Austin Engineering Company Ltd.

Dear Members, The Directors have pleasure in submitting their 37th Annual Report of the company together with the Audited Statements of Accounts for the year ended 31st March, 2015. FINANCIAL RESULTS The Company''s financial performance for the year ended March 31,2015 under review along with previous year figure is summarized as here under: STAND ALONE (Rs. In Lacs) Year ended Year ended 31st March, 31st March, 2015 2014 Gross profit before 668.55 689.10 Interest Depreciation and Tax Less: Interest and 225.03 287.82 Depreciation Profit before Tax 443.52 401.28 Less: Provision for 159.50 142.40 Taxation Deferred Tax Assets (44.55) (48.37) Profit after Tax 328.57 307.25 Add: Balance brought 3641.48 3435.25 forward from last year Profit available for 3970.05 3742.50 appropriations Appropriations: Adjustment Relating to 25.31 0.00 fixed Asset Proposed Dividend 52.17 52.17 Provision for Tax on 10.62 8.86 Proposed Dividend Transfer to General 40.00 40.00 Reserve Balance carried forwarded 3841.95 3641.47 to next year REVIEW OF BUSINESS OPERATION AND FUTURE PROSPECTS : The performance of the Company during the year under review remains satisfactory looking to the economic situation as a whole. The sales of the Company have increased both in domestic and export segment. The sales during the year were Rs.9828.85 Lacs as against Rs. 8836.50 Lacs in the previous year. The sales thus registered an increase of 11.23% as compared to the last year. The net profit of the Company has increased to Rs. 328.58 Lacs as against Rs. 307.26 Lacs in the last year registering an increase of increment of 6.94%. This was mainly attributed due to increase in sales coupled with stringent measures adopted by the management towards cost control. The Company has also earned revenue to the tune of Rs. 79.11 Lacs as against Rs. 82.35 Lacs in the last year from the Wind Mill Project. The Company continued to launch a number of new and higher value added products and undertook various cost effective measures to strengthen the Company''s competitiveness and profitability in the future. DIVIDEND : Your Directors are pleased to recommend for your approval a dividend of Rs. 1.50 (Tax Free) per Equity share of the Company in respect of the financial year ended on 31st March, 2015. (Previous Year Rs. 1.50). The said dividend shall be payable to those members whose names appear on the register of member of the Company on record date. FIXED DEPOSITS : The Company has neither accepted nor renewed any deposits during the year under review. DIRECTORS RESPONSIBILITY STATEMENT : In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement as enumerated here under: * In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; * 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 and loss of the Company for that period; * 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; * The directors have prepared the annual accounts on a going concern basis; and * 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. * 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. DIRECTORS AND KEY MANGERIAL PERSONNEL : In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shashikant M Thanki and Mr. Narottam C Vadgama Directors, retire by rotation at the ensuring Annual General Meeting and being eligible offers themselves for re- appointment. In compliance of the requirements of Section 149(1) of the Companies Act, 2013 read with clause 49 of the Listing Agreement, Ms. Arati Goswami who was appointed as an additional Non Executive Woman Director on the Board of the Company with effect from 30th March, 2015, vacates the office as Director at this Annual General Meeting. The Company has received notice under Section 160 of the act from a member proposing her candidature for the office of Director of the Company liable to retire by rotation. The following are the Key Managerial Personnel as defined under Section 2(51) of the Companies Act, 2013: * Mr. Narottam C Vadgama (Chairman and Executive Director) * Mr. Shashikant M Thanki (Managing Director) * Mr. Rajan R Bambhania (Joint Managing Director) * Mr. Jeshanker R Bhogayta (Executive Director) * Mr. Siddik A Kotal (Chief Financial Officer) * Ms. Zalak M Talreja (Company Secretary) AUDITORS AND AUDITORS'' REPORT : STATUTORY AUDITORS : M/s. Dhirubhai Dand & Co., Chartered Accountants, the auditors of the Company retires at the conclusion of this Annual General Meeting and being eligible, offered themselves for re-appointment. The Company has received a letter from them to the effect that their reappointment, if made, would be within prescribed limit under Section 141 of the Companies Act, 2013 read with Rule 4(1) of the Companies (Audit & Auditors) Rules, 2014 and that they are not disqualified for reappointment. SECRETARIAL AUDITOR : The Board has appointed Mr. K.J.SHAH of K J Shah & Company, Practicing Company Secretary, to conduct the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure C to this Report. INTERNAL FINANCIAL CONTROLS : The Company has 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 was observed DISCLOSURES : * AUDIT COMMITTEE : The provisions of Section 177 of the Companies Act, 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013 is applicable to the Company. The Audit committee consists of the following directors viz: Mr. B. D. Joshi, [Chairman of committee] Mr. K. J. Mehta, [Member of committee] Mr. D. B. Nakum, [Member of committee] All the members of Audit Committee are independent directors. * WHISTLE BLOWER POLICY : The Company has a WHISTLE BLOWER POLICY to deal with instances of unethical behaviour, actual or suspected fraud or violation of the company''s code of conduct, if any. The details of the whistle blower policy is explained in the Corporate Governance 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 managerial remuneration, directors'' qualifications, positive attributes, independence of directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Corporate Governance Report and the