To,
The Members,
PATELS AIRTEMP (INDIA) LTD.
Ahmedabad.
Your Directors have pleasure in presenting herewith the 31st
Annual Report 2022-23 together with the Audited Standalone & Consolidated Financial
Statements of the Company for the year ended 31st March, 2023.
FINANCIAL RESULTS (STANDALONE)
(` in lakhs except EPS)
Particulars |
Year ended 31-03-2023 |
Year ended 31-03-2022 |
Revenue from Operations |
28147.85 |
30321.97 |
Other Income |
132.56 |
112.47 |
Total Income |
28280.41 |
30434.44 |
Less: Depreciation & Amortisation Expenses |
410.83 |
361.55 |
Finance Cost |
1204.84 |
901.51 |
Other Expenses |
25128.94 |
27487.95 |
Total Expenses |
26744.61 |
28751.01 |
Profit before Tax |
1535.80 |
1683.43 |
Less :Tax Expenses |
416.99 |
443.30 |
Net Profit for the year |
1118.81 |
1240.12 |
Total Comprehensive Income for the year |
1112.50 |
1240.33 |
Balance brought forward from previous year |
9726.64 |
8613.06 |
Other Comprehensive Income (Net of Tax) |
(6.31) |
0.21 |
Profit available for Appropriation |
10839.14 |
9853.39 |
Less: Dividend |
141.97 |
126.76 |
Less: Tax on Dividend |
-- |
-- |
Less Transfer to General Reserve |
-- |
-- |
Surplus carried forward to Balance Sheet |
10697.17 |
9726.63 |
Earnings Per Share of ` 10/- each (` ) |
21.44 |
24.46 |
STATE OF COMPANY'S AFFAIRS (STANDALONE)
The Company has earned total revenue from operations of ` 28147.85
Lakhs during the year ended on 31st March, 2023 as against ` 30321.97 Lakhs
earned during the previous year ended on 31st March, 2022. The Company has also
earned other income of ` 132.56 Lakhs during the year under review as against ` 112.47
Lakhs earned during the previous year.
Out of the total revenue from operations of ` 28147.85 Lakhs earned by
the Company during the year under review, ` 27784.36 Lakhs represents sale of products
(Domestic & Export), ` 163.60 Lakhs represents sale of Services (Processing Charges)
and ` 199.90 Lakhs represents other operating revenue including export incentives.
The Company has incurred total expenses of ` 26744.61 Lakhs during the
year ended on 31st March, 2023 as compared to ` 28751.01 Lakhs incurred during
the previous year ended on 31st March, 2022.
The Company has earned the Profit before Tax of ` 1535.80 Lakhs during
the year ended on 31st March, 2023 as compared to ` 1683.43 Lakhs earned during
the previous year ended on 31st March, 2022.
The Company has earned Net Profit of ` 1118.81 Lakhs for the year ended
on 31st March, 2023 after making Provision for Tax Expenses of ` 416.99 Lakhs
and other adjustments, as compared to Net Profit of ` 1240.12 Lakhs earned by the Company
during the previous year ended on 31st March, 2022.
After adding the Surplus in the Statement of Profit & Loss of `
9726.64 Lakhs brought forward from the previous year to the profit of ` 1118.81 Lakhs
earned by the Company during the year under review and after adjusting the amount of `
6.31 Lakhs towards Items of Other Comprehensive Income for the year (Net of Tax) and
Dividend of ` 141.97 Lakhs, the total amount of ` 10697.18 Lakhs is available for
appropriation. The Audited Standalone Financial Statements of the Company and all other
documents required to be attached thereto have been included in the Annual Report 2022-23,
which has been put on the Company's website
https://www.patelsairtemp.com/investors/annual-reports/.
MATERIAL EVENTS DURING THE YEAR PREFERENTIAL ISSUE AND CHANGE IN SHARE
CAPITAL
During the financial year 2022-23, 4,00,000 Equity Shares of face value
of ` 10/- each of the Company for cash at a premium of ` 222/- per share aggregating to `
9,28,00,000/- (Rupees Nine Crores Twenty Eight Lakhs Only) (Distinctive Nos. from 5070241
to 5470240), issued and allotted to the Promoters and Promoter Group of the Company on 16th
November, 2022 under Preferential basis as per provisions of the Companies Act, 2013 and
Rules made thereunder and SEBI (ICDR) Regulations, 2015 upon conversion of their unsecured
loan advanced to the Company as stipulated by Bank of Baroda (the Banker) into Equity
Shares as approved by the Shareholders at the Extraordinary General Meeting (EGM) held on
8th October, 2022, due to which, the Share Capital of the Company has been
increased from 50,70,240 Equity Shares of ` 10/- each to 54,70,240 Equity Shares of ` 10/-
each due to issue and allotment of 4,00,000 Equity Shares.
The Company has received listing and trading approval from BSE Ltd.
vide its letter No. LOD/PREF/TP/ CP/13646/2022-23, dated 1st December, 2022 for
trading of 4,00,000 Equity Shares of ` 10/- each effective from 2nd December,
2022.
The Equity Shares issued on preferential basis will be subject to
lock-in as provided in Regulation 167(1) of the SEBI ICDR Regulations i.e. for a period of
18 months from the date of trading approval. As such, 4,00,000 Equity Shares of face value
of ` 10/- each of the Company for cash at a premium of ` 222/- per share aggregating to `
9,28,00,000/- (Distinctive Nos. from 5070241 to 5470240) allotted to the Promoters and
Promoter Group under Preferential Issue upon conversion of their unsecured loan into
Equity Shares, have been locked in up to 30th June, 2024.
