Your Directors have pleasure in presenting their Thirty First Report together with theAudited Financial Statement of Accounts for the year ended on March 31 2016.
1. FINANCIAL RESULTS AND HIGHLIGHTS :
Rs. In Lacs
| ||Year ended ||Year ended |
| ||March 31 2016 ||March 31 2015 |
|INCOME || || |
|Sales and Services (Gross) ||3258.76 ||21800.75 |
|Less : Excise Duty & Service tax ||(240.86) ||(2896.98) |
|Sales and Service income (Net) ||3017.90 ||18903.77 |
|Other Income ||28.49 ||24.57 |
| ||3046.39 ||18928.34 |
|EXPENDITURE || || |
|Manufacturing and other expenses ||3638.29 ||17835.35 |
|Depreciation ||663.05 ||773.18 |
|Financial expense ||151.27 ||163.39 |
| ||4452.61 ||18771.92 |
|PROFIT BEFORE TAX ||(1406.22) ||156.42 |
|PROVISION FOR TAX || || |
|Wealth Tax || ||0.06 |
|NET PROFIT /(LOSS) FOR THE YEAR ||(1406.22) ||156.36 |
|PROFIT AND LOSS ACCOUNT beginning of the year ||(1692.09) ||(1848.45) |
|PROFIT AND LOSS ACCOUNT end of the year ||(3098.31) ||(1692.09) |
2. PERFROMANCE & OPERATIONS :
Gross sales income during the year under review was Rs.3258.76 Lacs including Rs537.00 lacs for re-export of / resale of LED components. The net loss of the company forthe fiscal 2015- 2016 is Rs.1406.22 Lacs. There was no production of LED TVs since April2015 (Except in the month of August 2015) and of Air conditioners since June 2015.
3. MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE :
The Management Discussion Analysis and the report on Corporate Governance are attachedto the Directors' Report and form parts of this Annual Report. A Certificate from aCompany Secretary in whole time practice verifying compliance thereof is also incorporatedin the Corporate Governance section.
4. CERTIFICATES AND MARKS:
Your Company continues to be an ISO 14001 and ISO 9001 certified Company.
5. INDUSTRIAL RELATIONS:
Industrial Relations have been and continue to be harmonious and cordial
i) Statutory Auditors:
The members in their 29th Annual General Meeting held on 22nd September 2014 haveappointed M/s. S R B C & Co LLP Chartered Accountants as the Statutory Auditors ofthe Company from the conclusion of 29th annual general Meeting up to the conclusion of32nd annual general meeting of the Company for a period of three years. The Appointment ofM/s. S R B C & Co LLP Chartered Accountants as the Statutory Auditors of theCompany will be placed for ratification by the shareholders as per the first proviso toSection 139 of the Companies Act 2013. Members are requested to consider the ratificationof the appointment of the Statutory Auditors and authorize the Board to fix theirremuneration.
ii) Cost Auditors:
The Board of Directors have appointed M/s. Chandrashekhar. S. Adawadkar & Co.Practicing Cost Accountant as the Cost Auditor for the financial year 2015-16 which endedon 31st March 2016 upon recommendation of the Audit Committee. M/s. Chandrashekhear SAdawadkar & Co. Cost Accountant will submit the cost audit report along with annexureto the Central Government (Ministry of Corporate Affairs) in the prescribed from withinspecified time and at the same time forward a copy of such report to your company.
The Board of Directors have appointed M/s. Chandrashekhar S Adawadkar & Co.Practicing Cost Accountant to conduct the Cost Audit of the Company for the financialyear ending on 31st March 2017 upon recommendation of the Audit Committee. TheRemuneration payable to the Cost Auditors for the financial year 2016-2017 requiresratification by the members of the Company. The same is put before the members of thecompany for their consideration and approval.
iii) Secretarial Auditors:
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 Directorsof the Company appointed M/s. SVD & Associates Practicing Company Secretaries as the'Secretarial Auditors' of the company for the financial year 2015-2016.
