|BSE: 500495||Sector: Auto|
|NSE: ESCORTS||ISIN Code: INE042A01014|
|BSE 16:01 | 27 Mar 2018||Escorts Ltd|
|NSE 05:30 | 01 Jan 1970||Escorts Ltd|
|Mkt Cap.(Rs cr)||10,125|
|Mkt Cap.(Rs cr)||10,125|
Escorts Ltd. (ESCORTS) - Director Report
Company director report
Your Directors have pleasure in presenting the Sixty Ninth Annual Report for the yearended on March 31 201 5.
The brief highlights of the Company's performance for the financial year ended March31 201 5 are:-
Net Revenue of the Company for the Financial Year 2014-15 was ' 4046.48 Cr.
Profit Before Interest Depreciation Amortisation Exceptional Items & Taxstood at ' 222.05 Cr.
Profit Before Tax (PBT) stood at ' 68.25 Cr and Profit After Tax (PAT) stood at' 74.71 Cr. Earnings per share is of ' 6.26 for the year under review.
Your Company sold 59779 tractors during the year under review.
Management Discussion & Analysis
Management Discussion & Analysis which forms an integral part of this Annual Reportprovides a detailed analysis on the performance of individual businesses and theiroutlook.
Your Directors are pleased to recommend a Dividend of ' 1.20 per Equity Share (12%) onthe face value of ' 10 each aggregating ' 14.71 Cr (exclusive of tax on dividend) for thefinancial year ended March 31 2015. The dividend payout is subject to the approval ofmembers at the ensuing Annual General Meeting (AGM).
The dividend if approved at the ensuing AGM will be paid to members whose namesappear in the Register of Members as on Friday September 4 2015; in respect of sharesheld in dematerialised form it will be paid to members whose names are furnished byNational Securities Depository Limited and Central Depository Services (India) Limited asbeneficial owners as at that date.
The dividend payout for the period under review has been formulated in accordance withshareholders' aspirations and the Company's policy to pay sustainable dividend linked tolong-term growth objectives of the Company to be met by internal cash accruals.
Employee Stock Option Scheme
The particulars with regard to the Employees Stock Options as on March 31 201 5 asrequired to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employees StockOption Scheme and Employees Stock Purchase Scheme) Guidelines 1999 as amended areenclosed at Annexure - A and forms an integral part of this Report.
In accordance with the provisions of Companies Act 2013 and Articles of Association ofthe Company Mr. Hardeep Singh Director retires by rotation at the ensuing AGM and beingeligible offers himself for re-appointment.
The Board of Directors in their meeting held on January 16 2015 co-opted Dr. SutanuBehuria Ms. Nitasha Nanda and Mr. G.B. Mathur as Additional Directors on the Board of theCompany. They shall hold office of Director(s) upto date of ensuing AGM.
Further Ms. Nitasha Nanda has been appointed as Whole-time Director for a period of 5years w.e.f. January 16 201 5 liable to retire by rotation subject to the approval ofthe shareholders in the ensuing AGM. Her appointment is appropriate and in the bestinterest of the Company.
Pursuant to the provisions of Section 149 and other applicable provisions of theCompanies Act 2013 your Directors are seeking appointment of Dr. Sutanu Behuria asIndependent Director for a period of 3 years. The Company has received requisite noticesin writing from members proposing Dr. Sutanu Behuria Ms. Nitasha Nanda and Mr. G.B.Mathur for appointment as Directors of the Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with criteria of independence as prescribed under sub-section(6) of Section 149 of the Companies Act 2013 and under Clause 49 of the Listing Agreementwith the Stock Exchanges. The policy for selection of directors and determining directorsindependence is attached as Annexure - B and forms an integral part of this Report.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the Non-Executive and Executive Directors. In accordance with the Policy aprocess of evaluation was followed by the Board for its own performance and that of itsCommittees and individual Directors. The remuneration policy for directors key managerialpersonnel and other employees is annexed as Annexure - C and forms an integral partof this Report.
The brief resumes and other details relating to the Directors who are proposed to beappointed/ re-appointed as required to be disclosed under Clause 49 of the ListingAgreement is given in the Annexure to the Notice of the 69th AGM.
Your Directors recommend the appointment/ re-appointment of the above said Directors atthe ensuing AGM.
The details of programme for familarisation of Independent Directors with the Companytheir roles rights responsibilities in the Company nature of industry in which theCompany operates business model of the Company and related matters are put up on thewebsite of the Company - www.escortsgroup.com.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 1 34(3)(m) of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are provided as Annexure- D and forms an integral part of this Report.