However, the Hon'ble National Company Law Tribunal (NCTL),
Ahmedabad Bench has issued the Order dated 6th October, 2022 against the
Interlocutory Application (IA) No. IA/68(AHM)2022 read with Company Petition (CP) No.
58/(AHM)2018 filed by one Mr. Bhavesh D. Narumalani (Applicant) vs. Therm Flow Engineers
Private Limited (Respondent) with regards to approval of the Shareholders received at the
Extraordinary General Meeting ("EGM") of the members of the company held on 8th
October, 2022 for the above referred Preferential Issue that in case of any resolution
passed in this meeting which is ultimately affecting the rights of the Applicant, it is
subject to outcome of the said referred Interlocutory Application and Company Petition.
However, the Company has so far not received any directives from the Hon'ble NCLT/
High Court in the above matter as on the date of this Report.
Pursuant to Regulation 32(7A) of SEBI Listing Regulations, 2015 as
amended read with SEBI circular no. CIR/ CFD /CMD1/162/2019 dated 24th
December, 2019, the Statement of Deviation / Variation in utilisation of funds raised by
the Company under Preferential Issue as above from the objects stated in the explanatory
statement to the notice for the general meeting was not applicable to the Company as it
was conversion of unsecured loan of Promoters and Promoter Group into Equity Shares. The
Company submitted to BSE Ltd., the stock exchange, Statement of deviation(s) or
variation(s) along with the quarterly financial results.
RE-CLASSIFICATION OF PROMOTER / PROMOTER GROUP TO PUBLIC SHAREHOLDER
CATEGORY
Mrs. Rashmika Narendra Patel holding 3,07,326 Equity Shares (6.06% of
share capital) of the Company, have been re-classified from Promoter category to Public
Shareholder category duly approved by BSE Limited vide its letter no.
LIST/COMP/YG/30/2022-23 dated May 25,2022.
Mr. Kanaiyalal Gagandas Narumalani holding 3,750 Equity Shares (0.07%
of share capital) of the Company, have been re-classified from Promoter Group category to
Public Shareholder category duly approved by BSE Limited vide its letter no.
LIST/COMP/YG/29/2022-23 dated May 25,2022.
DIVIDEND
The Directors have recommended dividend of ` 3.00 per share (@ 30 %) on
54,70,240 Equity Shares of ` 10/- each of the Company (share capital increased from
50,70,240 Equity Shares of ` 10/- each to 54,70,240 Equity Shares of ` 10/- each due to
issue and allotment of 4,00,000 Equity Shares on Preferential basis as above) out of the
profits of the Company for the Financial Year ended 31st March, 2023 (2022-23),
as compared to Dividend of ` 2.80 per share (@ 28 %) declared on 50,70,240 Equity Shares
of ` 10/- each for the previous Financial Year ended 31st March, 2022. This
will absorb ` 164.11 lakhs.
A resolution to that effect has been placed for the approval of the
members at this Annual General Meeting of the Company and that the same, when declared,
shall be paid to the Members.
Pursuant to Finance Act, 2020, dividend income will be taxable in the
hands of the shareholders w.e.f. 1st April 2020 and the Company is required to
deduct tax at source ("TDS") from dividend paid to the Members at prescribed
rates, subject to the provisions of Income Tax Act, 1961. In this regard, the details
regarding TDS have been mailed to the shareholders and have also been included in the
Notice of AGM included in this Annual Report.
TRANSFER TO RESERVE
In view of above, the Company has not transferred any amount to the
General Reserve for the year ended on 31st March, 2023 and retain the entire
amount of profits in the Profit & Loss Account.
EXPANSION UNDER NEW GREENFIELD PROJECT (DUDHAI UNIT)
In respect of new Greenfield project set up by the Company in the year
2019-20 at Dudhai, Taluka. Kadi, Dist. Mehsana, Gujarat (Dudhai Unit), the Company has
constructed total four bays/shades with total covered area of 11,016 Sq. Mtrs., with total
capital outlay of around ` 24.00 crores.
With this, the Company has created additional infrastructure required
for the purpose of taking care of a part of the production process and primarily removed
the space constraints and the company is in a position to carry out the assembly
operations in a cost effective and efficient manner.
WHOLLY-OWNED SUBSIDIARY (WOS/FOREIGN ENTITY) (OVERSEAS SUBSIDIARY)
Members are aware that during the year 2019-20, Patels Airtemp (USA)
Inc. became Wholly Owned Subsidiary (WOS/Foreign Entity) of the Company on 13th
January, 2020 by acquiring 100% Shares of Patels Airtemp (USA) Inc.
During the year under review, there are no significant transactions and
arrangements entered into by the said Wholly Owned Subsidiary of the Company. Audit
Committee and Board of Directors of the Company review quarterly unaudited financial
results / statements of the said Wholly Owned Subsidiary. The Company monitors performance
of its Wholly Owned Subsidiary, inter alia, by the Minutes of Board Meetings and General
Meeting of the said Wholly Owned Subsidiary placed before the Company's Board.
As on March 31, 2023, the Company did not have any material unlisted
subsidiary as defined in Regulation 16(1)(c) of SEBI Listing Regulations. Accordingly, the
requirement of appointment of Independent Director of the Company on the Board of
Directors of the material unlisted subsidiary companies as per Regulation 24 of SEBI
Listing Regulations does not apply.
