Your Directors are pleased to present the 32nd Annual Report on the operations of yourCompany together along with Annual Audited Accounts for the financial year ended 31stMarch 2017.
The Company's performance during the year ended as compared to the previous year issummarized below:
| || ||(Rs. in Lacs) |
| ||Current Year ||Previous Year |
|Sales ||1502.32 ||1491.05 |
|Profit/(Loss) before Financial Charges & Depreciation ||109.83 ||53.06 |
|Less : Financial Charges ||6.54 ||17.91 |
|Less : Depreciation ||31.00 ||28.37 |
|Profit/(Loss) Before tax ||72.29 ||6.78 |
|Provision for Tax ||-- ||-- |
|Profit/(Loss) after tax ||72.29 ||6.78 |
|Add : Brought forward Profit/(Loss) ||(2192.11) ||(2198.89) |
|Balance Carried to Balance Sheet ||(2119.82) ||(2192.11) |
During the year under review the total sales of your Company were Rs. 1502.32 lacs asagainst Rs. 1491.05 lacs for the previous year. The Profit before financial charges anddepreciation amounted to Rs. 109.83 lacs as compared to Rs. 53.06 lacs in the previousyear. The net profit for the year was Rs. 72.29 lacs as compared to net profit Rs. 6.78lacs during previous year.
During the year your Company introduced new products namely Wedding Par and Air Zing2020 (Window Air Conditioner Air Purifier) which helped the Company to increase revenuesand earn better profits. These products have been developed as EMS projects for OSRAMGermany. Initially these products will be for India market and based on performance thesewill be also exported to other countries. The benefit of these products started accruingduring the year under review and will strengthen the Company's position in the comingyears. The R&D division of your Company is also working on some other new productswhich are expected to be brought into production in financial year 2017-18.
ACQUISITION OF LIGHTING ELECTRONICS BUSINESS UNDERTAKING OF CALCOM ELECTRONICS LIMITED
The Board of Directors of your Company approved acquisition of the Lighting Electronicsbusiness of Calcom Electronics Limited for a consideration of Rs 7.25 crores. Thisacquisition would further spread the business of the Company by expanding the Customerbase and bringing economies of scale through optimum utilization of manpower assetsinstalled capacity and other facilities. The acquisition is expected to be beneficial forthe Company in long term.
MATERIAL CHANGES AND COMMITMENTS 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 REPORT
There are no material changes after the balance sheet date and no significant orderspassed by any regulators / courts which may materially affect the financial position ofthe Company.
In light of capital requirements for business purposes the Directors regret theirinability to propose any dividend for the year ended 31st March 2017.
During the year no amounts had been transferred to Reserves.
RESEARCH & DEVELOPMENT
The Research and Development Department of your Company has been providing usefulsupport towards developing of new products and improving quality of existing products. Wehave successfully developed two new products i.e. Wedding Par and Window Air ConditionerAir Purifier for Osram Germany.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
Information relating to conservation of Energy Technology Absorption etc. in terms ofSection 134(3) (m) of the Companies Act2013 read with relevant rules is enclosed as perAnnexure-I.
During the year under review the Paid-up share capital of the Company increased to Rs.56811560/-.
In pursuance of the scheme of Rehabilitation ("the Scheme") sanctioned by theHon'ble BIFR vide its Order dated 08th July 2014 the Company had allotted218804 Zero Coupon Convertible Bonds of face value of Rs. 1000/- each to promoters /strategic investor on 13th August 2014 convertible into equity shares of theCompany of Face Value of Rs. 10 each at a premium of Rs. 20 per equity share against which2431156 equity shares of the Company were allotted to the promoters / strategic investoron 14th November 2016. As a result of this the issued subscribed and paid upcapital of the Company has increased from Rs. 32500000/- to Rs. 56811560/-.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has adequate internal control systems and procedures designed toeffectively control the operations. The internal control systems are designed to ensurethat the financial and other records are correct and reliable for the preparation offinancial statements and for maintaining assets. The Company has well designed StandardOperating Procedures.
Internal Auditors conduct audit covering a wide range of operational matters and ensurecompliance with specified standards. Planned periodic reviews are carried out by InternalAudit. The findings of Internal Audit are reviewed by the top management and by the AuditCommittee of the Board of Directors.
The Audit Committee also meets the Company's Statutory Auditors regularly to ascertaintheir views on the financial statements including the Financial Reporting SystemsCompliance to Accounting Policies and Procedures the adequacy and effectiveness of theInternal Controls and Systems followed by the company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Shiv Nath Chopra (DIN: 07399510) the representative of Hon'ble Board forIndustrial & Financial Reconstruction (BIFR) was appointed as Nominee Director onFebruary 13 2016. Pursuant to the notification issued by Government of India Board forIndustrial and Financial Reconstruction (BIFR) has been wound up w.e.f. 1st December 2016and consequently Mr. Shiv Nath Chopra ceased to be a director of the Company with effectfrom that date.
In accordance with the provisions Section 152(6) of the Companies Act 2013 Ms. YuvikaBader (DIN: 07114760) retires by rotation and being eligible offers herself forre-appointment.
The information on the particulars of Directors being appointed / reappointed in termsof Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 has been provided in the notes to the notice convening the Annual General Meeting.
