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AIA Engineering

BSE: 532683|NSE: AIAENG|ISIN: INE212H01026|SECTOR: Castings & Forgings
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Directors Report Year End : Mar '19    Mar 18

The Members,

The Directors take pleasure in submitting the 29th Annual Report and the Audited Annual Accounts of the Company for the year ended 31 March 2019.

1. FINANCIAL HIGHLIGHTS (Rs. in Lakhs)

Standalone

Consolidated

Particulars

Year ended 31 March 2019

Year ended 31 March 2018

Year ended 31 March 2019

Year ended 31 March 2018

Revenue from Operations

2,73,716.71

2,09,573.23

2,96,743.46

2,39,629.96

Other Operating Income

10,041.79

7,008.74

10,206.53

7,038.81

Total Income from Operations

2,83,758.50

2,16,581.97

3,06,949.99

2,46,668.77

Other Income

11,621.58

21,698.25

12,089.29

12,181.49

Total Income

2,95,380.08

2,38,280.22

3,19,039.28

2,58,850.26

Profit before Finance Cost, Depreciation & Amortization and Tax Expenses

68,680.05

68,235.68

78,079.29

65,751.45

Finance Cost

719.05

656.72

754.71

692.76

Depreciation &Amortization

7,769.59

6,439.39

7,884.57

6,558.07

Profit Before Tax

60,191.41

61,139.57

69,440.01

58,500.62

(i) Provision for Taxation

16,963.31

14,709.53

17,116.40

14,887.54

(ii) Deferred Tax

1,745.93

(560.62)

1,179.84

(749.02)

Total Tax(i ii)

18,709.24

14,148.91

18,296.24

14,138.52

Profit afterTax

41,482.17

46,990.66

51,143.77

44,362.10

Non Controlling Interest

-

-

(60.72)

(26.88)

Net Profit after Non Controlling Interest

41,482.17

46,990.66

51,083.05

44,335.22

Other Comprehensive Income (Net of Minority Interest)

95.16

120.65

(654.21)

(2,064.94)

Total Comprehensive Income

41,577.33

47,111.31

50,428.84

42,270.28

Standalone Operating Results:

During the year under review, the Revenue from operation of the Company is Rs.2,83,758.50 Lakhs as compared to Rs.2,16,581.97 Lakhs in the previous Financial Year. Exports Turnover registered in the same period is Rs.2,07,549.52 Lakhs as against the Export Turnover of Rs.1,50,545.25 Lakhs in the previous Financial Year.

During the year under review, Company has earned a Profit Before Tax (PBT) of Rs.60,191.41 Lakhs and Profit After Tax (PAT) of Rs.41,482.17 Lakhs as compared to PBT of Rs.61,139.57 Lakhs and PAT of Rs.46,990.66 Lakhs respectively in the previous Financial year.

Consolidated Operating Results:

During the year under review, on a Consolidated basis, your Company (together with its Subsidiaries) has earned Revenue from Operations of Rs.3,06,949.99 Lakhs as compared to Rs.2,46,668.77 Lakhs in the previous Financial Year. Correspondingly, the Consolidated Profit After Tax (PAT) registered during the year under review is Rs.51,083.05 (After Minority Interest) as compared to PAT (After Minority Interest) of Rs.44,335.22 Lakhs in the previous Financial Year.

2. DIVIDEND:

The Board of Directors are pleased to recommend a Dividend of Rs.9/- (450%) per Equity Share of the face value of Rs.2/- each amounting to Rs.8,488.83 Lakhs for the Financial Year 2018-19.

The Dividend, if declared by the shareholders at the ensuing Annual General Meeting, will be paid to those Shareholders, whose names stand registered in the Register of Members as on 5 August 2019. In respect of Shares held in dematerialised form, it will be paid to the members whose names are furnished by National Securities Depository Limited and Central Depository Services(lndia) Limited, as beneficial owners.

The total Dividend outgo for the year ended 31 March 2019 would be Rs.10,233.74 Lakhs including the Corporate Dividend Tax of Rs.1,744.91 Lakhs.

