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Star Delta Transformers Ltd.

BSE: 539255 Sector: Engineering
NSE: N.A. ISIN Code: INE541K01014
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OPEN 176.20
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VOLUME 80
52-Week high 204.95
52-Week low 81.10
P/E 16.32
Mkt Cap.(Rs cr) 53
Buy Price 175.00
Buy Qty 288.00
Sell Price 187.45
Sell Qty 30.00
OPEN 176.20
CLOSE 183.05
VOLUME 80
52-Week high 204.95
52-Week low 81.10
P/E 16.32
Mkt Cap.(Rs cr) 53
Buy Price 175.00
Buy Qty 288.00
Sell Price 187.45
Sell Qty 30.00

Star Delta Transformers Ltd. (STARDELTATRANS) - Director Report

Company director report

To

THE MEMBERS

STAR DELTATRANSFORMERS LIMITED BHOPAL

Your Directors have pleasure in presenting the 40th Annual Report of your Company forthe financial year ended 31st March 2016.

1. FINANCIAL HIGHLIGHTS AND OPERATION:

(Rupees inThousands)
2015-2016 2014-2015
Sales and other income 787916 534245
Profit before depreciation 55998 31082
Depreciation 7834 8898
Profit before tax 48164 22184
Provision for tax 15800 5413
Deffered tax provision written off 1200
Income tax earlier year (481) (14)
Net Profit after tax 31645 16771
Profit brought forward from previous year 6685 1707
Transfer to general reserve 5000 10000
Balance carried 33330 6685

2. STATE OF COMPANY'S AFFAIRS & FUTURE OUTLOOK:

The Company's revenue has been increased from Rs.534244817 to Rs 787915576. i.e. 47.48%and Company's profit before tax has increased from Rs 22183331 to Rs 48164389 i.e.117.11%.

Company is expected to have good demand for Distribution and PowerTransformers andpower related equipments because massive investments are planned in coming years by theGovt. (Central & States) as well as private sector.

3. DIVIDEND:

The Board of Directors has not recommended any dividend for the financial year 2015-16.

4. AMOUNTSTRANSFERREDTO RESERVES:

The Company has transferred Rs 50 Lakh to its General reserve.

5. DETAILS OF SUBSIDIARY/JOINTVENTURES/ASSOCIATE COMPANIES

As on March 31 2016 the Company does not have any Subsidiary/Joint Venture/AssociateCompanies.

6. CHANGE INTHE NATURE OF BUSINESS:

There is no change in the nature of the business of the company during the year.

7. MATERIAL CHANGES AND COMMITMENTS:

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report

8. EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as required under section 92(3) of the Companies Act 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is annexed herewith for your kind perusal and information. (Annexure: I)

9. LOANS GUARANTEES AND INVESTMENTS

The company has not given any loan to any person or other body corporate or given anyguarantee or provided security in connection with a loan to any other body corporate orperson or acquired by way of subscription purchase or otherwise the securities of anyother body corporate during the financial year under review.

10. RELATED PARTYTRANSACTIONS

The Related party contracts / arrangements / transactions entered into by the Companydo not fall under the ambit of Section 188(1) of the Companies Act 2013 and all relatedparty transaction during the financial year were at arm's length and in ordinary course ofbusiness. In compliance with the provisions of the Act and Regulation 23(2) of theSecurities and Exchange Board Of India (Listing Obligations And Disclosure Requirements)Regulations 2015 Company has obtained omnibus approval from the Audit Committee andtransactions were reported to the Audit Committee / Board at their quarterly meeting.

During the Fiscal 2016 there have been no materially significant related partytransactions that is exceeding ten percent of the annual consolidated turnover as per thelast audited financial statements between the Company and Directors managementsubsidiaries or relatives as defined under Section 188 of the Act and Regulation 23 theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.

There are no transactions that are required to be reported in Form AOC-2 and as suchdoes not form part of the Report.

The Company has formulated the policy on materiality of Related party transactions asper Securities and Exchange Board Of India (Listing Obligations And DisclosureRequirements) Regulations 2015The same has been available on the company's websitehttp://www.stardeltatransformers.com/index.php

Suitable disclosures have been made in the financial statements as prescribed inaccounting standards.

11. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

Conservation of Energy:

Company continues its efforts to reduce and optimize the energy consumption at allmanufacturing facilities including corporate office through continuous monitoring andhigh degree of awareness for energy conservation. Company also has its own solar powerplant.

A. POWER & FUEL CONSUMPTION 2015-16 2014-15
I ELECTRICITY
Purchased Units 364993 346676
Total Amount (Rs.) 3425925 3027451
Rate per Unit (Rs.) 9.39 8.73
Own Generation
Diesel Generator Units 1170 719
Units per Ltr. Of Diesel 35 34.00
Average Cost per unit (Rs) 35 34.00
II COAL - -
Quantity (MT) - -
Total Cost (Rs) - -
Average Rate (Rs) - -

B . CONSUMPTION PER UNIT OF PRODUCTION

STANDARD 2015-16 2014-15
(IF ANY)
Products (with Details) Transformers 1434.154 789.652 MVA
Units KVAH - 364993 346676
Electricity/ MVA - 254.50 439.02
Coal - - -

Technology Absorption:

The Company continues to use the latest technologies for improving the productivity andquality of its services and products. The Company's has not imported technology durningthe last three years and No Research work has been carried out and therefore there is noexpenditure on this account.

Foreign Exchange earnings and outgo:

Foreign Exchange Earnings: NIL

Foreign Exchange Outgo: 51605831

12. RISK MANAGEMENT

Risk management policy and processes enable the Company to proactively manageuncertainty and changes in the internal and external environment to limit negative impactsand capitalize on opportunities. Risk Management is a central part of firm's strategicmanagement. Risk Management is a continuous process. There are four fundamentalapproaches:

• Identity

• Asses & Evaluate

• Take action

• Review & report

Identified risk elements

• State/local regulations

• Labour concerns

• General economic conditions

• Commodity/ Raw material prices

• Competition

• Demand for products

• Technology innovation

• Legal/ Secretraial

• Natural disasters

Company through its functional heads reviews from time to time the deviation from thebenchmarks and promptly make report to the Board which in turn takes the correctiveaction to avoid severe conditions. The framework seeks to create transparency minimizeadverse impacts on the business objectives and enhance the Company's competitiveadvantage.

13. DIRECTORS AND KMP:

Durning the Financial year 2015-16 the following changes have occurred in theconstitution of Directors/KMP of the Company:

• Miss Shweta Agarwal was appointed as the Company Secretary and Complianceofficer of the company in the Board meeting held on 22nd April 2015 and was designated asKey managerial personnel.

• Pursuant to provisions of section 152 and Articles of Association of theCompany Mr. Kishore Gupta [DIN: 00014205] Managing Director will retire by rotation atthe Annual General Meeting and being eligible has offered himself for re-appointment.

14. DEPOSITS

The company has not accepted any deposits during the year 2015-16.

15. INDEPENDENT DIRECTORS & DECLARATION

Company's Board of Director comprises of following three Independent Directors:

Name Date of Original appointment Date of Re-appointment
Mr. Laxmendra Maheshwari (DIN:00278005) 25/06/2009 27/03/2015
Mr. Shahshendra Lahri (DIN:02704101) 25/06/2009 27/03/2015
Mrs. Chhavi Kharb (DIN: 01791358) 27/03/2015

All the Independent Directors have confirmed that they meet the criteria as mentionedunder Regulation 16(1)(b) of the SEBI Listing Regulations read with Section 149(6) of theAct.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the Act and theListing Regulations.

The Company issues a formal letter of appointment to independent directors in themanner as provided in the Companies Act 2013. As per regulation 46(2) of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the terms and conditions of appointment of independent directors are placed on theCompany's website (http://www.stardeltatransformers.com/star_delta_investor1.php)

A separate meeting of Independent Directors was conducted as per Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 on 13th August 2015. All the independent directors were present for the meeting.

16. ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act 2013 Schedule IV & Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the company has evaluated the performance of every Director Independent DirectorsBoard and its Committees and Chairperson based on the criteria laid down by the Nominationand Remuneration Committee. Rating sheets were circulated to the directors for the purposeof evaluation. A summary of performance evaluation of the Board its Committees andindividual directors was prepared on the basis of rating sheets received from theindividual directors and the same was placed before the Board.

17. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Internal financial controls with reference to the financial statements were adequateand operating effectively.

18. CORPORATE SOCIAL RESPONSIBILITY

Detailed information report on corporate social responsibility policy developed andimplemented by the Company on CSR initiatives taken during the year pursuant to section135 of the Companies Act 2013 is given in the annexed Annual Report on CSR activities.(Annexure: II)

During the year the Company's spend on the CSR activities has been less than thelimits prescribed under Companies Act 2013. However our CSR committee is constantlyworking to channelize the funds in line with CSR objectives. Company is in the process ofevaluating and identifying the programmes and is in dialogue with various organisationsfor implementing the CSR activities In future the Company will endeavour to spend on CSRactivities in accordance with the prescribed limits.

19. ANTI SEXUAL HARASSMENT POLICY

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment ofWomen at theWorkplace (Prevention Prohibition and Redressal)Act 2013. All women employees (permanent contractual temporary trainees) are coveredunder this policy. During the year 2015-16 no complaints were received by the committee.

20. VIGIL MECHANISM

As per Section 177(9) and (10) of the Companies Act 2013 and Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 thecompany has established Vigil Mechanism for directors and employees to report genuineconcerns and made provisions for direct access to the chairperson of the Audit Committee.Company has formulated the present policy for establishing the vigil mechanism/WhistleBlower Policy to safeguard the interest of its stakeholders Directors and employees tofreely communicate and address to the Company their genuine concerns in relation to anyillegal or unethical practice being carried out in the Company. The same has been postedon the website of the Company. No personnel of the Company was denied access to the AuditCommittee.

21. NUMBER OF MEETINGS OFTHE BOARD

There were nine meetings of the Board held during the year details of which are asfollows:

S.No. Date Board Strength No. of Directors Present
1 22.04.2015 5 5
2 30.05.2015 5 5
3 24.06.2015 5 3
4 11.07.2015 5 3
5 13.08.2015 5 5
6 09.11.2015 5 5
7 25.12.2015 5 4
8 23.01.2016 5 3
9 01.03.2016 5 3

22. COMMITTEES OFTHE BOARD

The Company's Board has the following Committees:

1. Audit Committee

Pursuant to the provisions of Section 177 of the Companies Act 2013 and rules madethere and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Committee consists of the following members:

Name of Member Category Status
Mrs. Chhavi Kharab (DIN:01791358) Non-Executive Independent Director Chairperson
Mr. Laxmendra Maheshwari (DIN:00278005) Non-Executive Independent Director Member
Mr. Rakesh Gupta (DIN:00014139) Executive Director Member

2. Nomination and Remuneration Committee

Pursuant to the provisions of Section 178 of the Companies Act 2013 and rules madethere and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Committee consists of the following members:

Name of Member Category Status
Mr. Laxmendra Maheshwari (DIN:00278005) Non-Executive Independent Director Chairperson
Mr. Shashendra Lahri (DIN:02704101) Non-Executive Independent Director Member
Mrs. Chhavi Kharab (DIN:01791358) Non-Executive Independent Director Member
Mr. Kishore Gupta (DIN:00014205) Executive Director Member

3. Stakeholders Relationship Committee

Pursuant to the provisions of Section 178 of the Companies Act 2013 and rules madethere and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Committee consists of the following members:

Name of Member Category Status
Mr. Laxmendra Maheshwari (DIN:00278005) Non-Executive Independent Director Chairperson
Mrs. Chhavi Kharab (DIN:01791358) Non-Executive Independent Director Member
Mr. Rakesh Gupta (DIN:00014139) Executive Director Member

4. Corporate Social Responsibility Committee

Pursuant to the provisions of Section 135 of the Companies Act 2013 and rules madethere under Corporate Social Responsibility Committee consists of the following members:

Name of Member Category Status
Mr. Kishore Gupta (DIN:00014205) Executive Director Chairperson
Mr. Rakesh Gupta (DIN:00014139) Executive Director Member
Mr. Laxmendra Maheshwari (DIN:00278005) Non-Executive Independent Director Member

The detailed description of the above Committees of the board is provided in theCorporate Governance section of the annual report.

