of Rs. 55.42 (previous year - Rs. 41.31), the total comprehensive income (net of tax) stood at Rs. 69.03 crores against previous year''s Rs. 51.20 crores.
Taking note of the emerging demand scenario in the coming years and to timely cater the customer requirements, your Company has also finalized another capacity expansion programme to increase its capacity to 1,20,000 engines per annum from existing 1,05,000 engines per annum by the end of next fiscal. This capacity expansion will be fully financed through the internal resources.
FINANCE
The fund position of the Company remained comfortable throughout the year under review and after meeting the capital expenditure and working capital requirements to support operations, the Company has generated an income of Rs. 16.90 crores (previous year - Rs. 16.09 crores) on surplus funds.
Dividend
Your Directors are pleased to recommend an equity dividend of Rs.18.00 per share of the face value of Rs. 10 each for the financial year ended 31st March, 2017. Further, keeping in view the overall fund position of the Company, the Board, over and above the said normal dividend, has also recommended a special dividend of Rs. 25.00 per share, taking the total dividend to Rs. 43.00 per share for the financial year 2016-17 (previous year - Rs. 33.00 per share).
If approved by the Shareholders at the ensuing Annual General Meeting, the above equity dividend will be paid to those shareholders whose names shall appear in the Register of Members as on the Book Closure date. The total equity dividend outgo for the financial year 2016-17, including dividend distribution tax, surcharge and education cess will absorb a sum of Rs. 64.28 crores (previous year - Rs. 49.33 crores). Further, the Board of your Company has decided not to transfer any amount to the General Reserves for the year under review.
Current Year''s Review
With government''s continued thrust on agri sector and the forecast of normal monsoon for this year, the tractor industry is expected to maintain its growth trajectory in the current fiscal as well. In this backdrop, the engine business of your Company is also expected to benefit from industry growth.
B. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in its operating effectiveness was observed.
C. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms part of this Annual Report.
D. RELATED PARTY TRANSACTIONS
All related party transactions that were entered during the financial year 2016-17 were in the ordinary course of the business and were on arm''s length basis. There were no materially significant related party transactions made by the Company which may have a potential conflict of the interest with its Promoters, Directors, Key Managerial Personnel or other persons. All such related party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the transactions which cannot be foreseen and the same are subsequently shared with Audit Committee on quarterly basis. The policy on materiality of and dealing with related party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is (http://www.swarajenterprise.com/ policies). The disclosure of related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed herewith as "Annexure A".
E. BOARD AND COMMITTEES Directors
Consequent upon his resignation, Shri Rajan Wadhera ceased to be a Director of the Company with effect from 24th April, 2017. Further, Shri M.N. Kaushal, upon completion of his tenure as Whole Time Director on 31st March, 2017, also ceased to be a Director of the Company with effect from 1st April, 2017. Your Board has placed on record its sincere appreciation of the significant and notable contributions made by Shri Wadhera and Shri Kaushal during their tenure as Directors of the Company.
Shri Rajesh Jejurikar and Shri Subhash Mago were appointed as Additional Directors of the Company with effect from 25th April, 2017. Further, the Board has also appointed Shri Subhash Mago as Whole Time Director of the Company designated as Whole Time Director & Chief Executive Officer for a period from 25th April, 2017 to 31st March, 2020. Shri Jejurikar and Shri Mago hold office up to the date of the forthcoming Annual General Meeting. The Company has received notices under Section 160 of the Companies Act, 2013 from Member signifying intention to propose Shri Rajesh Jejurikar and Shri Subhash Mago for the office of Director at the forthcoming Annual General Meeting.
All the Independent Directors of the Company have submitted declaration under Section 149(7) of the Companies Act, 2013 that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year.
In terms of Section 152 of the Companies Act, 2013, Shri S. Durgashankar and Dr. Pawan Goenka shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a system has been put in place to carry out performance evaluation of the Board, its Committees and individual Directors. Criteria for performance evaluation is covered in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on appointment of Directors and Senior Management and their remuneration. The Remuneration Policy is covered in the Corporate Governance Report.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, four Meetings of Board and four meetings of the Audit Committee were convened and held. The details are covered in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
The Independent Directors of the Company meet at least once in every financial year without the presence of Non-Independent Directors, Executive Director and any other management personnel. The meeting(s) is conducted in a manner to enable the Independent Directors to discuss matter pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, assess the quality, quantity and timeliness of flow of information between the Company''s management and the Board that is necessary for the Board to effectively and reasonably perform their duties. During the year, one meeting of Independent Directors was held on 28th November, 2016.
The 30th Annual General Meeting of the Company was held on 26th July, 2016.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on representations received from the Operating Management, and after due enquiry, confirm that:
a) in the preparation of Annual Accounts for the financial year ended 31st March, 2017, the applicable accounting standards have been followed;
b) in the selection of accounting policies, consulted the Statutory Auditors and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for 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 irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) internal financial controls to be followed by the Company have been laid down, which are adequate and operating effectively;
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
Audit Committee
The Audit Committee currently comprises of the following Directors viz. Shri Dileep C. Choksi (Chairman of the Committee), Dr. T.N. Kapoor, Shri S. Durgashankar and Smt. Neera Saggi. Except Shri S. Durgashankar, all the Members are Independent Directors. All the Members of the Committee possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the Board.
F. CORPORATE GOVERNANCE Corporate Governance
A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.
Vigil Mechanism/Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has put in place anti sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy is gender neutral. Internal complaints committee has been set up to redress complaints received, if any, regarding sexual harassment. During the year, no complaint was received.
Risk Management
Pursuant to the requirement of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.
G. EMPLOYEES
Key Managerial Personnel (KMP)
The following have been designated as the Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Shri M.N. Kaushal, Whole Time Director (ceased w.e.f. 1st April, 2017)
Shri Subhash Mago, Chief Executive Officer (appointed w.e.f. 1 st October, 2016)
Shri M.S. Grewal, Company Secretary
Shri Rajinder Arora, Chief Financial Officer
Employees'' Stock Option Scheme
The Nomination and Remuneration Committee of the Board of the Directors of the Company, inter alia, administers and monitors the Employees'' Stock Option Scheme-2015 ("the Scheme") of the Company. The Scheme is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 and there have been no change in the said Scheme during the year. Pursuant to the said Scheme, the Nomination and Remuneration Committee during FY 2015-16 have granted 9389 options to eligible employees which will become due for exercise from FY 2017-18 onwards.
Industrial Relations
Industrial relations remained cordial throughout the year under review.
Particulars of Employees
The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as âAnnexure Bâ. Futher, there was no employee who was in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31st March, 2017 or not less than Rs. 8,50,000 per month during any part of the year.
Safety, Health and Environmental Performance
Your Company''s commitment towards Safety, Occupational Health and Environment is being continuously enhanced. The Company encourages involvement of all its employees in activities related to safety, including promotion of safety standards. This is also to ensure sustainable business growth. The Company has a well-established Safety, Occupational Health and Environmental Policy which inter alia ensures safety of public, employees, plant and equipment by ensuring compliance with all statutory rules and regulations on regular basis. During the year, no major accident has occurred. Your Company also imparts training to its employees as per the predefined training calendar, carries out statutory safety audits of its facilities as per legal requirement and promotes eco-friendly activities. Showing its commitment to improve the well-being of its employees, Medical Check-ups, both curative and preventive have been organized regularly, including educating the employees on Industrial Hygiene at the work place. The Company''s plant is certified under OHSAS 18001:2007 and EMS ISO 14001:2004.
H. AUDITORS
Statutory Auditors and Auditors'' Report
M/s Davinder S. Jaaj & Company, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting. Pursuant to Section 139 of the Companies Act, 2013, the Board of Directors on the recommendation of Audit Committee has appointed M/s B.K. Khare & Co., Chartered Accountants (ICAI FRN 105102W), as the Statutory Auditors of the Company to hold office from the conclusion of the forthcoming Annual General Meeting (AGM), until the conclusion of the fifth consecutive AGM of the Company (subject to ratification of their appointment by the Members at every AGM held after the ensuing AGM). M/s B.K. Khare & Co. have confirmed that their appointment, if approved, will be within the limits of Section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from disqualification specified under Section 141(3) of the Companies Act, 2013. The Members are requested to appoint Auditors and fix their remuneration.
The Audit Report issued by the Auditors of the Company forms part of the Annual Report and does not contain any qualification, reservation or adverse remark.
Secretarial Auditors
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. Arora & Co., Company Secretaries in practice (CP No. 993) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure C". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Cost Auditors
Pursuant to Section 148(3) of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors on the recommendation of Audit Committee has appointed M/s V. Kumar & Associates, Cost Accountants, as the Cost Auditors of the Company for the financial year ending on 31st March, 2018. M/s V. Kumar & Associates have confirmed that their appointment, if approved, will be within the limits of Section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from disqualification specified under Section 141(3) of the Companies Act, 2013. The Audit Committee has also received a certificate from the Cost Auditors certifying their independence and arms length relationship with the Company. As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s V. Kumar & Associates, Cost Accountants is included in the Notice convening the Annual General Meeting.
I. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS Corporate Social Responsibility
Keeping with Company''s core value of Good Corporate Citizenship, your Company is committed to its social responsibility by taking various initiatives which would benefit the society at large. During the year, your Company took initiatives to provide ventilator/life saving equipments to Pediatrics Intensive Care Unit (PICU) at PGIMER, Chandigarh, support for the education of special children by providing laptops to SOREM - an NGO promoted by the Govt. and dedicated to the cause of children with Mental Retardation, Cerebral Palsy and Autism, provided three hearse vans for use at PGIMER, Chandigarh and also upgraded infrastructure of Govt. School adopted by your Company at village Kambali. Further, your Company continued its efforts towards girl education, tree plantation at various locations, organizing medical camps, celebration of festivals with underprivileged, public awareness camps for road safety and pollution etc. Your Company continued its support to the two nearby villages adopted under Swaraj Engines Swachh Bharat Integrated Sanitation Programme. The Company has also contributed Rs. 50 lacs to the Prime Minister National Relief Fund.
Further, in compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company''s Corporate Social Responsibility (CSR) Committee during the year comprised of Shri Sudhir Mankad (Chairman) and S/Shri Vijay Varma, Rajan Wadhera and M.N. Kaushal as other members. Consequent to changes in the Board of Directors, the Committee has been reconstituted with effect from 25th April, 2017 by inducting Shri Rajesh Jejurikar and Shri Subhash Mago as Members in place of Shri Rajan Wadhera and Shri M.N. Kaushal. The Annual Report on CSR activities is annexed herewith as "Annexure D".
Sustainability Initiative
Your Company is conscious of its responsibility towards preservation of natural resources and continuously taking various initiatives to reduce the consumption of electricity and water.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars in respect of the above activities stipulated under Section 134(3)(m) of the Companies Act 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure E".
J. SECRETARIAL
Share Capital
The Issued and Paid-up Share Capital of the Company remained unchanged during the year and stood at Rs.12.42 crores at the end of the financial year 2016-17.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as "Annexure F". Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not extended any loans, given guarantees or provided securities and made investment pursuant to Section 186 of the Companies Act, 2013.
Deposits
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has not made any loans/advances and investment in its own shares, associates, etc. during the year. General
The Company is not paying any commission to the Whole Time Director(s). However, Whole Time Director(s) is eligible for grant of Stock Options of the Company, subject to approval of the Nomination and Remuneration Committee.
The Company has no holding/subsidiary company.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions / events happened on these items during the year under review:
1. issue of equity shares with differential voting rights or sweat equity.
2. significant or material orders passed by the Regulators / Courts / Tribunal which impact the going concern status of the Company and its future operations.
3. voting rights which are not directly exercised by the employees in respect of shares for the subscription/purchase for which loan was given by the Company (as there is no scheme pursuant to which such person can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013).
4. fraud reporting by the auditors.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to acknowledge the contributions of all the stakeholders and are grateful for the cooperation of various Government Authorities, excellent support received from the Shareholders, Banks and other Business Associates. The Directors also recognize and appreciate the hard work and efforts put in by all the employees and their continued contribution to the Company.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai (SUDHIR MANKAD)
Date : 25th April, 2017 Chairman
Mar 31, 2016
The Directors present their 30th Annual Report together with Audited
Accounts for the financial year ended 31st March, 2016.
A. FINANCIAL RESULTS AND OPERATIONAL REVIEW :
(Rs. in Crores)
Year Ended Year Ended
31st March, 2016 31st March, 2015
Net Operating Revenue 525.91 539.70
Profit before Other
Income, Depreciation,
Finance Charges,
Exceptional items and Tax 73.59 74.72
Other Income 16.30 16.31
Profit before
Depreciation, Finance
Charges, Exceptional
items and Tax 89.89 91.03
Finance Costs 0.04 0.01
Depreciation 13.80 13.20
Profit before
Exceptional/
Extraordinary
items & tax 76.05 77.82
Exceptional /
Extraordinary Items - -
Profit Before Tax 76.05 77.82
Tax Provision
- Current 23.25 26.44
- Deferred 1.60 (0.46)
Profit After Tax 51.20 51.84
Surplus - Opening
Balance after
adjustment for
carrying value of
Assets
39.50 36.99
Surplus available
for Appropriation : 90.70 88.83
Appropriations :
Proposed Dividend 40.99 40.99
Tax on Proposed Dividend 8.34 8.34
Surplus - Closing Balance 41.37 39.50
Performance Review
The financial year 2015-16 was the challenging year for your Company as
the domestic tractor industry, which has direct linkage on the
performance of your Company, registered de-growth for the second
consecutive year. However, against the industry''s declining trends,
your Company was able to sustain its engines sale volume for the year
under review by posting a sale of 64,088 units which were almost at par
with last year''s 64,595 units.
On above engines sale volume, net operating revenue for the financial
year 2015-16 reached Rs. 525.91 crores as against last year''s Rs.
539.70 crores due to change in product mix. However, with its continued
thrust on cost control initiatives, your Company was able to maintain
its profit margins both at operating and after tax level. While Profit
before tax for the year stood at Rs. 76.05 crores (previous year Rs.
77.82 crores), Profit after tax of Rs. 51.20 crores (previous year Rs.
51.84 crores) translates into Basic Earnings Per Share of Rs. 41.22
(previous year Rs. 41.74).
Further, the capacity enhancement project announced in January 2014 to
increase the annual capacity to 1,05,000 units, has been completed
during the year. With this, your Company is now geared up to meet any
future upswing in the demand.
Finance
The fund position of the Company remained comfortable throughout the
year under review and after meeting the capital expenditure and working
capital requirements to support operations, the Company has generated
an income of Rs. 16.09 crores (previous year Rs. 16.14 crores) on
surplus funds.
Dividend
Your Directors are pleased to recommend an equity dividend of Rs. 15.00
per share of the face value of Rs. 10 each for the financial year ended
31st March, 2016. Further, keeping in view the Company''s surplus cash
position, the Board, over and above the said normal dividend, has also
recommended a special dividend of Rs. 18.00 per share, taking the total
dividend to Rs. 33.00 per share for the financial year 2015-16, same as
in previous year. This dividend would be payable to those Members whose
names shall appear in the Register of Members as on Book Closure date.
The total equity dividend outgo for the financial year 2015-16,
including dividend distribution tax, surcharge and education cess will
absorb a sum of Rs. 49.33 crores (previous year Rs. 49.33 crores).
Current Year''s Review
As witnessed in the fourth quarter of last fiscal, tractor industry has
started showing pick up in the demand. The forecast of good monsoon for
this year and government''s enhanced thrust on agri sector would be
positive for the tractor industry and in this backdrop, the engine
business of your Company is also expected to move in tandem with the
industry.
B. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with
reference to financial statements, commensurate with the size, scale
and complexity of its operations. During the year, such controls were
tested and no reportable material weakness in its operating
effectiveness was observed.
C. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Company''s performance is discussed in the
Management Discussion and Analysis Report, which forms part of this
Annual Report.
D. RELATED PARTY TRANSACTIONS
All related party transactions that were entered during the financial
year 2015-16 were in the ordinary course of the business and were on
arm''s length basis. There were no materially significant related party
transactions made by the Company which may have a potential conflict of
the interest with its Promoters, Directors, Key Managerial Personnel or
other persons. All such related party transactions are placed before
the Audit Committee for approval, wherever applicable. Prior omnibus
approval for normal transactions is also obtained from the Audit
Committee for the related party transactions which are of repetitive
nature as well as for the transactions which cannot be foreseen and the
same are subsequently shared with Audit Committee on regular intervals.
The policy on materiality of and dealing with related party
transactions as approved by the Audit Committee and the Board of
Directors is uploaded on the website of the Company and the link for
the same is (http://www.swarajenterprise.com/ NCC.asp). The disclosure
of related party transactions pursuant to Section 134(3)(h) of the
Companies Act, 2013 in Form AOC-2 is annexed herewith as "Annexure A".
E. BOARD AND COMMITTEES
Directors
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed both under the Companies Act, 2013 and
Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
In terms of Section 152 of the Companies Act, 2013, Shri Vijay Varma
and Shri Rajan Wadhera shall retire by rotation at the forthcoming
Annual General Meeting and being eligible, offer themselves for
re-appointment.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, a system
has been put in place to carry out performance evaluation of the Board,
its Committees and individual Directors. Criteria for performance
evaluation is covered in the Corporate Governance Report.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration
Committee, framed a policy on appointment of Directors and Senior
Management and their remuneration. The Remuneration Policy is covered
in the Corporate Governance Report.
Board Meetings and Annual General Meeting
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the year, five meetings of Board and four meetings of
the Audit Committee were convened and held. The details are covered in
the Corporate Governance Report. The intervening gap between the
meetings was within the period prescribed under the Companies Act,
2013.