3. SHARE CAPITAL:

The paid up Equity Share Capital of the Company as on 31 March 2019 is Rs.1,886.41 Lakhs. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock option or sweat equity.

4. FINANCE:

Cash and cash equivalents as at 31 March 2019 were Rs.2,066.47 Lakhs. The Company continues to focus on judicious management of its Working Capital, Receivables, Inventories, while other Working Capital parameters were kept under strict check through continuous monitoring.

Capital Expenditure Outlay:

During the year under review, the Company has incurred an expense of Rs.19,710.34 Lakhs.

Deposits:

During the year under review, the Company has neither accepted nor renewed any deposits within the meaning of Section 73 of the Companies Act, 2013 (“the Act”).

Particulars of Loans, Guarantees or Investments:

During the year under review, Company has not provided any loan but it has provided a guarantee covered under the provisions of Section 186 of the Companies Act, 2013. The details of Guarantees provided and Investment made by the Company are given in the notes to the Financial Statements.

Internal Financial Control and Audit:

The Company has designed and implemented a process driven framework for Internal Financial Controls [IFC] within the meaning of the explanation to Section 134(5) (e) of the Act. For the year ended on 31 March 2019, the Board is of the opinion that the Company has sound IFC commensurate with the size, scale and complexity of its business operations. The IFC operates effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved internal controls whenever the effect of such gaps would have a material effect on the Company’s operations.

The Board of Directors at the recommendations of the Audit Committee appointed M/s. Talati & Talati, Chartered Accountants as Internal Auditors of the Company for the Financial Year2019-20 and M/s. NRCA& Associates, Chartered Accountants as Internal Auditors for Nagpur Unit.

Related Party Transactions:

All the Related Party Transactions entered into during the financial year were on an Arm’s Length basis and in the Ordinary Course of Business. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel (KMP) which may have a potential conflict with the interest of the Company at large.

Prior Omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were placed before the Audit Committee and the Board of Directors for their approval on quarterly basis. The details of Related Party Transactions entered by the Company are disclosed in Form AOC-2 - as Annexure “A”.

The Policy on Related Party Transactions as approved by the Board of Directors is uploaded on the website of the Company viz http://www.aiaengineering.com/finances/ pdf/ POLICYONRELATEDPA RTYTRANSACTIONS.pdf Credit Rating:

CRISIL has reaffirmed both the Long Term and Short Term rating of the Company as CRISIL AA /Stable and CRISIL A1 , respectively.

Dun & Bradstreet Information India Private Limited (D & B) has evaluated the Company during October, 2017 and reassigned a Dun Bradstreet Rating of 5A3, which indicates that overall status of the Company is “Strong”.

5. HUMAN RESOURCE:

Human resource is considered by the company as one of its biggest strength and asset and hence puts a lot of emphasis on nurturing and developing this asset. The company acknowledges that one of the most important parameters for the continuous and sustained growth of the organization is the strength of its human capital and hence the company puts great emphasis to ensure that the employees are fully motivated and involved in the operations of the company.

Employee engagement activities are regularly organised in the company for better teamwork and cross functional rapport. This also helps employees to be more innovative and creative in their work areas and enhances their out of the box thinking capabilities. Apart from this, the company appreciates the significance of a healthy work life balance and hence promotes such employee engagement activities which help in de-stressing the employees. This includes organising and participating in various sports activities and festival celebrations. Employee development and skill upgradation is another area which is considered extremely vital by the company. The company is of the firm opinion that there has to be a continuous skill upgradation endeavor and hence organises regular training programs across all functions. The training is not only functional training, but also includes sessions related to motivational training, behavioral training as well as wellness information. The company realises that if the skills of its human resource is not upgraded, it can lead to stagnation and hence apart from organising in house training programs by subject experts, also deputes its people to various seminars and programs.

The organization also encourages performance driven culture and hence puts in a lot of emphasis on a performance management system which is objective, transparent and result oriented. Clarity of structure, roles and responsibilities, key result areas and key performance indicators helps in creating a result oriented culture and performance based appraisals. These are some of the initiatives that have been consistently practiced and executed across the organization. It is mainly because of these measures that although the company has grown significantly over the last few years, its basic fabric of loyal employees dedicated to the growth of the organization remains as strong as ever.

