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Patels Airtemp (India) Ltd.,
Your Directors have pleasure in presenting herewith the 25th Annual Report together with the Audited Financial Statements for the year ended on 31st March, 2017.
|(Rs. in Lacs)|
|Particulars||Year ended on 31-03-2017||Year ended on 31-03-2016|
|Revenue from Operations (Net)||13614.59||12664.72|
|Less: Depreciation & Amortisation Expense||258.16||239.59|
|Profit/(Loss) on sale of Fixed Assets||(2.62)||0.93|
|Profit before Tax||1220.08||1108.73|
|Tax Expenses :|
|- Net Current Tax Expenses||429.45||392.31|
|- Deferred Tax||4.07||1.60|
|Profit after Tax||786.56||714.82|
|Balance brought forward from previous year||4586.36||4095.79|
|Less: Adjustment on Account of Change in||Nil||Nil|
|useful life of Assets|
|Less : Short Provision for Dividend||Nil||Nil|
|Profit available for Appropriation||5372.92||4810.61|
|Less: Proposed Dividend #||-||111.54|
|Less: Tax on Dividend #||-||22.71|
|Less Transfer to General Reserve #||-||90.00|
|Surplus carried forward to Balance Sheet #||5372.92||4586.36|
|Earning Per Share||15.51||14.10|
# Refer para "TRANSFER TO RESERVE" hereunder.
STATE OF COMPANYS AFFAIRS:
The Company has earned revenue from operations (gross) of Rs.148.61 crores during the year ended on 31st March, 2017 as against Rs.137.66 crores earned during the previous year ended on 31st March, 2016, giving a rise of 7.95 % as compared to previous year.
Out of the revenue from operations of Rs.148.61 crores earned by the Company during the year under review, Rs.1 43.75 crores represents sale of products (Domestic & Export), Rs.1.65 crores represents sale of Services (Processing Charges) and Rs.3.21 crores represents other operating revenues. The Company has also earned other income of Rs.50.71 lakhs during the year under review as against Rs.45.78 lakhs earned during the previous year.
The Company has earned the Profit before Tax of Rs.1 2.20 crores during the year ended on 31 st March, 2017 as compared to Rs.11.09 crores earned during the previous year ended on 31st March, 2016, showing a rise of 10 %.
The Company has earned Net Profit of Rs.7.87 crores for the year ended on 31st March, 2017 after making Provision for Tax Expenses of Rs.4.34 crores and other adjustments, as compared to Net Profit of Rs.7.15 crores earned by the Company during the previous year ended on 31st March, 201 6, a rise of 10.07 %.
After adding the Surplus in the Statement of Profit & Loss of Rs.45.86 crores brought forward from the previous year to the profit of Rs.7.87 crores earned by the Company during the year under review, the total amount of Rs.53.73 crores is available for appropriation.
As you aware that the Company is in engineering industry and is engaged in manufacturing/fabricating tailor made machines and therefore, the order book position of such type of company can play pivotal role in the growth of the Company. Your Directors are pleased to state that continuing the past trend; the Company is having confirmed orders of about Rs.252 Crores on hand as on 01/08/201 7. Thus your Directors are quite bullish on repeating similar performance in future. Your Directors are cautious and making untiring efforts so as not to compromise on growth, quality, and profitability of the Company.
CHANGE IN SHARE CAPITAL
There is no change in the Share Capital of the Company during the year under review.
The Directors have recommended dividend of Rs.2.50 per share (@ 25 %) on 50,70,240 Equity Shares of Rs.10/- each of the Company for the Financial Year ended on 31st March, 2017 (2016-2017), as compared to Dividend of Rs.2.20 per share (@ 22.00%) declared for the previous Financial Year ended on 31st March, 2016. This will absorb Rs.126.76 lakhs as against Rs.111.54 lakhs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be Rs.25.81 lakhs as against Rs.22.71 lakhs in the previous year.
The proposed rate of dividend has been increase from 22% to 25% for the financial year 2016-2017, being Silver Jubilee Year of the Company, as 25 years completed by the Company.
A resolution to that effect has been placed for the approval of the members at this Annual General Meeting of the Company and that the same, when declared, shall be paid to the Members.