The Independent Directors of the Company meet at least once in every
financial year without the presence of Non-Independent Directors,
Executive Director and any other management personnel. The meeting(s)
is conducted in a manner to enable the Independent Directors to discuss
matter pertaining to, inter alia, review of performance of
Non-Independent Directors and the Board as a whole, assess the quality,
quantity and timeliness of flow of information between the Company''s
management and the Board that is necessary for the Board to effectively
and reasonably perform their duties. During the year, one meeting of
Independent Directors was held.
The 29th Annual General Meeting of the Company was held on 28th July,
2015.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors,
based on representations received from the Operating Management, and
after due enquiry, confirm that:
a) in the preparation of Annual Accounts for the financial year ended
31st March, 2016, the applicable accounting standards have been
followed;
b) in the selection of accounting policies, consulted the Statutory
Auditors and applied them consistently, and made judgments and
estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company as at 31st March, 2016 and
of the profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for 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 irregularities;
d) the Annual Accounts have been prepared on a going concern basis;
e) internal financial controls to be followed by the Company have been
laid down, which are adequate and operating effectively;
f) proper systems have been devised to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
Audit Committee
The Audit Committee currently comprises of the following Directors viz.
Shri Dileep C. Choksi (Chairman of the Committee), Dr. T.N. Kapoor,
Shri S. Durgashankar and Smt. Neera Saggi. Except Shri S. Durgashankar,
all the Members are Independent Directors. All the Members of the
Committee possess strong accounting and financial management knowledge.
The Company Secretary of the Company is the Secretary of the Committee.
All the recommendations of the Audit Committee were accepted by the
Board.
F. CORPORATE GOVERNANCE
Listing Agreement
The Securities and Exchange Board of India, by replacing the earlier
listing agreement, had issued SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 effective from 1st December, 2015.
Accordingly, your Company has executed fresh Listing Agreements with
BSE Limited and National Stock Exchange of India Limited.
Corporate Governance
A Report on Corporate Governance along with a Certificate from the
Auditors of the Company regarding the compliance of conditions of
Corporate Governance as stipulated under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 forms part of the Annual
Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal
with instance of fraud and mismanagement, if any. The details of the
Policy is explained in the Corporate Governance Report and also posted
on the website of the Company.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013
The Company has put in place anti sexual harassment policy in line with
the requirements of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The policy is gender
neutral. Internal complaints committee has been set up to redress
complaints received, if any, regarding sexual harassment. During the
year, no complaint was received.
Risk Management
Pursuant to the requirement of Regulation 17 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Company
is having Risk Management framework covering identification, evaluation
and control measures to mitigate the identified business risks.
G. EMPLOYEES
Key Managerial Personnel (KMP)
The following have been designated as the Key Managerial Personnel of
the Company pursuant to Sections 2(51) and 203 of the Companies Act,
2013 read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014:
Shri M.N. Kaushal, Whole Time Director
Shri M.S. Grewal, Company Secretary
Shri Rajinder Arora, Chief Financial Officer
There was no change in KMPs during the year under review.
Employees'' Stock Option Scheme
During the year, pursuant to the Employees'' Stock Option Scheme ("the
Scheme") approved by the Members in the Annual General Meeting of the
Company held on 28th July, 2015, the Nomination and Remuneration
Committee have granted 9389 options to eligible employees which will
become due for exercise in subsequent period. There was no change in
the Scheme during the year. Requisite disclosure in compliance with
SEBI (Share Based Employee Benefits) Regulations, 2014 is annexed as
"Annexure B".
Industrial Relations
Industrial relations remained cordial throughout the year under review.
Particulars of Employees
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 Companies Act, 2013, the
Report 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 the ensuing Annual General Meeting. If any Member is interested
in obtaining a copy thereof, such Member may write to the Company
Secretary in this regard.
Safety, Health and Environmental Performance
Your Company is committed towards excellence in Safety, Occupational
Health and Environment. This is also to ensure sustainable business
growth. The Company has a well-established Safety, Occupational Health
and Environmental Policy which inter alia ensures safety of public,
employees, plant and equipment by ensuring compliance with all
statutory rules and regulations on regular basis. Your Company also
imparts training to its employees as per the predefined training
calendar, carries out statutory safety audits of its facilities as per
legal requirement and promotes eco-friendly activities. Showing its
commitment to improve the well-being of its employees, Medical
Check-ups, both curative and preventive have been organized regularly,
including educating the employees on Industrial Hygiene at the work
place. The Company''s plant is certified under OHSAS 18001:2007 and EMS
ISO 14001:2004.
H. AUDITORS
Statutory Auditors and Auditors'' Report
M/s Davinder S. Jaaj & Company, Chartered Accountants, Statutory
Auditors of the Company, hold office till the conclusion of the ensuing
Annual General Meeting and being eligible, offer themselves for
re-appointment. They have expressed their willingness to act as
Auditors of the Company, if appointed, and have further confirmed that
the said appointment, if made, would be within the prescribed limits
under Section 141(3)(g) of the Companies Act, 2013 and that they are
not disqualified for re-appointment. The Members are requested to
appoint Auditors and fix their remuneration.
The Audit Report issued by the Auditors of the Company forms part of
the Annual Report and does not contain any qualification, reservation
or adverse remark.
Secretarial Auditors
Pursuant to Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company has appointed M/s A. Arora & Co., Company Secretaries in
practice (CP No. 993) to undertake the Secretarial Audit of the
Company. The Report of the Secretarial Audit is annexed herewith as
"Annexure C". The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
Cost Auditors
Pursuant to Section 148(3) of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of
Directors on the recommendation of Audit Committee has appointed M/s V.
Kumar & Associates, Cost Accountants, as the Cost Auditors of the
Company for the financial year ending on 31st March, 2017. M/s V. Kumar
& Associates have confirmed that their appointment, if approved, will
be within the limits of Section 141(3)(g) of the Companies Act, 2013
and have also certified that they are free from disqualification
specified under Section 141(3) of the Companies Act, 2013. The Audit
Committee has also received a certificate from the Cost Auditors
certifying their independence and arms length relationship with the
Company.
I. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS
Corporate Social Responsibility
Keeping with Company''s core value of Good Corporate Citizenship, your
Company is committed to its social responsibility by taking various
initiatives which would benefit the society at large. As a major CSR
initiative, your Company had adopted two nearby villages under Swaraj
Swachh Bharat Integrated Sanitation Programme and provided community
toilets and waste collection/management system. In addition, the
Company has also upgraded infrastructure of the Govt. Schools located
in these villages and the said initiatives are well appreciated by the
local residents. In short span of last eight months, there is a
noticeable improvement in these villages in the areas of Company''s
focus. Further, your Company has made significant contribution towards
girl education, tree plantation at various locations, organizing
medical camps, celebration of festivals with under privileged, public
awareness camps for road safety and pollution etc. The Company has also
contributed Rs. 60.00 lacs to the Prime Minister National Relief Fund.
Further, in compliance with Section 135 of the Companies Act, 2013 read
with the Companies (Corporate Social Responsibility Policy) Rules,
2014, the Company has constituted Corporate Social Responsibility (CSR)
Committee comprises Shri Sudhir Mankad (Chairman) and S/Shri Vijay
Varma, Rajan Wadhera and M.N. Kaushal as other members. The Annual
Report on CSR activities is annexed herewith as "Annexure D".
Sustainability Initiative
Your Company is conscious of its responsibility towards preservation of
natural resources and continuously taking various initiatives to reduce
the consumption of electricity and water.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Particulars in respect of the above activities stipulated under Section
134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies
(Accounts) Rules, 2014 is annexed herewith as "Annexure E".
J. SECRETARIAL
Share Capital
The Issued and Paid-up Share Capital of the Company remained unchanged
during the year and stood at Rs.12.42 crores at the end of the
financial year 2015-16.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form
MGT-9 is annexed herewith as "Annexure F".
Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not extended any loans,
given guarantees or provided securities and made investment pursuant to
Section 186 of the Companies Act, 2013.
Deposits
The Company has not accepted deposit from the public falling within the
ambit of Section 73 of the Companies Act, 2013 and the Companies
(Acceptance of Deposits) Rules, 2014.
The Company has not made any loans / advances and investment in its own
shares, associates, etc. during the year.
General
The Whole Time Director is not receiving any commission from the
Company. However, he has been granted Stock Options of the Company
which will become due for exercise in the subsequent period.
The Company has no holding / subsidiary company.
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions / events
happened on these items during the year under review:
1. issue of equity shares with differential voting rights or sweat
equity.
2. significant or material orders passed by the Regulators / Courts /
Tribunal which impact the going concern status of the Company and its
future operations.
3. voting rights which are not directly exercised by the employees in
respect of shares for the subscription / purchase for which loan was
given by the Company (as there is no scheme pursuant to which such
person can beneficially hold shares as envisaged under Section 67(3)(c)
of the Companies Act, 2013).
