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Transformers & Rectifiers India Ltd.

BSE: 532928 Sector: Engineering
NSE: TRIL ISIN Code: INE763I01026
BSE LIVE 14:23 | 15 Dec 36.25 0.90
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NSE 14:07 | 15 Dec 36.20 0.70
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OPEN 35.65
PREVIOUS CLOSE 35.35
VOLUME 65432
52-Week high 47.59
52-Week low 29.11
P/E 43.15
Mkt Cap.(Rs cr) 481
Buy Price 36.10
Buy Qty 1802.00
Sell Price 36.25
Sell Qty 3288.00
OPEN 35.65
CLOSE 35.35
VOLUME 65432
52-Week high 47.59
52-Week low 29.11
P/E 43.15
Mkt Cap.(Rs cr) 481
Buy Price 36.10
Buy Qty 1802.00
Sell Price 36.25
Sell Qty 3288.00

Transformers & Rectifiers India Ltd. (TRIL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 23rd Annual Report on thebusiness and operations together with the Audited accounts for the financial year ended 31stMarch 2017. The performance of the Company for the financial year ended on 31stMarch 2017 is summarised below.

Financial Highlight

(Rs. in Lacs)

Particulars

Standalone

2016-17 2015-16
Net Revenue from Operation 80224.26 57637.48
Other Income 667.73 503.51
Total Revenue 80891.99 58140.99
Cost of Raw Material Consumed 61971.27 48339.53
(Increase)/ Decrease in Inventories of
Finished Goods & work in progress (72.43) (1953.83)
Employee Benefit Expense 2656.47 2279.21
Finance Costs 3628.21 3280.99
Depreciation and Amortization 1344.68 1348.14
Other Expenses 8035.62 6100.84
Total Expenses 77563.82 59394.88
Profit/(Loss) before exceptional items & tax 3328.17 (1253.89)
Exceptional Item 1254.82 -
Profit/(Loss) before tax 2073.35 (1253.89)
Tax Expense 770.07 (400.35)
Net Profit/(Loss) after Tax 1303.28 (853.54)

Dividend

Your Directors do not recommend any dividend on Share Capital (Previous year - Nil).

Review of Operations

For the financial year ended 31st March 2017 your Company has reportedstandalone total revenue of Rs.80891.99 Lacs and net Profit of Rs.1303.28 Lacs ascompared to previous year's total revenue of Rs.58140.99 Lacs and net loss of Rs.853.54Lacs.

Share Capital

The Paid up Equity Share Capital as at 31st March 2017 stood at Rs.1325.64lacs. During the financial year under review the Company has not issued any ShareCapital.

MVA Production

During the financial year 2016-17 Your Company has manufactured 23617 MVA out ofwhich Changodar unit produced 12156 MVA Moraiya unit produced 10691 MVA & Odhavunit produced 770 MVA against the last year's total production of 15973 MVA.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company pursuant to Regulation 33 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and prepared inaccordance with the Accounting Standards prescribed by the Institute of CharteredAccountants of India are attached herewith this Annual Report.

Order Book

As on 30th June 2017 the Company has Order Book position of Rs.93291Lacs. The table below indicates the division of our order book between our businesssegments:

Type of Transformers Order Book %
Power transformer 72492 78
Reactor Transformer 7953 9
Distribution Transformer 6686 7
Furnace/Rectifier transformer 2146 2
Export 4014 4
Total 93291 100

Exports

During the financial year the Company has achieved export sales of Rs.3571.28 Lacs.

Fixed Deposit

The Company has neither accepted nor invited any deposit from public falling withinthe ambit of Section 73 of the Companies Act 2013 and The Companies (Acceptance ofDeposits) Rules 2014.

Particulars of Loans Guarantees and Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statement.

Achievements

33 kV 132 MVA Furnace Transformer

During the financial year your Company has successfully manufactured and tested 132MVA 33 kV Furnace transformer for South American client.

66kV Green Transformers

During the financial year your Company has received a single order to supply 80 Nos.of 66 kV Ester filled "Green Transformers". Incidentally these transformers areprovided with dry cable terminations on low voltage side adding feather towards firesafety. 12 Numbers of 33 kV ester filled transformers are already successfully suppliedand commissioned in various sub stations of a power distribution company in Ahmedabadduring current fiscal year.