Your Company reaffirms its commitment to the good corporate governance practices andhas adopted the Code of Conduct which has set out the systems processes and policyconforming to international standards. Pursuant to Clause 49 of the Listing Agreement withthe Stock Exchanges Corporate Governance Report and Auditors' Certificate regardingcompliance of conditions of Corporate Governance are enclosed as Annexure - E andforms an integral part of this Report.
Corporate Social Responsibility
During the financial year ended March 31201 5 the Corporate Social Responsibility(CSR) Committee had been reconstituted by inducting Mr. G.B. Mathur and Mrs. Vibha PaulRishi as members of the Committee w.e.f. January 16 201 5.
The CSR Committee comprises of following Directors:
1. Mr. Rajan Nanda (Chairman)
2. Mr. Nikhil Nanda
3. Mr. Hardeep Singh
4. Mr. S.C. Bhargava
5. Mrs. Vibha Paul Rishi
6. Mr. G.B. Mathur
The said committee has been entrusted with the responsibility of formulating andrecommending to the Board a Corporate Social Responsibility Policy (CSR Policy)indicating the activities to be undertaken by the Company monitoring the implementationof the framework of CSR Policy and recommending the amount to be spent on CSR activities.
The key philosophy of all CSR initiatives of the Company is to make CSR a key businessprocess for sustainable development of the society. The initiatives aim at enhancingwelfare measures
of the society based on the immediate and long term social and environmentalconsequence of its activities.
The Company intends to undertake other need based initiatives in compliance withSchedule VII of the Act.
The CSR Policy may be accessed on the Company's website
During the year the Company has spent ' 0.78 Cr. (0.48% of the average net profits oflast three financial years) on CSR activities.
Since being the first year of the CSR Committee the Company under the guidance anddirections of the Committee is formulating its initiatives for undertaking activities asidentified in the CSR Policy. The full impact of the CSR spend shall be felt in thefinancial year 201 5-16.
The Annual Report on CSR activities is enclosed as Annexure - F and forms anintegral part of this Report.
Consolidated Financial Statements
The Consolidated Financial Statements in accordance with the Companies Act 2013 andAccounting Standard (AS) - 21 applicable to the Consolidated Financial Statements readwith AS-23 on Accounting for Investments in Associates and AS- 27 on Financial Reportingof Interests in Joint Ventures issued by The Institute of Chartered Accountants of Indiahave been prepared. The Audited Consolidated Financial Statements along with the Auditors'Report thereon are annexed with this Report.
Subsidiaries Joint Ventures and Associate Companies
The statement containing salient features of financial statements of subsidiariesassociate and joint venture companies prepared in accordance with Section 129 of theCompanies Act 2013 read with Rule 5 of Companies (Accounts) Rules 2014 forms anintegral part of this Report. The Consolidated Financial Statements presented by theCompany include the financial results of its subsidiaries associate and joint venturecompanies.
The Company will make available the Annual Accounts of its subsidiaries associate andjoint venture companies and related information to the members of the Company who may beinterested in obtaining the same. The annual accounts of its subsidiaries associate andjoint venture companies will also be kept open for inspection at the Registered Office ofthe Company.
Contracts and Arrangements with Related Parties
All contract/ arrangements/ transactions entered by the Company during the financialyear with related parties were
in the ordinary course of business and on an arm's length basis. During the year theCompany had not entered into any contract/ arrangement/ transaction with related partieswhich could be considered material in accordance with the policy of the Company on themateriality of related party transactions. The particulars of contracts and arrangementwith related parties under Section 188(1) of the Act in Form AOC-2 is enclosed as Annexure- G.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website
Your Directors draw attention of the members to Note 46 to the financial statementwhich sets out related party disclosures.
Auditors and Auditors' Report Statutory Auditors
M/s. S.N. Dhawan & Co. Chartered Accountants Delhi (Firm Registration No.000050N) Statutory Auditors of the Company hold office till the conclusion of the ensuingAGM and are eligible for re-appointment.
The Company has received letter of confirmation from M/s. S.N. Dhawan & Co.Chartered Accountants to the effect that their appointment if made would be within theprescribed limits under Section 139 of the Companies Act 2013 and that they are notdisqualified for such appointment within the meaning of Section 1 41 of the Companies Act201 3 read with Companies (Audit and Auditors) Rules 201 4.
