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The Board of Directors (hereinafter referred to as "the Board") hereby submit the report of the business and operations of the Company (hereinafter referred to as "the Report") along with the Audited Financial Statements of the Company for the Financial Year (FY) ended March 31, 2018. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
Financial Results and Highlights of Performance
The Companys performance, as per Indian Accounting Standards (IND AS), during the Financial Year under review is summarized as follows:
Rs in Million
|FY 17-18||FY 16-17||FY 17-18||FY 16-17|
|Revenue and Other Income (Total Income) from Continuing Operations||3049.79||2971.78||28577.52||30750.04|
|Earnings before Finance Cost, Depreciation, Exceptional Item & Tax||657.56||517.62||1590.80||1580.00|
|Profit / (Loss) after Finance, Depreciation and before Exceptional Items & Tax||460.70||334.35||(135.25)||129.36|
|Exceptional Items - Income/(Expense)||-||112.04||-||822.07|
|Profit before Tax (PBT) from Continuing Operations||460.70||446.39||(135.25)||951.45|
|Profit after Tax (PAT) from Continuing Operations||409.00||496.58||(416.16)||706.97|
|Profit after Tax (PAT) from Discontinuing Operations||-||469.53||-||-|
|Share of Net Profit of joint ventures||-||-||94.07||186.48|
|Profit/(loss) for the year||409.00||966.11||(322.09)||893.45|
|Other Comprehensive Income/(Loss)||0.27||(4.37)||271.90||100.18|
|Total Comprehensive Income||409.27||961.74||(50.19)||993.63|
|Earnings Per Share - Basic and Diluted ()||31.71||74.90||(25.30)||70.17|
Note: The above figures are extracted from Standalone and Consolidated Financial Statements as per Indian Accounting Standard (IND AS") and are prepared in accordance with the principles stated therein as prescribed by the Ministry of Corporate Affairs under Section 133 of the Companies Act, 2013 ("the Act") read with relevant Rules framed therein.
Management Discussion & Analysis of Financial Condition, Results of Operations and State of Company Affairs
Globally, the global economic upswing that began around mid-2016 has become broader and stronger. Economic activity has gathered momentum, both in advanced and emerging market economies, though financial market volatility and potential trade wars pose a threat to the outlook. Economic activity remained robust in emerging market economies. Surge in crude prices remain an area of concern. At 3.8 percent, global growth in year 2017 was the fastest since year 2011. With financial conditions still supportive, global growth is expected to pick up to a 3.9 percent rate in both year 2018 and 2019.
It has been an eventful year for your Company with many events playing its part and impacting the organisation substantially. Across businesses we have renewed leadership at some levels, built a highly supportive customers, and motivated team with a solid action plan to improve financial returns. In short, we are continuing a journey that began a little less than three years ago when markets were weak, business was declining and our overall performance was not upto our own expectations. Today, markets are improving, business is growing and the opportunities for better financial performance are substantial.
We are far from peak performance but we are beginning to get our competitive capabilities positioned to address the challenges and realize the potential that is in front of us.
Today we have a team that has the operational experience as well as the energy and passion required to ensure continuing success in executing the business plan our team has developed and is implementing.
Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India, Mr Narendra Modi, had launched the Make in India program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the world by the end of year 2020. With the forward push by the Government, the sectors in which we operate, provide us great opportunity in each of our businesses viz. Engineering, Industrial Automation, Consumer Durables (Water and Air Products), Chemical Tankers and Real Estate.
The manufacturing sector of India has the potential to reach US$ 1 trillion by year 2025 and India is expected to rank amongst the top three growth economies and manufacturing destination of the world by the year 2020. Companies engaged in the engineering sector are virtually on a roll. Capacity creation in sectors like infrastructure, power, mining, oil & gas, refinery, steel, automotive, and consumer durables has been driving demand in the engineering sector.
Separately, theapprovalofsignificantnumber of Special Economic Zones (SEZs) across the country and the development of the Delhi Mumbai Industrial Corridor (DMIC) across seven states is expected to further bolster the engineering sector.