The Secretarial Audit Report given by M/s. SVD & Associates Practicing CompanySecretaries for the financial year 2015-2016 is annexed as Annexure-C.
7. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT - 9 is annexedherewith as 'Annexure-A' to this Report.
8. NUMBER OF MEETINGS OF THE BOARD
During the year under review Five Board Meetings were convened and held. The detailsof which are given in the Corporate Governance Report.
9. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(1) (c) and 134 (5) of the Companies Act2013 in respect of Directors' Responsibility Statement it is hereby confirmed that:
a) in the preparation of the annual accounts for the financial year ended on 31st March2016 the applicable accounting standards have been followed and that there are nomaterial departures;
b) the Directors have 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 of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
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 theCompany and that such internal financial controls are adequate and are operatingeffectively;
f ) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
10. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
11. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRETERIA FORDETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR:
The Board had on the recommendation of the Nomination and Remuneration Committee frameda policy for selection and appointment of Directors Key Managerial Personnel and SeniorManagement Personnel and their remuneration. The policy is appended as 'Annexure - B' tothis Report.
Criteria for Determining Qualifications Positive Attributes
& Independence of Director (Evaluation Criteria):
i. Qualifications of Director:
A director shall possess appropriate skills experience and knowledge in one or morefields of engineering finance law management sales marketing administrationresearch corporate governance operations or other disciplines related to the Company'sbusiness.
ii. Positive attributes of Directors:
An director shall be a person of integrity who possesses relevant expertise andexperience and who shall uphold ethical standards of integrity and probity; actobjectively and constructively; exercise his responsibilities in a bona-fide manner in theinterest of the Company; devote sufficient time and attention to his professionalobligations for informed and balanced decision making; and assist the Company inimplementing the best corporate governance practices.
iii. Independence of Independent Directors:
An Independent director should meet the requirements of the Companies Act 2013 andSEBI (Listing obligations and Disclosure Requirements) Regulations 2015 concerningindependence of directors."
12. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QULIFICATION RESERVATION OR ADVERSEREMARKS OR DISCLAIMER MADE (1) BY THE AUDITOR IN HIS REPORT (2) BY THE COMPANY SECRETARYIN PRACTICE IN HIS SECRETARIAL AUDIT REPORT:
The Auditors' Report and the Cost Audit Report for the financial year ended 31st March2016 do not contain any comments qualification reservation adverse remark ordisclaimer.
Secretarial Auditors' comments on Material Related Party Transactions with the holdingcompany Sharp Corporation Japan and Directors' explanation thereto:
The approval of members of the Company is sought in the ensuing 31st Annual GeneralMeeting for the material related party transactions entered into by the company during thefinancial year 2015-2016 with the holding company Sharp Corporation Japan. The Companyhas filed the revised quarterly Corporate Governance Compliance Report as on 31st March2016 with BSE Limited and informed them the material related party transactions enteredduring the financial year 2015-2016.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013:
The Company has not given any loans guarantees or has not made any investments duringthe financial year 2015-2016 under review.
14. RELATED PARTY TRANSACTIONS:
During the Financial year the Company has entered in to contracts or arrangements withthe related parties in the ordinary course of business and on arm's length basis exceptthe re-export / sale of excess LED imported components which was not in the ordinarycourse of business. Prior approval of the Audit Committee was obtained for all the relatedparty transactions entered into by the Company for the financial year ended on 31st March2016. Member's approval is sought for all the Material Related Party Transactions enteredinto by your company during the financial year 2015-2016. The policy on related partytransactions as approved by the Board of Directors has been displayed on the website ofthe Company : www.sharpindialimited.com.
15. THE STATE OF THE AFFAIRS OF THE COMPANY:
State of Company's affairs has been covered as a part of this report under thefinancial results & Management Discussion and Analysis. (MDA).
