Your Directors have pleasure in presenting their Twenty Third Annual Report on thebusiness and operations of your Company and the audited Statement of Accounts for the yearended 31st March 2016.
1. Financial Highlights Rs.Millions
| ||Consolidated ||Standalone |
|Particulars ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Revenue ||4044.82 ||4879.97 ||3316.69 ||3162.24 |
|Profit before Depreciation and Interest ||558.71 ||1057.99 ||518.96 ||511.82 |
|Depreciation ||166.49 ||166.94 ||62.36 ||71.30 |
|Interest ||33.11 ||25.16 ||24.68 ||13.48 |
|Profit before tax ||359.11 ||865.89 ||431.92 ||427.04 |
|Profit after tax ||262.61 ||433.47 ||324.07 ||320.46 |
During the current year of operations your company has registered revenue of Rs.4044.82 million at consolidated level a decrease of about 17% compared to the previousfinancial year. Your company posted Profit after Taxes of Rs. 262.61 million with adecrease of 39% over the previous financial year.
At standalone level a revenue of Rs.3316.69 million an increase of about 5% comparedto the previous financial year. Your company posted Profit after Taxes of Rs.324.07million with an increase of 1% over the previous financial year.
During the 9th year of operations Centum Rakon India Private Limited has registeredrevenue of Rs.821.90 million and incurred a loss of Rs.8.70 million. Statement containingsalient features of the financial statement of subsidiary is attached herewith as Annexure- I.
During the year your company has declared first interim dividend of Re. 1 per shareand also declared second interim dividend of Rs. 2 per share totaling to Rs. 3 per sharefor the year 2015-16. The total dividend payout was Rs. 37.98 million for the year.
4. Consolidated Financial Statements and subsidiary
The Consolidated Financial statements have been prepared by the Company in accordancewith the applicable Accounting standards issued by the Institute of Chartered Accountantsof India and the same together with the Auditors Report thereon is provided in theAnnual Report.
The annual accounts of the subsidiary and related detailed information will be kept atthe Registered Office of the Company and will be available to investors seekinginformation at any time.
The Company has adopted a Policy for determining Material Subsidiaries in terms ofRegulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Policy as approved by the Board is available on the Investor page atCompanys website centumelectronics.com.
5. Risk Management
Your Company has a robust Risk Management policy. Your Company regularly assess therisks and ensures that the risk mitigation plans are in place.
6. Internal Control Systems and their adequacy
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has appointed Ernst and Young LLP. as itsInternal auditor. The Audit Committee defines the scope and areas of internal audit. TheInternal auditor audits the areas recommended by the committee every year.
The audit observations and corrective actions thereon are being presented to the AuditCommittee of the Board. Based on the report of Internal auditor process owners undertakecorrective action in their respective areas and thereby strengthen the controls. Duringthe year the internal audit was done on the areas recommended and no material weaknessobserved.
7. Directors and Key Managerial Personnel
The changes that had occurred in the composition of the Board of Directors are givenbelow:
In accordance with the provisions of Section 149 & 161 of the Companies Act 2013Mr.Thiruvengadam P was appointed as Additional Director w.e.f. February 8 2016 and willhold office until the conclusion of the ensuing Annual General Meeting and being eligibleoffer himself for appointment as an Independent director.
In the opinion of the Board he fulfills the conditions of independence as specified inthe Act and the Rules made there under and is independent of the management.TheAppointment of the aforesaid director has been included as an item in the notice conveningthe ensuing Annual General Meeting.
Except the above no other Director or Key Managerial Person has been appointed or hasretired or resigned during the year.
Further all the Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
a. Annual evaluation of Board its Committees and Individual Directors:
The Board of Directors has carried out an annual evaluation of its own performance itsCommittees and invididual Directors pursuant to the requirements of the Act and theListing Regulations.
Further Independent directors have reviewed the performance of the Board its Chairmanand Non-Executive Directors and other items as stipulated under the listing regulations.
b. Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Nomination and Remuneration Policy is attached to this report asAnnexure II.
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year five meetings of the Board of directors and four meetings of the AuditCommittee were convened and held. The details of which are given in the CorporateGovernance Report. The Intervening gap between the meetings was within the periodprescribed under the Companies Act 2013.
