| Dear Members,
The Directors present the Twenty Fourth Annual Report together with
the Audited Statements of Account for the financial year ended March
31, 2015.
1. FINANCIAL RESULTS:
During the year under review the Company has achieved the following
financial results: ( Rs. in Lakhs )
Particulars 31.03.2015 31.03.2014
Revenue from operations 653.85 669.38
Other Income 9.28 17.94
Profit /(Loss) before Financial
Charges, Depreciation, Taxation
and Prior Period items (53.02) (16.06)
Less: Finance Costs 88.11 63.95
Profit /(Loss) before Depreciation,
Taxation and Prior Period items (141.13) (80.01)
Less: Depreciation 39.41 35.88
Profit /(Loss) before Taxation
and Prior Period items (180.54) (115.89)
Less: Taxation (Including Deferred Tax) 0.00 22.98
Profit /(Loss) for the year (180.54) (92.90)
Less: Prior period items 0.00 0.00
Net Profit/(Loss) for the year (180.54) (92.90)
Balance of Profit/(Loss) brought
forward from last year (325.84) (621.74)
Less: Capital Reduction Account
transferred 0.00 388.80
Profit/(Loss) Carried forward to
Balance sheet (506.38) (325.84)
2. OVERVIEW OF COMPANY PERFORMANCE:
During the year under review the sales of your Company has remained
muted. However, loss has gone up from Rs. 92.90 Lakhs to Rs. 180.54
Lakhs due to increase in finance costs and employee benefits expense.
Though the Company was hopeful of wiping off its accumulated losses
upon reduction of its Capital by 90% and amalgamation of erstwhile
Smiths & Founders (India) Limited with the Company as envisaged in the
Scheme of Rehabilitation submitted by the Company and approved by the
Hon. Board for Industrial and Financial Reconstruction, the Scheme did
not yield the desired result in view of drastic fall in sales and
losses suffered by the amalgamating Company in the financial years
2012-13 and 2013-14.
The Company also had to bear the burden of additional depreciation
amounting to Rs. 1.15 Crores being the carrying amount of assets whose
written down value has been written off since the useful life is nil as
at 01.04.2014 pursuant to the provisions of Companies Act, 2013, which
has been charged to the accumulated losses of the Company.
As a result of this, the Company's accumulated losses has exceeded
fifty percent of its net-worth at the end of the financial year.
However, the board is of the view that as the accumulated losses for
the financial year is Rs. 5.06 Crores, there is no erosion of 50% or
more of its peak net worth and hence no reporting under the Sick
Industrial Companies (Special Provisions) Act, 1985 is required. The
Company is confident of earning a modest net profit in the current
financial year.
3. DIVIDEND & RESERVES:
In view of loss incurred by the Company, your Directors do not
recommend any dividend for the financial year ended March 31, 2015.
During the year under review no amount was transferred to General
Reserve.
4. INCREASE IN PAID UP CAPITAL:
Consequent to amalgamation of erstwhile Smiths & Founders (India)
Limited with the Company, the Company has issued 97676525 equity shares
of Rs. 1/- fully paid up in 2 tranches, ie. 48838265 shares on July 1,
2014 and 48838260 shares on December 27, 2014 to the shareholders of
erstwhile Smiths & Founders (India) Limited in the ratio of 5 equity
shares of Rs. 1/- fully paid up of the Company for every 2 equity shares
of Rs. 1/- held by them. The Paid Up Capital of the Company, as a result
of this, has increased to Rs. 10,19,96,525/-.
5. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form
MGT-9, as required under Section 92 (3) of the Companies Act, 2013 and
Rule 12(1) of the Companies (Management & Administration) Rules, 2014,
is included in this Report as Annexure-A and forms an integral part of
this Report.
6. NUMBER OF MEETINGS OF THE BOARD:
During the Financial Year 2014-15, 6 (Six) meetings of the Board were
held, details of which are given in the Corporate Governance Report.
7. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has evaluated its performance taking
into consideration of the various aspects of its functioning,
composition of the Board and its Committees and performance of specific
duties, obligations and governance. The performance evaluation of the
Chairman and Non-Independent Directors was carried out by the
Independent Directors through a meeting of Independent Directors.
8. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The details of programmes for familiarisation of Independent Directors
with the Company, their roles, rights, responsibilities in the Company,
nature of the industry in which the Company operates, business model of
the Company and related matters are put up on the website of the
Company, www.smithsandfoundersindia. com
9. DIRECTORS:
During the year under review Mr. G. Ananda, who was a Independent
Director on the board since 02.08.2008 resigned on November 14, 2014.
The Board places on record its appreciation of his immense contribution
to the Company during his long tenure. The Board appointed Mr.
Sudhindra N. Kalghatgi on November 14, 2014 to fill the vacancy caused
by the resignation of Mr. G. Ananda.
Mr. V. Parthasarathy and Mr. Sudhindra N. Kalghatgi, Independent
Directors have been appointed as such in the Annual General Meeting of
the Company held on December 27, 2014. to give effect to the applicable
provisions of Sections 149 and 152 of the Companies Act, 2013.
The Independent Directors have given declaration that they meet the
criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
Mr. Umesh Shastry and Mr. Satish Shastry retire by rotation at the
ensuing Annual General Meeting and are eligible for re-appointment. The
Board recommends their re-appointment.
10. FIXED DEPOSITS:
The Company has not accepted fixed deposits from the public and
shareholders within the meaning of Section 73(1) of the Companies Act,
2013 and Rules made there under, during the year under review.
The Company has re-paid all outstanding deposits accepted before the
commencement of the Companies Act, 2013, during the year under review.