The Company has formulated a Policy for determining Material
Subsidiaries. The Policy is put up on the Company's website and can be accessed at
https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/policy-on-material-subsidiaries.pdf.
The Company has already filed an Annual Performance Report (APR) in
Form ODI Part II with the Reserve Bank of India for the year ended 31st
December, 2022 for its Overseas Direct Investment (ODI) in its Wholly Owned Subsidiary
(WOS) Patels Airtemp (USA) Inc. The Company has also filed an Annual Return on Foreign
Liabilities and Assets (FLA) for the year 2022-23 (as on 31st March, 2023) with
Reserve Bank of India.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the requirements of Section 129(3) read with Schedule III
of the Companies Act, 2013 and Rules made thereunder and as stipulated by Regulation 33 of
SEBI Listing Regulations and applicable Indian Accounting Standards, the Consolidated
Financial Statements of the Company and its Wholly Owned Subsidiary (WOS/Foreign Entity)
namely Patels Airtemp (USA) Inc. for the year ended 31st March, 2023 have been
attached with the Financial Statements of the Company. The Audited Consolidated Financial
Statements together with Auditors' Report form part of the Annual Report. The
Consolidated Financial Statements comprise of Audited Financial Statements of the Company
and management certified / Unaudited Financial Statements of Patels Airtemp (USA) Inc.
In accordance with the provisions of Section 136 of the Act and the
amendments thereto, read with the SEBI Listing Regulations, the Audited Consolidated
Financial Statements of the Company and all other documents required to be attached
thereto have been included in the Annual Report 2022-23, which has been put on the
Company's website https://www.patelsairtemp.com/investors/annual-reports/.
The Financial Statements of the Wholly Owned Subsidiary (WOS/Foreign
Entity) for the year ended 31st December, 2022, as required, are also put up on
the Company's website and can be accessed at
https://www.patelsairtemp.com/investors/subsidiary-company-accounts/. These documents will
also be available for inspection on all working days, except Saturdays, during business
hours, at the Company's Registered Office/Factory (Works) at Rakanpur, Dist.
Gandhinagar.
A statement containing the salient features of the financial statements
of the Company's Wholly-Owned Subsidiary (WOS/Foreign Entity) for the year ended 31st
March, 2023 in the prescribed Form AOC-1 as per first proviso to sub-section (3) of
Section 129 of the Companies Act, 2013 and Rule 5 of the Companies (Accounts) Rules, 2014
is attached herewith as per Annexure - A and forms an integral part of this Report.
FUTURE PROSPECTS
As you aware that the Company is in engineering industry and is engaged
in manufacturing/fabricating tailor made machines and therefore, the order book position
of such type of company can play pivotal role in the growth of the Company. Your Directors
are pleased to state that continuing the past trend; the Company has confirmed orders of
about ` 490 Crores on hand as on 1st August, 2023. Thus, your Directors are
quite bullish on repeating similar performance in future. Your Directors are cautious and
making untiring efforts so as not to compromise on growth, quality, and profitability of
the Company.
MATERIAL CHANGES AND COMMITMENTS
In terms of Section 134(3)(l) of the Companies Act, 2013, no material
changes or commitments affecting the financial position of the Company have occurred
between the end of the financial year and the date of this Report. There has been no
change in the nature of business of the Company.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN
FUTURE
The Company has not received any significant and material orders passed
by the Regulators or Courts or Tribunals impacting the going concern status and
Company's operations in future.
ANNUAL RETURN
Annual Return of the Company as on 31st March, 2023 as
required under Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 in the
prescribed Form MGT-7 is put up on the Company's website and can be accessed at
https://www.patelsairtemp.com/investors/annual-return/.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
In terms of provisions of Regulation 34 of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis
Report has been enclosed herewith as per Annexure B and forming part of the
Directors' Report.
RECOGNITION OR AWARDS
Along with development of product design and product manufacturing
application, the Company in its tenure of 50+ years continuously upgraded quality and
product system by acquiring world's most recognized system like ISO 9001:2015, ISO
14001:2015, ISO 45001:2018 and ASME (U2, U, S-Stamps). The Company is having Quality
Management System as per ISO 9001-2015 certification from TUV-SUD and recently received
Certificate for Environment Management System as per ISO 14001:2015 and Occupational
Health and Safety (OH&S) Management System as per ISO 45001:2018 from TUV-NORD.
The Company's products have ASME (American Society of Mechanical
Engineers-USA) "U", "U2" and "S" Stamp authorization. The
Company is also having "NB" and "R" Stamp. The Company is also a
member of HTRI (Heat Transfer Research, Inc, U.S.A.) for updating Heat Transfer
Technology.
Due to "U"/ "U2"/ "S" Stamp
authorization, it is expected to improve the Quality of the products/equipment of the
Company and to achieve higher growth and profitability of the Company in future.
The Company has also licensed software of ANSYS, CREO, PVelite, Nozzle
Pro and TEKLA for product development.
FINANCE
During the year 2022-23, the total working capital facilities,
including additional Working Capital Term Loan (AWCTL) under BGECL scheme and under
Emergency Credit Line Guarantee Scheme (ECLGS), availed by the Company from Bank of Baroda
and Axis Bank Ltd. under consortium arrangement has been increased from ` 194.17 Crores to
` 249.17 Crores (increased from ` 140.92 crores to ` 180.92 crores from Bank of Baroda and
from ` 53.25 crores to ` 68.25 crores from Axis Bank Ltd.). The Company has duly executed
security documents such as Hypothecation, Mortgage and other documents in favour of Bank
of Baroda and Axis Bank Ltd. for availing such enhanced / reviewed Working Capital
facilities aggregating to ` 249.17 Crores and also filed forms regarding charges with ROC
under MCA portal.
