To the Members
Your Directors present their 53rd Annual Report of the Company together with theAudited Statements of Accounts for the year ended 31st March 2018
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previousyearfigures are given hereunder:
|Particulars ||Year ended 31.03.2018 ||Year ended 31.03.2017 |
|Net Sales /Income from Business Operations ||6202.43 ||7210.85 |
|Other Income ||240.67 ||151.80 |
|Total Income ||6443.09 ||7362.65 |
|Less Interest ||1081.99 ||1120.62 |
|Profit / (Loss) before Depreciation ||(1240.92) ||(1089.15) |
|Less Depreciation ||144.19 ||155.75 |
|Profit / (Loss)after depreciation and Interest ||(1385.11) ||(1244.90) |
|Less Current Income Tax ||- ||- |
|Less Deferred Tax ||- ||- |
|Net Profit (Loss) after Tax ||(1385.11) ||(1244.90) |
|Dividend (including Interim if any and final) || || |
|Net Profit 1 (Loss) after dividend and Tax ||(1385.11) ||(1244.90) |
|Amount transferred to General Reserve || || |
|Balance carried to Balance Sheet ||(1385.11) ||(1244.90) |
|Earning in Rupee per share (Basic) ||(27.70) ||(24.90) |
|Earning in Rupee per Share(Diluted) ||(27.70) ||(24.90) |
1. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors wish to present the details of Business operations done during the yearunder review:
During the year there was continuous stress on liquidity due to which orders could notbe executed in time. On improvement in liquidity turnover can be increased in the currentyear with expected growth in sale of banking automation measuring instruments andpowersupplies.
I am hopeful of operational improvement during the year since the company now has asenior business consultant to advise and overview the comprehensive re-structuring thecompany's operations reducing the costs revamping the marketing with focus on growth inprofitable business expanding the distributor network strengthening MIS to improveoperational efficiency etc. Results are showing remarkable improvement midway in thesecond quarter of 2018-19. On the other hand we are in the process of selling the unusedindustrial properties which will allow us to reduce the interest burden and help us createa positive cash flow.
2. ANALYSIS OF PERFORMANCE
Since your company has not been lucky so far to find customers for its unused realestate assets worth over 60 Crores. Whenever that happens we can in one step reduce theburden of expensive borrowed funds and get back to positive cash flow helping ourpotential growth. Many large public companies in the country have used this route in thepast. Had your company been able to sell at least one of them the Balance Sheet of yourcompany would have looked different. Statutory Auditors have been strict and done theirjob to meet the current accounting guidelines by SEBI. Your management has given all thecooperation to them during the audit. Out of the 55 years since Aplab began its operationsas a hi-tech design and manufacturing 55 years ago for the first 48 years were ofsustained growth as a highly reputed source of world class electronic products. The a longand violent worker's strike broke our back On one hand huge losses were created duringthis period and no financial institution or bank will provide us the working capital.Since the banks are not lending us further loans even against our clean assets not pledgedwith bank we have been focusing on increasing order booking and work using the salesproceeds. Since this was not enough as the shareholder of the company my family hasprovided unsecured loans of over 25 crores to sustain the business serve the customersand save jobs. We are accumulating operational losses but we are somehow surviving due tocooperation from all employees and managers of the company through hardships. I wish RBIand lending institutions go deeper into the operations of manufacturing companies andunderstand the reasons for their sickness. If there is no misuse of lent funds and if theproblems relate to shortage of funds to manufacture products then banks should beauthorised to lend project loans for industrial inputs and labour which helps the companyto create wealth. Your company creates wealth that 45 -50% of its sale. This Iunderstand happens in Germany which is most concerned with the loss of jobs or allowingtechnology companies going sick. India unfortunately does not have financial policies tohelp manufacturing companies to tide over transient business crisis and help them goingthrough a rough weather since such transient crisis always happen during the life time ofa productive company. Both our banks are however trying to help us but rules andprocedures during the recent times is taking time. However I sincerely feel that chargingpenal interest to a genuine manufacturer merely adds to its indebtedness while no wayprotecting the lender. A high technology R&D based company like yours has anotherproblem. The company balance sheets as they are fail to show the real assets such as ourtechnological expertise of the company and our engineering talents and their specialknowhow. That indeed is the foundation of our business There is no place for this assetin the Balance Sheet. Even our highly respected and reputed Brand Name Aplab carries noasset value in our balance sheet. These special technological skills helps your company toreplace imports for our Armed Forces. Thanks to you all my shareholders that thesustained Share Value of your company all through this crisis period reflects your trust.Your employees and senior managers are giving excellent co-operation production ismaximized in spite limited resources incoming orders are very good and gross margins arealso rising. Indeed our business could have been far bigger if we had cash resources tofinance material purchasing and market promotion. The
current order booking is good in spite of no advertising and having lost over 50%marketing personnel as compared to those we had in 2010-11. Any way your company is todaythe victim of bad times. I feel confident that these times would soon be behind us. Asthey say tough times don't last tough people do. Your company is still strong and I amthankful to my shareholders for putting their faith in my management through thesedifficult times.