11. DIRECTORS RESPONSIBILITY STATEMENT:
As required under Section 134(3)(c) of the Companies Act, 2013, your
Directors state that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanations 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 March 31, 2015 and its loss 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 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
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.
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY:
During the year under review the Company has not given any loan,
guarantee or made any investment covered under the provisions of
Section 186 of the Companies Act, 2013.
13. REMUNERATION AND NOMINATION POLICY:
The Board of Directors have framed a policy which lays down a framework
in relation to remuneration of Directors, Key Managerial Personnel and
Senior Management of the Company. The policy also lays down criteria
for selection and appointment of Board Members. The Policy is given in
Annexure-B and forms an integral part of this report.
14. RELATED PARTY TRANSACTIONS:
During the year under review the Company has not entered into any
contract or arrangement with related parties attracting the provisions
of Section 188 of the Companies Act, 2013.
However, during the current year the Company has entered into a
transaction with a related party on arm's length basis and in the
ordinary course of business thereby not attracting the provisions of
Section 188 of the Companies Act, 2013. The details are given in
Annexure-C and forms an integral part of this report.
All Related Party Transactions are placed before the Audit Committee
and also to the Board for approval.
The policy on Related Party Transactions as approved by the Board of
Directors has been uploaded on the website of the Company,
www.smithsandfoundersindia. com
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
As per Companies Act, 2013 read with Clause 49 of the Listing
Agreement, the Board of Directors of the Company have constituted Vigil
Mechanism / Whistle Blower Policy and adopted a policy which aims to
provide a channel to the Directors and employees to report genuine
concerns about unethical behaviour, actual or suspected fraud or
violation of the Codes of Conduct or policy. The Company is committed
to adhere to the highest standards of ethical, moral and legal conduct
of business operations and in order to maintain these standards, the
Company encourages its employees who have genuine concerns about
suspected misconduct to come forward and express those concerns in
writing through an e-mail or a letter to the Chairman of the Company or
to the Compliance Officer or to the Chairman of the Audit Committee.
The Whistle Blower Policy of the Company can be accessed on the
Company's website at www.smithsandfoundersindia.com
16. RISK MANAGEMENT:
The Company has in place Risk Management Policy according to which the
Board of Directors of the Company and the Audit Committee periodically
review and evaluate the risk management system of the Company so that
the management controls the risks through properly defined network.
17. CORPORATE SOCIAL RESPONSIBILITY:
No disclosures on Corporate Social Responsibility are required as
provision under Section 135 of the Companies Act, 2013 and Rules made
thereunder are not applicable to the Company.
18. CORPORATE GOVERNANCE:
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 attached to this Report along with report on
Corporate Governance.
19. MANAGEMENT DISCUSSION AND ANALYSIS:
Pursuant to Clause 49 of the Listing Agreement, Management Discussion
and Analysis Report forms part of this Report.
20. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Rules made thereunder, the Company has appointed VB &
Associates, Company Secretaries as the Secretarial Auditor of the
Company. The Secretarial Audit Report is annexed as Annexure-D and
forms an integral part of this Report. The Secretarial Audit Report
does not contain any qualification, reservation or adverse remark.
21. AUDITORS:
The Company's Auditors, M/s. B.N.Subramanya & Co., Chartered
Accountants, were re-appointed as the Statutory Auditors of the Company
to hold office from the conclusion of Twenty Third Annual General
Meeting held on December 27, 2014 until the conclusion of the Twenty
Seventh Annual General Meeting to be held in the year 2018 subject to
ratification of their appointment by the Members at every Annual
General Meeting held after the Annual General Meeting held on December
27, 2014.
As required under provisions of Section 139 of the Companies Act, 2013,
the Company has received written consent from M/s. B.N.Subramanaya &
Co. to their appointment and a Certificate to the effect that that
their re-appointment, if made, would be in accordance with the
Companies Act, 2013 and the Rules framed thereunder and that they
satisfy the criteria provided in Section 141 of the Companies Act,
2013.
The Members are requested to ratify the appointment of the Statutory
Auditors as foresaid.
The Auditors' Report does not contain any qualification, reservation or
adverse remark on the financial statements for the year ended March 31,
2015. The statements made by the Auditors in their Report are self-
explanatory and do not call for any further comments.
22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
OR TRIBUNALS:
There are no significant and material orders passed by the
Regulators/Courts/Tribunals that would impact the going concern status
of the Company and its future operations.
23. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an adequate internal control system commensurate with
its size and nature of its business.
24. HEALTH, SAFETY AND ENVIRONMENT:
The health and safety of the workforce is of paramount importance. The
Company aims to provide a workplace that is free from any occupational
hazards or illness.
25. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION &
REDRESSAL) ACT, 2013:
During the year under review the Company has not received any complaint
under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013.
26. STATUTORY INFORMATION:
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo pursuant to Section 134 (3)(m) of
the Companies Act,
2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is
given in Annexure-E, which forms part of this Report.
There were no employees employed throughout the year who were in
receipt of remuneration of Rs. 60 Lakhs per annum or more. There were
no employees employed for part of the year who were in receipt of
remuneration of Rs. 5 Lakhs per month or more. During the year under
review the Company had 91 employees.
The information required under Section 197(12) of the Companies Act,
2013 read with Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and forming part of the Directors' Report for
the year ended March 31, 2015 is given in Annexure-F to this Report.
27. ACKNOWLEDGEMENTS:
Your Directors thank the Members, Government Authorities, Banks,
Customers and Vendors for their continued unstinted support to the
Company.
By the Order of the Board
Place: Bangalore SURESH SHASTRY
Date: 12.08.2015 Chairman & Managing Director
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