TRANSFER TO RESERVE :
Government of India, vide Notification dated March 30, 2016 and Circular No. 4/2016 dated April 27, 2016 had amended the Companies (Accounting Standards) Rules, 2016 effective from March 30, 2016. According to the amended rules, the proposed dividend as recommended by the Board will not be recorded as a liability as at March 31, 2017 (Refer Para 8.5 of AS 4 - Contingencies and Events occurring after the Balance Sheet date). Accordingly, the proposed dividend of Rs.2.50 per share (@ 25%) and tax thereon are not recognized as Liability in the Annual Accounts for the financial year ended 31/03/2017. However, the same will be considered as Liability on approval of shareholders at this Annual General Meeting.
In view of above, the Company has not transferred any amount to the General Reserve for the year ended on 31st March, 2017 and the total amount of Rs.53.73 crores is proposed to be retained as the Surplus in the Statement of Profit and Loss.
MATERIAL CHANGES AND COMMITMENTS
In terms of Section 134(3)(l) of the Companies Act, 2013, no material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year and the date of this Report. There has been no change in the nature of business of the Company.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
The Company has not received any significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company as required under Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, in the prescribed Form MGT-9, is annexed herewith as Annexure - A, to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report has been enclosed herewith as per Annexure - B and forming part of the Directors Report.
RECOGNITION OR AWARDS
The Companys products have ASME (American Society of Mechanical Engineers-USA) "U"/ "U2"/ "S" Stamp authorization. Our Company is also a member of HTRI (Heat Transfer Research, Inc, U.S.A.) for updating Heat Transfer Technology.
We are proud to announce that after 5 years of rigorous Preparation & 4 days of Survey and Audit of Quality Systems, Procedure, Calibration and Skills by a team of Super Specialist of ASME (American Society of Mechanical Engineers-USA) Accredited N & NPT authorization to our Company, a Global Qualification to Manufacture Heat Exchangers & Pressure Vessels for Nuclear Power Plant. Our Company is the 3rd Company in India with "N-NPT" authorization to Manufacture above equipments which has put our Company in elite League of Critical Nuclear Power Plant Equipments.
Due to "U"/ "U2"/ "S" and "N & NPT" Stamp authorization, it is expected to improve the Quality of the products/ equipments of the Company and to achieve higher growth and profitability of the Company in future.
FINANCE UNDER CONSORTIUM ARRANGEMENT WITH BANK OF BARODA & AXIS BANK
The Company is availing Working Capital facilities aggregating to 102.00 Crores under consortium arrangement with Bank of Baroda and Axis Bank after the sanction of Working Capital facilities of 22.00 Crores by AXIS Bank Ltd. (AXIS Bank) in August, 2016. The Company has duly executed security documents including Mortgage Deed, Supplemental Hypothecation Deed, Deed of Rectification, Personal Guarantees, Undertakings and other documents in favour of BOB and Axis Bank under Consortium arrangement and created securities on pari-passu basis. The Company has made regular repayment of Loan & interest and there is no any overdue payment to the said Banks.
However, BOB had reviewed in December, 2016 with decrease in existing credit facilities from Rs.97 Crores to 80 Crores.
During the year under review, HDFC Bank Ltd. has also granted to the Company Bill Discounting facility to the extent of Rs.7.00 Crores.
ACCEPTANCE OF DEPOSITS
During the year under review, the Company has not accepted any deposits from the Public and Members of the Company and therefore not required to comply with the requirement under the Companies Act, 2013 and the Rules made thereunder. As such, no amount of principal or interest was outstanding to the Public and Members of the Company as on March 31, 2017 and the Company is not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.
During the year under review, the Company has accepted deposits from the Directors of the Company which are exempted deposits under Rule 2(1)(c)(viii) of Companies (Acceptance of Deposits) Rules, 2014, subject to compliance of the provisions of the Companies Act, 2013 and the Rules made thereunder.
During the year under review, the Relatives of the Directors also brought in unsecured loan/deposits by way of contribution to bring additional long term funds as a part of conditions imposed by Bank of Baroda on the Directors and their relatives, while reviewing working capital facilities to the Company vide its letter dated 20-12-2016, which are exempted deposits under Rule 2(1)(c)(xiii) of Companies (Acceptance of Deposits) Rules, 2014.
Details of deposits accepted and repaid by the Company including interest to the Directors & their Relatives during the financial year 2016-2017 are mentioned in Note No. 28 (Relate party information) of the Notes to the Financial Statements attached with this Annual Report.
TRANSFER OF UNCLAIMED DIVIDEND TO IEPF
In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the amount of unclaimed/unpaid Dividend of Rs.3,29,913/- for the financial year 2008-2009 to IEPF established by the Central Government under Section 124 & 1 25 of the Companies Act, 2013 and Rules made thereunder.