6. MATERIAL CHANGES, TRANSACTIONS AND COMMITMENTS:

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the close of financial year on 31 March 2019 to which the financial statements relates and the date of this Report.

7. BUSINESS PROSPECTS:

The Company continues to invest its resources in furthering its market share in the high chrome mill internal market worldwide with specific focus on high growth in the mining sector. To that extent, the future growth prospects of the Company will rely on making further inroads in mining industry.

The Company focuses on 4 mineral ore types that represent the biggest pie of the mineral grinding space. These are Iron, Platinum, Gold and Copper. Annual replacement requirement of grinding media is estimated at 2.5 million tons. Of this, less than 20% is currently converted to high chrome while the balance is served by forged grinding media. This represents a large potential opportunity to convert forged grinding media to high chrome.

The Company started its engagement with the mining sector by offering grinding media in high chrome metallurgy which reduced wear rates and thereby the cost of these consumables. The Company’s DNA is to work on sharpening this engagement continuously by offering further solutions that improve customers’ operations and reduce their costs. In line with this philosophy, Company now offers solutions that can help in reduction in cost of other consumables (other than high-chrome grinding media), reduction in use of toxic reagents and thereby improving their environmental footprint and increasing metal recovery, especially relevant for gold and copper mines. This has helped your Company in being able to provide comprehensive solutions to the mining industry globally and in creating a unique positioning which augurs well for the consistent and steady growth in this industry over medium to long term.

In addition to Grinding Media, Company is now focussing on Mill Linings for the same mining customers. The Company has been making these parts for grinding mills for Cement grinding for more than 20 years. It now plans to offer these parts for grinding mills used for mineral ore grinding. The Company has entered into a technical collaboration with a US Company which has expertise in optimising grinding efficiency. Company will be able to offer reduced power costs and increased throughputs as a solution to customers. There will be material savings for the customer and with Company’s existing solutions around wear cost reduction, reagent consumption reduction and metal recovery improvement, it will position the Company as true partner with its Customers and help sharpen its engagement meaningfully. Company has announced plans to set up a greenfield facility to manufacture Mill Linings which will help it to service this industry.

The Company has consciously made efforts to target multiple ores and spread its presence across all major mining centers like North America, Latin America, Australia, Africa, and the Far East Asia, etc. thereby diversifying its risks significantly. On account of this, downturn in any one commodity or political and other issues in any one country will not materially impact the Company. During last few years, your Company has steadily increased its presence in the major mining groups across the globe. Given the current lower level of penetration of High Chrome Consumables in the mining segment as against the total requirement which is currently serviced by forged media, the Company has aggressive growth plans so as to capitalise upon the available opportunity in the mining segment and the vision is to emerge as the leading global solution provider in this segment. While the current focus of the Company in mining segment is outside India, your Company also has a major share of the domestic mining demand and shall be able to capture incremental demand as and when the same arises.

Cement market continues to remain flat on a global basis. While there is talk of increasing investments in infrastructure by many western countries, its implementation remains to be seen. Your Company is happy to inform that it continues to maintain market share and continues to make investments in new alloys, designs and process improvements which will ensure that it continues to be a preferred supplier to Cement Companies worldwide. On the domestic front, Company is seeing a resurgence of bullish trends on the back of overall investment climate and will benefit from the growth as it happens. On the whole, in near term, your Company continues to believe that the overall production and sales will remain flat in this segment.

In the Utility sector (Coal Thermal Power Plants), which is driven largely by the domestic market, your Company continues to enjoy a niche position. The Company will strive to maintain a steady growth rate in this particular segment matching with the rate at which the sector grows.

Power is one of the largest cost line items for the Company after raw materials. Your Company has been very sensitive in this regards and has been taking prudent steps to contain cost escalation. It was one of the first Companies in Gujarat to take benefit of open access linked power purchase from the exchange. In Financial Year 2018-19, it decided to further de-risk cost escalations by undertaking significant investment in Wind Mills. Accordingly, Company has now successfully purchased and commissioned 8 windmills at a total cost of ‘104.19 crore.