800kV shunt reactors

During the financial year your Company has received an order to supply 13 Nos. of 800kV shunt reactors from POWERGRID.

Subsidiary Companies

As on 31st March 2017 your Company has Four (4) Subsidiaries namelyTranspares Limited (51% holding) Transweld Mechanical Engineering Works Limited (WhollyOwned Subsidiary) TARIL Infrastructure Limited (Wholly Owned Subsidiary) and SavasEngineering Company Private Limited (Wholly Owned Subsidiary) and Further there has beenno material change in the nature of business of the subsidiaries.

Shareholders interested in obtaining a copy of the audited annual accounts of theSubsidiary Companies may write to the Company Secretary.

In terms of proviso to sub-section (3) of Section 129 of the Companies Act 2013 thesalient features of the financial statement of the subsidiaries is set out in theprescribed form AOC-1 which forms part of this Board of Director's Report as Annexure- 1.

The Performance of Subsidiary Companies are as under Transpares Limited

Transpares Limited ("Transpares") is the Subsidiary of the Company. For thefinancial year ended archived net sales of Rs.2285.84 lacs against Rs.1740.27 lacsduring the previous financial year 2015-16. Total Profit before tax for the financial year2016-17 is Rs.202.62 Lacs as against the total profit before tax of Rs.182.09 lacs for theprevious financial year 2015-16.

Profit after Tax (PAT) was Rs.155.70 lacs during the financial year as againstRs.116.91 lacs for the previous financial year 2015-16.

Transweld Mechanical Engineering Works Limited

Trans weld Mechanical Engineering Works Limited

("Transweld") is the wholly owned subsidiary of the Company. For thefinancial year ended Transweld archived net sales of Rs.2092.55 lacs against Rs.1411.35lacs during the previous financial year 2015-16. Total profit before tax for the financialyear 2016-17 is Rs.133.94 lacs as against the total profit before tax of Rs.7.08 lacs forthe previous financial year 2015-16.

Profit after Tax (PAT) was Rs.94.67 lacs during the financial year as against Rs.0.71lacs for the previous financial year 2015-16.

TARIL Infrastructure Limited

TARIL Infrastructure Limited ("TARIL") is the wholly owned subsidiary of theCompany. For the financial year ended TARIL archived net sales of Rs.558.86 lacs againstRs.708.13 lacs during the previous financial year 2015-16. Total profit before tax for thefinancial year 2016-17 is Rs.30.86 lacs as against the total profit before tax of Rs.22.72lacs for the previous financial year 2015-16.

Profit after Tax (PAT) was Rs.21.82 lacs during the financial year as against Rs.15.48lacs for the previous financial year 2015-16.

Savas Engineering Company Private Limited

Savas Engineering Company Private Limited ("Savas") is the wholly ownedsubsidiary of the Company. For the financial year ended Savas archived net sales ofRs.1596.90 lacs against Rs.1996.78 lacs during the previous financial year 2015-16.Total profit before tax for the financial year 2016-17 is Rs.16.72 lacs as against thetotal Profit before tax of Rs.34.16 for the previous financial year 2015-16.

Profit after Tax (PAT) was Rs.7.86 lacs during the financial year as against profit ofRs.38.92 lacs for the previous financial year 2015-16.

Directors

The Board of Directors of your Company comprises of Eight (8) Directors of which Four(4) are Executive Directors and Four (4) are Non-Executive and Independent Directors as on31st March 2017.

In terms of the provision of Section 149 of the Companies Act 2013 and Regulation17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aCompany shall have atleast one Woman Director on the Board of the Company. Your Companyhas Mrs. Karuna Mamtora as Director on the Board of the Company since its inception whois presently the Executive Director of your Company.

As per the provisions of Section 152 of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Satyen Mamtora being longest in the office shall retire atthe ensuing Annual General Meeting and being eligible for re-appointment offers himselffor re-appointment.