16. THE AMOUNT IF ANY WHICH IT PROPOSES TO CARRY TO ANY RESERVES: Nil
17. THE AMOUNT IF ANY WHICH IT RECEOMMENDS SHOULD BE PAID BY WAY OF DIVIDEND: Nil.
18. MATERIAL CHANGES AND COMMINTMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT : NIL
19. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO etc.:
Conservation of Energy & Technology Absorption etc.:
In line with the company's policy towards conservation of energy all units continuewith their efforts aimed at improving energy efficiency through various measures to reducewastage and optimize consumption. Your company continues with its efforts aimed atimproving the energy efficiency by adopting various measures. to conserve the energy andplaces very much importance for the conservation of energy and is conscious about itsresponsibility to conserve energy power and other energy sources. It lays great emphasistowards a safe and clean environment and continues to adhere to all regulatoryrequirements and guidelines.
Your company strongly and religiously follows and practices the 3E Policy i.e. -
a) Eco-positive Product - Products having less usage of resources and are safe foruse
b) Eco-positive Operation - Reduce adverse impact on environment duringManufacturing processes
c) Eco -positive Relationship. - Enhance corporate value during involvement ofEmployees
Even though the nature of company's operations is not energy-intensive in line withthe company's commitment towards conservation of energy all departments in the companycontinue with their efforts aimed at improving energy efficiency through improvedoperational and maintenance practices. The steps taken in this direction by your companyare as given below: Making constant efforts to reduce consumption of energy light oilwater & fuel in following ways:
(i) Reduction of energy consumption by turning off lights personal computers fans andother electronic equipments when not in use;
(ii) Timely maintenance and up-gradation of machinery & equipments;
(iii) Plantation of trees in the factory
(v) Awareness programs towards optimum utilization of natural resources at managerialas well as employee level;
(v) Timely repairs & maintenance of water taps in the factory.
Your company manufactures the products under the Technical collaboration Agreemententered with Sharp Corporation Japan. The technology provided by Sharp Corporation Japanis being absorbed and the company continues to utilize the same.
Expenditure on Research & Development :
| ||Amount Rs. Lacs |
|Capital ||- |
|Recurring ||77.33 |
|Total ||77.33 |
|Total R&D Expenditure as a percentage of total sales turnover ||02.563 |
Foreign Exchange Earnings and Out go:
| ||Amount Rs. Lacs |
|Foreign Exchange outgo ||184.02 |
|Foreign Exchange earning ||1477.09 |
20. RISK MANAGEMENT POLICY:
The Company has in place a Risk Management Policy pursuant to section 134 of theCompanies Act 2013. Your company believes that managing and mitigating the risk maximizesthe returns. The company has set up a Risk Management Committee duly approved by the Boardof Directors. The Committee identifies all strategic operational & financial risks byanalyzing and assessing the operations of the company. The company has laid downprocedures for the risk reporting. The details of risks identified along with measuresadopted to control the risks is placed before the Board & Audit Committee quarterlyfor their evaluation & suggestions.
21. CORPORATE SOCIAL RESPONSIBILITY POLICY: This policy is not applicable to theCompany at present.
22. MANNER OF ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEESAND OF DIRECTORS:
As per the policy and criteria laid down by the Nomination & RemunerationCommittee provisions of the Companies Act 2013 & SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 the performance evaluation of the independentdirectors was carried out by the entire board excluding the Director being evaluated andthe performance of the non-independent directors was carried out by the independentdirectors who also reviewed the performance of the Board as a whole. The board alsocarried out an annual performance evaluation of its own and committies.
23. THE DETAILS OF DIRECTORS KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVERESIGNED DURING THE YEAR:
Mr. Sanjay Vaidya has resigned as the Director of the Company with effect from 26th May2015. The Board places on record their sincere appreciation for the useful contributionmade by Mr. Sanjay Vaidya during his tenure as a director of the Company
Mr. Masahiko Nakagawasai was re-appointed as the Chief Financial Officer of the Companyfor a period of three years with effect from 28th May 2015.
He was also re-appointed as an Executive Director of the Company for a period of threeyears w.e.f. 28th May 2015. He resigned as an Executive Director of the Company witheffect from 14th August 2015. The Board places on record their sincere appreciation forthe useful contribution made by him during his tenure as an Executive Director of theCompany.