8. FUTURE EXPANSION:

The Company’s current capacity stands at 3,40,000 Mt of high chrome mill internals. The Company is in midst of expanding this capacity to 4,90,000 Mt by a mix of greenfield and brownfield expansion at its existing plant in GIDC Kerala, near Ahmedabad.

Of this expansion, 1,00,000 Mt will be grinding media which was planned in two phases of 50,000 Mt. each. The first phase of 50,000 Mt has been delayed on account of financial issues faced by one important equipment supplier thereby delaying supply of that equipment. We have now resolved this and expect to commission this first phase by September 2019. This will take our capacity to 3,90,000 Mt. The second phase of 50,000 Mt will be taken up thereafter and is estimated to be commissioned by December 2020. This should take Company’s capacity to 4,40,000 Mt.

The Company has firmed up plans to set up a Greenfield facility to manufacture 50,000 Mt of “Mill Linings” at a cost of Rs.250 crore and is estimated to be commissioned by December 2020. Post this expansion, Company’s capacity will stand at 4,90,000 Mt.

The Company plans to fund all above Capex from internal cash accruals.

9. SUBSIDIARY COMPANIES:

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of financial statements of Subsidiary companies in Form AOCIis given as Annexure “B”.

The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Subsidiary Companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Companies.

The separate audited financial statements in respect of each of the subsidiary companies are also available on the website of your Company at http://www. aiaengineering.com/financials.php During the year under review, Vega Industries Australia Pty Ltd, step down subsidiary of the Company have been incorporated by Vega Industries (Middle East)FZC. UAE, a Wholly Owned Subsidiary of the Company.

10. INSURANCE:

The Company has taken adequate insurance coverage of all its assets and Inventories against various types of risks viz. fire, floods, earthguake, cyclone, etc.

11. INDUSTRIAL RELATIONS (IR):

The Company continues to maintain harmonious industrial relations. Company periodically reviews its HR policies and procedures to aid and improve the living standards of its employees, and to keep them motivated and involved with the larger interests of the organization. The Company has systems and procedures in place to hear and resolve employee’s grievances in a timely manner, and provides avenues to its employees for their all-round development on professional and personal levels. All these measures aid employee satisfaction and involvement, resulting in good Industrial Relations.

12. CORPORATE GOVERNANCE:

In line with the Company’s commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (“SEBI LODR Regulations”).

A separate report on Corporate Governance and Practicing Company Secretary’s Certificate thereon is included as a part of the Annual Report.

13. MANAGEMENT DISCUSSION AND ANALYSIS (MDA):

MDA covering details of operations, International markets, Research and Development, Opportunities and Threats etc. for the year under review is given as a separate statement, which forms part of this Annual Report.

14. RISK MANAGEMENT:

In compliance with the provisions of Regulation 21 of SEBI LODR Regulations, the Board of Directors has constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board’s Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. Corporate Risk Evaluation and Management is an ongoing process within the Organization. The Company has a well-defined Risk Management framework to identify, monitor and minimising/mitigating risks.

The Risk Management framework has been developed and approved by the senior management in accordance with the business strategy.

The key elements of the framework include:

- Risk Structure;

- Risk Portfolio;

- Risk Measuring & Monitoring and Risk Optimising. The implementation of the framework is supported through criteria for Risk assessment, Risk forms & MIS. The objectives and scope of Risk Management Committee broadly comprises of:

- Oversight of risk management performed by the executive management:

- Reviewing the Corporate Risk Management Policy and framework within the local legal requirements and SEBI LODR Regulations;

- Reviewing risks and evaluate treatment including initiating mitigation actions and ownerships as per a predefined cycle;

- Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.

15. POLICIES:

(a) Vigil Mechanism / Whistle Blower Policy:

The Company has adopted a Vigil Mechanism/ Whistle Blower Policy through which the Company encourages employees to bring to the attention of Senior Management including Audit and Risk Management Committee, any unethical behavior and improper practice and wrongful conduct taking place in the Company. The brief details of such vigil mechanism forms part of the Corporate Governance Report.