4. fraud reporting by the auditors.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to acknowledge the contributions
of all the stakeholders and are grateful for the co- operation of
various Government Authorities, excellent support received from the
Shareholders, Banks and other Business Associates. The Directors also
recognize and appreciate the hard work and efforts put in by all the
employees and their continued contribution to the Company.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai (SUDHIR MANKAD)
Date : 26th April, 2016 Chairman
Mar 31, 2015
THE MEMBERS
The Directors present their 29th Annual Report together with Audited
Accounts for the financial year ended 31st March, 2015.
FINANCIAL RESULTS :
(Rs. in Crores)
Year Ended Year Ended
31st March, 2015 31st March, 2014
Net Operating Revenue 539.70 608.28
Profit before Other Income,
Depreciation, Finance Charges, 74.72 90.63
Exceptional items and Tax
Other Income 16.31 17.49
Profit before Depreciation, Finance
Charges, Exceptional items and Tax 91.03 108.12
Finance Costs 0.01 0.04
Depreciation 13.20 9.12
Profit before exceptional items & tax 77.82 98.96
Exceptional Items [Expenses / (Income)] - 1.15
Profit Before Tax 77.82 97.81
Tax Provision
- Current 26.44 30.20
- Deferred (0.46) 0.61
Profit After Tax 51.84 67.00
Surplus - Opening Balance after adjustment
for carrying value of Assets 36.99 28.15
Surplus available for Appropriation : 88.83 95.15
Appropriations :
Proposed Dividend 40.99 43.47
Tax on Proposed Dividend 8.34 7.38
Transfer to General Reserve - 7.00
Surplus - Closing Balance 39.50 37.30
DIVIDEND
Your Directors are pleased to recommend an equity dividend of Rs. 15.00
per share of the face value of Rs. 10 each for the financial year ended
31st March, 2015. In addition, continuing with its Investor friendly
approach and keeping in view the Company''s surplus cash position, the
Board, over and above the said normal dividend, has also recommended a
special dividend of Rs. 18.00 per share, taking the total dividend to
Rs. 33.00 per share for the financial year 2014-15, as against Rs.
35.00 per share, including special dividend of Rs. 20.00 per share,
declared and paid for previous year. This dividend would be payable to
those members whose names shall appear in the Register of Members as on
Book Closure date. The total equity dividend outgo for the financial
year 2014-15, including dividend distribution tax, surcharge and
education cess will absorb a sum of Rs. 49.33 crores (previous year Rs.
50.85 crores).
REVIEW OF OPERATIONS
During the financial year 2014-15, your Company''s engines sale stood at
64,595 units as against 74,062 units sold during the previous year. As
your Company is supplying engines for the fitment in tractors, the
business of your Company has been directly impacted by the significant
drop witnessed in the domestic tractor industry during the second half
of the fiscal 2015.
As a result of lower engines off takes, the net operating revenue for
the year under review restricted to Rs. 539.70 crores as compared to
last year''s Rs. 608.28 crores. While due focus on cost front has helped
to restrict the overall costs but lower absorption of fixed expenses
due to drop in volume coupled with higher depreciation and CSR expenses
mandated by the provisions of the Companies Act, 2013, the profit
before tax stood at Rs. 77.82 crores (previous year Rs. 97.81 crores).
Profit After Tax of Rs. 51.84 crores (previous year Rs. 67.00 crores)
translates into an Earning Per Share of Rs. 41.74 (previous year Rs.
53.95).
Taking note of the overall slowdown in tractor industry and its current
scenario, your Company, by following a prudent approach, has decided to
go little slow towards capacity enhancement project to increase the
annual capacity to 1,05,000 units announced in January 2014, which is
now expected to complete by end of second quarter of current fiscal
instead of initial plan of first quarter of financial year 2015-16.
SHARE CAPITAL
The Company has neither issued any shares with differential voting
rights nor granted stock options or sweat equity during the year under
review. The Issued and Paid-up Share Capital of the Company remained
unchanged during the year and stood at Rs.12.42 crores at the end of
the financial year 2014-15.
FINANCE
The fund position of the Company remained comfortable throughout the
year under review and after meeting the capital expenditure and working
capital requirements to support operations, the Company has generated
an income of Rs. 16.14 crores (previous year Rs. 17.43 crores) on
surplus funds.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
During the year under review, the Company has not extended any loans,
given guarantees or provided securities and made investment pursuant to
Section 186 of the Companies Act, 2013.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Company''s performance is discussed in the
Management Discussion and Analysis Report, which forms part of this
Annual Report.
CORPORATE GOVERNANCE
A Report on Corporate Governance along with a Certificate from the
Auditors of the Company regarding the compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement forms part of the Annual Report.
INDUSTRIAL RELATIONS
Industrial relations remained cordial throughout the year under review
except for minor IR issue with Diploma Engineer Trainees. While the
matter was fully resolved, there was no loss of production due to the
same.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE
Your Company is committed towards excellence in Safety, Occupational
Health and Environment. This is also to ensure sustainable business
growth. The Company has a well-established Safety, Occupational and
Environmental Policy which inter alia ensures safety of public,
employees, plant and equipment by ensuring compliance with all
statutory rules and regulations on regular basis. Your Company also
imparts training to its employees as per the predefined training
calendar, carries out statutory safety audits of its facilities as per
legal requirement and promotes eco-friendly activities. Showing its
commitment to improve the well-being of its employees, Medical
Check-ups, both curative and preventive have been organized regularly,
including educating the employees on Industrial Hygiene at the work
place. The Company''s plant is certified under OHSAS 18001:2007 and EMS
ISO 14001:2004.
CORPORATE SOCIAL RESPONSIBILITY
Keeping with Company''s core value of Good Corporate Citizenship, your
Company is committed to display its social responsibility by taking
various initiatives which would benefit the society at large. These
initiatives includes contribution towards girl education, tree
plantation at various locations, organizing medical camps, celebration
of festivals with under privileged, public awareness camps for road
safety and pollution etc.
Further, in compliance with Section 135 of the Companies Act, 2013 read
with the Companies (Corporate Social Responsibility Policy) Rules 2014,
the Company has constituted Corporate Social Responsibility (CSR)
Committee comprises Shri Sudhir Mankad (Chairman) and S/Shri Vijay
Varma, Rajan Wadhera and M.N.Kaushal as other members. The Annual
Report on CSR activities is annexed herewith as "Annexure A".
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of
natural resources and continuously taking various initiatives to reduce
the consumption of electricity and water.
DIRECTORS
Consequent to their resignations, Shri G.PGupta, Chairman of the Board
of Directors of the Company and Shri S.C.Bhargava ceased to be the
Directors of the Company after the conclusion of the last Annual
General Meeting of the Company held on 31st July, 2014. The Directors
placed on record their gratitude for the notable contributions made by
Shri Gupta and Shri Bhargava during their association with the Company.
In view of the resignation of Shri Gupta, the Directors have appointed
Shri Sudhir Mankad as the Chairman of the Board of Directors of the
Company.
As shared in the last year''s Directors'' Report, consequent upon their
resignations, Shri Rajesh Jejurikar and Shri V.S.Parthasarathy ceased
to be Directors of the Company with effect from 28th April, 2014 and
29th April, 2014 respectively and Shri Rajan Wadhera and Shri
S.Durgashankar joined the Company''s Board with effect from 29th April,
2014 and 18th June, 2014 respectively. Further, Members also approved
the appointments of Shri Sudhir Mankad, Dr. T.N.Kapoor, Shri Dileep C.
Choksi and Smt. Neera Saggi as Independent Directors under the
Companies Act, 2013 for a period of 5 years, not liable to retire by
rotation.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as laid down under Section 149(6) of the Companies Act,
2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.
In terms of Section 152 of the Companies Act, 2013, Dr. Pawan Goenka
and Shri R.R.Deshpande shall retire by rotation at the forthcoming
Annual General Meeting and being eligible, offer themselves for
re-appointment.
The Whole-time Director is not receiving any commission from the
Company. The Company has no holding / subsidiary company.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, a system has been put in place to carry out
performance evaluation of the Board, its Committees and individual
Directors. Criteria for performance evaluation is covered in the
Corporate Governance Report.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration
Committee, framed a policy on appointment of Directors and Senior
Management and their remuneration. The Remuneration Policy is covered
in the Corporate Governance Report.
DIRECTORS'' MEETINGS
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the year, four Meetings of Board and Audit Committee
were convened and held. The details are covered in the Corporate
Governance Report. The intervening gap between the Meetings was within
the period prescribed under the Companies Act, 2013.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors in terms
of Section 134(3)(c) of the Companies Act, 2013 state that:
a) in the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departure, if any;
b) in the selection of the accounting policies, consulted the Statutory
Auditors and applied them consistently and made judgment and estimates
that are reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at 31st March, 2015 and of the
profit of the Company for the year ended on that date;
c) proper and sufficient care has been taken for 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 Annual Accounts have been prepared on a going concern basis;
e) internal financial controls to be followed by the Company have been
laid down, which are adequate and operating effectively;
f) proper systems have been devised to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
AUDIT COMMITTEE
The Audit Committee comprises Shri Dileep C. Choksi (Chairman) and Dr.
