DIRECTORS' REPORT Your Directors have pleasure in presenting the Twenty Fifth Annual Report together with the Audited Financial Statements for the year ended March 31, 2016 and the Auditor's Report thereon DMDEND Your Directors do not recommend any Dividend for the year ended March 31, 2016. REVIEW OF BUSINESS OPERATIONS After a three years period of stagnation the automobile industry shows signs of revival during the year 2015-16. As a resuit, the demand for the company improved and therefore the company has recorded a sale of Rs.131.69 crores, 16.87% growth over the previous year. The growth was mainly driven by marginal increase in the sales of piston rings . and a significant increase in the sale of transmission components. The company has been able to get a break through in the export market foc sale of transmission components. However, the operating conditions continued to be difficult with increases in ail input costs particularly finance cost as a result of increased borrowings. As a result of the increased volumes and implementation of several cost reduction initiatives, the company has been able to arrest the losses and show a marginal profit before tax of Rs 12.11 Lacs for the year as compared to a loss of Rs 115.11 lacs during last year. FUTURE PROSPECTS It is expected that ail the economies indicators will continue to remain buoyant during the coming year and the demand for the company's products appears to be positive. The prospects are particularly bright in the export market for sale of forged transmission products. The demand for rings is also expected to increase in line with the growth in the automobile industry. The company is continuing with its drive to improve quality, reduce cost, achieve excellence in ail its operations, improve its competitiveness and leverage the opportunities that are available in a fast growing market. The company is pursuing an aggressive capital expenditure plan to cater to the increased demand for its products. Your Board of Directors have in principle proposed to issue further shares on a rights basis. DIRECTORS In accordance with the provisions of the Companies Act, 2013, Mr N Venkataramani, retire by rotation and is eligible for reappointment. Mr J Shivakumar, Independent Director was appointed as an Additional Director on October 30, 2015 and he will hold office until this Annual General Meeting. By virtue of Section 149 of the Companies Act, 2013, your Directors are seeking appointment of Mr J Shivakumar, as an Independent Director for a period of two consecutive years up to October 29, 2017. Mr Yoshio Onodera was appointed as an Additional Director on May 27, 2016 and he will hold office until this Annual General Meeting. He has been nominated by NPR in place of Mr Masaaki Otani. The approval of Members is being sought for re-appointment of Mr A Venkataramani as Managing Director for a term of 3 years effective from November 01, 2016. Mr S Ramachandra and Mr Masaaki Otani, Directors resigned from the Board on 30.10.2015 and 27.05.2016, respectively. Your Directors place on record their appreciation for the valuable services rendered by them during their tenure. Ail the Independent Directors of the Company have affirmed that they meet the criteria for independence as provided in Section 149(6) of the Companies Act, 2013. Formal Annual Evaluation of Directors was done as per the requirements of the Companies Act, 2013. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence the Company has devised a 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. The said policy is posted in the website of the Company. DIRECTORS'RESPONSIBILTTY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility statement:-: in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; v the Directors had 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 ended March 31,2016 and of the profit of the Company for that period; - the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; - the Directors had prepared the annual accounts on a going concern basis; the Directors had laid down internal financial contrails to be followed by the Company and that such internal financial controls are adequate and were operating effectively; & - the Directors had devised proper Systems to ensure compliance with the provisions of ail applicable laws and that such Systems were adequate and operating effectively. RISK MANAGEMENT POLICY The Company has an adequate Risk Management Policy commensuration with its size and operations. The risk management includes identifying types of risks and its assessrhent, risk handling and monitoring and reporting. OTHER POLICIES In accordance with the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board of Directors of the Company has framed ail applicable policies. The above policies where mandated are up-loaded on the Company's website, under the web-link <http://www.iprings.com> CORPORATE GOVERNANCE A Certificate from the Auditors of the Company regarding compliance of conditions of 'Corporate Governance' as stipulated under LODR is attached to this report. Pursuant to Regulations of Chapter IV of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance is included in the Annual Report. A Management Discussion and Analysis Report forms part of this Directors' Report. Ail the mandatory requirements under the Code of Corporate Governance have been complied with. AUDITORS Messrs. R.GN Price & Co., Chartered Accountants retire at this Annual General Meeting and are eligible for reappointment. INTERN AL AUDITORS Messrs. M.S. Krishnaswamy & Rajan, Chartered Accountants is the Internal Auditor of the Company COST AUDITORS In terms of Notification dated 3151 December 2014, issued by the Ministry of Corporate Affaire, Cost Audit is applicable to the Company with effect from April 01, 2015. M/s. Raman & Associates, Cost Auditors, Chennai are the Cost Auditors of the Company. The Cost Audit Report for the year ended March 31, 2016 will be filed in time. SECRETARI AL AUDITORS M/s. LK & Associates, Practicing Company Secretaries, Chennai are the Secretarial Auditors of the Company. A, Secretarial Audit Report as required under Section 204 of the Companies Act, 2013 for the year under review is given in the Annexure forming part of this Report. EXTRACTS OF ANNUAL RETURN The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is given in Form No. MGT-9, forming part of this Report. RELATED PARTY TRANSACTIONS Ail related party transactions that were entered into during the financial year were on arhVs length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of the transactions with related parties are given in the financial statements. PART1CULARS OF EMPLOYEES There were no employees in receipt of remuneration of Rs.5,00,000/- p.m. or more during the year ended 31.03.2016. INTERNAL COMPLAINTS COMMITTEE Your Company has put in place a policy for prevention, prohibition and redressed against sexual harassment of women at the Workplace to protect women employees and enable them to report sexual harassment at the workplace. An Internal Complaints Committee headed by a woman employee has also been constituted for this purpose. No complaints were received during the year. 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 given in the Annexure forming part of this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OFTHE COMPANIES ACT, 2013 The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the financial statements. ACKNOWLEDGEMENT Your Directors wish to place on record their appreciation of the Technical Assistance and Marketing Services extended by M/s Nippon Piston Ring Co. Ltd., Japan and M/s. India Pistons Limited, Chennai, respectively. Your Directors also wish to place on record their appreciation of the contribution made by the employees at ail levels. For and on behalf of the Board N Venkataramani Chairman Place : Chennai Date : May |