Dear Members,
The Board of Directors have pleasure in. presenting herewith their 78th Annual Report
together with the Audited Accounts of the Company for the year ended 31 st December, 2015.
OPERATIONS AND FINANCIAL RESULTS
The sales turnover of the Company for the year under review was at Rs.10,644.19 M as
against Rs.11,263.37 M in the previous year. With Other Income moving up to Rs.385.16 M as
against Rs.329.13 M for the previous
year, the total income of the Company for 2015 was at Rs.11,029.36 M (2014:Rs.11,592.51
M). Despite a decline in the sales turnover, the overall profitability for the year under
review showed a modest increase of over 5%. The financial performance of the Company for
the year 2015 was as under:-
|
|
(Rs. in Million) |
| Particulars |
2015 |
2014 |
| Gross profit for the year after meeting all operating expenses but before
depreciation, interest and taxation |
2,555.68 |
2,398.10 |
| Less: |
|
|
| a) Interest |
7.62 |
12.44 |
| b) Depreciation |
253.27 |
214.62 |
|
260.89 |
227.06 |
| Profit before tax |
2,294.79 |
2,171.04 |
| Less: Provision for taxation |
|
|
| a) Income tax |
813.99 |
721.69 |
| b) Deferred tax |
(34.46) |
(19.97) |
|
779.53 |
701.72 |
| Profit after taxation |
1,515.26 |
1,469.32 |
DIVIDEND
Considering the need to conserve resources for the Company’s ongoing capital
expenditure programme, the Board of Directors of the Company do not recommend any dividend
on the equity shares for the year ended 31st December 2015.
APPROPRIATIONS
The Board did not consider transfer of any amount to General Reserve. Accordingly the
net profit after tax for the year amounting to Rs.1,515.26 M (2014:Rs.1,469.32 M) is
retained in the Profit and Loss account whereby the net surplus in the Profit and Loss
account as at 31st December 2015 stood at Rs.8,250.84 M (Rs.6,735.58 M as at 31st
December, 2014).
PROSPECTS
In the light of the anticipated policy reforms and the projected economic recovery, the
Company looks forward to a year slightly better than the year under review barring
unforeseen contingencies.
The Company will continue to invest in expansion of its capacities where required and
for enhancing the effectiveness of its factories mainly for enhancing the manufacturing
efficiency besides development of infrastructure to achieve optimum productivity in line
with the proposed capital expenditure for the current year.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of foreign exchange spent and earned are given in Note No.s.36 and 37
respectively forming part of the Accounts.
CONSERVATION OF ENERGY
Energy conservation is pursued with considerable focus and commitment by the
Management. Over a period of time, the Company has been replacing the roofs of its
factories with FRP sheets so as to provide sufficient natural light during the day
dispensing with the need for electrical lights. Asbestos roofs are replaced by sandwich
aluminum panel sheets in Dapodi. Turbo ventilators in the factories maintain fresh air at
ambient temperature all the time. The lighting system at all places carry energy efficient
fittings to reduce energy consumption. Power factor panels in the circuit not only ensure
quality power for the factory sites without wastage of energy but also result in
considerable savings in the energy bills. The Company made a capital investment of about
Rs. 17 M on energy conservation equipment during the year under review besides taking
steps to curb diesel consumption.
ABSORPTION OF TECHNOLOGY
The Company has been periodically introducing newer models of decanters, separators and
heat exchangers while phasing out their older models for a variety of applications with
suitable technological inputs from the Principals. The Company’s operations are based
on three key technologies; Heat Transfer, Separation and Fluid Handling which are provided
by the Company’s Principals. Over the last few years, technology absorption in
respect of separators, heat exchangers and decanters for a variety of applications has
been successful leading to local supply of certain high value critical components. As the
research and development activities are centralized with the Principals, the Company does
not incur expenditure on research and development.
DIRECTORS
Ms. Susanne PahlenAklundh (DIN: 06999260) and Mr.Goran Mathiasson (DIN: 06999547)
retire by rotation and being eligible, offer themselves for re-election.
Mr. Ravi Krishnamurthi (DIN: 00002278) and Mr. Ashwani Gupta (DIN: 00122889) were duly
appointed as Independent Directors at the 77th Annual General Meeting held on 18th May,
2015. The said Independent Directors have furnished declarations to the Company under
Section 149(7) of the Act to the effect that they meet the criteria of independence
prescribed under Section 149(6) of the Act. -
KEY MANAGERIAL PERSONNEL
Mr. Manoj Barve (DIN: 03097616) who was the Director- Finance of the Company and who
was redesignated as Chief Financial Officer of the Company with effect from 16th February,
2015 in terms of Section 203 of the Companies Act, 2013 (“the Act”), resigned
from the services of the Company with effect from 31st August, 2015. The Board place on
record their appreciation for the services rendered by Mr. Manoj Barve during his tenure
of just over 5 years with the Company.
