To the Members,

The Directors have pleasure in presenting the THIRTY SIXTH ANNUAL REPORT and audited accounts for the financial year ended March 31, 2018. The performance of the Company for the financial year ended on March 31, 2018 is summarized below.

01. FINANCIAL HIGHLIGHTS :

(Amount Rs. in Lakhs)

02. REVIEW OF OPERATIONS:

During the year under review, Your Company’s revenue increased by 16.02% and profit before Tax decreased by 34.90%. This is due to price hike of major raw materials like MS scrap, Pig Iron, etc., and not compensated by customers in time.

During the year, there was steep increase in demand for the first half and later on remained sluggish even though your Company’s production increased by 15% on year to year basis. Further, the Company has increased power demand from 2200 to 2500 KVA and 2500 to 2800 KVA to meet the demand increased from customers and hence your Company expects to increase 25% in sales and production in coming years, i.e. 2018-19, and also hope for good margin due to higher volume.

03. DIVIDEND :

The Board of Directors recommend dividend of Rs.0.80 per Equity Share (8% on the face value of Rs. 10/- each) for the year ended on March 31, 2018 (Previous year paid dividend of Rs. 0.80 per equity shares, i.e. rate of 8%) subject to the approval of shareholders at the ensuing Annual General Meeting.

04. TRANSFER TO RESERVES :

Your Company has not transferred any amount to General Reserves. Your Company has retained amount of Rs. 815.84 Lakhs in the Statement of Profit and Loss.

05. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND :

The Company has transferred Rs. 0.95 Lakhs to the Investor Education and Protection Fund established by the Central Government during the financial year 2017-18, as unclaimed dividend after expiry of seven years for the year ended March 31, 2010.

06. PUBLIC DEPOSITS :

During the financial year 2017-18, your Company has not accepted or renewed any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

07. SHARE CAPITAL :

The paid up equity share capital as on March 31, 2018 was Rs. 2.88 Crores. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has also not purchased of its own shares by employees or by trustees for the benefit of employees.

08. LISTING :

The Equity shares of the Company continue to be listed on BSE Limited (Security Code: 504646) and required Listing fees for the year 2017-18 has been paid.

09. EXTRACT OF THE ANNUAL RETURN :

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013, the details forming part of the extract of the Annual Return for the financial year ended March 31, 2018 in form MGT-9 is annexed herewith as “Annexure A”.

10. THE DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO :

The Information required to be disclosed in the report of the Board of Directors as per the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 is annexed herewith as “Annexure B”.

11. DIRECTORS :

A) Changes in Directors and Key Managerial Personnel

Mr. Vimal R. Ambani (DIN: 00351512), who have appointed as Additional Director of the Company by the Board with effect from December 12, 2017 under section 161 of the Companies Act, 2013, holds office upto the date of forthcoming Annual General Meeting and who is eligible and confirming that they meet with the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013. The Board of directors recommends his appointment as an Independent Director of the Company.

As per provision of the Companies Act, 2013, Ms. Reena P. Bhagwati retires by rotation in the forthcoming Annual General Meeting and being eligible offered herself for re-appointment. The Board of Directors recommends her re-appointment.

B) Declaration by an Independent Director(s) and reappointment, if any

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013.

An independent director shall hold office for a term up to five consecutive years on the Board of the Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

C) Annual evaluation by the board of its own performance, its committees and individual directors

The Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the Company.

D) Policy on Directors’ appointment and remuneration

(Including criteria for determining qualification, positive attributes, independence of a Director, policy relating to remuneration for Directors, Key Managerial Personnel and other employees)

Policy on Directors’ appointment

Policy on Directors’ appointment is to follow the criteria as laid down under the Companies Act, 2013, the Listing Agreement with Stock Exchanges and good corporate practices. Emphasis is given to persons from diverse fields or professions.

Policy on Remuneration

Guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is that -

- Remuneration to unionised workmen is based on the periodical settlement with the workmen union.

- Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen (non Unionised) is industry driven in which it is operating taking into account the performance leverage and factors such as to attract and retain quality talent.

- For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars and guidelines issued by Central Government and other authorities from time to time.

12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS :

The Board of Directors has met 4 times and Independent Directors once during the year ended 31st March, 2018.

13. AUDIT COMMITTEE :

The Composition of Audit Committee of the Company is as under:

14. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES :

The Company has formulated Vigil Mechanism named Whistle Blower Policy with a view to report concern about unethical behavior, actual or suspected fraud. This policy provides mechanism for employee of the Company of any violation and to approach the chairman of the Audit Committee of the Company who shall investigate into the same and recommend suitable action to the management.

15. NOMINATION AND REMUNERATION COMMITTEE :

The Board has on recommendation of nomination and remuneration committee, framed a policy for selection and appointment of Director, senior management and their remuneration.

16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 :

There is no loan given, investment made, guarantee given or security provided by the Company to any entity under Section 186 of the Companies Act, 2013.

17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :

The particulars of every contract or arrangements entered into by the Company with related parties referred to in section 188(1) of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is disclosed in Form No. AOC -2 is annexed herewith as “Annexure C”.

18. PARTICULAR OF SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE COMPANY :

The Company does not have any subsidiary, Joint Venture and Associate Company.