Further, the Financial Year 2017-18 has been a year of reforms for India. The transformational Goods and Services Tax ("GST"), a landmark reform which will have a lasting positive impact on the economy and on the businesses, the Real Estate (Regulation and Development) Act, 2016 ("RERA") the new Indian Bankruptcy Code ("IBC") with its latest amendment and the decision to strengthen the balance sheets of the Public Sector Banks (PSBs) encountered challenges of policy, law and technology. In the first half of the financial year growth was affected as the economy slowed down due to the learning curve of adapting to the changes due to the new reforms. Towards the end of the second half, the economic growth improved due to the corrective actions taken and the global economic recovery.
The Reserve Bank of India (RBI) expects Indias economic growth rate to strengthen to 7.4 per cent in the current fiscal, from 6.6 per cent in 2017-18, on account of revival in investment activity with risks evenly balanced. Several factors, are expected to accelerate the pace of economic activities in the current year. There are now clearer signs of revival in investment activity as reflected in the sustained expansion in capital goods production and still rising imports, albeit at a slower pace. Global demand has been improving, which should encourage exports and boost fresh investment.
Precision Tools Group (PTG)
Marching ahead on journey to provide innovative solutions to customers and PTGs efforts of positioning Totem brand as high performance tools solution provider has started paying off & created impact in domestic & overseas market.
PTG is on an aggressive growth path and has delivered profitable 20% Year on Year (YoY) growth. High Performance Tool portfolio is showing decent growth and continues to be the future main revenue stream. This portfolio has opened many gates in the international market.
PTG introduced long drills in carbide for automotive application which has 100% Growth with specific success in applications of Crankshaft oil hole drilling, drilling of Automotive special parts & Mining drills.
Geographic expansion along with portfolio expansion has been the main theme. PTG has made inroads into new high potential export customers in Solid Carbide tools in Australia, Israel & Japan. Expansion in domestic distribution coverage has helped PTGs growth
PAN India. Engineering Division participated in many Domestic as well as International trade exhibitions viz. EMO (European Machine Tools Exhibition), IMTEX (Indian Metal Cutting Machine Tools Exhibitions), AeroDef & some other regional events to showcase our capabilities.
PTG continues to invest in design and technology to further strengthen our position against competition in domestic and overseas market. Investment in technology is done to enhance processes like Surface treatment, Edge preparation, Tool 3D scanning & application based tool design simulations.
Globally carbide cutting tool manufacturers are facing shortage & price hike in Carbide raw material from October 2017 due to increase in Cobalt & Tungsten Price.
Pressures are on costs due to escalation of prices of raw materials in international markets, making cost prudence drive a compulsion. General price increase has been announced in January2018 for all products to cover such increase, which have been accepted by the market.
PTG will continue to invest in capacity augmentation to meet increased market demand. Initiatives during the year included investment & capacity enhancement in manufacturing HSS drills at Waluj, Aurangabad for improved product margins & availability. Spring washer facility in Waluj, Aurangabad got approved by one of the major international fastener giants.
Industrial Automation and Coding Business Group (CBG)
Coding business group is at consolidation stage, with 12% Year on Year (YoY) growth but the future growth story for CBG is industrial automation and CBGs own manufactured Laser marking systems.
Industrial Automation business under CBG has proved its mettle in line automation projects done for a leading four wheeler manufacturer in India. Clutch Assembly & Gear Box Assembly lines were successfully installed & commissioned. The sales funnel is attractive in this area.
Large-value CBG automation orders from big automotive OEM companies are one of significant achievements in FY18 for the projects business.
Inroads into name plate marking Laser Special Purpose Machines, non-marking automation such as Billet feeding, Billet weighing & CAM sprocket auto tightening special purpose machines are new introduction in CBG. Further, our efforts to make inroads in major two wheeler manufacturers, Bearing Industries, Auto Ancillaries resulted in opening up of Tier-1 vendors doors for Telesis DOT pin marking applications.