Mr. Marcin Skiba was appointed as the Chief Financial Officer of the Company in terms
of Section 203 of the Act who commenced his service with the Company with effect from 1st
August, 2015.
Mr. Lars Dithmer, Managing Director (DIN: 06868911), Mr. Marcin Skiba, Chief Financial
Officer and Mr. V. Chandrasekhar, Company Secretary (DIN:00001447) are the Key Managerial
Personnel of the Company as on the date of this report.
BOARD AND COMMITTEE MEETINGS BOARD MEETINGS
Six Board Meetings were held during the financial year on 28th January, 2015, 18th
March, 2015, 14th April, 2015, 7th July, 2015, 8th October 2015 and 26th November, 2015
and the particulars of attendance of the Directors are as under:-
| Name of Director |
No. of Board Meetings attended |
| Mr. Ray Field |
3 |
| Mr. Henrik Holm |
4 |
| Mr. Ravi Krishnamurthi |
4 |
| Mr. Ashwani Gupta |
4 |
| Ms. Susanne PahlenAklundh |
1 |
| Mr. Goran Mathiasson |
1 |
| Mr. Lars Dithmer |
6 |
| Mr. KB Gorane |
6 |
AUDIT COMMITTEE
The Audit Committee comprising of Mr. Henrik Holm, Chairman of the Committee
(Non-Independent Director), Mr. Ravi Krishnamurthi, Member (Independent Director) and Mr.
Ashwani Gupta, Member (Independent Director) met 3 times during the financial year on 18th
March, 2015, 18th May, 2015 and 26th November, 2015. The particulars of attendance of the
Directors are as under-
| Name of Director |
No. of Meetings attended |
| Mr. Henrik Holm |
3 |
| Mr. Ravi Krishnamurthi |
2 |
| Mr. Ashwani Gupta |
1 |
Mr. V. Chandrasekhar, Company Secretary, acts as the Secretary to the Committee.
The recommendations of the Audit Committee were duly accepted and approved by the Board
of Directors.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprising of M/s. Ray Field, Henrik Holm,
Ravi Krishnamurthi and Ashwani Gupta met 2 times during the financial year. The
particulars of attendance of the Directors are as under-
| Name of Director |
No. of Meetings attended |
| Mr. Ray Field |
2 |
| Mr. Henrik Holm |
2 |
| Mr. Ravi Krishnamurthi |
2 |
| Mr. Ashwani Gupta |
2 |
Mr. V. Chandrasekhar, Company Secretary, acts as the Secretary to the Committee.
The terms of reference of the Nomination and Remuneration Committee are as under:-
a) Evaluation of the potential candidate(s) for the positions of Executive Directors,
Non-executive Directors, Management team member including Key Managerial Personnel.
Determination of the qualifications, positive attributes and independence of a director
where relevant;
b) formulating the criteria and framework for evaluation of the performance of the
Directors;
c) recommending the remuneration for the Directors to the Board.
The remuneration policy recommeneded by the Committee and approved by the Board of
Directors for the Directors, Key Managerial Personnel and Senior Management personnel is
performance driven, having a balance between fixed and incentive pay, and sufficient to
attract, retain and motivate them in the achievement of their set objectives in relation
to the working of the Company and its goals.
While the remuneration of the Managing Director, the Wholetime Director, Key Managerial
Personnel and Senior Management personnel comprises of salary, performance related bonus
or commission based on performance, perquisites and allowances as per the rules of the
Company and retirement benefits as per law, the remuneration of the Non-executive
Independent Directors comprises of commission and sitting fees for each meeting of the
Board and/or Committee attended.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The Corporate Social Responsibility (CSR) Committee comprising of M/s. Lars Dithmer,
Ravi Krishnamurthi and KB Gorane met 6 times during the financial year. The particulars of
attendance of the Directors are as under:-
| Name of Director |
No. of Meetings attended |
| Mr. Lars Dithmer |
6 |
| Mr. Ravi Krishnamurthi |
3 |
| Mr. KB Gorane |
6 |
Mr. V. Chandrasekhar, Company Secretary, acts as the Secretary to the Committee.
The Company’s CSR policy primarily focusses on promoting Sanitation and Hygiene so
as to provide the people staying in the surrounding areas of the Company’s factories,
in particular, with a clean environment and for them to lead a better everyday condition.
Besides, the policy’s focus is also for providing affordable education and healthcare
services to the poor or deprived sections of the community in terms of the strategy
specified in the CSR Policy. The Annual Report on CSR activities is contained at Annexure
I attached to this report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Commitee comprising of M/s. Ray Field and Henrik Holm met
once during the financial year on 26th November, 2015. Mr. V. Chandrasekhar, Company
Secretary, acts as the Secretary to the Committee.