19. RISK MANAGEMNET :

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in its strategy, business and operational plans.

Your Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as agreed from time to time with the Board of Directors.

There are no risks which in the opinion of the Board threaten the existence of your Company.

20. CORPORATE SOCIAL RESPONSIBILITY :

The provision of Corporate Social Responsibility is not applicable to your Company.

21 . THE NUMBER OF COMPLAINTS RELATING TO CHILD LABOUR, FORCED LABOUR, INVOLUNTARY LABOUR, SEXUAL HARASSMENT IN THE LAST FINANCIAL YEAR AND THOSE PENDING AS ON THE END OF THE FINANCIAL YEAR :

22. INFORMATION REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 :

A. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary or Manager, if any during the financial year 2017-18, and ratio of remuneration of each Director to the median remuneration of the employees of the Company for the financial year 201718:

Notes

1. The remuneration of Independent/ Additional Non-Executive Directors includes only sitting fees paid to them for the financial year 2017-18.

2. Median remuneration of the Company for all its employee is Rs. 4,30,458/- for financial year 2017-18.

B. Percentage increase in the median remuneration of employees in the financial year : 9.75%

C. Number of permanent employees on the rolls of the Company : 72 as on 31st March, 2018

D. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: On an average, employees received an annual increase of 10%. The individual increments varied from 7% to 14%, based on individual performance. The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects Company performance, the performance pay is also linked to organization performance, apart from an individual’s performance.

E. Affirmation that the remuneration is as per the Remuneration policy of the Company:

It is affirmed that the remuneration is as per the Remuneration policy of the Company.

23. MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to the Regulation 34(2) of the SEBI (LODR) Regulations, 2015, the report relevant to Management discussion and analysis forming part of the Annual report for the year under review is annexed herewith as “Annexure D”.

24. AUDITORS :

1) STATUTORY AUDITORS :

M/s. Mahendra N. Shah & Co., Chartered Accountants (FRN: 105775W) Ahmedabad were appointed as Statutory Auditor of the Company for a term of 5 (five) consecutive years, at the 34th Annual General Meeting held on September 21, 2016 upto the conclusion of the 39th Annual General Meeting at a remuneration as may be mutually agreed between the Board of directors of the Company and the Auditors.

The Company has received relevant letters/ certificates from them to the effect that they have not disqualified from continuing as Statutory Auditors of the Company within the prescribed limits under Section 141 of the Companies Act, 2013.

EXPLANATION OR COMMENTS ON AUDITORS’ REPORT :

There are no adverse observations, Notes made by the Auditors in their re—port so there are no comments by Directors on Auditors Notes.

2) INTERNAL AUDITORS :

Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Board of directors of the Company has appointed M/ s. Mehta Sheth & Associates, Chartered Accountants (FRN: 106238W) Ahmedabad as an Internal auditor of the Company for the financial year 2018-19.

3) SECRETARIAL AUDITOR :

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of directors has appointed M/s. Samdani Shah & Kabra, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2017-18. The Report of the Secretarial Audit Report is annexed herewith as “Annexure E”.

The Board has appointed M/s. Chirag Shah & Associates, Company Secretaries, Ahmedabad as Secretarial auditor of the Company for the financial year 2018-19.

25. DIRECTORS’ RESPONSIBILITY STATEMENT :

In terms of Section 134(3) of the Companies Act, 2013, in relation to the Financial Statements for FY 2017-18, the Board of Directors states that:

(a) in 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 and loss 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.

26. HUMAN RESOURCES :

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

27. CHANGE IN THE NATURE OF BUSINESS, IF ANY :

No change in nature of the business of the Company occurred during the year.

24. PROHIBITION OF INSIDER TRADING :

The Company has adopted a Code of Conduct for Prohibition of Insider Trading with regulate trading in securities by the Directors and designated employee of the Company. The Board is responsible for implementation of the Code. The code requires preclearance for dealing in the Company’s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employee while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading window is closed. The relevant policy is available on the Company’s website.

25. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT :

No other material changes have taken place after completion of the financial period up to the date of this report which may have substantial effect on business and finances of the company and which are required to be disclosed in this Report.

26. 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: There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

27. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. To maintain its objectives and independence, the internal Audit function reports to the chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficiency and adequacy of Internal Control System in the Company, its compliance with operating system, accounting procedures and policy of the Company. Based on the report of internal audit function, process owners undertake corrective action and thereby strengthen the controls. Significant audit observation and corrective actions thereon are presented to the audit committee of the board.

28. General:

(i). Insurance :

The assets of the company including Plant and Machineries, Factory Building, Stocks, Stores, Vehicles etc. have been adequately insured.

(ii). Industrial Relations :

During the year under review, your Company enjoyed cordial relationship with the workers and employees at all the levels.

(iii). Acknowledgement :

Your Directors thanks to various Central and State Government Departments, Organizations and Agencies for the continued cooperation and support extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

Place : Ahmedabad By order of the Board of Directors

Date : 26/05/2018 For, Bhagwati Autocast Limited

Dr. Pravin N. Bhagwati

Chairman & Managing Director

DIN : 00096799