T.N.Kapoor, Shri S.Durgashankar and Smt. Neera Saggi as other members.
All the recommendations made by the Audit Committee were accepted by
the Board.
KEY MANAGERIAL PERSONNEL
Shri M.N.Kaushal, Whole Time Director, Shri M.S.Grewal, Company
Secretary and Shri Rajinder Arora, Chief Financial Officer of the
Company are the Key Managerial Personnel of the Company as per the
provisions of the Companies Act, 2013. While Shri Kaushal and Shri
Grewal were already in the office before the commencement of the
Companies Act, 2013, the Board appointed Shri Rajinder Arora as Chief
Financial Officer with effect from 29th April, 2014.
RISK MANAGEMENT
Pursuant to the requirement of Clause 49 of the Listing Agreement, the
Company is having Risk Management framework covering identification,
evaluation and control measures to mitigate the identified business
risks.
INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no material weakness in their operating effectiveness was
observed.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism through Whistle Blower Policy to deal
with instance of fraud and mismanagement, if any. The details of the
Policy is explained in the Corporate Governance Report and also posted
on the website of the Company.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered during the financial
year 2014-15 were in the ordinary course of the business and were on
arm''s length basis. There were no materially significant related party
transactions made by the Company which may have a potential conflict of
the interest with its Promoters, Directors, Key Managerial Personnel or
other persons. All such Related Party Transactions are placed before
the Audit Committee for approval, wherever applicable. Prior omnibus
approval for normal transactions is also obtained from the Audit
Committee for the related party transactions which are of repetitive
nature as well as for the transactions which cannot be foreseen and the
same are subsequently shared with Audit Committee on regular intervals.
The policy on materiality of and dealing with Related Party
Transactions as approved by the Audit Committee and the Board of
Directors is uploaded on the website of the Company and the link for
the same is (http://www.swarajenterprise.com/ NCC.asp).
AUDITORS
M/s Davinder S. Jaaj & Company, Chartered Accountants, Statutory
Auditors of the Company, hold office till the conclusion of the ensuing
Annual General Meeting and being eligible, offer themselves for
re-appointment. They have expressed their willingness to act as
Auditors of the Company, if appointed, and have further confirmed that
the said appointment, if made, would be within the prescribed limits
under Section 141(3)(g) of the Companies Act, 2013 and that they are
not disqualified for re-appointment. The Members are requested to
appoint Auditors and fix their remuneration.
The Audit Report issued by the Auditors of the Company forms part of
the Annual Report and does not contain any qualification, reservation
or adverse remark.
COST AUDITORS
Pursuant to Section 148(3) of the Companies Act, 2013 read with The
Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of
Directors on the recommendation of Audit Committee has appointed M/s
V.Kumar & Associates, Cost Accountants, as the Cost Auditors of the
Company for the financial year ending on 31st March, 2016. M/s V.Kumar
& Associates have confirmed that their appointment, if approved, will
be within the limits of Section 141(3)(g) of the Companies Act, 2013
and have also certified that they are free from disqualification
specified under Section 141(3) of the Companies Act, 2013.
The Cost Audit Report for the financial year 2013-14 was filed within
the due date on 25th September, 2014.
SECRETARIAL AUDIT
Pursuant to Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company has appointed M/s A. Arora & Co., a firm of Company Secretaries
in practice to undertake the Secretarial Audit of the Company. The
Report of the Secretarial Audit is annexed herewith as "Annexure B".
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
DEPOSITS
The Company has not accepted deposits from the public falling within
the ambit of Section 73 of the Companies Act, 2013 and the Companies
(Acceptance of Deposits) Rules, 2014.
The Company has not made any loans / advances and investment in its own
shares, associates, etc. during the year which are required to be
disclosed in the annual accounts of the Company pursuant to Clause 32
of the Listing Agreement.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and
its future operations.
CURRENT YEAR
In view of the unseasonal rains and lower crop prices, tractor sales
during the first half of the fiscal 2016 is expected to remain
moderate. However, prediction of normal monsoon and positive signs in
infrastructure sector could improve the overall market scenario and
lead to growth in the tractor industry in the second half of the year.
In this background, it is expected that the engine business of your
Company will also move in tandem with the tractor industry.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Particulars in respect of the above activities stipulated under Section
134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies
(Accounts) Rules, 2014 is annexed herewith as "Annexure C".
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form
MGT9 is annexed herewith as "Annexure D". PARTICULARS OF EMPLOYEES
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 Companies Act, 2013, the
Report 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 the ensuing Annual General Meeting. If any Member is interested
in obtaining a copy thereof, such Member may write to the Company
Secretary in this regard.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to acknowledge the contributions
of all the stakeholders and are grateful for the co- operation of
various Government Authorities, excellent support received from the
Shareholders, Banks and other Business Associates. The Directors also
recognise and appreciate the hard work and efforts put in by all the
employees and their continued contribution to the Company.
FOR AND ON BEHALF OF THE BOARD
Place : Mumbai SUDHIR MANKAD
Date : 27th April, 2015 Chairman
Mar 31, 2013
TO THE MEMBERS
The Directors present their 27th Annual Report together with Audited
Accounts for the financial year ended 31st March, 2013.
FINANCIAL RESULTS :
(Rs. in Crores)
Year Ended Year Ended
31st March, 2013 31st March, 2012
Net Operating Revenue 479.03 448.58
Other Income 15.32 12.24
Profit before Depreciation,
Finance Charges and Tax 86.81 81.61
Finance Costs 0.15 0.08
Depreciation 7.16 4.26
Profit Before Tax 79.50 77.27
Tax Provision
 Current 20.97 23.17
 Deferred 3.13 1.28
Profit After Tax 55.40 52.82
Surplus - Opening Balance 26.70 23.64
Surplus available for Appropriation 82.10 76.46
Appropriations :
Proposed Dividend 40.99 16.14
Tax on Proposed Dividend 6.96 2.62
Transfer to General Reserve 6.00 31.00
Surplus - Closing Balance 28.15 26.70
DIVIDEND
Your Directors are pleased to recommend an equity dividend of Rs. 13.00
per share of the face value of Rs. 10 each for the financial year ended
31st March, 2013. In addition, following its Investor friendly approach
and keeping in view the Company''s surplus cash position, the Board,
over and above the said normal dividend, has also recommended a special
dividend of Rs. 20.00 per share, taking the total dividend to Rs.
33.00 per share for the financial year 2012-13, as against Rs.13.00 per
share declared and paid for previous year. This dividend would be
payable to those members whose names shall appear in the Register of
Members as on Book Closure date. The total equity dividend outgo for
the financial year 2012-13, including dividend distribution tax,
surcharge and education cess will absorb a sum of Rs. 47.95 crores
(previous year Rs. 18.76 crores).
REVIEW OF OPERATIONS
Members would be happy to note that your Company''s engines sale for the
financial year 2012-13 registered a growth of 4% to reach 57,377 units
against 55,239 units sold during the previous year. This increase in
the sales was achieved despite the fact that the overall domestic
tractor industry, which has direct bearing on Company''s performance,
declined by 2% during the year.
Based on the above performance, Company''s net operating revenue for the
year stood at Rs. 479.03 crores as compared to Rs.448.58 crores for the
previous year - a growth of 7%. During the year, your Company has also
completed the phased capacity expansion plan within the projected cost
and timelines. Accordingly, enhanced capacity of 75,000 engines per
annum is available from the beginning of current fiscal 2014. The
higher depreciation due to said expansion coupled with enhanced spend
on R&D related activities impacted the profit for the year under review
to some extent, but with continuous focus on cost control and higher
returns on surplus funds, Profit Before Tax for the year reached Rs.
79.50 crores as against last year''s profit of Rs. 77.27 crores. Profit
After Tax of Rs. 55.40 crores (previous year Rs. 52.82 crores)
translates into an Earning Per Share of Rs. 44.61 (previous year Rs.
42.53).
FINANCE
The fund position of the Company was comfortable throughout the year
under review. As a result, after meeting routine capital expenditure
and working capital requirements to support operations, a total income
of Rs. 15.22 crores was generated on surplus funds.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Company''s performance is discussed in the
Management Discussion and Analysis Report, which forms part of this
Annual Report.
CORPORATE GOVERNANCE
A Report on Corporate Governance along with a Certificate from the
Auditors of the Company regarding the compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement forms part of the Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations remained cordial throughout the year under review.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE
Your Company is committed towards excellence in Safety, Occupational
Health and Environment. This is also to ensure sustainable business
growth. The Company has a well-established Safety, Occupational and
Environmental Policy which inter alia ensures safety of public,
employees, plant and equipment by ensuring compliance with all
statutory rules and regulations on regular basis. Your Company also
imparts training to its employees as per the predefined training
calendar, carries out statutory safety audits of its facilities as per
legal requirement and promotes eco-friendly activities. Showing its
commitment to improve the well being of its employees, Medical
Check-ups, both curative and preventive have been organized regularly,
including educating the employees on Industrial Hygiene at the work
place. The Company''s plant is certified under OHSAS 18001:2007 and EMS
ISO 14001:2004.