The Company is also availing Bill Discounting facility from Citibank
NA.
The Company is also availing overdraft facility against fixed deposit
with various branches of Bank of Baroda. The Company also availed temporary
excess/overdrawing facility in Cash Credit (CC) limit to the extent of ` 1.00 Crore as a
temporary overdraft for a period of 15 days on urgent basis from Bank of Baroda.
ACCEPTANCE OF DEPOSITS
During the year under review, the Company has not accepted any deposits
from the Public and Members of the Company and therefore not required to comply with the
requirement under the Companies Act, 2013 and the Rules made thereunder. As such, no
amount of principal or interest was outstanding to the Public and Members of the Company
as on March 31, 2023 and the Company is not required to furnish information in respect of
outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions,
1966 and Companies (Accounts) Rules, 2014.
During the year under review, the Company has accepted deposits from
the Directors of the Company which are exempted deposits under Rule 2(1)(c)(viii) of
Companies (Acceptance of Deposits) Rules, 2014, subject to compliance of the provisions of
the Companies Act, 2013 and the Rules made thereunder. During the year under review, the
Relatives of the Directors also brought in unsecured loan/deposits by way of contribution
to bring additional long term funds as a part of conditions imposed by Bank of Baroda on
the Promoters and their relatives, while reviewing working capital facilities to the
Company vide its Letter No. AR/SMEBR/2021-22/July, 94 dated 7th August, 2021,
which are exempted deposits under Rule 2(1)(c) (xiii) of Companies (Acceptance of
Deposits) Rules, 2014.
During the financial year 2022-23, part of unsecured loan/deposit to
the extent of ` 9.28 Crores of the Directors/Promoters and their relatives lying with the
Company were converted into 4,00,000 Equity Shares of face value of ` 10/- each of the
Company for cash at a premium of ` 222/- per share, issued and allotted to the said
Directors/Promoters and their relatives on 16th November, 2022 under
Preferential basis as per provisions of the Companies Act, 2013 and the Rules made
thereunder and SEBI (ICDR) Regulations, 2015 and duly approved by the Shareholders at the
Extraordinary General Meeting (EGM) held on 8th October, 2022.
Details of exempted deposits accepted and repaid by the Company
including interest to the Directors & their Relatives during the financial year
2022-23 are mentioned in Note No. 33 (Relate Party information) of the Notes to the
Standalone Financial Statements attached with this Annual Report.
The Company has duly filed the required Form DPT-3 during the year
under review regarding exempted deposits under MCA portal.
TRANSFER OF UNCLAIMED DIVIDEND TO IEPF
In terms of the provisions of Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF), as amended, during
the year under review, the Company has transferred the amount of unclaimed/unpaid Dividend
of ` 1,99,588.40/- for the financial year 2014-15 to IEPF established by the Central
Government under Section 124 & 125 of the Companies Act, 2013 and Rules made
thereunder. Pursuant to provisions of Investor Education and Protection Fund (Uploading of
information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the
Company has uploaded the details of unpaid / unclaimed amounts lying with the Company as
on 27th September, 2022 (date of the previous Annual General Meeting) on the
Company's website: https://www.patelsairtemp.com/investors/ unclaimed-dividend/.
TRANSFER OF SHARES TO IEPF DEMAT AUTHORITY ACCOUNT
Pursuant to the provisions of Section 124 and 125 of the Companies Act,
2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Rules, 2016, as amended, the Company has, during financial year 2022-23,
transferred to the IEPF Authority 3,091 Equity Shares of the face value of ` 10/- each
belonging to 35 Shareholders in respect of which dividend had remained unpaid or unclaimed
for seven consecutive years or more from 2014-15 to 2020-21. Details of shares transferred
to the IEPF Authority are available on the website of the Company
https://www.patelsairtemp.com/investors/ iepf-shares-transfer/.
The said details have also been uploaded on the website of the IEPF
Authority and the same can be accessed through the link: www.iepf.gov.in. In accordance
with the said IEPF Rules and its amendments, the Company had sent notices to all the
Shareholders whose shares were due to be transferred to the IEPF Authority and
simultaneously published newspaper advertisement. The voting rights on the shares
transferred to IEPF Authority shall remain frozen till the rightful owner claims the
shares.
Members may note that the dividend and shares transferred to the IEPF
can be claimed back by the concerned shareholders from the IEPF Authority after complying
with the procedure prescribed under the Rules. The Company has duly appointed Company
Secretary of the Company as Nodal Officer for the purposes of verification of claims and
coordination with Investor Education and Protection Fund Authority.
The Company has duly filed all the required IEPF Forms with the
authorities.
CORPORATE GOVERNANCE
Being a Listed Company, the Company has taken necessary measures to
comply with the provisions of Listing Regulations regarding Corporate Governance as
amended from time to time. A separate report on Corporate Governance for the year ended 31st
March, 2023 is attached herewith as a part of this Annual Report viz Annexure - C.
A certificate from Practicing Company Secretary regarding compliance of the aforesaid
provisions of Corporate Governance is obtained by the Company and annexed to the Corporate
Governance Report. The Certificate on Corporate Governance issued by Practicing Company
Secretary for the financial year 2022-23 does not contain any qualification, reservation
or adverse remark in respect of Corporate Governance Report.
