Circuit Systems (India) Ltd.
Your Directors have pleasure in presenting herewith the 20th Annual Reporttogether with the Audited Statement of Accounts of the Company for the year ended on 31stMarch 2015.
| || ||(Rs. In Lacs) |
|Particulars ||2014-15 ||2013-14 |
|Income from Operation (Net of Excise) ||2424.95 ||2447.49 |
|Other Income ||45.65 ||36.29 |
|Profit before Finance Cost Depreciation and Tax ||317.26 ||251.38 |
|Less: Interest and Financial Charges ||(105.90) ||(92.49) |
|Less : Depreciation ||(103.40) ||(155.67) |
|Profit from operations ||107.96 ||55.06 |
|Exceptional Items ||(677.24) ||(14.44) |
|Profit for the year before tax ||(569.28) ||40.62 |
|Add/(Less) : Provision for taxation ||7.55 ||(8.56) |
|Profit for the year after Tax ||(561.73) ||32.05 |
The dividend payout for the year under the review has been formulated in accordancewith the companys policy to pay substantial dividend linked to long termperformance keeping in view the companys need for capital for its growth plans andthe intent to finance through internal accruals to maximum. Your directors have alwayswished to appreciate the trust and faith of its members by improving the performance ofthe Company.
Even though the company has moderate operating profit in the current year yourdirectors consider need of funds in future for capital expansion. Therefore yourdirectors do not recommend any dividend during the year under consideration.
The Company is in High Mix low volume business. This policy has started showingbenefits in terms of improved margins and profitability in spite of fall in turnover. TheCompany considers continuing the same policy in future and your directors expects that thesame will result into improved profitability in future. During the year the company hasearned operating profit of Rs. 1.07 crore before exceptional items. However Company alsoregistered an overall loss due to exceptional items taken into consideration in book ofaccounts.
DEPRECIATION ON FIXED ASSETS
Attention of members is drawn to Note of financial statements regarding calculations ofdepreciation for current financial year. The Companies Act 2013 has changed method ofcomputation of depreciation from calculations based on rates of depreciation tocalculations based on the useful life of the company. Therefore the company was requiredto ascertain useful life of all assets as on 1 April 2014 and depreciate the written downvalue on remaining useful life of the assets. Further those assets whose useful life hasbecome Nil as on 1 April 2014 is required to be discarded and remaining WDV of such assetsis required to be adjusted towards reserves of the company. The company has carried outrequired changes and identified useful life and WDV of all assets as per provisions ofCompanies Act 2013 and recalculated depreciation on all assets accordingly. Further thecompany has debited amount of Rs. 8 67 28201/- against reserves and surplus as writeoff towards fixed assets whose useful life has become zero on 1 April 2014. This is onetime write off and not expected to recur in future. Your directors believe that this willenable the company to present more correct view of financial position of the company.Members are requested to refer Note 11 of financial statements.
WRITE OFFS DURING FINANCIAL YEAR
The company has conducted detailed verification of its inventory and receivables duringthis financial year to find out stock which has become obsolete or receivables which hasbecome irrecoverable. The company had accumulated significant quantity of stocks andspares which had book value but could not be used by the company for manufacturing andmaintenance purpose because of its odd size shape or other factors. Hence economic valueof such stocks has practically become zero for the company. During the year companycarried out exercise to find such obsolete inventories and scarp them in order to reflectmore realistic position of the inventory. Accordingly the company has reduced value ofRs. 2 96 27916/-in its closing inventory as on 31 March 2015. Your directors believethat this will reflect more realistic position of financial position of the company. Thisis one time reduction and not expected to recur in near term and mid term future.
Further the company had accumulated balance in receivables which was long overdue buthad not received since long. The payments were pending due to various reasons such asquality disputes compliance disputes and rate disputes receivables being unresponsiveand other reasons. The company had made detail assessment of recoverability of eachreceivable and decided to write off those balances which cannot be recovered even afterconsiderable efforts since last few years. During year the company has written off Rs. 230 05998/ - for various irrecoverable balances. Your directors believe that this willhelp the company to show correct position of trade receivable and companys financialposition. The company has made significant improvements to its credit policy to customersand such bad debts have reduced drastically since last few years and it will furtherimprove in near and mid term future.
SUBSIDIARY COMPANIES & CONSOLIDATED FINANCIAL STATEMENT:
The Company has only one subsidiary i.e PCB Power (India) Limited. The subsidiarycompany has not started full fledge commercial operations yet. Your directors expect tostart commercial operations from current financial year.