(b) Policy on protection of Women against Sexual Harassment at Workplace:

In line with the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder, the Company has adopted a policy for the same. The brief details of the said policy form part of the Corporate Governance Report. The Company has not received any complaints in this regard.

(c) Code of Conduct to Regulate, Monitor and Report Trading by Insiders:

SEBI Vide its Notification No. SEBI/LAD-NRO/GN/2018/59 dated 31 December 2018 has amended the SEBI (Prohibition of Insider Trading) (Amendment) (Regulations) 2018 which became applicable from 1 April 2019. In Compliance with the aforesaid notification of SEBI, the Company has revised Model Code of Conduct of Insider Trading Regulations, the Company adopted the Code of Conduct to regulate, monitor and report trading by Designated Person(s) in order to protect the Investor’s Interest. The details of the said Code of Conduct forms part of the Corporate Governance Report.

(d) Policy for Business Responsibility

Pursuant to Regulation 34 of SEBI LODR Regulations, top 500 companies based on market capitalization (calculated as on 31 march of every financial year)are required to prepare and enclose with its Annual Report, a Business Responsibility Report describing the initiatives taken by them from an environmental, social and governance perspectives. A separate report on Business Responsibility is annexed herewith as Annexure “C”.

(e) Dividend Distribution Policy:

The Board of Directors had approved the Dividend Distribution Policy in line with SEBI LODR Regulations. The Policy is annexed herewith as Annexure “D” to this Board’s Report.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

(a) Board of Directors and KMP:

The Board of Directors of the Company is led by the Independent - Non Executive Chairman and comprises nine other Directors as on 31 March 2019, including one Managing Director, one Whole-Time Director, four Independent Directors (including one Woman Independent Director) and three Non-Executive Directors (other than Independent Directors).

Mrs. Janaki Udayan Shah has been appointed as an Additional Independent Director for a period of 5(Five)years subject to the approval of members in the General Meeting.

All the independent Directors of the Company have furnished declarations that they meet the criteria of independence as prescribed under the Companies Act, 2013 and SEBI LODR Regulations. Dr. S. Srikumar (DIN 01025579), Director of the Company retires by rotation at the ensuing Annual General Meeting and eligible for re-appointment, expressed his unwillingness to be re-appointed. Hence, he will cease to be a director of the Company from this Annual General Meeting.

Mrs. Khushali Samip Solanki (DIN 07008918), Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offered herself for re-appointment.

Mr. Rajendra S. Shah (DIN- 00061922), Mr. Sanjay

S. Majmudar (DIN - 00091305) and Mr. Dileep C. Choksi (DIN - (00016322) have been appointed as Independent Directors for a period of 5 consecutive years from 11.09.2014 to 10.09.2019. The Board, on the recommendation of Nomination and Remuneration Committee, has re-appointed them as Independent Directors for a further period of 5 consecutive years from 11 September 2019 and proposed respective resolutions for member’s approval at the ensuing Annual General Meeting.

As required under SEBI LODR Regulations amended from time to time, the information on the particulars of the Directors proposed for re- appointment has been given in the Notice of the Annual General Meeting.

(b) Meetings:

During the year under review, Four Board Meetings and Four Audit Committee meetings were convened and held. The detail of composition of Audit Committee is as under:-

Mr. Rajendra S. Shah, Chairman

Mr. Sanjay S. Majmudar, Member

Mr. Bhadresh K. Shah, Member

Mr. Rajan R. Harivallabhdas, Member

All recommendations made by the Audit Committee during the year were accepted by the Board.

The details of Composition of other Committees and dates of the meetings are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI LODR Regulations.

(c) Committees of the Board of Directors:

In compliance with the requirement of applicable laws and as part of the best governance practice, the Company has following Committees of the Board as on 31 March 2019.

(i) Audit Committee

(ii) Stakeholders’ Relationship Committee

(iii) Nomination and Remuneration Committee

(iv) Corporate Social Responsibility Committee

(v) Risk Management Committee

The details with respect to the aforesaid Committees are given in the Corporate Governance Report.