8. Directors Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 your Directors confirm: i.that in the preparation of annual accounts for the year ended March 31 2016 theapplicable Accounting Standards have been followed along with the proper explanationsrelating to material departures; ii. that such accounting policies as mentioned in Note 1of the Notes to the Financial Statements have been
adopted and applied consistently and made judgments and estimates that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company asat March 31 2016 and of the profit of the Company for year ended on that date; iii. thatproper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities; iv. that theannual financial statements have been prepared on a going concern basis. v. that properinternal financial controls were in place and that the financial controls were adequateand operating effectively. vi. that systems to ensure compliance with the provisions ofall applicable laws were in place were adequate and operating effectively.
9. Contracts and Arrangements with Related Parties
All related party transactions that were entered into during the financial year were inthe ordinary course of business and were at an arms length basis. There were nomaterially significant related party transactions made by the company during the year withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the company at large.
All the related party transactions were placed before the Audit Committee and also theBoard for approval. Prior omnibus approval of the Audit Committee is being obtained forthe transactions which are of a foreseen and repetitive nature in terms of Regulation23(3)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The company has framed a policy on dealing with the related party transactions and thesame is available on the company website.
Your directors draw attention of the members to Note 33 to financial statement whichsets out the related party disclosures.
a. Statutory auditors
M/s. BSR & Co. LLP (formerly known as M/s. BSR & Co.) Chartered AccountantsStatutory Auditors of the company will retire at the forthcoming annual general meetingand are eligible for re-appointment.
The retiring auditors have furnished a certificate of their eligibility under Sec 139of the Companies Act 2013 and the Rules framed thereunder for the reappointment asAuditors of the company. Also as required under Regulation 33(1)(d) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the auditors have confirmedthat they hold a valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India.
b. Secretarial audit
The Board has appointed Ms. Aarthi G Krishna Practicing Company Secretary to conductSecretarial Audit for the financial year 2015-16. The Secretarial Audit Report for thefinancial year ended March 31 2016 is annexed herewith as Annexure III to this report.
11. Awards and recognitions
Your company has received the below awards during the year under review:
i. Cost out Award from GE
ii. EHS Excellence Award received from GE
iii. Electronics Man of the year award 2014-15 received by Mr. Apparao VMallavarapu Chairman and Managing Director from ELCINA-EFY
iv. High growth electronic hardware exporter award for the year 2014 - 15from the STPI (Software Technology Park of India).
v. Listed in the Forbes Asias 200 Best Under Billion List.
12. Corporate Governance
Pursuant to Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the company has complied with the requirements. The Certificate oncompliance of Corporate Governance requirements issued by the Statutory Auditors isannexed to the Report of Corporate Governance.The Report on Corporate Governance isattached herewith as Annexure IV.
13. Conservation of Energy Technology absorption Research & Development andForeign Exchange Earnings and Outgo.
The particulars prescribed under subsection (3) (m) of Section 134 of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are given in theannexure - V attached to this report.
14. Particulars of Employees
The information pursuant to Section 197 of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the company will be provided upon request.
However as per the provisions of Section 136 of the Act the Report and Accounts arebeing sent to the Members and others entitled thereto excluding the information onemployees particulars. The same is available for inspection by the Members at theRegistered Office of the company during business hours on working days of the Company upto the date of ensuing Annual General meeting. If any Member is interested in obtaining acopy thereof such Member may write to the Company Secretary in this regard.
15. Particulars of Loans Guarantees and Investments
The details of the investments made by the Company are in Note 10 of the auditedfinancial statements. The Company has made an investment amounting to Rs. 13.26 Millionduring the year within the meaning of Section 186.
16. Corporate Social Responsibility
As part of its initiatives under "Corporate Social Responsibility (CSR) theCompany has funded many projects that aid and improve education literacy and healthcarefor children. It has also funded and participated in projects that support and aidchildren with disabilities. These projects are largely in accordance with Schedule VII ofthe Companies Act 2013.
The Annual Report on CSR activities is annexed herewith as "Annexure VI".
17. Details of establishment of Vigil Mechanism
The Company has a Vigil mechanism to deal with the instances of fraud andmismanagement if any. The details of the Policy is explained in the Corporate GovernanceReport and also posted on the website of the company. During the year under review thereare no such instances to report.
18. Prevention Prohibition and Redressal of sexual harassment at work place
The Company has zero tolerance for sexual harassment at workplace and has formulated aPolicy on Prevention Prohibitionand Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.
The Company has also constituted an Internal Complaints Committee to inquire intocomplaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2015-16.
19. Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as Annexure VII.
20. Management Discussion and Analysis
In compliance with the requirements of the listing agreement a detailed ManagementDiscussion and Analysis Report giving details of the companys business and operatingresults is given in Annexure VIII attached to this report.