CBG has ambitious growth plan in scaling up existing solution & introducing Robotic solutions. CBG is building sales network at regional level to strengthen business development & critical talent development in new technology areas to support growth initiative.
The Engineering Division continued to be committed towards Employee Safety & wellbeing through its various employee engagement initiatives, operations by complying all environmental & safety regulations.
ACE (Adapt Change Excel) change management program will continue to set directions to achieve our vision of being market leader by providing innovative solution.
During the year, some product lines were moved from Chikalthana to Waluj. Continuing the journey of synergising and consolidation of products portfolio, the Company is now in the process of reestablishing the supply chain effectively.
Project Vicinia, Chandivali
The real estate development Project Vicinia at Chandivali is registered under Maharashtra Real Estate Regulatory Authority and is expected to be completed by June 2021. The Company has sold 129 flats pertaining to its share in Project Vicinia as at March 2018.
Investment in Subsidiaries/Joint Ventures
During the year under review, the Company invested Rs 10 crores in Preference Shares of Forbes Technosys Limited a wholly owned subsidiary of the Company.
Subsidiaries/ Associates /Joint Ventures
The following companies have become or ceased to be subsidiaries, joint ventures or associates:-
|Name of Company||Nature of Relationship|
|Aquamall Water||A wholly owned subsidiary of Eureka|
|Solutions Limited||Forbes Limited merged with Eureka Forbes Limited vide Court Order dated March 31, 2018 with effect from April 1, 2016.|
|Brightyclean (Spain) S.L||A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) ceased to a subsidiary with effect from December 31, 2017.|
|Lux CZ s.r.o||A wholly owned subsidiary of Lux Professional International Gmbh (a step down subsidiary of Eureka Forbes Limited) ceased to a subsidiary with effect from December 31, 2017.|
|Lux Oesterreich Professional GmbH, Austria||A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) was merged with Lux Oesterreich Gmbh with effect from October 31, 2017.|
|Lux Professional GmbH, Germany||A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) was merged with Lux (Deutschland) Gmbh with effect from December 31, 2017.|
|Lux/SK/s.r.o||A wholly owned subsidiary of Forbes International AG (Earlier known as Forbes Lux Group AG, a step down subsidiary of Eureka Forbes Limited) ceased to be a subsidiary with effect from December 31, 2017.|
|Lux Waterline GmbH||A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) was merged with Lux (Deutschland) Gmbh effect from December 31, 2017.|
|Lux International Service KFT||Incorporated as a wholly owned Subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) with effect from January 6, 2017|
|Forbes International AG||A wholly owned subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) ceased to be subsidiary with effect from April 1, 2018|
|Lux Professional International Gmbh||A wholly owned subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) merged with Lux International AG with effect from April 1, 2018|
|Lux Aqua Hungaria KFT||A wholly owned subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) ceased to be subsidiary with effect from April 30, 2018|
|Lux Aqua Czech s.r.o||A wholly owned subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) ceased to be subsidiary with effect from April 30, 2018|
Details of subsidiaries, associate companies and joint venture companies are set out in the statement in Form AOC-1, pursuant to Section 129 of the Act, and is attached, herewith, as Annexure "I". Financial Statements of these subsidiaries are available for inspection at the registered office of the Company and that of the subsidiary company concerned and the same would be also available on the website of the Company, www.forbes.co.in
Eureka Forbes Limited & its Subsidiaries (Collectively "EFL")
In a year that has been interesting for businesses and economy yet recovering from the impact of demonetisation and transition to GST, where both the consumer and trade sentiments took a beating in the early half of the year, slowly getting back to track in the later part of the financial year.