CORPORATE SOCIAL RESPONSIBILITY
Keeping with Company''s core value of Good Corporate Citizenship, your
company is committed to display its social responsibility by taking
various initiatives which would benefit the society at large. These
initiatives includes tree plantation at various locations, organizing
medical camps, celebration of festivals with under privileged, etc.
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of
natural resources and continuously taking various initiatives to reduce
the consumption of electricity and water.
DIRECTORS
Shri D.R.Swar and Shri Hardeep Singh who were liable to retire by
rotation at the last Annual General Meeting of the Company and
expressed their desire not to seek re-appointment, ceased to be the
Directors of the Company at the conclusion of the Annual General
Meeting held on 31st July, 2012. Your Board has placed on record its
sincere appreciation of the valuable guidance and significant
contributions made by Shri Swar and Shri Hardeep Singh during their
association with the Company.
Consequent upon his resignation, Shri Bishwambhar Mishra, Vice
Chairman, ceased to be a Director of the Company with effect from 1st
April, 2013. Your Board has placed on record its sincere appreciation
of the valuable guidance and significant contributions made by Shri
Mishra during his association in building the Company to its present
position of eminence.
Shri Sudhir Mankad and Shri Rajesh Jejurikar were appointed as
Additional Directors of the Company with effect from 31st July, 2012
and 22nd April, 2013 respectively. Shri Mankad and Shri Jejurikar hold
office upto the date of the forthcoming Annual General Meeting. The
Company has received notices under section 257 of the Companies Act,
1956 from Members signifying their intention to propose Shri Mankad and
Shri Jejurikar for the office of Directors at the forthcoming Annual
General Meeting.
Shri S.C.Bhargava, Dr. Pawan Goenka and Shri V.S.Parthasarathy retire
by rotation, and being eligible, offer themselves for re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to section 217(2AA) of the Companies Act, 1956, your
Directors, based on the representations received from the Operating
Management, and after due enquiry, confirm that :
a) in the preparation of Annual Accounts, applicable accounting
standards have been followed;
b) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and these have been applied consistently and
reasonable and prudent judgment and estimates have been made so as to
give a true and fair view of the state of affairs of the Company as at
31st March, 2013 and of the profit of the Company for the year ended on
that date;
c) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) the Annual Accounts have been prepared on a going concern basis.
AUDITORS
The Company''s Statutory Auditors, M/s Davinder S. Jaaj & Company,
Chartered Accountants, retire at the conclusion of the ensuing Annual
General Meeting and being eligible, offer themselves for
re-appointment. They have expressed their willingness to act as
Auditors of the Company, if appointed, and have further confirmed that
the said appointment would be in conformity with the provisions of
Section 224(1B) of the Companies Act, 1956. The Members are requested
to appoint Auditors and fix their remuneration.
COST AUDITORS
In conformity with the directives of Central Government, the Board of
Directors of the Company appointed M/s V.Kumar & Associates, Cost
Accountants, as Cost Auditors of the Company for conducting the cost
audit for the year ended 31st March, 2013. Subsequently, their
appointment was also approved by the Central Government.
Further, pursuant to Section 233B(2) of the Companies Act, 1956, the
Board of Directors on the recommendation of Audit Committee has
re-appointed M/s V.Kumar & Associates, Cost Accountants, as the Cost
Auditors of the Company for the financial year ending on 31st March,
2014. M/s V.Kumar & Associates have confirmed that their appointment,
if approved, will be within the limits of Section 224(1B) of the
Companies Act, 1956 and have also certified that they are free from
disqualification specified under Section 233B(5) read with Section 224
and sub section (3) or sub section (4) of the Section 226 of the
Companies Act, 1956.
The Audit Committee has also received a certificate from the Cost
Auditors certifying their independence and arm''s length relationship
with the Company.
As per the circulars issued by Ministry of Corporate Affairs, due date
for filing of Cost Audit Report for the financial year ended 31st
March, 2012 in XBRL mode was 28th February, 2013. The Report was filled
on 31st January, 2013.
DEPOSITS
The Company has not accepted deposits from the public or its employees
during the year under review.
The Company has not made any loans / advances and investment in its own
shares, associates, etc. during the year which are required to be
disclosed in the annual accounts of the Company pursuant to Clause 32
of the Listing Agreement.
CURRENT YEAR
The current financial year (2013-14) has begun on a positive note and
in line with the higher engines demand from its key customer, engines
sale during April  May 2013 period moved to 11,945 units as against
9,218 units sold during the corresponding period of the previous year -
a growth of 30%.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.
Particulars in respect of the above activities under the Companies
(Disclosure of particulars in the Report of Board of Directors) Rules,
1988 are given in the Annexure to this Report.
PARTICULARS OF EMPLOYEES
In accordance with section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of employees) Rules, 1975 as amended, the
Company had no employee who was in receipt of remuneration of not less
than Rs. 60,00,000 per annum and was employed throughout the year ended
31st March, 2013 or not less than Rs.5,00,000 per month and was
employed for a part of the financial year 2012-13.
ACKNOWLEDGEMENTS
Your Directors recognise and appreciate the hard work and efforts put
in by all the employees of the Company and their contribution to the
progress of the Company in a very challenging environment. The
Directors also take this opportunity to acknowledge the contributions
of all the stakeholders and are grateful for the co-operation of
various Government Authorities, excellent support received from the
Shareholders, Banks and other Business Associates.
FOR AND ON BEHALF OF THE BOARD
Place : S.A.S. Nagar (Mohali) G.P.GUPTA
Date : 14th June, 2013 Chairman
Mar 31, 2012
The Directors present their Twenty Sixth Annual Report together with
Audited Accounts for the financial year ended 31st March, 2012.
FINANCIAL RESULTS :
(Rs. in Crores)
Year Ended Year Ended
31st March,
2012 31st March,
2011
Net Operating Revenue 448.58 361.03
Other Income 12.24 8.19
Profit before Depreciation, Finance
Charges and Tax 81.61 68.85
Finance Costs 0.08 0.04
Depreciation 4.26 4.46
Profit Before Tax 77.27 64.35
Tax Provision
- Current 23.17 21.20
- Deferred 1.28 (0.76)
Profit After Tax 52.82 43.91
Surplus - Opening Balance 23.64 20.17
Surplus available for Appropriation : 76.46 64.08
Appropriations :
Proposed Dividend 16.14 12.42
Tax on Proposed Dividend 2.62 2.02
Transfer to General Reserve 31.00 26.00
Surplus - Closing Balance 26.70 23.64
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs.13.00 per
Equity Share for the financial year 2011-12 as against Rs. 10.00 per
share declared and paid for previous year, payable to those members
whose names appear in the Register of Members as on Book Closure date.
The dividend including dividend distribution tax, surcharge and
education cess will absorb a sum of Rs.18.76 crores.
REVIEW OF OPERATIONS
Financial year 2011-12 was yet another year of achieving new highs.
Taking the full advantage of enhanced engine demand from Mahindra &
Mahindra Limited - Swaraj Division, your Company for the first time has
crossed the 50,000 mark - both for production and sale of engines.
Timely increase of production capacities coupled with productivity
improvement initiatives enabled the Company to achieve this milestone.
Based on stepped up demand, the engine sales volume posted a growth of
17% during the year under review and reached 55,239 units as compared
to previous year's sale of 47,413 units. Accordingly, Company's net
operating revenue moved to Rs.448.58 crores from previous year's
revenue of Rs. 361.03 crores - a growth of 24%. While Profit Before Tax
for the year reached Rs. 77.27 crores (previous year Rs. 64.35 crores),
Profit After Tax of Rs. 52.82 crores (previous year Rs. 43.91 crores)
translates into an Earning Per Share of Rs. 42.53 (previous year Rs.
35.35).
As Members are aware, the Company had undertaken an expansion project
to increase its annual capacity to 75,000 engines in two phases. While
the first phase of expansion to increase the capacity to 60,000 engines
per annum is near completion barring some equipments which are still
under installation, the second phase which will take the total capacity
to 75,000 engines per annum is progressing well and is expected to be
completed by the end of current calendar year.
FINANCE
The fund position of the Company was comfortable throughout the year
under review. As a result, after meeting routine capital expenditure
and working capital requirements to support operations, a total income
of Rs. 12.08 crores was generated on surplus funds.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Company's performance is discussed in the
Management Discussion and Analysis Report, which forms part of this
Annual Report.
CORPORATE GOVERNANCE
A Report on Corporate Governance along with a Certificate from the
Auditors of the Company regarding the compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement forms part of the Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations remained cordial throughout the year under review.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE
Your Company is committed towards excellence in Safety, Occupational
Health and Environment. This is also to ensure sustainable business
growth. The Company has a well-established Safety, Occupational and
Environmental Policy which inter alia ensures safety of public,
employees, plant and equipment by ensuring compliance with all
statutory rules and regulations on regular basis. Your Company also
imparts training to its employees as per the predefined training
calendar, carries out statutory safety audits of its facilities as per
legal requirement and promotes eco-friendly activities. Showing its
commitment to improve the well being of its employees, Medical
Check-ups, both curative and preventive have been organized regularly,
including educating the employees on Industrial Hygiene at the work
place.