No Dividend is recommended forfhe current financial year due to loss incurred by theCompany. (Previous Year- Nil)
4. TRANSFER OF DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 no unclaimed or unpaid Dividend duefor remittance to the Investor Education and Protection Fund established by the CentralGovernment since the company has not declared any dividend after2008-09.
5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE ANDTHE DATE OFTHE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateon the date of this report
6. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act
2013 read with Rule 8(3) of the Companies (Accounts) Rules
2014 is furnished in Annexure to the Directors' Report and is attached to this report.
7. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHECOMPANY
Risk Management Committee is operating throughout the yearto identify and evaluateelements of business risks.
8. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVE
Due to the losses incurred presently during the year under review Corporate SocialResponsibility could not be implemented. However on improved performances the same willbe implemented.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
The particulars of Loans Guarantees or Investments made under Section 186 is furnishedin Notes to Financial Statement and is attached to this report
10. RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties were on arm's
length basis and in the ordinary course of business. There were no material significantrelated party transactions made by the company during the year under review withPromoter/Directors or Key Managerial Personnel. All related party transactions are placedbefore the Audit Committee and has also been placed at the Board Meeting for approval andomnibus approval was obtained on a yearly basis for transactions which are of respectivenatures. The policy on related party transactions as approved by the Board has beenuploaded on the website of the company. None of the Directors has any pecuniaryrelationship or transactions visa-vis the company. Hence Form AOC-2 is not annexed withthe Directors' Reportforthe current year.
11. SALE OF COMPANY PREMISE FOR PAYMENT OF STATUTORY LIABILITIES
Your Company has entered an agreement with Shree Saptashri Developers for sale of Thaneproperties situated at Plot Nos. A-1 A-3 A-5 & A-6 Wagle Estate Thane to pay thecommitted and statutory liabilities. The transaction is under process and expected tocomplete during the current year.
12. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There were no adverse comments qualifications or reservations or adverse remarks bythe Practicing Company Secretary in the Secretarial Audit Report. The Secretarial AuditReport in terms of Section 204 is annexed as Annexure- Ato this report.
However the Statutory Auditors have made the following remarks
Basis of Qualified Opinion
a) The Company has incurred a loss of Rs. 1587lacs during this year. The Company hasaccumulated losses and its net worth has continued to remain negative during this year.The Company could not repay overdue Term Loans or matured Public Deposits or honor LCs onits due dates. The Bank has taken symbolic possession of Land & Building at BhosariPune due to the default of Rs. 1177 lacs and initiated recovery action.
b) The Company during the year could not pay various statutory dues in time and thedelay ranges between 2 to 12 months. The Unpaid Statutory Dues amounted to Rs. 257 lacsand separated employee Unpaid Gratuity/other dues are Rs.592 lacs at the year end.
These events indicate material uncertainty that casts doubt on the Company's ability tocontinue as a going concern considering negative net worth continued losses andgenerating adequate operational inflows. The Company is in the process of selling few ofits properties to repay debts and induce funds for its operations.