RELATED PARTY TRANSACTIONS
The particulars of contracts with related parties as referred to in Section 188(1) of
the Act is provided in the prescribed form AOC-2 attached as Annexure II to this
report.
RISK MANAGEMENT POLICY
The Company has a wide framework of methods and processes to identify, assess, monitor
and mitigate risks while at the same time to seize business opportunities related to the
achievement of its objectives. The Board of Directors of the Company reviews periodically
the risk assessment and the steps for mitigation concerning the various risks associated
with the affairs of the Company.
DEPOSITS
The Company has not accepted any deposit and as such no amount of principal and/or
interest was oustanding as at the end of the year under review.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINAL POSITION OF THE COMPANY
BETWEEN THE DATE OF FINANCIAL STATEMENTS AND THE BOARD REPORT
There have been no material changes and/or . commitments affecting the financial
position of the Company between 31st December 2015 and the date of this Report except for
the increase in the paid-up equity share capital by an amount of Rs. 840/- and the
Securities Premium Account by an amount of Rs. 5,292/- due to the allotment of 84 equity
shares kept in abeyance since 1993 on account of litigation which got resolved during the
year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS
There are no significant or material orders passed by the ’ Regulators, Courts
and/or Tribunals impacting the going concern status and the operations of the Company in
future.
WHISTLE BLOWER POLICY
The Company’s Whistle Blower Policy broadly provides a detailed process for
reporting, handling and investigation of reported violations and for providing necessary
protection to the whistle blowers besides measures for preventing retaliation against
whistle blowers. The details of the Whistle Blower policy is available on the
Company’s website www.alfalaval.in -
POLICYON PREVENTION OFSEXUALHARASSMENT AT WORKPLACE
The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in
line with the requirements of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal)
Act, 2013 and Rules framed thereunder. The Internal Complaints Committee has also been
set up to redress complaints received regarding sexual harassment.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act
read with Rule 12 of the Companies (Management and Administration) Rules, 2014 forms part
of this Report as Annexure III.
SECRETARIAL AUDIT
The Secretarial Audit report issued by Mr. SV Deulkar of SVD Associates, Practising
Company Secretary (CP No.965) is attached as Annexure IV to this Report.
In relation to the observation made by the Secretarial Auditor on the non-filing of
MGT-14 for approval of audited accounts and Directors’ report for the year 2014, the
Company has taken a stand that the relevant provisions of Companies Act, 2013 are not
applicable for the said documents relating to the financial year commencing on 1st January
2014 as the Companies Act, 2013 was made applicable from the financial year commencing on
or after 1st April, 2014..
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors confirm that:-
a) In the preparation of the annual accounts for the year ended 31 st December, 2015,
the applicable accounting standards had been followed along with proper explanation
relating to material departures;
b) The accounting policies, which have been selected, have been applied consistently
and judgments and estimates made are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company as at 31st December, 2015 and of the Profit of
the Company for the year ended on that date;
c) Proper and sufficient care have been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d) The annual accounts for the year ended 31st December, 2015 have been prepared on a
going concern basis;
e) Internal financial controls being followed by the Company are adequate and operating
effectively;
f) Proper systems have been devised to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
In relation to the fraud on the Company reported at clause (xii) of the Annexure to the
Auditor’s Report by the Auditors, the Company has, based on the interim investigation
report, taken appropriate action against the concerned employees while the investigation
is ongoing to determine the extent of fraud and to explore the possibility of further
action against the relevant parties.
EMPLOYEES
Employee relations continue to be cordial. The Board wishes to place on record their
appreciation for the services rendered by the employees of the Company at all levels.
Information as per Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, forms part of this Report. However, the Report and Accounts are being sent to
all shareholders of the Company excluding the information relating to the statement of
particulars of employees. Any shareholder interested in obtaining such particulars may
write to the Company Secretary for a copy.
STATUTORY AUDITORS
The Auditors, M/s. BSR & Associates LLP, Chartered Accountants, were appointed as
the Auditors of the Company at the 76th Annual General Meeting of the Company held on 19th
June, 2014 to hold office till the conclusion of the 81st Annual General Meeting of the
Company. The matter relating to such appointment is being placed before the Members for
their ratification at the ensuing Annual General Meeting.
ACKNOWLEDGEMENT
The Board places on record their appreciation of the contribution of the customers,
suppliers and all other stakeholders towards the performance of the Company during the
year under review.
For and on behalf of the Board of Directors,
| Henrik Holm |
Lars Dithmer |
| Director |
Managing Director |
| Place : Pune |
|
| Dated : 9th March, 2016 |
|
+91-9892691696