Pursuant to provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on July 30, 2016 on the Companys website: http://www.patelsairtemp.com.
TRANSFER OF SHARES TO IEPF DEMAT AUTHORITY ACCOUNT
Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended vide IEPF (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017, ("Rules") notified by the Ministry of Corporate Affairs effective from February 28, 201 7, the Company is mandatorily required to transfer all such shares in respect of which dividend(s) has not been en-cashed or claimed by the shareholders for 7 (Seven) consecutive years or more from 2009-10 to 2015-16 to the Investor Education and Protection Fund ("IEPF") Authority Demat Account set up by the Central Government.
In this regard, the Company has communicated to the concerned shareholders individually to immediately claim their unclaimed dividends to avoid transfer of their shares to IEPF. In case the Company does not receive any communication from the concerned shareholders within three months from the date of letter issued, the Company shall with a view to adhering with the requirements of the Rules, transfer the shares to the IEPF Demat Account of Authority as per the procedure set out in the rules. No claim shall lie against the Company in respect of unclaimed dividend amount and shares transferred to IEPF pursuant to the said Rules. The Company has also published the Notice in Indian Express and Financial Express for the aforesaid matters. The full details of such shareholders and shares due for transfer to the IEPF Authority Demat Account are also uploaded on the website of the company www.patelsairtemp.com to enable the Shareholders to refer the above website to verify the details of the shares liable to be transferred to the IEPF.
Shareholders may claim back both the unclaimed dividend and corresponding shares transferred to Demat Account of Authority including all the benefits accruing on such shares, if any, from the IEPF Demat Account of Authority after following the procedure prescribed in the rules.
In case of shareholders holding shares in physical form and whose shares are liable to be transferred to the IEPF Demat Account of Authority, the Company will issue duplicate share certificate(s) in lieu of the original held by them for the purpose of transfer of the shares to the IEPF Demat Account of Authority as per the Rules and upon such issue, the original share certificate(s) which are registered in their name will stand automatically cancelled and be deemed non-negotiable and Company shall inform to Depository by Corporate Actions for transfer of shares against the demat shares that need to be transferred in favour of IEPF Authority Demat Account. In case shares are held in dematerialized form and are liable to be transferred, the Company will inform to Depository by Corporate Actions for transfer of shares in favour of IEPF Authority Demat account.
SUBSIDIARY, ASSOCIATE OR JOINT VENTURE COMPANY
The Company does not have any subsidiary, joint venture or associate companies within the meaning of Section 2(6) and 2(87) of the Companies Act, 2013. As such, a report in the prescribed Form AOC- 1 as per first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rules made thereunder is not required to be attached and a Policy for determining material subsidiaries is not required to be framed by the Company.
CONSOLIDATED FINANCIAL STATEMENTS
Since the Company does not have any subsidiary, joint venture or associate companies as mentioned above, Consolidated Financial Statements are not required to be prepared and attached with the financial statement of the Company pursuant to the requirements of Section 1 29 read with Schedule III of the Companies Act, 2013 and Rules made thereunder and Listing Regulations and applicable Accounting Standards.
Being a Listed Company, the Company has taken necessary measures to comply with the provisions of Listing Regulations regarding Corporate Governance as amended from time to time. A separate report on Corporate Governance for the year ended on 31st March, 2017 is attached herewith as a part of this Annual Report viz Annexure - C. A certificate from Statutory Auditors of the Company regarding compliance of the aforesaid provisions of Corporate Governance is obtained by the Company and annexed to the Corporate Governance Report. The Auditors Certificate for the financial year 20162017 does not contain any qualification, reservation or adverse remark in respect of Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(C) and 134(5) of the Companies Act, 2013 and confirm that :
(a) in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same;
(b) the Directors 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 as at 31 st March, 201 7 and of the profit of the Company for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 201 3 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts for the year ended on 31st March, 2017 on a going concern basis ;
(e) the Directors 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
(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given and securities provided by the Company under Section 186 of the Companies Act, 2013 are not provided, as during the year under review, the Company has not given any loan nor made any investment nor given any guarantee nor provided any security to any person.
RELATED PARTY TRANSACTIONS
Information on transaction with related party referred to under sub-section (1) of Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is attached herewith viz Annexure - D and forming part of the Directors Report pursuant to Section 1 34(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.