21. Employee Stock Option Plan
As a measure of rewarding the employees your company had introduced an Employee StockOption Plan (ESOP) during year 2007 & 2013.
The particulars prescribed under Guideline 12.1 of the SEBI (Employee Stock Optionscheme and Employee Stock Purchase Scheme) Guidelines 1999 are given in the Annexure - IXattached to this report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:a. Details relating to deposits covered under Chapter V of the Companies Act 2013. b.Issue of equity shares with differential rights as to dividend voting or otherwise. c.Issue of shares (including sweat equity shares) to employees of the company under anyscheme save and except ESOP referred to in this report. d. There is no remunerationreceived by the Managing Director from the subsidiary company. e. No significant ormaterial orders were passed by the regulators or courts or tribunals which impact thegoing concern status and the companys operations in future.
Your Directors thank the customers for their continued patronage and the investorsbankers and vendors for their continued support.
Your Directors acknowledge and thank the invaluable contributions of all the employeeswho have demonstrated their skill teamwork and commitment through their competence hardwork cooperation and support. Your Directors would also like to place on record thesupport received from the Electronic Hardware Technology Park the Customs and ExciseDepartments the Reserve Bank of India the Department of Industries and CommerceKarnataka the Karnataka Udyog Mitra and all the other Central and State Governmentalagencies.
| ||By order of the Board || |
| ||For Centum Electronics Limited || |
|Place: Bangalore ||Apparao V Mallavarapu ||S. Krishnan |
|Date: 27 May 2016 ||Chairman & Managing Director ||Director |
FORM AOC I
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures [Pursuant to first proviso to sub-section(3) of Section 129 read with Rule 5 of Companies (Accounts) Rules 2014].
Part "A" : Subsidiaries
|Particulars ||Name of the Subsidiary |
| ||Centum Rakon India Private Limited |
|1. Reporting period for the subsidiary concerned if different from the holding companys reporting period. ||N.A. |
|2. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. ||N.A. |
|3. Share capital ||56.00 |
|4. Reserves and Surplus ||578.93 |
|5. Total assets ||634.93 |
|6. Total liabilities ||634.93 |
|7. Investments ||- |
|8. Turnover ||821.90 |
|9. Profit before taxation ||-15.79 |
|10. Provision for taxation ||7.09 |
|11. Profit after taxation ||-8.70 |
|12. Proposed Dividend ||- |
|13. % of shareholding ||51% |
1. Reporting period and reporting currency of the above subsidiary is the same as thatof the company.
2. Part B of the Annexure is not applicable as there are no associate companies/jointventures of the company as on 31st March 2016.
NOMINATION AND REMUNERATION POLICY
Centum has formulated the Nomination and Remuneration Policy (the Policy) consisting ofConstitution of the Nomination and Remuneration committee (Committee) and its objectivesappointment remuneration of the Board and such other matters as may be required underthe Companies Act 2013 and Cluase 49 of the Listing agreement from time to time.
2. Constitution of the Committee:
The Board of Directors has the power to constitute/ reconstitute the Committee fromtime to time in order to make it consistent with the Companys policy and applicablestatutory requirement.
3. Objectives of the Committee:
The Objectives of the committee are in line with Section 178 of the Companies Act 2013and Clause 49 (7) of the Listing agreement. Accordingly the Committee at Centum shall:
a. Formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of Directors key managerial personnel (KMP) and other employees.
b. Formulation of criteria for evaluation of Independent Director and the Board.
c. Devising a policy on Board diversity.
d. Identify persons who are qualified to become Director and persons who may beappointed in Key Managerial and Senior Management positions in accordance with thecriteria laid down in this policy.
e. Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.
"Board" means Board of Directors of the Company.
"Director" means Directors of the Company.
"Independent Director" means a non-executive director other thannominee director and more particularly as defined under the Companies Act 2013 and therevised Clause 49 of the Listing agreement.
"Key Managerial Personnel":- Key Managerial Personnel (KMP) means-
a. the Chief Executive Officer or the managing director or the manager;
b. the Whole-Time Director;
c. the Chief Financial Officer; and
d. the Company Secretary;
e. such other officer as may be prescribed under the applicable statutory provisions /regulations
"Senior Management":- The expression seniormanagement means personnel of the company who are members of its coremanagement team excluding Board of Directors comprising all members of management onelevel below the executive directors including the functional heads.
Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.
5. Policy on Board diversity:
The Board of Directors shall have the optimum combination of Directors from thedifferent areas/fields like Technology Markets Operations and Finance etc. and as maybe considered appropriate.