The Board of Directors of your Company at their meeting held on 5th May2017 has approved the re-appointment of Mrs. Karuna Mamtora as Executive Director of theCompany w.e.f. 1st April 2017 for further period of Three (3) year subject toapproval of shareholders. Accordingly the approval of shareholders is being sought forhis re-appointment as a Executive Director of the Company for the period of 3 years.

The Board of Directors of your Company at their meeting held on 5th May2017 has approved the change in designation of Mr. Vinod Masson from Executive Director toNon-Executive Director of the Company with effect from 1st April 2017. there-appointment of Mr. Vinod Masson as Executive Director of the Company w.e.f 1stJuly 2017 for further period of One (1) year subject to approval of shareholders.Accordingly the approval of shareholders is being sought for his re-appointment as aNon-Executive Director of the Company for the period of One year.

Details of Director seeking re-appointment as required under the Listing Regulationsare provided in the Notice forming part of this Annual Report. Their re-appointments areappropriate and in the best interest of the Company.

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 Regulation25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Theterms and conditions of the Independent Directors are incorporated on the website of theCompany www.transformerindia.com

To familiarize the Independent Directors with the strategy operations and functions ofour Company the Executive Directors/Senior Managerial Personnel make presentations to theIndependent Directors about the Company's strategy business model operations serviceand product offerings markets organization structure finance human resourcestechnology quality facilities and risk management. Further the Company has devised aFamiliarization Programme for Independent Director and same been placed on the web site ofthe Company at the Link: http://www.transformerindia.com/download/Details%20of%20Familiarization%20 Programme-2016-17.pdf

None of the Directors of the Company is disqualified for being appointed as Director asspecified in Section 164 (2) of the Companies Act 2013.

Appointments and Resignations of the Key Managerial Personnel

Mr. Jitendra Mamtora Chairman and Whole-time Director Mr. Satyen Mamtora ManagingDirector Mr. Devendra Kumar Gupta Chief Financial Officer and Mr. Rakesh Kiri CompanySecretary of the Company are the Key Managerial Personnel as per the provisions of theCompanies Act 2013

During the financial year under review Mr. Devendra Kumar Gupta appointed as ChiefFinancial Officer of the Company as on 3rd February 2017 due to resignation ofMr. Samkit Mehta from post of Chief financial officer as on 1st October 2016.

Number of the Meetings ofthe Board ofDirectors

Regular Board Meetings are held once in a quarter inter-alia to review the quarterlyresults of the Company.

During the financial year 2016-17 the Board of Directors met Four (4) times i.e. 26thMay 2016 25th July 2016 10th November 2016 and 3rdFebruary 2017. Detailed information on the Board Meetings is included in the CorporateGovernance Report which forms part of this Annual Report.

The details of number of meetings of Committees held during the financial year 2016-17forms part of Corporate Governance Report.

Committees of the Board of Directors

Your Company has several Committees which have been established as part of the bestCorporate Governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes.

The Company has following Committees of the Board:

• Audit Committee

• Stakeholder's Grievances and Relationship Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Management Committee

• Transfer Committee

The details with respect to the compositions powers terms of reference and otherinformation of relevant committees are given in details in the Corporate Governance Reportwhich forms part of this Annual Report.

Corporate Social Responsibility Committee

In Compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has establishedCorporate Social Responsibility (CSR) Committee and statutory disclosures with respect toCSR Committee and an Annual Report on CSR Activities forms part of this Board ofDirector's Report as Annexure - 2.

Board Diversity

Your Company has over the years been fortunate to have eminent persons from diversefields as Directors on its Board. The Nomination and Remuneration Committee has formalizeda policy on Board Diversity to ensure diversity of experience knowledge perspectivebackground gender age and culture.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 and Regulation25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 astructured questionnaire was prepared after taking into consideration of the variousaspects of the Board's functioning Composition of the Board and Committees cultureexecution and performance of specific duties obligation and governance. The performanceevaluation of the Independent Directors was completed.

During the financial year under review the Independent Directors met on 3rdFebruary 2017 interalia to discuss:

• Performance evaluation of Non Independent Directors and Board of Directors as awhole;

• Performance evaluation of the Chairman of the Company;

• Evaluation of the quality of flow of information between the Management andBoard for effective performance by the Board.