23. TRAININGTO INDEPENDENT DIRECTORS:

With a view to familiarize the independent directors with the Company's operations asrequired under regulation 25(7) of the SEBI Listing Regulations 2015 the Company conductvarious familiarization programmes for the independent directors as and when required.

The details of such familiarisation programmes are placed on the Company's websitewww.stardeltatransformers.com

24. PARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Name Designation Ratio to median remuneration
Kishore Gupta Managing Director 13.22
Rakesh Gupta Whole time director 09.69

Notes:

Number of employees as on 31.03.2016

Median remuneration of employees other than directors

b. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year:

There was 10% increase in the remuneration of Mr Rakesh Gupta (DIN: 00014139) wholetime director & chief financial officer in the financial year 2015-16.

c. The percentage increase in the median remuneration of employees in the financialyear:

2015-16 2014-15 Percentage increase in median remuneration in 2015-16
Median Remuneration of employees other than whole time directors 108900 88200 23.46%

d. The number of permanent employees on the rolls of Company:

Total permanent employees as on 31.03.2016 are Fifty two excluding Directors e. Averagepercentile increase already made in the salaries of employees other than the managerialpersonnel in the last financial year and its comparison with the percentile increase inthe managerial remuneration and justification thereof and point out if there are anyexceptional circumstances for increase in the managerial remuneration:

On an average individual employees remuneration increased by 8%-10% from Financial year2014-15 to Financial year 2015-16 There was 10% increase in the remuneration of Mr RakeshGupta (DIN: 00014139) whole time director & chief financial officer in the financialyear 2015-16.

The increase in remuneration is in line with the market trends cost of living and toensure the retention of skilled staff and compliance of Minimum wages Act.

There are no exceptional circumstances for increase in the managerial remuneration

f. The key parameters for any variable component of remuneration availed by thedirectors:

None

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

The Company affirms that the remuneration is as per the remuneration policy of theCompany.

Statement showing employees who are covered under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014

Name Designation Remunerati on (per month) Nature of employment whether cont- ractual or other- wise Qalifications and experience of the employee Date of comme- ncement of employment Age The last employment held by such employee before joining the Company The percentage fo equity shares held by the employee in the Company Whether any such employee is a rela- tive of any director or manager of the Company and if so name of such Dire- ctor or manager
Anil Ranjan Das Vice President 113000 Permanent B.E. 01.12.2008 57 Self-employed Nil No
Mayank Gupta Vice President 66000 Permanent B.E. MBA 22.06.2011 30 Self-employed 14.27 Yes (son of Mr. Kishore Gupta Managing director)
Rohit Shrivastava Sales Executive 27510 Permanent B. Tech 01.10.2001 44 Self-employed Nil No
A.K. Daga Accountant 22000 Permanent M. Com 16.08.1991 56 Self-employed 0.01 No
R.K. Dixit Manager 22000 Permanent Graduate 17.00.2015 Self-employed Nil No
Miss Shweta Agarwal Company Secretary & Compliance officer 20000 Permanent Company Secretary 22.04.2015 26 Self-employed Nil No
Tahir Hussain Supervisor 18280 Permanent Graduate 01.11.2009 56 Self-employed 0.03 No
Raj Babu Sharma Supervisor 15800 Permanent B.E. 01.12.2012 35 Self-employed Nil No
Pradeep Kumar Supervisor 15600 Permanent B.E. 15.11.2013 40 Self-employed Nil No
Ravi Karan Supervisor 15600 Permanent B.E. 15.11.2013 30 Self-employed Nil No

25. REMUNERATION POLICY:

The remuneration policy as recommended by the Nomination and Remuneration Committee andapproved by Board in Board meeting is presented in the Corporate Governance report formingpart of the Annual report.

26. SHARES IN SUSPENSE ACCOUNT:

There are no shares in suspense account

27. SHARES IN UNCLAIMED SUSPENSE ACCOUNT:

There are no shares in unclaimed suspense account

28. CODE OF CONDUCT:

Regulation 17(5) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 requires listed companies to lay down a Code ofConduct for its directors and senior management incorporating duties of directors as laiddown in the Companies Act 2013. As required the said code has been posted on the websiteof the Company (http://www.stardeltatransformers.com/index.php.) All the Board members andSenior Management personnel have affirmed compliance with the code for the year ended 31March 2016. A declaration to this effect signed by the Managing Director forms part of theCorporate Governance report.