The Board shall have at atleast one Board member who has accounting or relatedfinancial management expertise.
a. General Appointment Criteria:
i. The Committee shall consider the ethical standards of integrity and probityqualification expertise and experience of the person for appointment as Director/Independent Director/ KMP/ Senior Management Personnel and accordingly recommend to theBoard his / her appointment.
ii. The Company should ensure that the person so appointed as Director/ IndependentDirector/ KMP shall not be disqualified under the Companies Act 2013 rules madethereunder Listing Agreement or any other enactment for the time being in force.
iii. The Director/ Independent Director/ KMP shall be appointed as per the procedurelaid down under the provisions of the Companies Act 2013 rules made thereunder ListingAgreement or any other enactment for the time being in force.
b. Additional Criteria for Appointment of Independent Directors:
The Committee shall consider qualifications for Independent Directors as mentionedherein earlier under the head Definitions and also their appointment andcessation shall be governed as per the provisions of clause 49 of the Listing Agreement(as amended from time to time ) and the Companies Act 2013.
7. Evaluation of the Board and Independent Director:
Following are the Criteria for evaluation of performance of Independent Directors andthe Board:
a. Executive Directors:
The Executive Directors shall be evaluated on the basis of targets / Criteria given toexecutive Directors by the board from time to time
b. Non-Executive Director:
The Non-Executive Directors shall be evaluated on the basis criteria mentioned inSection 178 of the Companies Act 2013 and Clause 49 of the Listing agreement which interalia consists that the directors:
i. act objectively and constructively while exercising their duties;
ii. exercise their responsibilities in a bona fide manner in the interest of thecompany;
iii. devote sufficient time and attention to their professional obligations forinformed and balanced decision making;
iv. do not abuse their position to the detriment of the company or its shareholders orfor the purpose of gaining direct or indirect personal advantage or advantage for anyassociated person; v. refrain from any action that would lead to loss of his independence
vi. inform the Board immediately when they lose their independence
vii. assist the company in implementing the best corporate governance practices.
viii. strive to attend all meetings of the Board of Directors and the Committees;
ix. participate constructively and actively in the committees of the Board in whichthey are chairpersons or members;
x. strive to attend the general meetings of the company;
xi. keep themselves well informed about the company and the external environment inwhich it operates;
xii. do not to unfairly obstruct the functioning of an otherwise proper Board orcommittee of the Board;
xiii. moderate and arbitrate in the interest of the company as a whole in situationsof conflict between management and shareholders interest.
xiv. abide by Companys Memorandum and Articles of Association companyspolicies and procedures including code of conduct insider trading guidelines etc.
c. Senior Management
The Senior Management shall be evaluated on the basis of targets / Criteria given tothem by the Executive Director from time to time.
The Committee will recommend the remuneration to be paid to the Managing DirectorWhole-time Director KMP and Senior Management Personnel to the Board for their approval.
The level and composition of remuneration so determined by the Committee shall bereasonable and sufficient to attract retain and motivate directors Key ManagerialPersonnel and Senior Management of the quality required to run the company successfully.The relationship of remuneration to performance should be clear and meet appropriateperformance benchmarks. The remuneration should also involve a balance between fixed andincentive pay reflecting short and long-term performance objectives appropriate to theworking of the company and its goals:
a. Director/ Managing Director
Besides the above Criteria the Remuneration/ compensation/ commission etc to be paidto Director/ Managing Director etc shall be governed as per provisions of the CompaniesAct 2013 and rules made thereunder or any other enactment for the time being in force.
b. Non-executive Independent Directors
The Non- Executive Independent Director may receive remuneration by way of sitting feesfor attending meetings of Board or Committee thereof and commission as approved by theshareholders. Provided that the amount of such fees/commission shall be subject toceiling/ limits as provided under Companies Act 2013 and rules made thereunder or anyother enactment for the time being in force.
c. KMPs / Senior Management Personnel etc .
The Remuneration to be paid to KMPs/ Senior Management Personnel shall be based on theexperience qualification and expertise of the related personnel and governed by thelimits if any prescribed under the Companies Act 2013 and rules made thereunder or anyother enactment for the time being in force.
9. Directors and Officers Insurance
Where any insurance is taken by the Company on behalf of its Directors KMPs/ SeniorManagement Personnel etc. for indemnifying them against any liability the premium paid onsuch insurance shall not be treated as part of the remuneration payable to any suchpersonnel.