Transaction with related parties pursuant to the provisions of Listing Regulations and erstwhile Listing Agreement are disclosed in Note No. 28 of the Notes to the Financial Statements for the year ended on 31 st March, 2017, in the Annual Report as required by the Accounting Standard (AS) 18 issued by ICAI.
However, there are no materially significant related party transactions made/entered into by the Company with its related parties including promoters, directors or the management etc. that may have potential conflict with the interests of the Company at large.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website viz. www.patelsairtemp.com.
All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. However, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder and Listing Regulations and as such no approval of the Shareholders require.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Mr. Devidas C. Narumalani (DIN No: 00097592), who retired by rotation, ceased to be a Director of the Company with effect from 30th July, 201 6, being the date of 24th Annual General Meeting of the members of the Company, by not re-appointed by the Shareholders at the said 24th Annual General Meeting and through Remote E-Voting. Mr. Devidas C. Narumalani was the Nonexecutive & Non-independent Director of the Company.
Pursuant to the provisions of Section 1 52(6)(d) of the Companies Act, 2013 and Rules made thereunder, Mr. Prakash N. Patel (DIN: 00249210), Managing Director of the Company, shall retire by rotation as a Director of the Company at this Annual General Meeting as determined by lot at the Board Meeting of the Company held on 14th August, 2017 between himself and Mr. Narendra G. Patel (DIN: 00023205), Whole time Director of the Company, as they became Directors on the same day at the time of their last appointment, and being eligible, offer himself for re-appointment, for which necessary resolution has been incorporated in the notice of the meeting. The Board of Directors recommends reappointment of Mr. Prakash N. Patel as a Director of the Company.
The brief resume/details relating to the said Director, who is to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.
There were no changes in the Key Managerial Personnel of the Company during the year.
The Company has received declarations from all the Independent Directors of the Company in terms of Section 149(7) of the Act, confirming that they meet the criteria of independence as prescribed under Section 1 49(6) of the Act and Regulation 16(b) & 25 of SEBI Listing Regulations, 201 5.
COMMITTEES OF DIRECTORS
The Board of Directors has the following Committees:
1. Audit Committee (AC)
2. Nomination and Remuneration Committee (NRC)
3. Stakeholders Relationship Committee (SRC)
4. Corporate Social Responsibility Committee (CSR)
The details of various Committees of Directors constituted by the Board of Directors under various provisions of Companies Act, 2013 and Rules made thereunder and Listing Regulations, Meetings & Attendance, terms of reference and other details are provided in the Corporate Governance Report annexed with the Directors Report.
The composition of various Committees and their terms of references may be accessed on the Companys website viz. www.patelsairtemp.com.
The Board has carried out an evaluation of its own performance and that of its Committees and Directors and also Chairperson in terms of Section 134(3)(p) of the Companies Act, 2013 and Rules made thereunder and Listing Regulations. The Board has approved a policy (NRC Policy) for criteria of determining qualifications, selection, appointment and remuneration of Directors, KMP and Senior Management and the same has been uploaded on the Companys web-site www.patelsairtemp.com.
In a separate meeting of independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors and assessed the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Policy on appointment and remuneration of Directors, KMP and other employees and other matters as required under Section 178(3) of the Companies Act, 2013 is available on the web-site of the Company viz. www.patelsairtemp.com.
NUMBER OF BOARD MEETINGS
During the financial year 2016-2017, 4 (Four) Board Meetings were held on 28/05/2016, 13/08/2016, 1 2/11/201 6 & 03/02/2017. The gap between two Board Meetings did not exceed 1 20 days as prescribed in the Companies Act, 2013 and Regulations 17 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015.
The particulars of number of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report. Agenda of the meetings were prepared and all necessary papers were circulated to Members of the Board in advance. Necessary disclosures were made by the Directors in the Board Meeting whenever required. The Company has complied with Secretarial Standards 1 (SS-1) related to Board Meeting of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure - E attached herewith and forming part of the Directors Report.
Business risk evaluation and management, covering the business operations of the Company, is an ongoing process within the Company and the management reviewed frequently risk assessment and to minimize them. The ultimate goal of risk management is the preservation of physical and human assets of the organization for successful continuation of its operations. Pursuant to the provisions of Regulation 21 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, at present, the Company is not required to constitute Risk Management Committee of the Directors of the Company.