29. MEMORUNDUM AND ARTICLES OF ASSOCIATION

The Company has sought the consent of the members in ensuing Annual General meeting toamend the Articles of Association of the Company.

30. REGISTRAR &TRANSFER AGENT OFTHE COMPANY

The RTA division of System Support Services will be merging with Link Intime witheffect from 1st October 2016. The Board of Directors of your Company at their meetingheld on 13th August 2016 approved the appointment of Link Intime India Pvt Ltd (LI) asthe Registrar & Transfer Agent with effect from 1st October 2016.

31. CORPORATE GOVERNANCE

A separate report on the Corporate Governance is attached as a part of the annualreport. The Auditors Certificate regarding Compliance of the conditions of CorporateGovernance is also annexed hereto as Annexure III which forms part of this report.

32. MANAGEMENT DISCUSSION & ANALYSIS

A separate report on the Management Discussion & Analysis is attached as a part ofthe annual report.

33. AUDITORS and REPORT thereon

Statutory Audit

The Auditors M/s. A.K. Khabya & Co Chartered Accountants (FR No. 001994C) retireat the ensuing Annual General Meeting and being eligible offer themselves forreappointment from the conclusion of this Annual General Meeting till the conclusion ofnext Annual General Meeting .

There are no qualifications or adverse remarks in the Auditors' Report which requireany clarification/ explanation. The Notes on financial statements are self-explanatoryand needs no further explanation.

Secretarial Audit

Pursuant to the provisions of section 204 of the Companies Act 2013 and Rules madethere under the Company has appointed ASA & Associates Company Secretaries inPractice to undertake the secretarial audit of the Company. Secretarial Audit Report forthe year 2015-16 in the prescribed form MR-3 is annexed to this Report (ANNEXURE- IV).

2015-2016

Pursuant to the provisions of section 204(3) and 134(3) of the Companies Act 2013 andRules made there under the Board of directors of Star DeltaTransformers Limited providethe following clarification in respect to the observations raised by the Secretarialauditor in Secretarial audit report:

Company is in compliance with all the provisions of various acts applicable to theCompany. However due to inevitable reasons some points were missed. Company has takennote of the same and will ensure compliance in the future.

Cost Audit

Pursuant to section 148 of the Companies Act 2013 and the Rules made there under theBoard of Directors had on the recommendation of the Audit Committee appointed of M/s.Sanjay Kasliwal Cost Accountants to audit the cost accounts of the Company for thefinancial year 2016-17 on a remuneration of Rs. 25000/-(RupeesTwenty five thousand) plusout of pocket expenses on the recommendation of Audit Committee subject to ratificationby the shareholders at the annual general meeting. Accordingly a resolution seekingmembers' ratification for the remuneration payable to the cost auditor is included in theNotice convening the annual general meeting.

34. GENERAL DISCLOSURES:

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:

1. Issue of Bonus Shares and/or Right Shares.

2. Issue of equity shares with differential rights as to dividend voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

4. Buy Back of Shares.

5. Significant or material orders passed by the Regulators or Courts orTribunals whichimpact the going concern status and Company's operations in future.

6. During the FinancialYear 2015-16 no change has been occurred in the share capitalof the Company. (General disclosure)

35. DETAILS OF FRAUDS REPORTABLE U/S 143(12):

There is no fraud being or has been committed against the company by officers oremployees of the company which are reportable by the Auditors to the Central Governmentunder sub-section (12) of Section 143 and which need to be disclosed in the Board reportduring the year under review.

36. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-

(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 provisionsof all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation to the continuedco-operation received from the Banks Government Authorities CustomersVendors andShareholders during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the committed service of the Executives staff andWorkers of the Company.

On behalf of Board of Directors
Place : Bhopal Sd/- Sd/-
Date : 13th August 2016 (KISHORE GUPTA) (RAKESH GUPTA)
(DIN : 00014205) (DIN : 00014139)
MANAGING DIRECTOR DIRECTOR