FORM NO. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016
[Pursuant to section 204(1) of the Companies Act 2013 and rule No. 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014] To The Members
Centum Electronics Limited
I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Centum Electronics Limited(hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on my verification of the Centum Electronics Limited books papers minute booksforms and returns filed and other records maintained by the company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of secretarial audit I hereby report that in my opinion the companyhas during the audit period covering the financial year ended on 31st March 2016complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance-mechanism in place to the extent in the manner andsubject to the reporting made hereinafter: I have examined the books papers minutebooks forms and returns filed and other records maintained by Centum Electronics Limited("the Company") for the financial year ended on 31st March 2016 according tothe provisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii)The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-(a) The Securities and ExchangeBoard of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011; (b)
The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;1
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;2
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;2
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;(g)
The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009;2 and (h)
The Securities and Exchange Board of India (Buyback of Securities) Regulations 1998.4
(vi) Other Laws as applicable to Electronic System Design and Manufacturing (ESDM)Company viz:-
1. EXIM Policy of India relating to Export Oriented Unit(EOU).
2. Semiconductor Integrated Circuits Layout Design Act 2000.
3. Environment (Protection) Act 1986 Water (Prevention and Control of Pollution)Act1974; Air (Prevention and Control of Pollution) Act1981; e-waste & hazardouswaste (Management and Handling Rules).
4. Micro Small and Medium Enterprises Development Act 2006.
I have also examined compliance with applicable clauses of the following: (i)Secretarial Standards issued by the Institute of Company Secretaries of India; (ii)Thelisting Agreement entered into by the Company with the National Stock Exchange of IndiaLimited and BSE Limited; 5
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc mentioned above subject to the followingdisclaimer: My opinion is based on audit evidence explanations and information given tome during the audit and the Management Representation Letter in support of compliances inrespect of the Act Rules Regulations Guidelines Standards etc mentioned above.
I further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act. Adequate notice is given to alldirectors to schedule the Board Meetings agenda and detailed notes on agenda were sent atleast seven days in advance and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting. Majority decision is carried through while the dissentingmembers views are captured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines. My opinion on the BoardStructures/systems and process during the Audit period as reported above is subject to thefollowing observations; (i) Notes on items of business which are in the nature ofUnpublished Price Sensitive Information are given at a shorter period of time than statedabove.
I further report that during the audit period the company has:
(i) Allotted 91187 equity shares of Rs. 10/- each to employees who exercised theiroption under the Employee Stock Option Plans.
(ii) Obtained the approval of the Members through postal ballot for enhancement ofBorrowing limits of the Board of Directors and creation of charge on the assets of theCompany.
To be read with our letter annexed hereto which forms an integral part of this report
1 Replaced with SEBI(Prohibition of Insider Trading) Regulations 2015
2 There were no actions necessitating compliance under these Regulations.
3 Replaced with SEBI (Share Based Employee Benefits) Regulations 2014
4 Including SEBI (Buy-back of Securities) (Amendment) Regulations 2015.
5 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
| ||AARTHI G KRISHNA |
| ||Company Secretary in practice |
|Place : Bengaluru ||FCS No.: 5706 |
|Date : 27th May 2016 ||C P No.: 5645 |
Centum Electronics Limited Bangalore
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
| ||AARTHI G KRISHNA |
| ||Company Secretary in practice |
|Place : Bengaluru ||FCS No.: 5706 |
|Date : 27th May 2016 ||C P No.: 5645 |
INFORMATION PURSUANT TO THE SECTION 134(3)(m) OF THE COMPANIES ACT 2013
1. CONSERVATION OF ENERGY
The Company continues to accord priority to energy conservation. Companysenergy saving team is committed to minimize the energy consumption and isimplementing several energy saving projects. Consistent efforts are being made foridentifying potential areas for energy saving.
Some of the measures your company had undertaken during the period under report in thehigh priority area of Energy Conservation are:
Chemical descaling of Chillers carried out to improve the efficiency. Currentlyonly one chiller is in operation due to the improved efficiency.
Chemical descaling of all the AHUS cooling coil was carried out andimproved the efficiency of Centralized AC system.
Damaged and rusted AHU Condenser coil changed and improved the AC efficiency.
Power factor improvement is achieved by replacing inefficient capacitors withnew capacitors.
Monitored LT voltage & found to be less discussed with BESCOM and improvedthe Voltage.
Regularly monitored the top 10 power guzzlers like chiller Process Chillersair compressors etc. on daily basis and fixed the limits to control the cost.