The Company has furnished to BSE Ltd., where the Shares of the Company
are listed, Corporate Governance Compliance Report for the Quarter/Half-year/Whole year
during the financial year 2022-23 in the format as specified by SEBI from time to time as
placed before the Board as per various provisions of SEBI Listing Regulations. The said
Corporate Governance Compliance Report have also been uploaded on the website of the
Company https://www.patelsairtemp.com/investors/corporate-governance-report/.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
confirmation and explanations obtained by them, your Directors make the following
statement in terms of Section 134(3)(C) and 134(5) of the Companies Act, 2013 and confirm
that: (a) in the preparation of the annual accounts for the year ended 31st
March, 2023, the applicable accounting standards read with requirements set out under
Schedule III to the Act have been followed and there are no material departures from the
same; (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 as at 31st
March, 2023 and of the profit of the Company 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 Companies Act, 2013 for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities; (d)
the Directors have prepared the annual accounts for the year ended on 31st
March, 2023 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 are operating effectively; and (f) the Directors had devised proper systems
to ensure compliance with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
PARTICULARS OF LOAN GIVEN AND INVESTMENT MADE
During the year under review, the Company has not provided any loan or
guarantee or security to any person nor made any investment.
Particulars of earlier loan given and investment made by the Company in
its Wholly Owned Subsidiary (WOS), namely, Patels Airtemp (USA) Inc. are provided in the
Standalone Financial Statements of the Company (Please refer Note No. 4, 5 and 40 to the
Standalone Financial Statements).
RELATED PARTY TRANSACTIONS (RPTs)
Information on transactions with related parties referred to under
sub-section (1) of Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is
attached herewith viz Annexure - D and forming part of the Directors' Report
pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts)
Rules, 2014.
Pursuant to the provisions of SEBI Listing Regulations, details of
related party transactions entered into by the Company, in terms of Ind AS-24 have been
disclosed in Note No. 33 of the Notes to the Standalone Financial Statements for the year
ended 31st March, 2023, forming part of this Report.
However, there are no materially significant related party transactions
made/entered into by the Company with its related parties including promoters, directors
or the management etc. that may have potential conflict with the interests of the Company
at large.
"Policy on Materiality of Related Party Transactions and Dealing
with Related Party Transactions" related to entering into Related Party Transactions
by the Company with Related Parties is uploaded on the Company's website viz.
https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/policy-on-materiality-of-related-party-transaction-and-dealing-with-related-party-transactions.pdf.
SEBI (Listing Obligations and Disclosure Requirements) (Sixth
Amendment) Regulations, 2021 pertaining to Related Party, Related Party Transactions,
Prior Approvals and Disclosures effective from April 01, 2022 and other earlier
amendments, except for a few provisions which are effective from April 01, 2023, have
introduced substantial changes in the RPT framework. In view of the said amendments,
policy on materiality of related party transactions and dealing with related party
transactions of the Company (Policy on RPTs) was modified / revised / updated in line of
the above amendments which is effective from 12th November, 2022.
All Related Party Transactions are placed before the Audit Committee
for its approval (by Independent Directors only from 1st January, 2022 as per
amendment in SEBI Listing Regulations) as also to the Board for approval including Omnibus
approval for the transactions for one financial year, which are repetitive in nature and
also for the transactions, which are not foreseen (subject to financial limit). However,
the Company has not entered into any contract/ arrangement / transaction with related
parties which could be considered material in accordance with the provisions of Section
188 of the Companies Act, 2013 and the Rules made thereunder and SEBI Listing Regulations
and as such no approval of the Shareholders require. The Company has duly filed with BSE
Ltd. half-yearly statement of Related Party Transactions ended on 31st March,
2022 and 30th September, 2022 in accordance with applicable Indian Accounting
Standards on a consolidated basis in the format as specified by SEBI from time to time
pursuant to Regulation 23(9) of SEBI Listing Regulations and uploaded the said details on
website of the Company viz. https://www.
patelsairtemp.com/investors/disclosures-of-related-party-transactions/.
SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards, i.e. SS-1
and SS-2, relating to Meetings of the Board of Directors' and General
Meetings', respectively, have been duly followed by the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of the Companies Act, 2013 and Rules made
thereunder and Articles of Association, Mr. Shivang P. Patel (DIN: 08136652), Whole-time
Director of the Company, shall retire by rotation as Director of the Company at this
Annual General Meeting, and being eligible, offers himself for re-appointment, for which
necessary resolution has been incorporated in the notice of the meeting. The Board of
Directors recommends re-appointment of Mr. Shivang P. Patel (DIN: 08136652) as Director of
the Company. The brief resume/details relating to the said Director, who is to be
re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.
Mr. Narayanbhai G. Patel (DIN: 00023107) has been re-appointed as
Whole-time Director of the Company designated as "Chairman & Whole-time
Director" for a further period of 3 years with effect from 20th May, 2023
to 19th May, 2026 upon the terms and conditions including Salary of `
4,00,000/- per month plus perquisites and allowances ("remuneration") for the
said period of 3 years as recommended and approved by Nomination & Remuneration
Committee and Board of Directors, subject however to the approval of the Shareholders in
this Annual General Meeting by passing Special Resolution, for which necessary resolution
has been incorporated in the notice of the meeting. The Board of Directors recommends
reappointment of Mr. Narayanbhai G. Patel as Whole-time Director of the Company. The brief
resume/details of Mr. Narayanbhai G. Patel, who is to be re-appointed are furnished in the
Notes to the Notice of the Annual General Meeting.