In accordance with Section 136(1) of Companies Act 2013 the Balance Sheet Profit andLoss Accounts and other documents of the subsidiary company are not being attached withthe Annual Report of the Company but are uploaded on website of the company. The Companywill provide the annual accounts of its subsidiary companies and the related detailedinformation on the specific request made by any shareholders and the said annual accountsare open for the inspection at the registered office of the Company during office hours onall working days except Sundays and holidays between 2.00 p.m. and 4.00 p.m. TheStatement showing salient features of subsidiaries as required u/s 123 (3) of CompaniesAct 2013 read with Rule 5 of Companies (Accounts) Rules 2014 is attached in Form NoAOC-1 with this report.
As required under Clause 32 of Listing Agreement with the stock exchange(s) and inaccordance with the requirements of Accounting Standard AS-21 issued by the Institute ofChartered Accountants of India the Company has prepared Consolidated Financial Statementsof the Company and its subsidiary and is included in the Annual Report.
During the year under review the Company has not accepted any deposits from the publicwithin the meaning of Companies Act 2013.
All the existing properties including Plant and Machineries Building and stocks areadequately insured.
Pursuant to the provisions of Companies Act 2013 Mr. Jayesh Shah Director of theCompany retires at the ensuing Annual General Meeting of the Company and is eligible forreappointment. The Board recommends their reappointment as Directors of the Company.
The Board has appointed Ms. Madhu Kejriwal as independent director of the company on 26July 2014. Her appointment is subject to confirmation by the members at annual generalmeeting. The board recommends her appointment.
FORMAL EVALUATION STATEMENT
The evaluation framework for assessing the performance of Chairman Directors Boardand Committees comprises inter-alia of the following parameters:
a. Directors bring an independent judgment on the Boards discussions utilizinghis knowledge and experience especially on issues related to strategy operationalperformance and risk management.
b. Directors demonstrate awareness and concerns about norms relating to CorporateGovernance disclosure and legal compliances.
c. Directors contribute new ideas/insights on business issues raised by Management.
d. Directors anticipate and facilitate deliberations on new issues that Management andthe Board should consider.
e. The Board / Committee meetings are conducted in a manner which facilitates opendiscussions and robust debate on all key items of the agenda.
f. The Board receives adequate and timely information to enable discussions/ decisionmaking during Board meetings.
g. The Board addresses interests of all stakeholders of the Company.
h. The Committee is delivering on the defined objectives.
i. The Committee has the right composition to deliver its objectives.
The performance evaluation of Chairman Directors Board and Committees was undertakenby the Nomination and Remuneration Committee for the year under review and the resultswere reported to the Board of Directors.
The Shareholders of the company has accorded their consent in their 19thAnnual General meeting for appointment of M/s Baheti Bhadada & Associates CharteredAccountants as Statutory Auditor of the company for period of 5 years commencing fromconclusion of 19th Annual General Meeting till conclusion of 24th AnnualGeneral meeting.
Members are requested to appoint M/s Baheti Bhadada and Associates CharteredAccountants as statutory auditor of the company from current annual general meeting tillend of next annual general meeting. The board has received letter from them to the effectthat their appointment if made will be within limits specified u/s 141(1)(g) of CompaniesAct 2013.
The observations made in the Auditors Report are self explanatory and therefore neednot require any further comments by the board of directors.
SECRETARIAL AUDIT REPORT
In pursuant to Section 204 of the Companies Act 2013 the Board herewith attachessecretarial audit report issued by practicing company secretary. There are no remarks orcomments in said report which requires clarifications by the board.
ABSTRACTS OF ANNUAL RETURN
In pursuant to requirement of 93 (3) of Companies Act 2013 the abstracts of annualreturn is herewith attached in Annexure of the report in prescribed Form No MGT-9.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to requirement under section 134(3)(c) of Companies Act 2013 with respect toDirectors Responsibility Statement it is hereby confirmed.
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO:
Energy Conservation Measures:
Your Company uses electric energy for its machineries installed at the work premisesand office equipments at office premises. All possible measures have been taken toconserve energy by using latest technology which is most efficient and conservative inabsorbing the energy.
Foreign Exchange Earnings and Outgo:
1. Foreign Exchange Earned During the year :
| ||Amount in Indian Rupees |
|Particulars ||2014-15 ||2013-14 |
|Exports ||10045036 ||11686999 |
|2. Foreign Exchange Outgo : || || |
|Repairs and Maintenance Machinery ||945199 ||512101 |
|Interest on Buyers Credit ||- ||103221 |
|Travelling Expense ||616940 ||764149 |
|Sales Commission Export ||- ||23928 |
|Foreign Bank charges ||23142 ||62097 |
|Imports (CIF) ||94573582 ||87962803 |
RISK MANAGEMENT POLICY
The Risk management policy of the company has been discussed in detail in theManagement Discussion & Analysis Report which forms part of this directorsreport attached with annual report. The attention of members is drawn to this fact.