Mr. Sunil Kumar Sinha has resigned as the Chairman & Director of the company witheffect from 14th August 2015. The Board places on record its sincere appreciation andvaluable contribution made by Mr. Sunil Kumar Sinha during his tenure as a Chairman &Director of the Company.
Mr. Kazunori Ajikawa was appointed as an additional director of the Company w.e.f 14thAugust 2015. He has been regularized as a Director of the Company in the 30th AnnualGeneral Meeting of the Company held on 30th September 2015.
Mr. Tomio Isogai was re-appointed as the Managing Director of the Company w.e.f 9thDecember 2015 for a period of three years. Members approval is required for there-appointment of Mr. Tomio Isogai as the Managing Director of the Company for theaforesaid period. His re-appointment has been made under schedule- V of the Companies Act2013 and the rules made thereunder.
Directors proposed to be re-appointed at the ensuing Annual general Meeting :
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Kazunori Ajikawa retire by rotation as a Director of theCompany and being eligible he has offered himself for the reappointment.
24. THE NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIESJOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR:
There are no companies which have become/ceased to be subsidiaries joint ventures andassociate companies during the year.
Your Company has not accepted any Fixed Deposits during the year under review.
26. SIGNIFICANT AND MATERIAL ORDERS :
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
27. INTERNAL FINANCIAL CONTROLS :
Considering the nature and size of the business the company has in place adequateinternal financial controls. These are regularly tested by Internal and statutory Auditorsof the company. The Internal Audit observations & the corrective/ follow-up actionsare reported to the Audit Committee.
28: INFORMATION FORMING PART OF THE DIRECTORS REPORT PURSUANT TO SECTION 197(12) OF THECOMPANIES ACT 2013 AND RULE NO. 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014 :
The relevant information required to be given under section 197(12) of the CompaniesAct 2013 and Rule no. 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed at 'Annexure - D' to this Report.
29. COMPOSITION OF THE AUDIT COMMITTEE ETC.:
Composition of the Audit Committee and other relevant information has been given in thesection 'Corporate Governance'.
30. VIGIL MECHANISM /WHISTLE BLOWER POLICY:
The Vigil Mechanism/ Whistle Blower Policy adopted by the Company provides for formalmechanism to the directors and employees to report concerns about unethical behavioractual or suspected fraud. The Policy provides for adequate safeguards againstvictimization of employees who avail of the mechanism and also provides for direct accessto the Chairman of the Audit Committee to report the concerns. During the year underreview your company has not received any complaints under the said mechanism. This policyhas been posted on the website of the company- www.sharpindialimited.com
31. FAMILIARIAZATION PROGRAM OF INDEPENDENT DIRECTORS:
Familiarization programs are conducted for the independent directors of the company tomake them familiar with the companies policies operations business models etc. and thedetails about the same are available on the website of theCompany-www.sharpindialimited.com
32. POLICY UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
Company has zero tolerance for sexual harassment at the workplace and in terms of theprovisions of the Sexual Harassment of Woman at Workplace (Prevention Prohibition andRedressal) Act 2013 the Company has formulated a policy to prevent sexual harassment ofwomen at the workplace. The policy aims to provide protection to the women employees atthe workplace and prevent and redress the complaints of sexual harassment at theworkplace. During the year under review your company has not received any complaints ofsexual harassment of women at the workplace and there were no cases filed pursuant to theSexual Harassment of Woman at Workplace (Prevention Prohibition and Redressal) Act 2013.
33. ACKNOWLEDGEMENTS :
Your Directors express their gratitude for the valued and timely support and guidancereceived from Sharp Corporation Japan and also wish to place on record their appreciationfor the cooperation extended by the Bankers Financial Institutions and its valuedinvestors. The Board also acknowledges the untiring efforts and contribution made by thecompany's employees.
For and on behalf of the Board of Directors
|Date: 8th August 2016 ||Tomio Isogai ||Kazunori Ajikawa |
|Place : Pune ||Managing Director ||Director |
| ||DIN : 03426524 ||DIN : 01637592 |