To the Members
Your Directors present their 52nd Annual Report of the Company together withthe Audited Statements of Accounts for the year ended 31st March 2017
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previous yearfigures are given hereunder: (Figures are in Lakhs)
|Particulars ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|Net Sales /Income from || || |
|Business Operations ||7210.85 ||7101.33 |
|Other Income ||151.80 ||84.01 |
|Total Income ||7362.65 ||7185.34 |
|Less Interest ||1120.62 ||1123.69 |
|Profit / (Loss) before Depreciation ||(1089.15) ||(1596.77) |
|Less Depreciation ||155.75 ||162.04 |
|Profit / (Loss)after depreciation and Interest ||(1244.90) ||(1758.81) |
|Less Current Income Tax ||- ||- |
|Less Deferred Tax ||- ||- |
|Net Profit ( Loss) after Tax ||(1244.90 ) ||(1758.81) |
|Dividend (including Interim if any and final ) ||- ||- |
|Net Profit / ( Loss) after dividend and Tax ||(1244.90 ) ||(1758.81) |
|Amount transferred to General Reserve || || |
|Balance carried to Balance Sheet ||(1244.90) ||(1758.81) |
|Earning in Rupee per share (Basic) ||(24.90) ||(35.18) |
|Earning in Rupee per Share(Diluted) ||(24.90) ||(35.18) |
2. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors wish to present the details of Business operations done: During the yearunder review the Company could achieve marginally higher turnover of Rs. 7210.85 Lakhsagainst Rs. 7101.33 Lakhs of previous year and incurred loss of Rs.1244.90 Lakhs againstloss of Rs.1758.81 Lakhs of previous year. Enhancement in turnover was mainly intraditional business of power electronics other divisions could maintained the pastperformance. During the year there was continuous stress on liquidity due to which orderscould not be executed in time. On improvement in liquidity turnover can be increased inthe current year with expected growth in sale of banking automation measuring instrumentsand power supplies.
3. ANALYSIS OF PERFORMANCE
It is a great pity that Aplab has not been lucky so far to find customers for itsunused real estate assets worth over 60 Crores. When that happens we can in one stepreduce the burden of expensive borrowed funds and get back to positive cash flow helpingour potential growth. Many large public companies in the country have used this route inthe past. Had your company been able to sell at least one of them the Balance Sheet ofyour company would have looked different. Statutory Auditors have been strict and donetheir job to meet the current accounting guidelines by SEBI. Your management has given allthe cooperation to them during the audit. Out of the 55 years since I set up your companyas technical entrepreneur we had 48 years of sustained profitable growth. More than yearlong violent strike has put us in a spin. Losses Incurred during the period has become analbatross around your company's neck. Consequential cash flow problem continues to hauntAplab in spite of my family giving over 25 Crores of unsecured loans. Can you believe thatno bank or NBFI will lend money to us even we have one asset worth ten Crore which has notbeen pledged to anyone? Even against the high class Pune Property valuation of which bythe MIDC is Rs.49 Crore our borrowing is only 12 Crore! In spite on this we can't get anyNBFI to lend 20 Crore that can help us to be free from being NPA. Instead of looking atcompany's long term viability to be profitable (as in Germany) NPA is the only criteriafor not funding even a company with evidence of being profitable and support hundreds ofjobs. Rather blindly no one will lend us because of the RBI directive that company withNPA can't be funded by any other financial institution. Dr. S. K. Hajela eminent TelecomExpert and the independent director on your board says "It is ironical that blanketapplication of RBI order about lending to company having one NPA account like APLAB goescounter to "Make in India" policy. Loans that enable industry to produce goodsand services against firm orders from customers and create wealth should be examined oncase by case basis by Banks. Blanket ban is counter-productive. RBI may be requested toreview so that such industries are assisted to be brought to good financial health and canpay back instead of getting weaker." Unfortunately our banks too have addedsignificantly to our losses by charging us penal interest. Again I am told that it is asper the official guidelines. Banks have to charge penal interest. In my opinion penalinterest charged by the bank in spite of the high market value of the pledged assets thanwhat is considered by them while granting the limits has no justification. By charging22% interest it has no way ensured that company shall be able to pay its overduepromptly. In fact it has merely inflated your company's losses on one hand and inflatedbank's own profit on the