EFL believed in the power of PLUS positivity leads to ultimate success. In a year that otherwise was stretched, EFL continued to play within its categories across channels remaining positive about the mid-term outlook of the industry and continue to invest strongly in our core categories and brands, developing them for the future. The competitive intensity will continue to increase and as leaders, EFL continued to anticipate and moved swifter. Key Priorities:
Drive Growth across all Businesses
Bring in cost efficiencies to Optimise Efficiency
Build an organisation of Customer Fanatics and build relationships
Incubate New Categories and Segments
Sustained efforts in Digitisation
Continued focus on innovations and activations
Bring about Cultural Change
Armed with consumer insights, EFL continued to drive innovation across brands, categories, operations and adapted the go-to-market strategies, taking into account the diversity, market needs, and the evolving channels of distribution. EFL is harnessing technology, mobile connectivity to build leading edge operational and marketing capabilities. It is indeed helping EFL to engage and understand its customers and its people better through different mediums such as Eureka TV. EFL continued to lead the digital transformation within and leveraged its Direct Sales capabilities to drive competitive advantage. EFL grew in the fast emerging e-commerce channel supported by Eurochamps and its Retail and Institutional efforts to assist the customers across the length and breadth of India continued. Most importantly, EFLs brands and operations continued to be held together by its firm belief / purpose to be Friend for Life. EFL has under Jal Daan movement installed 26 Community Drinking Water Plants and products to support communities and School children touching lives of over 50,000 fellow citizens.
Forbes Technosys Limited (FTL)
During the year under review FTL continued its growth across multiple sectors and dimensions, albeit with pressures on revenue growth. During the year, GST though beneficial in long term, in the year under review, posed several issues related to re-classification of goods and services as well as reconfiguration of GST by the companys customers impacted the velocity and scale of business. In these circumstances, FTL chose to consolidate across its business verticals and product range in a challenging business environment and increase in service and solution revenue, which has resulted in an Earnings Before Interest Depreciation Taxation and Amortization (EBIDTA) growth from Rs 0.60 Crores in FY 2016-17 to Rs 6.82 Crores in FY 2017-18.
Business from key verticals such as banking, telecom and Government slowed down as these segments faced challenges of their own.
The year under review proved to be a difficult one for the banking segment as banks put on hold procurement plans due to their preoccupation with dealing with large NPAs and their focus on digitization initiatives.
The telecom segment saw pricing and profitability challenges posed by new entrant Reliance Jio, which stalled further roll-out plans for bill payment machines.
Key Government programs like Digital India and Smart cities also did not reach the envisaged roll-out stage during the year.
All the above factors not only impacted performance of FTL but also of our competitors in the same industry, in addition to causing a sudden reduction in overall demand.
However, over the year, it has been seen that post demonetization, cash has come back to pre-demonetization levels and our customer segments have again felt the need to frame programs to handle cash, cheques and other instruments alongside their digitization initiatives. As a result of this and the pent-up demand, it is expected that large roll-outs self-service kiosks by banks, telcos and Govt. will happen in the coming year.
Forbes Xpress, FTLs e-payments services platform, continued to grow both in terms of scale, franchisee numbers and geographic presence. During the year, development effort for launching the
Bharat Bill Payment System (BBPS) was undertaken and was launched on schedule. FTL received the following awards during the year:
- Forbes Xpress bagged the prestigious Drivers of Digital award for "Best Digital Payment Facilitator" in the country
- Our R&D won the ASSOCHAM- MSME runners-up award in the category- "Reduce dependence on non-renewable sources of energy"
FTL will continue to focus on improving financial strength, while making investments in new services such as Bharat Bill Payment System, Aadhaar enabled Payment System, Insurance etc., infrastructure creation, franchisee network and new product development. These investments will help us in addressing emerging opportunities in domestic and international markets in the near future.
Shapoorji Pallonji Forbes Shipping Limited (SPFSL, formerly SCI Forbes Limited)
In January2018, SPFSL acquired one 2006 Japanese built vessel with stainless steel tanks of 20,938 mt dwt ("MT Saranga") increasing the total dwt capacity of the company to 73,424 mt. SPFSL is the only company in India that owns chemical tankers. SPFSL is committed to the safe and efficient transport of chemical cargoes for all its customers and partners. All the five vessels maintain approvals from Oil Majors including Shell, Exxon, Chevron, BP and Total for carrying their products.