CORPORATE SOCIAL RESPONSIBILITY
Keeping with Company's core value of Good Corporate Citizenship, your
company is committed to display its social responsibility by taking
various initiatives which would benefit the society at large. These
initiatives includes tree plantation at various locations, organizing
medical camps, celebration of festivals with under privileged.
DIRECTORS
Consequent upon his resignation, Shri A.M.Sawhney ceased to be a
Director of the Company with effect from 26th March, 2012. Your Board
has placed on record its deep appreciation of notable contributions of
Shri Sawhney as Director of the Company.
Upon completion of his current tenure as Executive Director on 31st
March, 2012, the Board of Directors at its meeting held on 27th
January, 2012 has approved continuation of Shri Bishwambhar Mishra as
Non-Executive Director of the Company with effect from 1st April, 2012
and will continue to be the Vice Chairman of the Board of the Company.
Taking note of emerging needs, the Board of Directors at its meeting
held on 27th January, 2012 has approved the appointment of Shri
M.N.Kaushal as Whole-time Director for a period of 5 years with effect
from 1st April, 2012. Appropriate resolution for his appointment has
been proposed for the approval of the Shareholders at the forthcoming
Annual General Meeting.
Shri Vijay Varma and Shri G.P. Gupta retire by rotation, and being
eligible, offer themselves for re-appointment. Shri D.R. Swar and Shri
Hardeep Singh also retire by rotation at the ensuing Annual General
Meeting and have expressed their desire not to seek re-appointment. The
Company does not intend to fill the vacancies caused by the retirement
of Shri D.R. Swar and Shri Hardeep Singh.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to section 217(2AA) of the Companies Act, 1956, your
Directors, based on the representations received from the Operating
Management, and after due enquiry, confirm that :
a) in the preparation of Annual Accounts, applicable accounting
standards have been followed;
b) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and these have been applied consistently and
reasonable and prudent judgment and estimates have been made so as to
give a true and fair view of the state of affairs of the Company as at
31st March, 2012 and of the profit of the Company for the year ended on
that date;
c) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) the Annual Accounts have been prepared on a going concern basis.
AUDITORS
The Company's Statutory Auditors, Messrs Davinder S. Jaaj & Company,
Chartered Accountants, hold office until the conclusion of the
forthcoming Annual General Meeting and are eligible for re-appointment.
The Company has received a certificate from them to the effect that
their re-appointment, if made, would be within the limits specified
under Section 224(1B) of the Companies Act, 1956. Members are requested
to appoint Auditors and fix their remuneration.
COST AUDITORS
As per the Order of the Central Government and in pursuance of Section
233B of the Companies Act, 1956, your Company's cost records are
subject to Cost Audit. The due date for filing of the Cost Audit Report
with the Ministry of Corporate Affairs for the financial year ended
31st March, 2011 was 30th September, 2011. This Report was filed on 2nd
September, 2011. The Board of Directors has upon recommendation of the
Audit Committee appointed Messrs V. Kumar & Associates, Cost
Accountants to audit the cost accounts of the Company for the financial
year ending 31st March, 2013, subject to the approval of the Central
Government. As required under the provisions of Section 224(1B) of the
Companies Act, 1956, the Company has obtained a written confirmation
from Messrs V. Kumar & Associates to the effect that they are eligible
for appointment as Cost Auditors under Section 233B of the Companies
Act, 1956. The Board of Directors of the Company has also received a
certificate from the Cost Auditor certifying their independence and
arm's length relationship with the Company.
DEPOSITS
The Company has not accepted deposits from the public or its employees
during the year under review.
The Company has not made any loans / advances and investment in its own
shares, associates, etc. during the year which are required to be
disclosed in the annual accounts of the Company pursuant to Clause 32
of the Listing Agreement.
CURRENTYEAR
As the operations of the Company are directly linked to tractor
industry, taking note of recent tractor industry scenario, the demand
during fiscal 2013 is expected to remain moderate. In this backdrop,
engines sale during April - May 2012 period was 9,218 units against
9,447 units sold during the corresponding period of the previous year.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.
Particulars in respect of the above activities under the Companies
(Disclosure of particulars in the Report of Board of Directors) Rules,
1988 are given in the Annexure to this Report.
PARTICULARS OF EMPLOYEES
In accordance with Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of employees) Rules, 1975 as amended, the
Company had no employee who was in receipt of remuneration of not less
than Rs. 60,00,000 per annum and was employed throughout the year ended
31st March, 2012 or not less than Rs.5,00,000 per month and was
employed for a part of the financial year 2011-12.
FOR AND ON BEHALF OF THE BOARD
Place : S.A.S. Nagar (Mohali) G.PGUPTA
Date : 26th June, 2012 Chairman
Mar 31, 2011
The Directors present their Twenty Fifth Annual Report together with
Audited Accounts for the financial year ended 31st March, 2011.
FINANCIAL RESULTS:
(Rs. In Crores)
Year Ended Year Ended
31st March, 2011 31st March, 2010
Net Operating Revenue 360.63 282.44
Other Income 2.37 4.18
Profit before Depreciation,
Finance Charges and Tax 63.08 53.75
Finance Charges (Net) (5.73) (5.80)
Depreciation 4.46 4.84
Profit Before Tax 64.35 54.71
Tax Provision
- Current 21.20 18.54
- Deferred (0.76) (1.18)
Profit After Tax 43.91 37.35
Balance of Profit
from Prior Years 20.17 16.40
Surplus available for Appropriation: 64.08 53.75
Appropriations:
Proposed Dividend 12.42 9.93
Tax on Proposed Dividend 2.02 1.65
Transfer to General Reserve 26.00 22.00
Balance carried to Balance Sheet 23.64 20.17
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs.10.00 per
Equity Share for the financial year 2010-11 as against Rs. 8.00 per
share declared and paid for previous year, payable to those members
whose names appear in the Register of Members as on Book Closure date.
The dividend including dividend distribution tax, surcharge and
education cess will absorb a sum of Rs.14.44 crores.
REVIEW OF OPERATIONS
The financial year 2010-11 was a year of sustained growth for your
Company. During the year under review, taking advantage of stepped up
schedules from Mahindra & Mahindra Limited - Swaraj Division and backed
up by productivity improvement initiatives, your Company raised engine
output to 48,015 units, a growth of 22% over 2009-10 production of
39,254 units.
On the strength of increased engine demand scenario, your Company
recorded its all time high yearly engine sales volume of 47,413 units
compared to 39,143 units during previous fiscal - a growth of 21%.
Concurrently, supplies of hi-tech engine components to SML Isuzu also
registered a growth of 20% and reached Rs. 22.68 crores against
previous years supplies valuing Rs. 18.95 crores.
Reflecting the above enhanced engine sales coupled with growth in
hi-tech engine components business, net operating revenue for the year
under review touched Rs. 360.63 crores as against previous years
revenue of Rs. 282.44 crores. While Profit Before Tax for the year
reached Rs. 64.35 crores (previous year Rs. 54.71 crores), Profit After
Tax of Rs. 43.91 crores (previous year Rs. 37.35 crores) translates
into an Earning Per Share of Rs. 35.35 (previous year-Rs. 30.08).
To meet the increased upcoming engine demand, your Company during the
year had also approved expansion programmes to increase its total
installed capacity to 75,000 engines per annum. Besides capacity
augmentation, investment will also be made towards sharpening Companys
engineering and quality edges. Expansion programme is progressing well
and plant capacity will move upto 60,000 engines per annum by end of
fiscal 2012 and full annual capacity of 75,000 engines is expected to
be in place by June 2012. The entire capex of Rs. 94 crores on the
proposed expansion will be met from internal resources.
FINANCE
The fund position of the Company was comfortable throughout the year
under review. As a result, after meeting routine capital expenditure of
Rs. 7.22 crores and working capital requirements to support operations,
a total income of Rs. 8.10 crores was generated on surplus funds.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Companys performance is discussed in the
Management Discussion and Analysis Report, which forms part of this
Annual Report.
CORPORATE GOVERNANCE
A Report on Corporate Governance along with a Certificate from the
Auditors of the Company regarding the compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement forms part of the Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations remained cordial throughout the year under review.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE
Your Company is committed towards excellence in Safety, Occupational
Health and Environment. This is also to ensure sustainable business
growth. The Company has a well-established Safety, Occupational and
Environmental Policy which inter alia ensures safety of public,
employees, plant and equipment by ensuring compliance with all
statutory rules and regulations on regular basis. Your Company also
imparts training to its employees as per the predefined training
calendar, carries out statutory safety audits of its facilities as per
legal requirement and promotes eco-friendly activities. Showing its
commitment to improve the well being of its employees, Medical
Check-ups, both curative and preventive have been organized regularly,
including educating the employees on Industrial Hygiene at the work
place. During the year, your Company has also received Occupational
Health and Safety Management System Standard (OHSAS) certification for
safety culture improvement.