Mr. Sanjivkumar N. Patel (DIN:02794095) has been re-appointed as
Managing Director of the Company for a further period of 3 years with effect from 20th
May, 2023 to 19th May, 2026 upon the terms and conditions including Salary of `
4,00,000/- per month plus perquisites and allowances ("remuneration") for the
said period of 3 years as recommended and approved by Nomination & Remuneration
Committee and Board of Directors, subject however to the approval of the Shareholders in
this Annual General Meeting by passing Special Resolution, for which necessary resolution
has been incorporated in the notice of the meeting. The Board of Directors recommends
re-appointment of Mr. Sanjivkumar N. Patel as Managing Director of the Company. The brief
resume/details of Mr. Sanjivkumar N. Patel, who is to be re-appointed are furnished in the
Notes to the Notice of the Annual General Meeting.
The second term of Mr. Himanshu N. Rawal (DIN: 06631728) as Independent
Director of the Company, shall be completed on the date of this Annual General Meeting and
he will cease to be an Independent Director of the Company with effect from the date of
this meeting. Consequently. Mr. Himanshu N. Rawal will also cease to be a Member of Audit
Committee (AC), Nomination & Remuneration Committee (NRC), Stakeholders Relationship
Committee (SRC) and Corporate Social Responsibility (CSR) Committee of the Board w.e.f.
the date of this meeting. The Board places on record their appreciation for the assistance
and guidance provided by Mr. Himanshu N. Rawal during his tenure as an Independent
Director of the Company and also as a Member of AC, NRC, SRC & CSR Committees of the
Board.
Since the second term of Mr. Himanshu N. Rawal (DIN: 06631728) as
Independent Director of the Company shall be completed on the date of this Meeting as
referred to above, the Board of Directors at their meeting held on 12th August,
2023 appointed Mr. Naimishbhai B. Patel (DIN: 02813295) as Additional Director on the
Board of the Company w.e.f. 12th August, 2023 based on the recommendation of
Nomination and Remuneration Committee (NRC) and based on the skills, experience and
knowledge. The Company has received notice under Section 160 of the Companies Act, 2013
from a member proposing the appointment of Naimishbhai B. Patel as a Director of the
Company. Further, based on the recommendations of NRC, the Board, in accordance with the
provisions of Section 149 read with Schedule IV to the Act and Regulation 16 of the SEBI
Listing Regulations, appointed Mr. Naimishbhai B. Patel (DIN: 02813295) as Independent
Director of the Company, not liable to retire by rotation, for a first term of 5 years
from 12th August, 2023 up to 11th August, 2028, subject to approval
of the Members by passing Special Resolution, for which necessary resolution has been
incorporated in the notice of the meeting. The Board of Directors recommends appointment
of Naimishbhai B. Patel as an Independent Director of the Company. The brief
resume/profile of Naimishbhai B. Patel, who is to be re-appointed are furnished in the
Notes to the Notice of the Annual General Meeting.
COMMITTEES OF DIRECTORS
The Board of Directors has the following Committees:
1. Audit Committee (AC)
2. Nomination and Remuneration Committee (NRC)
3. Stakeholders' Relationship Committee (SRC)
4. Corporate Social Responsibility Committee (CSR)
The details of various Committees of Directors
constituted/re-constituted by the Board of Directors as above under various provisions of
Companies Act, 2013 and Rules made thereunder and SEBI Listing Regulations, Meetings &
Attendance, terms of reference and other details are provided in the Corporate Governance
Report annexed with the Directors' Report.
The change in composition of various Committees as on the date of this
report has been mentioned in the Corporate Governance Report annexed with the
Directors' Report.
The composition of various Committees and their terms of references may
be accessed on the Company's website viz.
https://www.patelsairtemp.com/investors/composition-of-committees-of-board-of-directors/.
BOARD EVALUATION
The Board has carried out an evaluation of its own performance and that
of its Committees and Directors and also Chairperson in terms of Section 134(3)(p) of the
Companies Act, 2013 and Rules made thereunder and SEBI Listing Regulations. The Board has
approved a policy (NRC Policy) for criteria of determining qualifications, selection,
appointment and remuneration of Directors, KMP and Senior Management and the same has been
uploaded on the Company's web-site
https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/nomination-and-remuneration-policy.pdf.
In a separate meeting of independent Directors held on 30th
March, 2023, performance of non-independent directors, performance of the Board as a whole
and performance of the Chairman was evaluated, taking into account the views of executive
directors and non-executive directors and assessed the quality, quantity and timeliness of
flow of information between the company management and the Board that is necessary for the
Board to effectively and reasonably perform their duties.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy on appointment and remuneration of Directors, KMP and other
employees and other matters as required under Section 178(3) of the Companies Act, 2013 is
available on the web-site of the Company viz.
https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/nomination-and-remuneration-policy.
pdf.
NUMBER OF BOARD MEETINGS
During the financial year 2022-23, 8 (Eight) Board Meetings of the
Company were held on 4th May, 2022, 28th May, 2022, 13th
August, 2022, 10th September, 2022, 12th November, 2022, 16th
November, 2022, 12th December, 2022 and 11th February, 2023.