The Board of Directors expressed their satisfaction with the evaluation process.

Policy on Director's Appointment and Remuneration

The Company has a Nomination and Remuneration Committee. The Committee reviews andrecommend to the Board of Directors about remuneration for Directors and Key

Managerial Personnel and other employee up to one level below of Key ManagerialPersonnel. The Company does not pay any remuneration to the Non-Executive Directors of theCompany other than sitting fee for attending the Meetings of the Board of Directors andCommittees of the Board. Remuneration to Executive Directors is governed under therelevant provisions of the Act and approvals.

The Company has devised the Nomination and Remuneration Policy for the appointmentre-appointment and remuneration of Directors Key Managerial Personnel and SeniorManagement Personnel. All the appointment re-appointment and remuneration of DirectorsKey Managerial Personnel and Senior Management Personnel are as per the Nomination andRemuneration Policy of the company.

Vigil Mechanism

The Company has established a vigil mechanism and accordingly framed a Whistle BlowerPolicy. The policy enables the employees to report to the management instances ofunethical behavior actual or suspected fraud or violation of Company's Code of Conduct.Further the mechanism adopted by the Company encourages the Whistle Blower to reportgenuine concerns or grievances and provide for adequate safe guards against victimizationof Whistle Blower who avails of such mechanism and also provides for direct access to theChairman of the Audit Committee in exceptional cases. The functioning of vigil mechanismis reviewed by the Audit Committee from time to time. None of the Whistle blowers has beendenied access to the Audit Committee of the Board. The Whistle Blower Policy of theCompany is available on the website of the Company www.tfansfofmefindia.com.

Risk Management Policy

The Company is aware of the risks associated with the business. It regularly analysesand takes corrective actions for managing/ mitigating the same.

The Company has framed a formal Risk Management Framework for risk assessment and riskminimization which is periodically reviewed to ensure smooth operation and effectivemanagement control. The Audit Committee also reviews the adequacy of the risk managementframework of the Company the key risks associated with the business and measure and stepsin place to minimize the same.

Sexual Harassment of Women at Workplace

There were no incidences of sexual harassment reported during the year under review interms of the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

Directors' Responsibility Statements

As stipulated in Section 134(3)(c) read with sub section 5 of the Companies Act 2013Directors subscribe to the "Directors' Responsibility Statement" and confirmthat:

a) In preparation of annual accounts for the year ended 31st March 2016the applicable accounting standards have been followed and that no material departureshave been made from the same;

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 or loss of the Company for that year;

c) The Directors had 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 had prepared the annual accounts for the year ended 31stMarch 2016 on going concern basis.

e) The Directors had laid down the internal financial controls to be followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively; and

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.

Insurance

Assets of your Company are adequately insured against various perils.

Corporate Governance

The Company endeavours to maximize the wealth of the Shareholders by managing theaffairs of the Company with pre-eminent level of accountability transparency andintegrity.

A separate section on Corporate Governance standards followed by your Company asstipulated under Regulation 27 and 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is enclosed as an annexure to this Report.

A Certificate from Mr. Tapan Shah Practicing Company Secretary conforming complianceto the conditions of Corporate Governance as stipulated under Regulation 27 and 34 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed tothis Report.

Joint Venture Agreements

During the financial year under review the Company entered into a Joint VentureAgreement with Jiangsu Jingke Smart Electric Company Limited (Jingke) as on 5thOctober 2016 for purpose of starting the business of manufacturing and marketing ofGIS/HGIS/TGIS systems and products for 220kV and below and distribution products of 40.5kV and below in India. The Company will hold majority of share in the Joint venture.

The Company also entered into a Joint Venture Agreement with Mr. Gopal Sanasy as on 15 thApril 2017 for the purpose of providing site services and maintenance of transformer andother oils. The Company will hold majority of share in the Joint venture.