other. Banks are money lenders lending money against the assetslike any other money lender. As a concerned lender if they would have verified how thelent funds have been used they would have noticed that your company management has notfraudulently diverted even a single rupee for personal gains like other large companiesappear to do as revealed in hundreds of press reports. I sincerely feel that chargingpenal interest to a genuine manufacturer in a way looks no different than exploitationof farmers by their money lenders. Experts and your auditors however tell me that theseare current lending policies and we have to live them even if they are unjust.Unfortunately the company balance sheets as they are fail to show the real worth of yourindustrial enterprise. What gets ignored are the non-financial essential assets of acompany like its knowledge base technological prowess product quality experience ofpeople business prospects customer profile such as the armed forces and the marketimage. Thanks to you all that the growing Share Value of your company seems to reflectthat trust. None of these assets are a part of the balance sheets. Your employees andsenior managers are giving excellent co-operation production is maximized in spitelimited resources incoming orders are very good and gross margins are more than evergiving you more than 50% value addition. Business could have been far bigger if we hadcash resources to finance material purchasing and market promotion. The current orderbooking is good in spite of no advertising and having lost over 50% marketing personnel ascompared to those we had in 2010-11. Me and my team are confident that as soon as we sellour asset we shall grow far speedily and profitably. Any way your company is today thevictim of bad times. I feel confident that these times would soon be behind us. As theysay tough times don't last tough people do. Your company is still strong and I amthankful to my shareholders for putting their faith in my management through thesedifficult times.
No Dividend is recommended for the current financial year due to loss incurred by theCompany. (Previous Year - Nil)
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 any unclaimed or unpaid Dividendrelating to the financial year 2008-09 due for remittance to the Investor Education andProtection Fund established by the Central Government is transferred to the fund.
6. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateon the date of this report
7. CONSERVATIONOFENERGYTECHNOLOGYABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexureto the Directors' Report and is attached to this report.
8. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICYOF THE COMPANY
Risk Management Committee is operating throughout the year to identify and evaluateelements of business risks.
9. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATESOCIAL RESPONSIBILITY INITIATIVE
Due to the losses incurred presently during the year under review Corporate SocialResponsibility could not be implemented. However on improved performances the same willbe implemented.
MADE UNDER SECTION 186 OF THE COMPANIES ACT 2013
The particulars of Loans Guarantees or Investments made under Section 186 is furnishedin Notes to Financial Statement no. 23 under item no. 9 and is attached to thisreport
11. RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties were on arm's length basis and in theordinary course of business. There were no material significant related party transactionsmade by the company during the year under review with Promoter/Directors or Key ManagerialPersonnel. All related party transactions are placed before the Audit Committee and hasalso been placed at the Board Meeting for approval and omnibus approval was obtained on ayearly basis for transactions which are of respective natures. The policy on related partytransactions as approved by the Board has been uploaded on the website of the company.None of the Directors has any pecuniary relationship or transactions vis--vis thecompany. Hence Form AOC-2 is not annexed with the Directors' Report for the current year.
12. SALE OF COMPANY PREMISE FOR PAYMENT OF
Your Company has entered an agreement with Shree Saptashri Developers for sale of Thaneproperties situated at Plot Nos. A-1 A-3 A-5 & A-6 Wagle Estate Thane to pay thecommitted and statutory liabilities. The transaction is under process and expected tocomplete during the current year.
13. EXPLANATION OR COMMENTS ON QUALIFICATIONSRESERVATIONSORADVERSEREMARKSORDISCLAIMERS
MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There were no adverse comments qualifications or reservations or adverse remarks bythe Practicing Company Secretary in the Secretarial Audit Report. The Secretarial AuditReport in terms of Section 204 is annexed as Annexure-A to this report.