For the Board Meetings held as above, the gap between two Board
Meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and Regulation
17 of SEBI Listing Regulations. The Board Meetings were generally held at the Factory
(Works) of the Company situated at Rakanpur, Dist. Gandhinagar, Gujarat. The particulars
of number of meetings held and attended by each Director are detailed in the Corporate
Governance Report, which forms part of this Report. Agenda of the meetings were prepared
and all necessary papers were circulated to Members of the Board in advance. Necessary
disclosures were made by the Directors in the Board and Committee Meetings whenever
required. The Company has complied with Secretarial Standards 1 (SS-1) related to Board
and Committee Meetings of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013 read
with the Rule 8(3) of the Companies (Accounts) Rules, 2014, details relating to
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are
given in the Annexure E attached herewith and forming part of the
Directors' Report.
RISK MANAGEMENT
Business risk evaluation and management, covering the business
operations of the Company, is an ongoing process within the Company and the management
reviewed frequently risk assessment and to minimize them. The ultimate goal of risk
management is the preservation of physical and human assets of the organization for
successful continuation of its operations. Pursuant to the provisions of Regulation 21 of
SEBI Listing Regulations, at present, the Company is not required to constitute Risk
Management Committee of the Directors of the Company.
CORPORATE SOCIAL RESPONSIBILITY
The details regarding Corporate Social Responsibility of the Company
are given in the Corporate Governance Report, which forms part of this Report.
The salient features of the Policy forms part of the Annual Report on
CSR activities annexed to the Board's Report. The Annual Report on CSR activities and
expenditure, as required under Sections 134 and 135 of the Companies Act, 2013 read with
Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of
the Companies (Accounts) Rules, 2014, is annexed herewith marked as Annexure - F.
The Company continues its endeavour to improve the lives of people and provide
opportunities for their holistic development through its different initiatives in the
areas of (i) promotion of health care, including preventive health care, sanitation and
disaster management (ii) promoting rural development, (iii) promoting education, Social
Development/Services, Environment, etc., contribution to Educational Trust & Skill
Development Program, employment enhancing vocation skills among children, woman, elderly
and differently abled persons, and Education related activities for bright & poor
students, (iv) eradicating hunger, poverty and malnutrition (v) purchase of Oxygen
cylinders for COVID-19 patients, (vi) promoting sports related activities such as Rural
Sports, National Sports, Paralympics Sports and Olympic Sports.
INTERNAL FINANCIAL CONTROLS
The Company has in place 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 were observed. The Company's
internal control system is commensurate with its size, scale and complexities of its
operations.
STATUTORY AUDITORS & AUDIT REPORT
M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad (Firm
Registration No. 107525W) were appointed as Statutory Auditors of your Company at the 30th
Annual General Meeting of the Company held on 27th September, 2022, for a first
term of five consecutive years from the conclusion of the said 30th Annual
General Meeting of the Company till the conclusion of the 35th Annual General
Meeting to be held in the year 2027 in place of retiring Statutory Auditors M/s. Shah
& Shah Associates, Chartered Accountants, Ahmedabad (Firm Registration No. 113742W).
In accordance with the Companies Amendment Act, 2017, enforced on 7th
May, 2018 by the Ministry of Corporate Affairs (MCA), the appointment of Statutory
Auditors is not required to be ratified at every Annual General Meeting. Accordingly, no
resolution has been proposed for ratification of appointment of Auditors of the Company.
No fraud has been reported by the Auditors under Section 143(12) of the
Companies Act, 2013 requiring disclosure in the Board's Report, therefore no detail
is required to be disclosed under Section 134(3)(ca) of the Act.
The Notes on _ financial statement referred to in the Auditors'
Report are self-explanatory and do not call for any further comments. The Auditors'
Report does not contain any qualification, reservation, adverse remark or disclaimer.
During the Financial Year 2022-23, the Company has paid total fees of `
4,38,000 including statutory audit fees, certification fees, and fees for other services
to M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad, the Statutory Auditors of
the Company.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Section 204 of the Companies Act, 2013 and Rules made thereunder inter
alia requires every Listed Company to annex with its Board Report a Secretarial Audit
Report given by a Company Secretary in Practice in the prescribed form. The Board
appointed Mr. Punit Lath, Practicing Company Secretary, Ahmedabad (COP No. 11139 &
Membership No. 26238) as the Secretarial Auditor to conduct Secretarial Audit of the
records of the Company for the financial year 2022-23 and to submit his report to the
Company. The Secretarial Audit Report for the financial year ended March 31, 2023 is
annexed herewith marked as Annexure G to this Report.
The Secretarial Audit Report for the financial year 2022-23 does not
contain any qualification, reservation or adverse remark. During the year under review,
the Secretarial Auditors had not reported any matter under Section 143(12) of the Act,
therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
The Board at its meeting held on 11th February, 2023, has
re-appointed Mr. Punit Lath as Secretarial Auditor, for conducting Secretarial Audit of
the Company for the financial year 2023-24. The Company has received his written consent
that the appointment is in accordance with the applicable provisions of the Act and rules
framed thereunder.
COMPLIANCE CERTIFICATE
The Company has also received Secretarial Compliance Report for the
year ended 31st March, 2023 from Mr. Punit Lath (COP No. 11139 & Membership
No. 26238), Practicing Company Secretary and duly filed with BSE Ltd., in respect of
compliance with the provisions of : (a) the Securities and Exchange Board of India Act,
1992 ("SEBI Act") and the Regulations, circulars, guidelines issued thereunder;
and (b) the Securities Contracts (Regulation) Act, 1956 ("SCRA"), rules made
there under and the Regulations, circulars, guidelines issued there under by the
Securities and Exchange Board of India ("SEBI").
