To the Members
Your Directors have pleasure in submitting their 41st Annual Reportof the Company together with the Audited Statements of Accounts for the year ended 31stMarch 2019.
The Company's financial performance for the year ended 31st March 2019along with previous year figure is summarized as here under:
|(STAND ALONE) || ||(Rs. In Lakhs) |
|Particulars ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Gross profit before Interest Depreciation and Tax ||434.49 ||69.69 |
|Less: Interest and Depreciation ||183.28 ||173.74 |
|Profit / (Loss) before Tax ||251.21 ||(104.05) |
|Less: Provision for Taxation ||- ||- |
|Deferred Tax (Assets) / Liabilities ||43.31 ||20.24 |
|Profit / ( Loss) after Tax ||207.90 ||(124.29) |
|Add: Other Comprehensive Income ||(1.19) ||(6.91) |
|Total Comprehensive Income ||206.71 ||(131.20) |
REVIEW OF BUSINESS OPERATION AND FUTURE PROSPECTS:
The performance of the company during the year under review remains good as compared tothe last year. The sales of the company have increased both in domestic and exportsegment. The sales during the year were Rs. 9514.45 lacs as against Rs. 7617.08 lacs inthe previous year. The sales thus registered as increase of 24.90% as compared to lastyear. The company had net profit of Rs. 207.90 lacs in the present year as against the netloss of Rs 124.29 lakhs in the previous year.
Your Directors are pleased to recommend for your approval for payment of dividend of Rs0.50 per Equity share of the company in respect of financial year ended on 31stMarch 2019. The said divided shall be payable to those members whose names appear on theregister of member of the company on record date.
The Company has not accepted any fixed deposits from the public falling within theambit of section 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits)Rules 2014. There are no unclaimed deposits as on March 31 2019.
The paid up Equity Share Capital of the Company as on March 31 2019 was Rs34778000/- During the year under review the Company has not issued any shares withdifferential voting rights nor granted any stock options or sweat equity. The shareholdingof Directors in the Company as on March 31 2019 is given in Extract of Annual Return.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mrs. Anila Shashikant Thanki a Director of the Companyretires by rotation at the ensuring Annual General Meeting of the Company and beingeligible offers himself for re-appointment. The Board recommends his appointment for yourapproval.
The following are the Key Managerial Personnel as defined under Section 2(51) ofthe Companies Act 2013:
Mr. Narottam C Vadgama (Whole-time Director)
Mr. Jeshanker R. Bhogayta (Whole-time Director upto 17th July 2018)
Mr. Rajan R Bambhania (Managing Director and CEO)
Mr. Siddik A Kotal (Chief Financial Officer upto 31st January 2019)
Ms. Meenu Bhomia(Company Secretary)
NOTING OF APPRECIATION OF SERVICES:
The Board places on record their appreciation for guidance and valuable servicesprovided by Mr. Jeshanker R Bhogayta and Mr. Bhagwanji D Joshi during their tenure asoffice of Directors.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
COMPOSITION OF VARIOUS COMMITTEES:
The details of various committees constituted by the Board as per the Regulation 18 19and 20 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 andCompanies Act 2013 are given in the Corporate Governance Report which forms part of thisreport.
During the year Six Board Meetings Four Audit Committee Meetings OneNomination and Remuneration Committee Meeting One Stakeholders RelationshipCommittee Meeting and One separate Meeting of Independent Directors were held. Thedetails of the same are given in the Corporate Governance Report. The intervening gapsbetween the Board meetings were within the period prescribed under the Companies Act 2013in compliance to secretarial standards SS-1 issued by ICSI.
The Independent Directors met on 30th April 2019 without theattendance of Non-Independent Directors and members of the management. The IndependentDirectors reviewed the performance of Non-Independent Directors and Board as a whole andassessed the quality quantity and timeliness of flow of information between the CompanyManagement and the Board that is necessary for the Board to effectively and reasonablyperform their duties.