However the Statutory Auditors have made the following remarks
Basis of Qualified Opinion a. The Company has incurred a loss of Rs. 1245 Lakhsduring this year. The Company has accumulated losses and its net worth has continued toremain negative during this year. The Company could not repay any installment of the TermLoans or repay Public Deposits or honor LCs on its due dates. The Bank has taken symbolicpossession of one of the Company property due to the default of Rs. 1177 Lakhs andinitiated recovery action. ( Refer Note No.2 & 7) b. The Company during the year couldnot pay various statutory dues in time and the delay ranges between 3 to 12 months. TheUnpaid Statutory Dues amounted to Rs.332 Lakhs and Unpaid Gratuity is Rs. 766 Lakhs at theyear end. (Refer Note 7) These events indicate uncertainty that casts doubt on theCompany's ability to continue as a going concern considering continued losses andoperational inflows. The Company is in the process of selling few of its properties torepay debts and induce funds for its operation.
It was explained to statutory auditors and same is explained here for knowledge of theshareholders that Board of Directors already initiated actions to overcome the financialdifficulties mentioned by statutory auditors. Major actions in this regards areliquidation of surplus premises raising funds from rights issue catering to orders withbetter margin improved product engineering to garner better market share focus on nichesegment in banking automation and power supplies. During the current year it is expectedthat all these measures will be showing results leading to improved liquidity which willenable elevating company's performance substantially.
14. COMPANY'S POLICY RELATING TO DIRECTORS
APPOINTMENT PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isin process due to absence of profit the present Executive Director is not drawing anyremuneration.
15. ANNUAL RETURN
The extracts of Annual Return pursuant to provisions of section 92 read with rule 12 ofthe companies (Management and Administration) Rules 2014 is furnished in Annexure - B andattached to this report.
16. NUMBER OF BOARD MEETINGS CONDUCTED DURING
THE YEAR UNDER REVIEW
The Company had 4 (Four) Board meetings during the financial year under review.
17. CORPORATE GOVERNANCE REPORT
In terms of SEBI CIRCULAR CIR/CFD/POLICY CELL/7/ 2014 September 15 2014 which waseffective October 1 2014 the Clause 49 of the Listing Agreement shall be applicable toall companies whose equity shares are listed on a recognized stock exchange. Howevercompliance with the provisions of Clause 49 shall not be mandatory for the time being inrespect of the following class of companies: Companies having paid up equity share capitalnot exceeding Rs.10 Crore and Net Worth not exceeding Rs.25 Crore as on the last day ofthe previous financial year; provided that where the provisions of Clause 49 becomesapplicable to a company at a later date such company shall comply with the requirementsof Clause 49 within six months from the date on which the provisions became applicable tothe company.
In view of the above your company is not required to annex the Corporate GovernanceReport to the Directors Report for the year ended March 31 2017
18. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement: (a) in the preparation of the annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures; (b) the directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period; (c) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;(d) the directors had prepared the annual accounts on a going concern basis; and (e) thedirectors in the case of a listed company had laid down internal financial controls tobe followed by the company and that such internal financial controls are adequate and wereoperating effectively. Internal financial control means the policies and proceduresadopted by the Company for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
19. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE
On liquidation of investment in Sprylogic Technologies Limited (former subsidiarycompany) there is no subsidiary company during the year under review and no jointventures.
The Company has neither accepted nor renewed any deposits during the year under review.
No shares held by Directors other than Promoter/Director. In accordance with theprovisions of the Companies Act 2013 Mrs. Amrita P. Deodhar (DIN: 00538573) is liable toretire by rotation at the forthcoming Annual General Meeting and being eligible hasoffered herself for re-appointment. During the year Capt. Vilas W. Katre (DIN: 00054460)was appointed as Independent Director.
22. DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
23. STATUTORY AUDITORS
The Statutory Auditors M/s Shahade & Associates. Chartered Accountants (ICAIRegistration No. 109840W) retire at the forthcoming Annual General Meeting. They havefurnished a certificate confirming their eligibility for reappointment under provisions ofsection 141 of the Companies Act 2013 and have expressed their willingness to bere-appointed. You are requested to appoint the Auditors for the current year and fix theremuneration
24. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE
AND PROVIDING VIGIL MECHANISM
The Audit Committee consists of the following members a. Mr. Jayant Deo (DIN: 00568381)b. Dr. S.K. Hajela (DIN: 01001987) c. Mrs. Amrita P. Deodhar (DIN: 00538573) The abovecomposition of the Audit Committee consists of independent Directors viz. Mr. Jayant Deo(DIN: 00568381) and Dr. S.K. Hajela (DIN: 01001987) who form the majority.