CORPORATE SOCIAL RESPONSIBILITY
Keeping with Companys core value of Good Corporate Citizenship, your
company is committed to display its social responsibility by taking
various initiatives which would benefit the society at large. These
initiatives includes tree plantation at various locations, organizing
medical camps, distribution of study material to students and
refreshments among weaker section of society.
DIRECTORS
Shri A.M.Sawhney, Shri V.S.Parthasarathy, Shri R.R.Deshpande and Dr.
T.N.Kapoor retire by rotation, and being eligible, offer themselves for
re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 217(2AA) of the Companies Act, 1956, your
Directors, based on the representations received from the Operating
Management, and after due enquiry, confirm that:
a) in the preparation of Annual Accounts, applicable accounting
standards have been followed;
b) they have, in the selection of the accounting policies, consulted
the Statutory Auditors and these have been applied consistently and
reasonable and prudent judgment and estimates have been made so as to
give a true and fair view of the state of affairs of the Company as at
31st March, 2011 and of the profit of the Company for the year ended on
that date;
c) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) the Annual Accounts have been prepared on a going concern basis.
AUDITORS
The Companys Statutory Auditors, Messrs Davinder S. Jaaj & Company,
Chartered Accountants, hold office until the conclusion of the
forthcoming Annual General Meeting and are eligible for re-appointment.
The Company has received a certificate from them to the effect that
their re-appointment, if made, would be within the limits specified
under section 224(1 B) of the Companies Act, 1956. Members are
requested to appoint Auditors and fix their remuneration.
DEPOSITS
The Company has not accepted deposits from the public or its employees
during the year under review.
The Company has not made any loans / advances and investment in its own
shares, associates, etc. during the year which are required to be
disclosed in the annual accounts of the Company pursuant to Clause 32
of the Listing Agreement.
CURRENTYEAR
During the period 1st April, 2011 to 31st May, 2011, 9,447 engines were
despatched as against 7,757 engines during the corresponding period of
the previous year - a growth of 22%. Taking note of expected demand
from its key customer - Mahihdra & Mahindra Limited - Swaraj Division,
the prospects for growth in the current fiscal is positive.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.
Particulars in respect of the above activities under the Companies
(Disclosure of particulars in the Report of Board of Directors) Rules,
1988 are given in the Annexure to this Report.
PARTICULARS OF EMPLOYEES
In accordance with section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of employees) Rules, 1975 as amended, the
Company had no employee who was in receipt of remuneration of not less
than Rs. 60,00,000 and was employed throught the year ended 31st
March,.2011 or not less than Rs.5,00,000 per month and was employed for
a part of the financial year 2010-11.
FOR AND ON BEHALF OF THE BOARD
G.P.GUPTA
Chairman
Place : S.A.S. Nagar (Mohali)
Date : 20th June, 2011
Mar 31, 2010
The Directors present their Twenty fourth Annual Report together with
Audited Accounts for the financial year ended 31st March, 2010.
FINANCIAL RESULTS (Rs. in Crores)
Year ended Year ended
31stMarch, 2010 31st March, 2009
Net Operating Revenue 282.44 208.17
Other Income 4.18 0.17
Profit before Depreciation, Finance
Charges and Tax 53.75 32.04
Finance Charges (Net) (5.80) (4.87)
Depreciation 4.84 4.69
Profit Before Tax 54.71 32.22
Tax Provision
à Current 18.54 12.11
à Deferred (1.18) (1.21)
à Fringe Benefit - 0.05
Profit After Tax 37.35 21.27
Balance of Profit from Prior Years 16.40 14.39
Surplus available for Appropriation : 53.75 35.66
Appropriations:
Proposed Dividend 9.93 6.21
Tax on Proposed Dividend 1.65 1.05
Transfer to General Reserve 22.00 12.00
Balance carried to Balance Sheet 20.17 16.40
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs.8.00 per
Equity Share as against Rs. 5.00 per share declared and paid for FY
2008-09, payable to those members whose names appear in the Register of
Members as on Book Closure date. The dividend including dividend
distribution tax, surcharge and education cess will absorb a sum of
Rs.11.58 crores.
REVIEW OF OPERATIONS
Members would have noted from the audited accounts that financial year
2009-10 was yet another year of healthy growth and strong financial
performance for the Company. During the year under review, taking
advantage of stepped up schedules from the Swaraj Division of Mahindra
& Mahindra Limited, the Company has registered an impressive growth of
37% in engine supplies to the Swaraj Division and in the process has
achieved despatches of 39,143 engines compared to 28,539 engines
despatched in the previous year. Concurrently, on the strength of
increased demand, out-turn of hi-tech engine components to Swaraj Mazda
also witnessed a growth of 34% and the value of supplies touched Rs.
18.95 crores against last years supplies aggregating Rs. 14.19 crores.
These increased volumes could be met due to the productivity
improvement measures taken through continuous thrust on detailed
planning and effective usage of manufacturing facilities.
Reflecting the good growth in engine sales, net operating revenue for
the year grew to Rs. 282.44 crores, up 36% over previous year. Rising
volumes of engines and productivity gain have boosted operating profit
to reach Rs. 49.57 crores as compared to Rs. 31.87 crores in the
previous year accompanied by an improved margin of 17.6% as against
previous years margin of 15.3%. Profit Before Tax for the year stood
at Rs. 54.71 crores as against Rs. 32.22 crores registering an increase
of 70%. Profit After Tax was Rs. 37.35 crores, up 76% over last year
which translates into an earning of Rs. 30.08 per share as against Rs.
17.13 per share in the previous year.
FINANCE
The fund position of the Company was comfortable throughout the year
under review. As a result, after meeting routine capital expenditure of
Rs. 2.02 crores and working capital requirements to support operations,
a total income of Rs. 9.98 crores was generated on surplus funds as
against Rs. 5.04 crores in the previous year.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Companys performance is discussed in the
Management Discussion and Analysis Report, which forms part of this
Annual Report.
CORPORATE GOVERNANCE
A Report on Corporate Governance along with a Certificate from the
Auditors of the Company regarding the compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement forms part of the Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations remained cordial throughout the year under review.
The Company entered into a new 4 year wage agreement with the workers.
SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE
Your Company is committed towards excellence in Safety, Occupational
Health and Environment. This is also to ensure sustainable business
growth. The Company has a well-established Safety, Occupational and
Environmental Policy which inter alia ensures safety of public,
employees, plant and equipment by ensuring compliance with all
statutory rules and regulations on regular basis. Your Company also
imparts training to its employees as per the predefined training
calendar, carries out statutory safety audits of its facilities as per
legal requirement and promotes eco-friendly activities. Showing its
commitment to improve the well being of the employees, Medical
Check-ups, both curative and preventive have been organized, including
educating the employees on Industrial Hygiene at the work place. During
the year, your Company has also received ISO 9001:2008 certification.
CORPORATE SOCIAL RESPONSIBILITY
Keeping with Companys core value of Good Corporate Citizenship, your
company is committed to display its social responsibility by taking
various initiatives which would benefit the society at large. These
initiatives include tree plantation at various places, organizing
medical camps, distribution of study material and refreshments among
weaker section of society.
DIRECTORS
Upon completion of his tenure as Managing Director of the Company, Shri
G.S.Rihal tendered his resignation from the directorship of the Company
and accordingly ceased to be Director of the Company with effect from
21st November, 2009. The Board has placed on record its sincere
appreciation of the notable contributions made by Shri Rihal in
building the Company to its present position of eminence during his
over two decade long association with the Company.
Shri M.N.Kaushal was appointed as Additional Director of the Company
with effect from 9th December, 2009 and holds office upto the date of
the forthcoming Annual General Meeting. The Company has received a
notice under section 257 of the Companies Act, 1956 from a Member
signifying his intention to propose Shri Kaushal as candidate for the
office of Director.
Shri Bishwambhar Mishra completed his tenure as Vice Chairman on 31st
March, 2010. In the context of his outstanding contributions to the
Companys growth and taking note of the future needs, the Board at its
meeting held on 19th January, 2010 has reappointed Shri Mishra as an
Executive Director of the Company designated as Vice Chairman for a
period of two years with effect from 1st April, 2010. Appropriate
resolution for his appointment has been proposed for the approval of
the Shareholders at the forthcoming Annual General Meeting.
Consequent upon his resignation, Shri Anjanikumar Choudhari ceased to
be a Director of the Company with effect from 1st April, 2010. The
Board has placed on record its sincere appreciation of the valuable
guidance and significant contributions made by Shri Choudhari during
his association with the Company.
FOR AND ON BEHALF OF THE BOARD
Place:New Delhi G.P.GUPTA
Date:6 th May,2010 Chairman
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Swaraj Engines Ltd.
-
Swaraj Engines Ltd. Tools
- Bulk Deals
-
Swaraj Engines Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
Swaraj Engines Ltd. Key Financial Ratios
- Ratios
-
Swaraj Engines Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Swaraj Engines Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Swaraj Engines Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Swaraj Engines Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+