CORPORATE SOCIAL RESPONSIBILITY
In terms of provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, a Committee of the Directors of the Company has been constituted as Corporate Social Responsibility (CSR) Committee. CSR Committee has formulated a policy on the Corporate Social Responsibility measures to be undertaken by the Company as specified in Schedule VII to the Companies Act, 201 3. The Corporate Social Responsibility Policy is available on the Companys web-site viz. www.patelsairtemp.com.
The Company has duly spent the required amount during the financial year ended on 31st March, 2017 towards CSR activities. The Annual Report on CSR activities including Responsibility Statement of the CSR Committee is annexed herewith marked as Annexure - F.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
The Companys internal control system is commensurate with its size, scale and complexities of its operations.
STATUTORY AUDITORS & AUDIT REPORT
The Companies Act, 2013 (the Act) was notified effective April 1, 2014. Section 139 of the Act lays down the criteria for appointment and mandatory rotation of statutory auditors. Pursuant to Section 1 39 of the Act and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two terms of five consecutive years. The Rules also lay down the transitional period that can be served by the existing auditors depending on the number of consecutive years for which an audit firm has been functioning as auditor in the same company. The incumbent auditors, M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad (Firm Registration No. 107525W) have served the Company for more than 10 years before the Act was notified and will be completing the maximum number of transitional period (three years) at the ensuing 25th AGM. The Board of Directors places on record its appreciation to the services rendered by M/s. Parikh & Majmudar as the Statutory Auditors of the Company.
The Audit Committee of the Company has proposed and on 14th August, 2017, the Board has recommended the appointment of M/s. Shah & Shah Associates, Chartered Accountants, Ahmedabad, having Firm Registration No. 113742W as the statutory auditors of the Company. M/s. Shah & Shah Associates will hold office for a period of five consecutive years from the conclusion of the 25th Annual General Meeting of the Company till the conclusion of the 30th Annual General Meeting to be held in 2022 (subject to ratification of the appointment by the members at every Annual General Meeting held after this Annual General Meeting). The first year of audit will be of the financial statements for the year ending March 31, 2018, i.e. 2017-2018. They have expressed their willingness to be appointed as Statutory Auditors of the Company. The Company has received a certificate from the said Auditors to the effect that their appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Act and they are not disqualified under the Act. The Members are requested to consider their appointment as Statutory Auditors of the Company.
The Auditors Report for the financial year 201 6-2017 does not contain any qualification, reservation or adverse remark.
SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT
Section 204 of the Companies Act, 2013 and Rules made thereunder inter alia requires every Listed Company to annex with its Board Report a Secretarial Audit Report given by a Company Secretary in Practice in the prescribed form. The Board had appointed Mr. Punit Lath, Practicing Company Secretary, Ahmedabad (Regn. No. 11139) as the Secretarial Auditor to conduct Secretarial Audit of the records of the Company for the financial year 2016-2017 and to submit his report to the Company. The Secretarial Audit Report for the financial year ended March 31, 2017 is annexed herewith marked as Annexure - G to this Report. The Board at its meeting held on 3rd February, 2017, has reappointed Punit Lath, as Secretarial Auditor, for conducting Secretarial Audit of the Company for FY 2017-18.
The Secretarial Audit Report for the financial year 2016-2017 does not contain any qualification, reservation or adverse remark.
Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to get its cost accounting records audited by a Cost Auditor.
Accordingly, the Board at its meeting held on May 30, 2017, has on the recommendation of the Audit Committee, appointed M/s. Rajendra Patel & Associates, Cost Accountant, Ahmedabad (Firm Registration No. FRN101163 and Membership No. 29021) to conduct the audit of the cost accounting records of the Company for FY 201 7-18 on a remuneration of Rs.70,000/- plus taxes as applicable and reimbursement of actual travel and out of pocket expenses. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification.
The Cost Audit Report for the Financial Year ended 31st March, 2016 has been duly filed in XBRL mode. The cost audit report of the Company for financial year ended March 31, 2017 will be filed with Central Government on or before the due date as prescribed under Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014.
All insurable interests of the Company including buildings, plant and machinery, furniture & fixtures and other insurable interest are adequately insured.
Pursuant to the provisions of Listing Regulations, the Company declares that the Equity Shares of the Company are listed on the BSE Limited (BSE). The Company confirms that it has paid Annual Listing Fees to BSE up to the Financial Year 2017-2018.
PARTICULARS OF EMPLOYEES
The Disclosure required under Section 1 97(1 2) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed as Annexure - H and forms an integral part of this Report.