Issue of Equity Shares by way of private placement to QIP

The Company has good opportunities for its growth and business expansion. This requiresufficient resources including funds available and to be allocated from time to time. Thegeneration of internal funds may not always be adequate to meet all the requirements ofthe Company's growth plans. It would be therefore prudent for the Company to have therequisite enabling approvals in place for meeting the fund requirements of its growth andbusiness expansion capital expenditure long term working capital refinancing theexisting borrowings and also such other corporate purposes as may be permitted under theapplicable laws and as may be specified in the appropriate approvals. This would also helpthe Company to take quick and effective action to capitalise on the opportunitiesprimarily those relating to growth and business expansion as and when available.

The Company has taken approval from the shareholders in 22nd Annual GeneralMeeting held on to the issue of Equity Shares by way of private placement to QIB up to anaggregate amount of Rs.125 Crores. However the Company has not materialized the same.Now the Board of Directors seeks shareholders's approval to the issue of Equity Shares byway of private placement to QIB up to an aggregate amount of Rs.250 Crores as per SEBIregulation considering the future need of funds and valuation of the shares of theCompany.

Subdivision

The Equity Shares of the Company are listed on the BSE Limited (BSE) and National StockExchange of India Limited (NSE). With a view to broad base the investor base byencouraging the participation of the small investors and also to increase the liquidity ofequity shares of the Company the Board of Directors have approved the subdivision of eachequity share of face value of Rs.10/- (Rupees Ten only) of the Company to face value ofRs.1/- (Rupees One only) each subject to approval of members. The Board is of the opinionthat the aforesaid subdivision of the nominal value of equity shares is in the bestinterest of the members.

Pursuant to the provisions of Section 13 and Section 61 of the Companies Act 2013approval of the members is required for subdivision of shares and consequent amendment toClause V of the Memorandum of Association.

At present the Authorised Share Capital of the Company is Rs.200000000/- (RupeesTwenty Crores only) divided into 20000000 (Two Crore) Equity Shares of Rs.10/-(RupeesTen only) each. The Issued Subscribed and Paid-up Share Capital of the Company is dividedinto 13256411 (One Crore Thirty Two Lacs Fifty Six Thousand Four Hundred Eleven) EquityShares of Rs.10/- (Rupees Ten only) each amounting to 132564110/- (Rupees ThirteenCrores Twenty Five Lakhs Sixty Four Thousand One Hundred Ten only). Due to this subdivision both authorized as well as paid-up share capital will be altered with thenominal value of share of '1/- (Rupee One only) per share.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the financial year under review asstipulated under Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is presented in the separate section forming part of thisAnnual Report.

Material Changes and Commitment Affecting Financial Position of the Company

There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of financial year as on 31st March2017 and the date of Director's Report i.e. 3rd August 2017.

Particular of Employees

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company will be provided upon request. In term of Section136 of the Companies Act 2013 the Report is being sent to all shareholders and othersentitled thereto excluding the aforesaid information and the said particulars areavailable for inspection by the Members at the Registered Office of the Company during thebusiness hours on working days of the Company. The members interested in obtaining suchparticulars may write to the Company Secretary.

The ratio of remuneration of each Director to the median employee's remuneration andother details in terms of subsection 12 of Section 197 of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are forming part of this Board of Director's Report as Annexure - 3.

Extract of Annual Return

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of Companies (Management and Administration) Rules2014 the extract of the Annual Return as on 31st March 2017 in Form MGT-9forms part of this Board of Director's Report as Annexure-4.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

Information relating to Conservation of Energy Technology Absorption and ForeignExchange Earning and Outgo required under Section 134(3)(m) of the Companies Act 2013forms part of this Board of Director's Report as Annexure - 5.

Contracts or Arrangements with Related Parties

All the related party transactions that were entered during the financial year were inthe Ordinary course of business of the Company and were on arm's length basis. There wereno materially significant related party transactions entered by the Company with itsPromoters Directors Key Managerial Personnel or other persons which may have potentialconflict with the interest of the Company.

All Related Party transactions are placed before the Audit Committee for approvalwherever applicable. Prior omnibus approval for normal business transactions is alsoobtained from the Audit Committee for the related party transactions which are ofrepetitive nature and accordingly the required disclosures are made to the Committee onquarterly basis in terms of the approval of the Committee.