PARTICULARS OF EMPLOYEE:
During the year there were no employees within the organization who were in receiptof remuneration exceeding Rs. 60 00000/- p.a. or if employed for part of the yeardrawing remuneration in excess of Rs. 5 00000/- p.m as prescribed.
The details under Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are as follows.
|Ratio of Remuneration of Each Director to median remuneration of employees of the company ||1. Mr. Paresh Vasani 21.09 times |
| ||2. Mr. Chetan Panchal - Nil |
| ||3. Mr. Jayesh Shah - Nil |
| ||4. Ms. Madhu Kejriwal - Nil |
|Percentage increase in remuneration of each director CFO & CS ||18.77% for CS. For others Nil |
|Number of Permanent employees on Roll of Company ||65 |
|Explanation on the relationship between average increase in remuneration and company performance. ||There is no increase in remuneration of key managerial persons during this financial year. Hence the same clause is not applicable. |
|Market Capitalization of Company ||As on 31 March 2015 Rs. 201100732/- |
| ||As on 31 March 2014 Rs. 117886636/- |
|Price Earnings Ratio ||As on 31 March 2015 (3.58) |
| ||As on 31 March 2014 42.50 |
|Percentage Increase (Decrease) in Market Price of shares with at rate at which company came up with last public offer. ||58.57% Decrease |
|Average Percentage Increase in salaries of employees other than managerial personnel & Managerial Personnel ||15.64% Increase in other than managerial No Increase in managerial personnel |
|Comparison of Managerial Remuneration against performance of the company ||There has been no change in managerial remuneration during current year. While performance of company has improved in terms of improved profitability. However net result is loss after adjustments of exceptional items. |
|Key Parameter for variable component of remuneration availed by the director ||There is no variable component in remuneration of any director |
|the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year ||Not Applicable |
There is no employee who receives remuneration in excess of highest paid director.
The Board hereby confirms that remuneration paid to all managerial personnel is inaccordance with the remuneration policy of the company.
LOANS ADVANCES AND GUARANTEES
The detail of loans and advances by the company is given in note 12 13 & 18 offinancial statement. There is no guarantee given by the company.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
There are no contracts or arrangements entered by the company with related parties atprice other than arms length price. Hence provisions of Section 188 of CompaniesAct 2013 is not applicable. Details of related party transactions are given in Note no 28of financial statements.
CORPORATE GOVERNANCE :
The Company has generally implemented the procedure and adopted practices in conformitywith the Code of Corporate Governance as enunciated in Clause 49 of the Listing Agreementwith the Stock Exchanges. The Corporate Governance Report forms part of Directorreport.
The Details of board of directors their composition and details of board meetings heldduring this year are given under Corporate Governance statement. Attention of members isdrawn to this fact.
The Board has formed nomination and remuneration committee as required under section178(1) of Companies Act 2013. The composition of the same is given in CorporateGovernance statement. Further disclosures for Nomination and Remuneration Policy is givenin annexure to this report as required under 178 (3) of Companies Act 2013.
The Board has constituted Audit Committee as required under section 177(1) of CompaniesAct 2013. The Composition of the same has been disclosed in Corporate Governance reportforming part of directors report. During the year the Board has agreed to allrecommendations of the audit committee.
The vigil mechanism for directors and employees have been set up and communicated toall employees. The extracts of whistle blower policy are given in Corporate GovernanceStatement.
A Certificate from the Practicing Company Secretaries regarding compliance of theconditions of the Corporate Governance is given in annexure which is attached hereto andforms part of Directors Report.
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 read with Rule 14 the Board confirms that nocomplaint / case has been filed / pending with the Company during the year
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Companys internal financial control systems are commensurate with thenature size and complexity of the businesses and operations. These are routinely testedand certified by Statutory as well as Internal Auditors. Significant audit observationsand the follow up action are reported to the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not mandated to contribute for corporate social responsibility. Howeverthe company will voluntarily contribute for social purpose if need arises.
Your Directors take this opportunity to acknowledge with gratitude for the trustreposed in the Company by the Shareholders Investors and Readers/Customers Corporationsand Government Authorities. Directors of your Company specifically express their gratitudeto the Bankers which has extended their full support to the Company. Further YourDirectors also keenly appreciate the dedication & commitment of the Employees of theCompany.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||Paresh Vasani ||Jayesh Shah |
|Date : 8 August 2015 ||Managing Director ||Director |
|Place : Ahmedabad ||DIN NO: 01376786 ||DIN NO: 02559296 |