Earnings in FY 2017-18 were affected adversely due to increase in supply of ships and increase in fuel prices. A total of 83 new build ships joined the chemical tanker fleet in the year 2017. The fuel oil prices increased from US$ 319 per mt in April 2017 to US$ 390 per mt in March 2018 thereby resulting in reduction in the net voyage earnings.
The average earnings per day per ship for marineline coated tankers were down to USD 8,780 as compared to USD 9,971 per day per ship during previous year. The earnings for MT Saranga averaged at US$ 12,083 per day.
Seaborne chemicals trade grew by about 2% YoY in 2017 but the freight rates remained subdued due to increase in supply. As per an estimate, about 136 vessels are expected to be delivered in 2018. With a sharp decline in the new build deliveries in 2019 onwards, the markets are expected to tighten up and give rise to the freight earnings.
Forbes Bumi Armada Limited (FBAL)
FBAL maintains exceptionally good manpower which continues to provide quality manning services to Floating Production Storage and Offloading (FPSO) located in Mumbai High. The manning team has brought laurels to the Company by maintaining both the FPSO with zero Loss Time Injury (LTI) and 100% commercial uptime. Manpower resource of company are delivering international standard services to client maintaining best Health Safety and Environment (HSE) records.
Assets of The Svadeshi Mills Company Limited (Svadeshi)
The Assets of Svadeshi continue to be in the hands of the Official Liquidator, High Court, Bombay. The Company is exploring options available.
Dividend & Transfer to Reserves
Your Directors are pleased to recommend for the approval of the Members a dividend of Rs 2.50 per equity shares (previous year: 2.50). The dividend, if approved by the Members would involve a cash outflow of Rs 38.9 million including dividend tax (Previous Year Rs 38.8 million). In accordance with SEBI (Listing Obligations and Disclosure Regulations), 2015 ("SEBI LODR"), the Board of Directors of the Company has adopted a Dividend Distribution Policy, which is annexed as Annexure "II". The policy is also available on the website of the Company, www.forbes.co.in The Company proposes to retain the entire balance amount of 787.7 million (Previous Year Rs 417.30 million) in the Profit & Loss Account.
The paid up Equity Share Capital of the Company as on March 31, 2018 was 128.99 million. During the year under review, the Company has not issued any shares with differential voting rights or sweat equity shares and has not granted any stock options. As on March 31, 2018 none of the Directors of the Company hold shares or convertible instruments of the Company.
The Company continues to focus on judicious management of its working capital. Relentless focus on receivables, inventories, strict cost control and, use of alternative borrowing instruments has helped in keeping the borrowings and effective interest cost under control.
Redeemable Non-convertible Debentures
The Non- Convertible Redeemable Debentures (NCDs) aggregating to 1,000 million were outstanding during the year ended March 31, 2018.
The Company has not accepted deposits from public falling within the ambit of Section 73 of the Act and The Companies (Acceptance of Deposits) Rules, 2014. Unclaimed matured deposits were transferred to Investor Education and Protection Fund as per the provisions of the Companies Act, 1956 / 2013.
Particulars of loans, guarantees and investments
Particulars of Loans, Guarantees and Investments covered under provisions of section 186 of the Act are given in the notes to the Financial Statements.
Related Party Transactions
All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There were no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of a foreseen and repetitive nature. The transactions entered pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis. Form AOC-2 is annexed as Annexure III to this report, pursuant to Section 188 of the Act. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website.
Vigil Mechanism/Whistle Blower Policy
The Company has Whistle Blower Policy/Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The Policy is also available on the website of the Company.
Internal Controls and Systems
The Company has an internal control system, which ensures that all transactions are recorded satisfactorily and reported and that all assets are protected against loss from unauthorized use or otherwise. The internal control systems are supplemented by an internal audit system carried out by a team under the direct supervision of the Head of Internal Audit. The findings of such internal audits are periodically reviewed by the management and suitable actions taken to address the gaps, if any. The Audit Committee of the Board meets at regular intervals and addresses significant issues raised by both the Internal Auditors and the Statutory Auditors. The process of internal control and systems, statutory compliance, information technology, risk analysis and risk management are inter-woven to provide a meaningful support to the management of the business.