The policy on Related Party Transactions as approved by the Board of Directors isuploaded on the website of the Company www.tfansfofmefindia.com

The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 as prescribed in Form AOC - 2 which forms partof this Board of Director's Report as Annexure - 6.

Internal Financial Control Systems and their Adequacy

Your Company has laid down the set of standards processes and structure which enablesto implement internal financial control across the Organization and ensure that the sameare adequate and operating effectively. To maintain the objectivity and independence ofInternal Audit the Internal Auditor reports to the Chairman of the Audit Committee of theBoard.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with the operating systems accountingprocedures and policies of the Company. Based on the report of Internal Auditor theprocess owners undertake the corrective action in their respective areas and therebystrengthen the Control. Significant audit observation and corrective actions thereon arepresented to the Audit Committee of the Board.

AUDITORS

Statutory Auditors

The Statutory Auditors Deloitte Haskins & Sells (Firm Registration No. 117365W)Chartered Accountants were appointed as Statutory Auditor of the Company from 20th AnnualGeneral Meeting until the conclusion of 23rd Annual General Meeting and perprovision of section 139 of the Companies Act 2013 they are not eligible to re-appointas statutory auditor of the Company.

K.C. Mehta & Co. (Firm Registration No. 106237W) Chartered Accountants haveexpressed their willingness to be appointed as the statutory auditors of the Company. TheAudit Committee has considered the qualifications and experience of the proposed statutoryauditors and has recommended their appointment. The Board of Directors has also consideredand recommends appointment of K.C. Mehta & Co. Chartered Accountants as statutoryauditors in place of the retiring Auditor Deloitte Haskins & Sells subject to approvalof shareholder of the company in ensuing Annual General Meeting of the Company. Writtenconsent of the proposed auditors together with a certificate that the appointment ifmade shall be in accordance with the conditions specified in Rule 4 of the Companies(Audit and Auditors) Rules 2014 has been received.

Internal Auditor

Manubhai and Shah LLP Chartered Accountants Ahmedabad has been appointed as InternalAuditors of the Company. Internal Auditors are appointed by the Board of Directors of theCompany on a yearly basis based on the recommendation of the Audit Committee. TheInternal Auditor reports their findings on the Internal Audit of the Company to the AuditCommittee on a quarterly basis. The scope of internal audit is approved by the AuditCommittee.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hadappointed Mr. Tapan Shah Practicing Company Secretary to undertake the Secretarial Auditof the Company for the financial year 2016-17. The Report of the Secretarial Audit Reportfor the financial year 2016-17 is annexed to this Board of Director's Report as Annexure-7.

Cost Auditor

Your Company has appointed Kushal & Co. Cost Accountants Ahmedabad as CostAuditor of your Company to audit the cost accounts for the financial year 2017-18.

As per Section 148 read with Companies (Audit & Auditors) Rules 2014 and otherapplicable provisions if any of the Companies Act 2013 the Board of Directors of yourCompany has appointed Kushal & Co. Cost Accountants as the Cost Auditor of your theCompany for the financial year 2017-18 on the recommendations made by the Audit Committeesubject to the approval of the Central Government. The remuneration proposed to be paid tothe Cost Auditors subject to the ratification by the members at the ensuing AnnualGeneral Meeting would be Rs.35000/- (Rupees Thirty Five Thousands only) excluding out ofpocket expenses if any.

The Cost Audit report for the financial year 2016-17 was filed within the due date. Thedue date for submission of the Cost Audit Report for the financial year 2016-17 is within180 days from 31st March 2017.

Statutory Auditor's Report

The Statutory Auditors' Report on the accounts of the Company for the accounting yearended 31st March 2017 is self-explanatory and do not call for furtherexplanations or comments that may be treated as adequate compliance of Section 134 of theCompanies Act 2013.

General

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. Details relating to deposits covered under Chapter V of the Companies Act 2013.

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 save and ESOS.

4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

Acknowledgment

Your Directors would like to express their appreciation for the assistance andco-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theexecutives staff and workers of the Company.