The Company has received necessary declarations from each Independent Director underSection 149 (7) of the Companies Act 2013 that he/she meets the criteria of independenceas laid down in Section 149 (6) of the Companies Act 2013 and Regulation 16(1)(b) ofSEBI(Listing Obligation and Disclosure Requirements) Regulations 2015.
None of the Directors of your Company is disqualified as per provisions of Section 164(2) of the companies Act 2013 for financial year ended on 31st March 2019.Your Directors have made necessary disclosures as required under Companies Act 2013. TheCompany has obtained certificate dated 18th May 2019 from Shahs &Associates Practising Company Secretaries in that regards.
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement as enumerated here under:
In the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
The directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the Company for that period;
The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
The directors have prepared the annual accounts on a going concern basis;
The directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
The directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
AUDITORS AND AUDITORS' REPORT:
M/S H. R. Dewani & Co. Chartered Accountants Junagadh (Firm Regn. No. 140668W) StatutoryAuditors of the Company were appointed for a period of consecutive 5 (Five) year at theAnnual General Meeting held on 26th September 2018. The Auditors haveconfirmed that they are not disqualified from continuing as Auditors of the Company.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
The Board had appointed M/s SHAHS & ASSOCIATES Practicing Company Secretariesto conduct the Secretarial Audit for the financial year 2018-19. The Secretarial AuditReport for the financial year ended on March 31 2019 is annexed herewith marked asAnnexure "C" to this Report.
The Board of Directors at the recommendations of the Audit Committee appointed M/sSHAHS & ASSOCIATES Practicing Company Secretaries to conduct the SecretarialAudit of the Company for the financial year 2019-20.
INTERNAL FINANCIAL CONTROLS:
The Company has a proper and adequate system of Internal Control commensurate with itssize and the nature of its operations to ensure that all assets are safeguarded andprotected against loss from un-authorized use or disposition and those transactions areauthorized recorded and reported correctly.
The Board of Directors at the recommendations of the Audit Committee appointed M/sSUBHASH AKBARI & CO. Chartered Accountants Junagadh as Internal Auditors of theCompany for the Financial Year 2019-20.
DISCLOSURES: AUDIT COMMITTEE:
Pursuant to Section 177 of the Companies Act 2013 read with Rule 6 and 7 of theCompanies (Meetings of the Board and its Powers) Rules 2013 the Audit committee consistsof the following directors: Mr. B. D. Joshi [Chairman of committee upto 20/04/2019]
Mr. B. R. Sureja[Chairman of committee w.e.f. 21/04/2019] Mr. J. B. Jagani [Member] Mr.Palak J Doshi [Member w.e.f. 13/05/2019] All the members of Audit Committee areindependent directors.
WHISTLE BLOWER POLICY:
The Company has a WHISTLE BLOWER POLICY to deal with instances of unethicalbehaviour actual or suspected fraud or violation of the company's code of conduct ifany. The details of the whistle blower policy is explained in the CorporateGovernance Report and also posted on the website of the Company.
DIRECTORS APPOINTMENT AND REMUNERATIONS POLICY:
The Company's policy relating to appointment of directors payment of managerialremuneration directors' qualifications positive attributes independence of directorsand other related matters as provided under Section 178 (3) of the Companies Act 2013 isfurnished in Corporate Governance Report and the same is also posted on website.
RELATED PARTY TRANSACTIONS:
All transactions entered into by the company with "Related Parties" duringthe period under review were in the ordinary course of business at prevailing marketrates. All related party transactions were placed before the Audit Committee andrecommended to the Board for their approval. The particulars of contracts or arrangementsmade with related party pursuant to section 188 of the Companies Act 2013 is furnishedvide Annexure "A" in form AOC-2 as per Companies Act 2013 and it formsthe part of this report. The policy on Related Party Transactions as approved by the Boardis uploaded on the Company's website at www.aec.com.