The observations and comments given by the Statutory Auditors in their report readtogether with notes to Accounts are selfexplanatory and hence do not call for any furthercomments under Section 134 of the Companies Act 2013.
The Board of Directors of the Company has re-appointed M/s. Ramanath Iyer and Co. CostAccountants New Delhi (Firm Registration No. 000019) Cost Auditors of the Company underSection 148 of the Companies Act 2013 for conducting the audit of cost records for thefinancial year 201 5-16.
The due date of filing the Cost Audit Report for the eighteen months period ended onMarch 31 2014 was September 30 201 4 and the same has been filed on September 22 201 4.
The Board of Directors of the Company has appointed M/s. Jayant Gupta and AssociatesPracticing Company Secretary to conduct secretarial audit of the Company for the financial
year 2014-1 5. The Secretarial Audit Report for the financial year ended March 31201 5is enclosed as Annexure - H and forms an integral part of this Report.
The observations and comments given by the Secretarial Auditors in their report areself-explanatory and hence do not call for any further comments under Section 204(3) ofthe Companies Act 2013.
During the year your directors have constituted a Risk Management Committee which hasbeen entrusted with the responsibility to assist the Board in (a) overseeing and approvingthe Company's enterprise wide risk management framework; and (b) Overseeing that all therisks that the organisation faces such as strategic financial credit market liquiditysecurity property IT legal regulatory reputational and other risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks. The Risk Management Policy was reviewed and approved bythe Committee.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
Meetings of the Board
Five meetings of the Board of Directors were held during the year. For further detailsplease refer Report on Corporate Governance annexed as Annexure - E to this Report.
The Audit Committee comprises of the following Non-Executive Directors:
1. Dr. S.A. Dave - Independent Director (Chairman)
2. Mr. S.C. Bhargava - Independent Director
3. Mr. Hardeep Singh - Non-Independent Director
All the recommendations made by the Audit Committee were accepted by the Board.
Extracts of Annual Return
In terms of provisions of Section 92 of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 the extracts of Annual Return in Form MGT-9is enclosed as Annexure - I and forms an integral part of this Report.
The Company has a vigil mechanism for Directors and Employees to report their concernsabout unethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct. The mechanism provides for adequate safeguards against victimisation ofDirector(s) and Employee(s) who avail of the mechanism. In exceptional cases Directorsand Employees have direct access to the Chairman of the Audit Committee. The WhistleBlower Policy is available on Company's website.
Particulars of Loans given Investments made Guarantees given and Securities provided
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilised by the recipient has been given elsewhere in the Annual Report and forms anintegral part of this Report.
Particulars of Employees and related disclosures
In terms of provisions of Section 197(12) of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementshowing the names and other particulars of the employees drawing remuneration in excess ofthe prescribed limits are available with the Company Secretary. Having regard to theprovisions of Section 136(1) of the said Act the Annual Report excluding the aforesaidinformation is being sent to the members of the Company. Any member interested inobtaining such particulars may write to the Company Secretary of the Company and the samewill be furnished on request.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure - J and forms an integralpart of this Report.
The Company has not accepted/ renewed any Fixed Deposit during the financial year. AllFixed Deposits which were due and claimed by the deposit holders have been paid on time.
Transfer to Investor Education and Protection Fund
Pursuant to the provisions of Section 205A(5) of the Companies Act 1956 the dividendwhich remained unclaimed or unpaid for a period of seven years has been transferred by theCompany
from time to time on due dates to the Investor Education and Protection Fund.
As on March 31 2015 136 unclaimed deposits for the period of seven years aggregatingto ' 26.45 lacs were transferred to Investor Education and Protection Fund.
Directors' Responsibility Statement
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement your Directors hereby state that:
(i) in the preparation of the annual accounts for the year ended March 31 2015 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed alongwith proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 201 5 and of the profitand loss of the Company for the year ended on that date;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) the Directors have prepared the annual accounts for financial year ended March312015 on a 'going concern' basis;
(v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 201 3.
Your Directors would like to express their sincere appreciation of the positiveco-operation received from the Central Government the Government of Haryana andUttaranchal Financial Institutions and the Company's Bankers Customers and Dealers.
The Directors also wish to place on record their deep sense of appreciation for thecommitment displayed by all executives officers workers and staff of the Companyresulting in the successful performance of the Company during the year.
The Board also takes this opportunity to express its deep gratitude for the continuedco-operation and support received from its valued shareholders.