same is also posted on website. * RELATED PARTIES TRANSACTIONS POLICY : All transactions entered into by the Company with Related parties during the period under review were in the ordinary course of business at prevailing market rate. The particulars of contracts or arrangements made with related parties pursuant to Section 188 of the Companies Act, 2013 is furnished vide Annexure A in form AOC-2 as per Companies Act, 2013 and it forms the part of this report. The Company has also posted the policy in respect of transactions with Related Parties on its website. All related party transactions were placed before the Audit Committee and also the Board for approval. The Company had also taken members'' approval at its Annual General Meeting held on 9th September, 2014 for entering into the transactions with Related parties for the period of three years i.e. from 01/04/2014 to 31/03/2017. RISK MANAGEMENT POLICY : The Board of Directors is overall responsible for identifying, evaluating and managing all significant risks faced by the Company. The Board approved Risk Management policy, which acts as an overarching statement of intent and establishes the guiding principles by which key risks are managed across the organization. The Board monitors and reviews the implementation of various aspects of the Risk Management policy through a duly constituted Risk Management Committee. The Risk Management Committee assists the Board in its oversight of the Company''s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework. The Company follows well established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board. The Company has in place a business risk management framework for identifying risks and opportunities that may have a bearing on the organization''s objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy. In the opinion of the Board, none of the risks faced by the Company threaten its existence. The Company has also posted the policy in respect of transactions with Related Parties on its website. * MATERIAL CHANGES AND COMMITMENTS : No material changes and commitments affecting the financial position of the Company occurred between the end of financial year to which this financial statement relate and the date of this report. DECLARATION OF INDEPENDENT DIRECTORS : The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under the Companies Act, 2013 read with clause 49 of the Listing Agreement. The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non- executive directors and executive directors. The said details have been shown in corporate governance Report. ANNUAL RETURN: The Extract of Annual Return pursuant to the provisions of Section 92 (3) of the Companies Act, 2013 read with Rule 12 (1) of the Company (Management and Administration) Rules, 2014 is furnished in Annexure B in form MGT-9 as per Companies Act, 2013 and it forms the part of this report. BOARD MEETINGS : The Board of Directors duly met 6 (Six) times respectively on 27th May, 2014 (2 Times), 23rd July 2014, 18th October, 2014, 21st January, 2015 and 30th March, 2015 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS : The particulars of Loans, guarantees or investments made under Section 186 and its applicability have been furnished in notes annexed to our financial statements. QUALIFICATIONS AND RESERVATIONS ON AUDIT REPORT : The Auditor''s Report and Secretarial Auditor''s Report are self explanatory and therefore do not require further comments and explanations. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 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 : The particulars of employees as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in the Annexure E appended hereto and it forms part of this Report. As per Section 136(1) of the Companies Act, 2013, the report and accounts are being sent to the shareholders of the Company, excluding the statement of particulars of employees under the said proviso. Any shareholder interested in obtaining a copy of the said statement may write to the Secretarial department at the Registered Office of the Company. SUBSIDIARY COMPANY : In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss account and other documents of M/s Accurate Engineering Inc., the subsidiary company, are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the said subsidiary company and its related detailed information to any member of the Company who may be interested in obtaining the same and also on Company''s website. The Annual Accounts of the subsidiary company will also be kept open for inspection at the 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 the Companies Act, 2013 is given in the Annexure F and it forms the part of this report. CONSOLIDATED FINANCIAL STATEMENTS : In accordance with the Accounting Standard (AS)-21, the audited consolidated financial statements are annexed to this Annual Report. CORPORATE GOVERNANCE REPORT : The Company has recognized the highest standards of Corporate Governance and adheres strictly to the said requirements as set out by SEBI. The Report on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT : Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in separate section forming part of the Annual Report. INDUSTRIAL RELATIONS : The industrial relation with workmen and staff continued to be extremely cordial during the year under review. ACKNOWLEDGMENT : Your Directors wish to place on record their gratitude for the continued co-operation and patronage extended by their esteemed customers both in OEM and after market segments. The Directors would also like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance during the year under report by our Bankers, all the customers, suppliers of the Company including Government agencies. The Board of Directors also wishes to express its appreciation for the efforts and contribution made by the employees at all levels during the year under report. order of the Board of Directors Sd/- Place : Patla, Dist. Junagadh N C Vadgama Date : 28th May, 2015 Chairman