RISK MANAGEMENT POLICY:
The Board of Directors is overall responsible for identifying evaluating and managingall significant risks faced by the Company. The Board approved Risk Management policywhich acts as an overarching statement of intent and establishes the guiding principles bywhich key risks are managed across the organization.
The Company follows well established and detailed risk assessment and minimizationprocedures which are periodically reviewed by the top management. The Company has inplace a business risk management framework for identifying risks and opportunities thatmay have a bearing on the organization's objectives assessing them in terms of likelihoodand magnitude of impact and determining a response strategy. In the opinion of the Boardnone of the risks faced by the Company threaten its existence. The Company has also postedthe policy in respect of transactions with "Related Parties" on its website.
In view of non-applicability of formation of Risk Management Committee the Company hasnot formed the said committee.
MATERIAL CHANGES AND COMMITMENTS:
No material changes and commitments affecting the financial position of the Company hasoccurred between the end of financial year to which this financial statement relate andthe date of this report.
The Extract of Annual Return pursuant to the provisions of Section 92 (3) of theCompanies Act 2013 read with Rule 12 (1) of the Company (Management and Administration)Rules 2014 is furnished in Annexure "B" " in form MGT-9 asper Companies Act 2013 and it forms the part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The particulars of Loans guarantees or investments made under Section 186 and itsapplicability have been furnished in notes annexed to our financial statements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure"D" attached to this report and it forms the part of this report.
PARTICULARS OF EMPLOYEES AND REMUNERATIONS:
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company is annexed to this Report as Annexure"E" forming part of this Report.
As per Section 136 (1) of the Companies Act 2013 the report and accounts are beingsent to the shareholders of the Company excluding the statement of particulars ofemployees under the said proviso. Any shareholder interested in obtaining a copy of thesaid statement may write to the Secretarial department at the Registered Office of theCompany.
In accordance with the General Circular issued by the Ministry of Corporate AffairsGovernment of India the Balance Sheet Profit and Loss account and other documents of AustinEngineering Company (Formerly known as Accurate Engineering Inc.) the subsidiarycompany are not being attached with the Balance Sheet of the Company. The Company willmake available the Annual Accounts of the said subsidiary company and its related detailedinformation to any member of the Company who may be interested in obtaining the same andalso on Company's website.
The Annual Accounts of the subsidiary company will also be kept open for inspection atthe registered office of the Company and the subsidiary company.
A statement as required in the prescribed form AOC-1 pursuant to section 129 (3) of theCompanies Act 2013 is given in the Annexure "F" and it forms the part ofthis report.
CONSOLIDATED FINANCIAL STATEMENTS:
In accordance with the Accounting Standard AS-21 the audited consolidated financialstatements are annexed to this Annual Report.
As per Chapter IV of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 separate reports on Corporate Governance Management Discussion andAnalysis and a certificate from the Company's Auditors form part of this Report. YourCompany is committed to maintain the highest standards of Corporate Governancereinforcing the valuable relationship between the Company and its Stakeholders.
The Company takes a very pragmatic approach towards insurance. Adequate cover has beentaken for all movable and immovable assets for various types of risks.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators /Courts/ Tribunalswhich would impact the going concern status of the Company and its future operations.
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee Board and /or Central Governmentunder Section 143 (12) of the Companies Act 2013 and Rules framed there under.
The industrial relation with workmen and staff continued to be extremely cordial duringthe year under review.
Your Directors wish to place on record their gratitude for the continued co-operationand patronage extended by their esteemed customers both in OEM and aftermarket segments.The Directors would also like to place on record their sincere appreciation for thecontinued cooperation guidance support and assistance during the year under report byour Bankers all the customers suppliers of the Company including Government agencies.The Board of Directors also wishes to express its appreciation for the efforts andcontribution made by the employees at all levels during the year under report.
| ||By Order of the Board of Directors |
| ||SD/- |
|Place : Patla Junagadh ||N C Vadgama |
|Date : 29th May 2019 ||Chairman |