By Order of the Board of Directors
Jitendra Mamtora
Place: Ahmedabad Chairman and Whole-time Director
Date: 3rd August 2017 (DIN: 00139911)

ANNEXURE - 5

Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under the

Companies (Accounts) Rules 2014

(A) Conservation of Energy :

i) The steps taken or impact on conservation of energy for 2016-17;

In a continuous endeavor to conserve and save energy several measures have beenadopted in FY 2016-17 notable amongst them are:

1. Replacement of all High Bay Light at Changodar Plant 160 Watt LED Light against 400Watt MH Light and 82 Watt LED against 250 Watt MH Light to reduce energy consumption andsave 40 % energy.

2. Modification of VPD Chiller plant Pipe line and storage tank location to reduceenergy consumption at Changodar plant.

3. Over hauling of 625 KVA DG set at Odhav plant 1375 KVA DG set at Changodar plantand 3125 KVA DG set at Moriya Plant to reduce Fuel consumption.

4. Use of high/ low pressure switch to operate fire hydrant system to save energy.

5. All Electrical equipments are shut down during the Lunch/ Dinner break leading toefficient use of energy.

ii) The steps taken by the Company for utilizing alternate sources of energy;

1. Uses of natural lights are resorted at various departments to save energy.

2. Transparent roof sheets provided in shops to use natural lights.

iii) The capital investment on energy conservation equipment;

There is no such specific investments done by the Company.

(B) Technology Absorption:

i) The effort made towards technology absorption;

• Your Company have been successfully produced and rolled 3 Nos. of 420 kV 125MVAr shunt reactors order from Telangana State Electricity Transmission Company(TSTRANSCO). Your Company successfully absorbed technology for 420 kV class shunt reactorsacquired from Fuji and First 125 MVAr shunt reactor is successfully commissioned at Gajwelsubstation of Telangana State Electricity Transmission Company (TSTRANSCO) in March 2017.

ii) The benefit derived like product improvement cost reduction product developmentor import substitution;

• Your Company has successfully manufactured and tested 132 MVA 33 kV Furnacetransformer for South American client.

• Your Company has received a single order to supply 80 Nos. of 66 kV Ester filled"Green Transformers". Incidentally these transformers are provided with drycable terminations on low voltage side adding feather towards fire safety. 12 Numbers of33 kV ester filled transformers are already successfully supplied and commissioned invarious sub stations of Torrent Power a power distribution company in Ahmedabad duringcurrent fiscal year.

• Your Company has received an order to supply 13 Nos. of 800 kV shunt reactorsfrom POWERGRID.

• Your Company's pioneering efforts to develop and supply green transformersfilled with ester liquids shall help us get similar order since more and more utilities inthe country are planning to go for such power transformers.

iii) in case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year);

Details of technology imported Year of import Status of implementation/absorption
The Company has entered into a Technology License Agreement (TLA) with Fuji Electrical Co. Ltd. ("Fuji") to use its technology and know-how; to design manufacture and supply: 2014 1. Technology for 420 kV class shunt reactors has been fully absorbed
• Generator step up transformers with single phase or three phase 420 kV Voltage and upto 1000 MVA bank capacity; 2. Manufacturing Training for shunt reactor imparted by Fuji experts at Chiba Japan and Company Moraiya plant.
• Shunt reactors with three phase 420 kV voltage and upto 125 MVAr capacity;
• Shunt reactor with single phase 765 kV voltage and upto 133 MVAr capacity. 3. Design training for 800 kV shunt reactors imparted by Fuji Experts at Fuji.

iv) The expenditure incurred on Research and Development

In pursuits of R&D endeavors the Company is continuously incurring R&Dexpenditure both on Capital and Revenue which has not been separately reflected but whichis being shown as part of regular heads of accounts in Fixed Assets and in Statement ofProfit and Loss respectively.

(C) Foreign Exchange Earnings and Outgo:

1. Export revenue during the year was Rs.3571.28 Lacs. The Company is continuouslyfocusing on supplying its products to various countries and trying to have its presence inexport market.

2. Total Foreign Exchange earnings and expenditure: Details concerning Foreign ExchangeEarnings and outgo have been given under note no. 41 42 & 43 of the notes to theFinancial Statement.