A statement showing the names of top 10 employees in terms of remuneration drawn as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed as Annexure - H and forms an integral part of this Report.
The Statement of particulars of employees under Section 1 97(1 2) read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is not provided with as, during the financial year under review, no employee of the Company including Whole-time Directors and Managing Directors were in receipt of remuneration in excess of the limits set out in the said rules.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has a Vigil mechanism and Whistle blower policy under which the employees are free to report any act of serious misconduct or wrongful activity being occurred or suspected to occur within the organization, to his immediate HOD or the HR Head or directly to the concern Whole-time Directors or Managing Directors of the Company, as he may desire. No employee of the Company is denied access to the Audit Committee. The vigil mechanism/whisle blower policy is also available on the website of the Company viz. www.patelsairtemp.com.
> During the year under review, there was no change in the nature of business of the Company and there is no material change and/or commitments, affecting the financial position of the Company, during the period from 31st March, 2017 till the date of this report.
> The Company does not provide any loan or other financial arrangement to its employees or Directors or Key Managerial Personnel for purchase of its own shares and hence, the disclosure under Section 67(3)(c) of the Companies Act, 2013 does not require.
> The disclosure in terms of Rule 4 of Companies (Share Capital and Debenture) Rules, 2014 is not provided, as the Company does not have any equity shares with differential voting rights.
> The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints pertaining to sexual harassment were received during FY 2016-17.
> No fraud has been reported by the Auditors to the Audit Committee or the Board.
The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.
The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.
The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.
|By order of the Board of Directors|
|NARAYANBHAI G. PATEL|
|Chairman & Whole-time Director|
|Date : 14th August, 2017|
|Place : Rakanpur, Dist. Gandhinagar|
ANNEXURE-E TO DIRECTORS REPORT
Details of particulars under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 forming part of the Directors Report for the year ended on 31st March, 2017 are given as under
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO, ETC.
A) CONSERVATION OF ENERGY
The main source of energy is power. Energy conservation continues to receive priority attention at all levels. All efforts are made to conserve and optimize use of energy with continuous monitoring, improvement in maintenance and distribution systems and through improved operational techniques. Uses of natural lights are resorted at factory premises to save energy. The Company is also looking forward, in adopting the technology by which consumption of energy can reduce and also promote the natural sources of energy. As part of Green Initiative, the Company has installed 130 KW Rooftop PV Solar Power Plant after getting required permissions from Govt. Authorities and UGVCL (Power Distribution Company in Local Area). The Solar Plant will generate nearly 190,000 Units of Energy every year; which equals to reduction of CO2 absorbed by 190 trees or plantation of 341 trees.
The Solar Plant being a stationary item renders almost negligible maintenance cost and have long life of around 25 years.
B) RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
The particulars as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3)(A) of the Companies (Accounts) Rules, 2014 with respect to Research & Development and Technology Absorption are given hereunder :
(1) Research & Development (R & D)
The Company has established a well equipped testing & NDE laboratory with the number of sophisticated instruments for testing and non destructive examination related to the product being manufactured. To upgrade the technology and technical qualifications, your Company has renewed ASME "U" and "NB"/R Stamp of National Board of USA and added ASME "U2"/ "S" and "N & NPT" Stamp authorization for improving the system and quality. Your Company is ISO 9001-2008 certified. Various technical softwares like PVElite, Auto Desk Mechanical, Microprotol, Pro-e, FE-Pipe/Nozzle Pro, etc. were updated for design & development of various products.
(2) Technology Absorption, Adaptation & Innovation
Updation of Technology is a Continuous process, absorption implemented and adapted by the Company for innovation. Efforts are continuously made to develop new products required in the Engineering Industry.
The Company has invested about Rs.72.34 Lakhs for Plant & Machineries to upgrade HI-tech equipments. The Company has HTRI Membership agreement for Catagory - II and Licence agreement for EHT (for enhanced heat transfer) and Honeywell UniSim UHX (for feed water heater) for latest technology in Heat Transfer from U.S.A. To increase productivity, Company has invested in Hydraulic Expander for tube to tube sheet expansion for higher tube sheet thikness and finned tube expansion. In-house, systems and operations are being innovated for better quality and to perform up to customers requirement.
C) FOREIGN EXCHANGE EARNING AND OUTGO
The details of Foreign Exchange Earnings and Outgo by the Company during the year under review are given in Note No. 38, 39 and 40 of Notes on Financial Statements.