COST AUDIT
Pursuant to Section 148(2) of the Companies Act, 2013 read with the
Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to get
its cost accounting records audited by a Cost Auditor.
Accordingly, the Board at its meeting held on 27th May,
2023, has on the recommendation of the Audit Committee, appointed M/s. Rajendra Patel
& Associates, Cost Accountant, Ahmedabad (Firm Registration No. FRN101163) to conduct
the audit of the cost accounting records of the Company for FY 2023-24 on a remuneration
of ` 70,000/- plus taxes as applicable and reimbursement of actual travel and out of
pocket expenses. The remuneration is subject to the ratification of the Members in terms
of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is
accordingly placed for your ratification. The Company has received their written consent
that the appointment is in accordance with the applicable provisions of the Act and rules
framed thereunder and confirmed that their appointment is within the limits of the Section
139 of the Companies Act, 2013. They have also certified that they are free from any
disqualifications specified under Section 141 of the Companies Act, 2013.
The Cost Audit Report for the Financial Year ended 31st
March, 2022 has been duly filed in XBRL mode. The cost audit report of the Company for
financial year ended March 31, 2023 will be filed with Central Government on or before the
due date as prescribed under Companies Act, 2013 read with Companies (Cost Records and
Audit) Rules, 2014.
INTERNAL AUDIT
Pursuant to the provisions of Regulation 18 read with Part C of
Schedule II of SEBI Listing Regulations, the Audit Committee reviews quarterly the Report
of internal audit received from Internal Auditor of the Company relating to internal
control weakness, if any, as mentioned in the Internal Audit Report.
LISTING FEES
Pursuant to the provisions of SEBI Listing Regulations, the Company
declares that the Equity Shares of the Company are listed on the BSE Limited (BSE). The
Company confirms that it has paid Annual Listing Fees to BSE up to the Financial Year
2023-24.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The Disclosures relating to remuneration and other details required
under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed
as Annexure - H and forms an integral part of this Report. The Statement of
particulars of top ten employees as required under Section 197(12) of the Act read with
the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel),
Rules, 2014 (as amended from time to time), in terms of remuneration drawn and other
particulars of the employees as set out in the said Rules forms part of this report.
Further, the Annual Report is being sent to the shareholders excluding the aforesaid
statement. In terms of Section 136(1) of the Companies Act, 2013, the said statement is
open for inspection by the shareholders. Any shareholder, who is interested in obtaining
these details, may also write to the Company Secretary to email id at
share@patelsairtemp.com.
None of the employees of the Company including Managing Director and
Whole-time Directors of the Company are in receipt of remuneration in excess of limit as
provided in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 (as amended from time to time), as such the statement of
particulars of employees is not annexed with this report.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company has a Vigil mechanism and Whistle blower policy under which
the employees are free to report any act of serious misconduct or wrongful activity being
occurred or suspected to occur within the organization, to his immediate HOD or the HR
Head or directly to the concern Whole-time Directors or Managing Director of the Company,
as he may desire. No employee of the Company is denied access to the Audit Committee. The
vigil mechanism/whistle blower policy is also available on the web-site of the Company
viz.
https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/whistel-blower-cum-vigil-mechanism-policy.pdf.
During the year under review, the Company has not received any whistle blower complaint.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the
workplace. The Company has adopted a Policy on Prevention, Prohibition and Redressal of
Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules
thereunder. The Policy aims to provide protection to employees at the workplace and
prevent and redress complaints of sexual harassment and for matters connected or
incidental thereto, with the objective of providing a safe working environment, where
employees feel secure. All employees (permanent, contractual, temporary, trainees) are
covered under the said Policy.
All employees (permanent, contractual, temporary, trainees) are covered
under this policy. No complaints pertaining to sexual harassment were received during the
financial year 2022-23.
Policy on Prevention, Prohibition and Punishment of Sexual Harassment
is also available on the web-site of the Company viz.
https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/sexual-harassment-policy.pdf.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following matters as there were no transactions on these matters during the
year under review: O The Company does not provide any loan or other financial
arrangement to its employees or Directors or Key Managerial Personnel for purchase of its
own shares and hence, the disclosure under Section 67(3)(c) of the Companies Act, 2013
does not require.
O The disclosure in terms of Rule 4 of Companies (Share Capital and
Debenture) Rules, 2014 is not provided, as the Company does not have any equity shares
with differential voting rights.
O No fraud has been reported by the Auditors to the Audit Committee
or the Board.
O The Company has not issued any shares under any scheme including
Employees' Stock Options Schemes or Sweat Equity Shares to employees of the Company.
O Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from its subsidiary.
O There is no proceeding pending under the Insolvency and
Bankruptcy Code, 2016. O There was no instance of onetime settlement with any Bank
or Financial Institution.
ACKNOWLEDGEMENT
The Directors place on record the appreciation and gratitude for the
co-operation and assistance extended by various departments of the Union Government, State
Government, Bankers and Financial Institutions. The Directors also place on record their
appreciation of dedicated and sincere services of the employees of the Company at all
levels.
The Company will make every effort to meet the aspirations of its
Shareholders and wish to sincerely thank them for their whole hearted co-operation and
support at all times.
|
By order of the Board of Directors |
|
|
Sanjivkumar N. Patel |
Shivang P. Patel |
Date : 12th August, 2023 |
Managing Director |
Whole-time Director |
Place : Rakanpur, Dist. Gandhinagar |
(DIN: 02794095) |
(DIN: 08136652) |