In response to these comments I must say that the Statutory Auditors have not takeninto account the impact of the sale of unused assets in the determined efforts of yourcompany to bounce back. When sale proceeds are realised they far more than funds needs tomeet the above mentioned liabilities listed bythem.
13. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OFTHEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isin process due to absence of profit the present Executive Director is not drawing anyremuneration.
14. ANNUAL RETURN
The extracts of Annual Return pursuant to provisions of section 92 read with rule 12offhe companies (Management and Administration) Rules 2014 is furnished in Annexure - Band attached to this report.
15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Board met 4 (four) times during the financial year 2017-18 i.e. on 29th May2017 12th September 2017 14th December 2017 and 9th February 2018. In respect of suchmeetings proper notices were given in time and the proceedings were properly recorded andsigned in the Minutes Book maintained for the purpose. No Circular Resolutions were passedby the company during the financial year under review.
16. CORPORATE GOVERNANCE REPORT
In terms of SEBI CIRCULAR CIR/CFD/POLICY CELL/7/2014 September 152014 which waseffective October 12014 the Clause 49 of the Listing Agreement shall be applicable toall companies whose equity shares are listed on a recognized stock exchange. Howevercompliance with the provisions of Clause 49 shall not be mandatory for the time being inrespect of the following class of companies:
Companies having paid up equity share capital not exceeding Rs.10 Crore and Net Worthnot exceeding Rs.25 Crore as on the last day of the previous financial year; providedthat where the provisions of Clause 49 becomes applicable to a company at a later datesuch company shall comply with the requirements of Clause 49 within six months from thedate on which the provisions became applicable to the company.
In view of the above your company is not required to annex the Corporate GovernanceReport to the Directors Report for the year ended March 312018
17. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:
(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 adequate accounting records in accordance with the provisions of thisAct for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively. Internal financial control means the policies andprocedures adopted by the Company for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.
(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.
18. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has no subsidiary company and no joint ventures during the year underreview
The Company has neither accepted nor renewed any deposits during the year under review.
No shares held by Independent Directors other than Promoter/Director.
In accordance with the provisions of the Companies Act 2013 Mrs. Amrita P. Deodhar(DIN: 00538573) is liable to retire by rotation at the forthcoming Annual General Meetingand being eligible has offered herself for re-appointment.
21. DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
22. STATUTORY AUDITORS
The Statutory Auditors M/s Shahade & Associates. Chartered Accountants (ICAIRegistration No. 109840W) retire at the forthcoming Annual General Meeting. They havefurnished a certificate confirming their eligibility for reappointment under provisions ofsection 141 of the Companies Act 2013 and have expressed their willingness to bere-appointed. You are requested to appoint the Auditors forthe current year and fix theremuneration.
23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM
The Audit Committee consists of the following members
i Capt. Vilas W. Katre (DIN: 00054460)
ii Dr. S.K. Hajela (DIN: 01001987)
iii Mrs. Amrita P. Deodhar (DIN: 00538573)
The above composition of the Audit Committee consists of independent Directors viz.Capf. Vilas W. Kafre (DIN: 00054460) and Dr. S.K. Hajela (DIN: 01001987) who form themajority.
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
c. BONUS SHARES
No Bonus Shares were issued during the year under review.
d. RIGHT ISSUE OF EQUITY SHARES
During the year the Board of Directors further passed the resolution for issue ofrights shares to the existing share holders. The procedure for issue of right shares isunder process.
e. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTIONPROHIBITION AND REDRESSAL ACT 2013)
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the work place (Prevention Prohibition andRedressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. No sexual harassment complaints were received during the year201718.
Your Directors place on record their sincere thanks to bankers business associatesconsultants employees and various Government Authorities for their continued supportextended to your Company's activities during the year under review. Your Directors alsoacknowledges gratefully the shareholders for their support and confidence reposed on yourCompany.
|P. S. Deodhar ||Vilas W. Katre |
|Chairman & Managing Director ||Director |
|DIN:00393117 ||DIN:00054460 |
|Date: August 14 2018 || |
|Place: Thane || |