Price Waterhouse Chartered Accountants LLP, the statutory auditors of the Company has audited the financial statements included in this annual report and has issued a report on our internal financial controls over financial reporting as defined in Section 143 of the Act.
The Company ensures compliance of applicable laws. The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Internal Complaints Committee Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. Internal Compliant Committee (ICC) has been setup to redress complaints receive regarding sexual harrasment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During FY 2017-18, no complaint on sexual harassment was received.
Corporate Governance and Management Discussion and Analysis
The guiding principle of the Code of Corporate Governance is harmony i.e. balancing the need for transparency with the need to protect the interest of the Company and balancing the need for empowerment at all levels with the need for accountability. A detailed report on Corporate Governance forms part of Annual Report. The Management Discussion and Analysis forms part of this report.
Corporate Social Responsibility (CSR)
The Company is committed to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical. The Company is committed to inclusive, sustainable development and contributing to building and sustaining economic, social and environmental capital and to pursue CSR projects, as and when required, that are replicable, scalable and sustainable with a significant multiplier impact on sustainable livelihood creation and environmental replenishment.
The Company during the FY 2017-18 undertook infrastructure funding project and committed and earmarked funds for partial reconstruction of school building. The said projects undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013. Rs 9.61 lakhs pertaining to FY 2017-18 has been spent on Safe drinking water, Environment Preservation and Supporting Schools. The Company has entered into a Memorandum of Understanding (MoU) with Aurangabad Municipal Corporation for balance unspent balance of Rs 11.39 Lakhs pertaining to FY 2017-18 towards partial reconstruction of a municipal school building in Aurangabad. The construction work would start after receipt of requisite approvals.
The Annual Report on CSR activities, in terms of Section 135 of the Act, is annexed to this report as Annexure IV.
Risk management process includes identification of risk, its underlying dynamics, mitigation mechanism, prioritization of risk, measurement of key indicators and establishing a monitoring system. A Company-wide awareness of risk management policies and practices are being inculcated to minimize the adverse effect of risks on the operating results and the subject of management of risks is being approached in a planned and co- ordinated manner. Elucidation of role clarity, understanding of level of authority and reporting system is expected to help this process significantly. It is realized that this is a continuous process, requiring continued updating, based on changing business conditions and that risk management and performance improvement will go hand in hand.
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.
Directors and Key Managerial Personnel
As per provisions of Section 152(6) of the Act, Mr. Jai Mavani is due to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board of Directors recommend his re-appointment as Director of the Company.
The Company has received declarations from all the Independent Directors of the Company con fi rming that they meet with the criteria of Independence as prescribed both under the Act and SEBI (LODR), 2015 and there has been no change in the circumstances which may affect their status as Independent Directors during the year.
Independent Directors are familiarized with their roles, rights and responsibilities in the Company through induction programmes at the time of their appointment as Directors and through presentations made to them from time to time. The details of familiarization programmes conducted have been hosted on the website of the Company and can be accessed at www.forbes.co.in
Audit Committee of the Board of Directors
The details pertaining to the composition of the Audit Committee of the Board of Directors are included in the Corporate Governance Report which forms part of this report.
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Obligations and Disclosure Requirements) Regulation, 2015 (SEBI LODR), the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as, the evaluation of the working of its Audit, Nomination and Remuneration, Stakeholders Relationship Committees.
The performance of the Board was evaluated by the Board after seeking feedback from all the Directors on the basis of the parameters/ criteria, of key responsibility by the Board, such as, degree of fulfillment Board Structures and Composition, establishment and delineation of responsibilities to the Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics and, Quality of relationship between the Board and the Management. The performance of the committees viz. Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility and Stakeholders Relationship Committee was evaluated by the Board after seeking feedback from Committee members on the basis of parameters/criteria such as degree of fulfillment of key responsibilities, adequacy of committee composition, effectiveness of meetings, committee dynamics and, quality of relationship of the committee with the Board and the Management.