(d) Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and SEBI LODR Regulations, 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 Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

(e) Familiarization Program for Independent Directors:

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their appointment letter alongwith necessary documents, reports and internal policies to enable them to familiarise with the Company’s Procedures and practices. The Company has through presentations at regular intervals, familiarised and updated the Independent Directors with the strategy, operations and functions of the Company and Engineering Industry as a Whole. The details of such familiarization programmes for Independent Directors is posted on the website of the Company and can be accessed at http://www.aiaengineering.com/finances/ corporategovernance.php

(f) Nomination and Remuneration Policy:

The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report which is a part of the Board’s Report. The detailed Policy is placed on the website of the Company at http://www. aiaengineering.com/finances/policy.php.

(g) Directors’ Responsibility Statement:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Clause (c) of Sub Section (3) of Section 134 of the Companies Act, 2013, which states that—

a) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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 at the end of the financial year and of the profit of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the Annual Accounts 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 were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. AUDITORS:

Statutory Auditors:

M/s. BSR & Co. LLP, Statutory Auditors of the Company have been appointed as Statutory Auditor of the Company for a period of five years in 27th Annual General Meeting of the shareholders of the Company.

In accordance with the Companies Amendment Act, 2017, enforced on 7 May 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

The Report given by the Auditors on the financial statements of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Cost Auditors:

The Cost Auditors has filed the cost audit report for the Financial Year ended 31 March 2018 within stipulated time frame.

The Board of Directors on the recommendation of the Audit Committee has appointed M/s Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the cost records of the Company for the Financial Year 2019-20. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the members of the Company for their ratification at the ensuing Annual General Meeting.

Accordingly, a resolution seeking member’s ratification of the remuneration payable to M/s Kiran J. Mehta & Co., Cost Accountants, Ahmedabad is included in the Notice convening the 29th Annual General Meeting.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed, Mr. Tushar M. Vora, Practicing Company Secretary (ACS-3459, CP No. 1745), Ahmedabad to conduct Secretarial Audit of the Company’s Secretarial and related records for the year ended 31 March 2019.

The Report on the Secretarial Audit for the year ended 31 March 2019 is annexed herewith as Annexure “E” to this Board’s Report. There were no qualification/ observations in the report.

18. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith to this report.

19. CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of the Company prepared in accordance with relevant Indian Accounting Standards (Ind AS) viz. Ind AS-27, Ind AS-28 and Ind AS-110 issued by the Ministry of Corporate Affairs, form part of this Annual Report.

20. EXTRACTOFANNUALRETURN:

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure “F”.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, the amount required to be spent on CSR activities during the year under review, is Rs.1,063.59 Lakhs and the Company has spent Rs.1,050.26 Lakhs during the Financial Year ended 31 March 2019. The shortfall in the spending during the year under report is intended to be utilised in a phased manner in future, upon identification of suitable projects within the Company’s CSR Policy. The requisite details of CSR activities pursuant to Section 135 of the Companies Act, 2013 and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure “G”.

The composition and other details of the CSR Committee is included in the Corporate Governance Report which form part of Board’s Report.

22. PARTICULAURS OF EMPLOYEES:

The information required pursuant to Section 197 of Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed as Annexure “H”. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

23. ENVIRONMENT, HEALTH AND SAFETY (EHS):

The Company is committed to health and safety of its employees, contractors and visitors. We are compliant with all EHS Regulations stipulated under the Water (Prevention and Control of Pollution) Act, The Air (Prevention and Control of Pollution) Act, The Environment Protection Act and The Factories Act and Rules made thereunder. Our mandate is to go beyond compliance standards and we have made a considerable improvement in this direction.

24. SECRETARIAL STANDARDS:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

25. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the Company’s customers, vendors, bankers, auditors, investors and Government bodies during the year under review. Your Directors place on record their appreciation of the contributions made by employees at all levels. Your Company’s consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board,

Place: Ahmedabad Rajendra S. Shah

Date: 27 May 2019 Chairman

(DIN:00061922)

Source : Dion Global Solutions Limited
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