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co- employees and the Company.
25. SHARES a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review. b.SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
c. BONUS SHARES
No Bonus Shares were issued during the year under review. d. RIGHT ISSUE OF EQUITYSHARES
During the year the Board of Directors passed the resolution for issue of rights sharesto the existing share holders. The procedure for issue of right shares is under process.e. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF
WOMEN AT WORK PLACE (PREVENTION PROHIBITION AND REDRESSAL ACT 2013)
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the work place (Prevention Prohibition andRedressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. No sexual harassment complaints were received during the year2016-17.
Your Directors place on record their sincere thanks to bankers business associatesconsultants employees and various Government Authorities for their continued supportextended to your Company's activities during the year under review. Your Directors alsoacknowledges gratefully the shareholders for their support and confidence reposed on yourCompany.
For and on behalf of the Board of Directors
|Prabhakar S. Deodhar ||Jayant N. Deo |
|Chairman & Managing Director ||Director |
|DIN: 00393117 ||DIN: 00568381 |
|Date: May 29 2017 || |
|Place: Thane || |
ANNEXURE TO THE DIRECTORS' REPORT
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO[Information pursuant to the Companies (Disclosure of Particulars in the Report of Boardof Directors) Rules 1988] A) ELECTRICAL ENERGY
1. Conservation of Energy:
The Company's production process does not involve any continuous process machinery. Asthe production involves electronic assembly power requirements are very minimal.
2. Energy conservation measures taken:
The company is switching over its lighting needs to energy efficient CFL and LEDlights. Measures are also taken to watch and correct the load PF as necessary. The companyis also working developing phantom loads
8 to reduce power requirements during equipment load testing.
3. Investments are proposed to be made in setting up Solar Panels for power generationto reduce the consumption and cost of purchased power.
B) TECHNOLOGY DEVELOPMENT - R & D
Research & Development in Power Electronics
Most of your company's R&D focus for the next few years will be on greentechnologies. Your company considers R&D and innovation as key in negating the effectsof squeezed margins in the competitive markets it operates in. Some of our R&D effortsthis year are on:
1. DSP charger productionised for UPS Frequency converter & FCBC & powersupply.
2. DSP stand alone Inverter proto type unit ready
3. Successfully developed & commissioned 200 kVA Frequency converter with IP 55class cabinet using external Industrial air conditioners.
4. Successfully supplied 15 kVA & 20 kVA Ruggedized UPS with SS 316 cabinets forMaldives project of BEL Bangalore
5. Successfully supplied & commissioned 50 kW DC power supply with 12 pulsetechnology using DSP controller
6. Successfully supplied & commissioned 48V / 300A FCBC with DSP controller
7. Successfully supplied & commissioned 12V to 24V
1500A DC Power supply with remote DC output voltage & current monitoring &controlling facility.
|Expenditure on R & D || || |
| || |
(Rs. in Lacs)
| ||2016-2017 ||2015-2016 |
|Capital Expenditure ||Nil ||Nil |
|Revenue Expenses ||51.51 ||64.28 |
|TOTAL ||51.51 ||64.28 |
|Total R & D Expenses as a || || |
|percentage to turnover ||0.71 ||0.91 |
FOREIGN EXCHAGE EARNINGS AND OUTGO:
The earnings and outgo in foreign exchange are as follows:
Earnings (FOB Value) Rs. 440.60 Lacs (P Y Rs. 551.95 Lacs)
Outgo (CIF Value of imports plus Rs. 559.97 Lacs expenses) (P Y 1765.85 Lacs)
For and on behalf of the Board of Directors
Prabhakar S. Deodhar Jayant N. Deo Chairman & Managing Director Director DIN:00393117 DIN: 00568381
Date: May 29 2017 Place: Thane