The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of self- assessment questionnaire and feedback/inputs from other Directors (without the concerned director being present).
In a separate meeting of Independent Directors, performance of Non-Independent Directors of the Board as a whole and the performance of the Chairman were evaluated.
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, senior management personnel and their remuneration. Remuneration Policy of the Company acts as a guideline for determining, inter alia, qualification, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal and evaluation of the performance of the Director, Key Managerial Personnel and senior managerial personnel. Nomination and Remuneration Policy is annexed as Annexure "V" to this report.
Disclosure as required under Section 197 (12) of Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure VI to this Report.
Meetings of the Board
The Board met at least once in each quarter and 6 meetings of the Board were held during the year and the maximum time gap between two Board meetings did not exceed the time limit prescribed in the Act. The details have been provided in the Corporate Governance Report.
Directors Responsibility Statement
Pursuant to the provisions of Section 134(5) of the Act, the Directors, based on the representations received from the operating management, confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; (iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and detecting fraud and other irregularities; (iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Auditors and Audit Report Statutory Auditors
Pursuant to the provisions of section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, Price Waterhouse Chartered Accountants LLP (PWC)(ICAI Firm Registration No.012754N/N500016) were appointed as the Statutory Auditors of the Company for a term of 5 years till the conclusion of 103rd Annual General Meeting of the Company.
The Audit Report forms part of the Annual Report. The Auditors have referred to certain matters in their report on Financial Statements to the shareholders, which read with relevant notes forming part of the accounts, is self - explanatory.
As per the requirements of Section 148 of the Act read with The Companies (Cost Records and Audit) Rules, 2014, the cost accounts of the Engineering Division and Project Vicinia of the Company are required to be audited by a Cost Accountant. The Board of Directors of the Company have, on the recommendation of the Audit Committee, appointed Kishore Bhatia & Associates, Cost Accountants, as Cost Auditors for the FY 2018-19 on a remuneration of Rs 0.44 million plus out of pocket expenses. As required under the Companies Act,
2013, necessary resolution seeking members ratification for the remuneration to the Cost Auditor is included in the Notice convening the Ninety Ninth Annual General Meeting of the Company.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Makarand M.
Joshi & Co, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial
Auditor is annexed herewith as Annexure VII. There was a delay in processing of one of the transmission request where the legal heirs had requested for waiver of specified documents and the amount involved was substantial. The delay was due to time taken by Registrar & Transfer Agents to reasonably satisfy itself about genuineness before processing transmission.
Human Resources Development and Industrial Relations
The major focus for Human Resources (HR) partnered closely with Engineering business for several important initiatives and imperatives. Talent infusion and augmentation in the respective Business is a major focus are a and was managed effectively in a highly competitive talent acquisition scenario. Performance and potential assessment with focus on career and succession planning continue and middle level leadership transitions were achieved successfully.
Continuing movement towards automation & digitisation, eg. HR processes like, the Performance Management System (PMS) and Leave Management System (LMS) were completely automated. The migration to SAP Payroll has also commenced.
The employee relations continued to be cordial and productive with boosting capacity utilisation, efficiency several significant and productivity in the plants
Particulars of Employees and Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
(a) The information required pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.
(b) Information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as Annexure VIII.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure IX and forms part of this Report.
Business Responsibility Report
A separate section on Business Responsibility Report forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI LODR.
Statements in the Boards Report and the Management Discussion
& Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply, input costs, availability, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
Your Directors acknowledge and thank all stakeholders of the Company viz. Government, customers, members, employees, dealers, vendors, banks and other business partners for their valuable sustained support and encouragement. Your Directors look forward to positive support and encouragement from all stakeholders in the years ahead.
For and on behalf of the Board
Shapoor P. Mistry
Mumbai, May 28, 2018