Consumption monitoring meter is provided for Nitrogen gas resulting in bettercontrol.
Overhauling of Reciprocating air compressors has been carried out to improve theefficiency.
Thermography imaging for all LT panels are done and corrective actions are taken& completed as a part of predictive maintenance.
Cooling tower of Chillers are overhauled for improving efficiency of chillers.
2. TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT
The company has taken the Transfer of Technology from Space Applications CentreISRO Ahmedabad for C Ext-C band Solid State Power Amplifiers which are used astransponders in Indian Communication satellites.
With an intention to enhance R&D activities The company continues to workwith Academia. Apart from engagements with Centre for Nano Science and Engineering (CeNSE)at IISc Bangalore The company is now engaged with SIT Tumkurs Department ofNanoTechnology as the member of the Industry Advisory Board (IAB) for guiding their MTech(Nano Technology) programme
Apart from S and C band Transmit Receive Module development The company R&Dteam has taken up development of X band TRMs involving RF Power and Digital domains
The company has developed and qualified new manufacturing processes involvingefficient materials for Space applications.
Research and Development (R&D) and benefits derived thereon: (i) Specific areas inwhich R&D carried out by the Company:
Channel Amplifiers (RF) and Electronic Power Conditioners for Space grade RFsubsystems for Communication satellites.
Point of Load converters for Hi-Rel applications.
Very Complex High Speed FPGA based digital subsystems for Defense applicationsare in advanced stages of R&D.
DC-DC converters for missile applications.
More variants of Digitally Tunable Filters for Defense Communication andSoftware Defined Radio applications.
Developing and improving upon the acceleration sensors for Inertial Navigationapplications in the strategic sector.
(ii) Benefits derived as result of the above R&D
Ability to develop high speed digital boards with critical signal integrityrequirements which are also high power dissipative ones needing thermal analysis andtechniques to address the heat flow requirements.
Ability to develop wider product range in high speed digital embedded and RFareas.
(iii) Future Plan of Action
Developing and manufacturing products in the Multi-Processor Multi FPGAconfiguration.
Medium Power converters in the range of 100-400 Watts.
Continue to enhance the development activities in areas of Electro optics andInertial Navigation.
(iv) Expenditure on R & D
| || ||Rs in Millions |
|For the year ended 31st March ||2015-16 ||2014-15 |
|A. Capital ||12.11 ||- |
|B. Recurring ||63.57 ||44.28 |
|C. Total ||75.68 ||44.28 |
|Total R&D expenditure as a % of total turnover ||2.2% ||1.4% |
3. FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings and Outgo are reported in Notes to Accounts No. 39 & 40and forming part of the Balance Sheet and Profit and Loss Account for the year ended 31stMarch 2016.
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
1. A brief outline of the Companys CSR policy including overview of projects orprogrammes proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programmes: The company has formulated CSR Policy and is available at Investorpage on the Company website www.centumelectronics.com.
2. Composition of the CSR Committee:
The Composition of the CSR Committee is as follows
|Mr. Apparao V Mallavarapu ||Chairman and Managing Director ||Chairman |
|Mr. Manoj Nagrath ||Independent Director ||Member |
|Mr. S. Krishnan ||Independent Director ||Member |
|Dr. Swarnalatha Mallavarapu ||Non Independent Director ||Member |
3. Average net profits of the Company for the last three financial years: Average netprofit Rs. 4074.35 lacs.
4. Prescribed CSR Expenditure (two percent of Average net profits): The company isrequired to spend Rs. 81.48 lacs towards CSR.
5. Details of CSR spend for the financial year: a. Total amount spent for the financialyear - Rs. 27.15 lacs b. Manner in which the amount spent during the financial year isdetailed below:
| || || || || ||(Amount in Rs. Lacs) |
|Projects/Activities ||Sector ||Locations ||Amount Spent ||Cumulative expenditure upto reporting period ||Amount spent Direct or through implementing agency* |
|1 Mathru blind school ||Education ||Bangalore ||7.80 ||- ||Direct |
|2 Provisio Asia ||Health care ||Bangalore ||3.25 ||- ||Direct |
|3 SEED ||Rural ||Hyderabad ||16.00 ||- ||Direct |
|4 FCCI- Flood Relief Fund || ||Chennai ||0.10 ||- ||Direct |
*Details of implementing agencies: N.A. c. Amount unspent: Rs. 54.34 lacs
Reason : The company has been exploring the options by considering the sustainabilityfor spending the amount as required.