Further Mr. Nitin Gupta resigned from the post of Chief Financial Officer of theCompany w.e.f. 27th May 2017 and subsequently Mr. Pramod has been appointed asthe new Chief Financial Officer w.e.f. 27th May 2017. Also Ms. Neha Gupta hasbeen appointed as the Company Secretary of the company w.e.f. 27th May 2017.
INDEPENDENT DIRECTORS' DECLARATION
The Independent Directors have confirmed and declared that they are not disqualified toact as an Independent Director in compliance with the provisions of Section 149 of theCompanies Act 2013 and the Board is also of the opinion that the Independent Directorsfulfill all the conditions specified in the Companies Act 2013 making them eligible toact as Independent Directors.
EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with Section 178(3) of Companies Act 2013 and Rule 8(4) of Companies(Accounts) Rules 2014 and Regulation 17(10) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the performance evaluation of the Board was carried out.Further details on the same are given in the Corporate Governance Report.
During the year five Board Meetings and five Audit Committee Meetings were convenedand held. The details of the said meetings are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 the year under review.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarms' length basis and were in the ordinary course of the business.
There are no materially significant related party transactions made by the company withPromoters Key Managerial Personnel or other designated persons which may have potentialconflict with interest of the company at large.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Act for the financial year 2016-17 in the prescribed format AOC-2 isenclosed with the report as Annexure-II.
The Company does not have any subsidiary or associate company.
CODE OF CONDUCT:
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviors of any form and the Board has laid down thedirectives to counter such acts. The Code of Conduct is laid down by the Board of whichCode of Business Ethics forms an appendix and the same has been posted on the Company'swebsite www.calcomindia.com .
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act 2013 the Company has establishedVigil Mechanism for directors employees suppliers contractors and other stakeholdersetc. of the Company. The same is also intended to cover the Whistle Blower Policy underthe aspect of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015.The purpose and objective of this Policy is to cover serious concerns that would have alarger impact on image and values of the company due to incorrect financial reporting orserious improper conduct. No complaints were received during the year.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading insecurities by the Directors and designated employees of the Company.The Code requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Board Directors and the designated employees have confirmed compliance with theCode.
M/s. Shanti Prashad & Co. Chartered Accountants (Firm Registration No. 019923N)Statutory Auditors of the Company being not eligible for reappointment after completion ofthree years period provided under Section 139(2) of Companies Act 2013 to the Companieswith regard to Statutory Auditor appointment. The appointment of M/s Ajay Jain &Associates Chartered Accountants (Firm Registration No. 009124N) was proposed to holdoffice from the conclusion of ensuing Annual General Meeting until the conclusion of 37thAnnual General Meeting.
There are no qualifications reservations or adverse remarks made by M/s Shanti Prasad& Co. Statutory Auditors in their report for the Financial Year ended March 312017.The Statutory Auditors have not reported any incident of fraud to the Audit Committee ofthe Company in the year under review.
Pursuant to 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 Deepak & Associates Company Secretaries (CP No.15690) toundertake the Secretarial Audit of the Company for financial year 2016-17. The SecretarialAudit report is annexed herewith as "Annexure-III".
SECRETARIAL AUDIT REPORT
As required under section 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report for the financial year 2016-17 which is self-explanatory. Thereare no Qualification remarks in Secretarial Audit Report except in respect of appointmentof Company Secretary. The Board of Directors of your Company has appointed Ms. Neha Guptaan associate member of The Institute of Company Secretaries of India as Company Secretaryand Compliance Officer of the Company w.e.f. 27th May 2017.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure-IV". PARTICULARS OF EMPLOYEES
Details as required under the provisions of Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are provided in the Annexure- V to this Report.
Details as required under the provisions of Section 197(12) of the Companies Act 2013read with Rule 5(2) and 5(3) of the said Rules which form part of the Directors' Reportare provided in Annexure- V to this report.
Having regard to the provisions of the first proviso to Section 136(1) of the CompaniesAct 2013 the Annual Report excluding aforesaid information is being sent to the Membersof the Company. The said information is available for inspection at the registered officeof the Company during working hours upto the date of ensuing Annual General Meeting andany Member interested in obtaining the said statement may write to the Company Secretarywhereupon a copy would be sent.
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels. MANAGEMENT DISCUSSION AND ANALYSIS
A report in the form of Management Discussion and Analysis pursuant to Schedule V ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as a part ofthis report is annexed hereto as Annexure-VI.
A separate section on Corporate Governance forming part of the Directors' Report andthe certificate from the auditors of the Company confirming the compliance of pursuant toSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015is included in the annual report as Annexure-VII.
A Certificate has been given by the Chairman & Managing Director and ChiefFinancial Officer to the Board as per requirement of Regulation 17(8) read with Part BSchedule II of the Listing Regulations is attached to the report.
RISK MANAGEMENT POLICY
The Company has adopted a comprehensive risk management policy covering processes foridentification and mitigation of all potential risks to suit the business requirements ofthe Company.
POLICY AGAINST SEXUAL HARASSMENT
The Company has framed a policy against sexual harassment of employees and has alsoconstituted an Internal Complaints Committee to handle such cases. No such cases werereported during the year.
Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers for theircontinuous cooperation and assistance.
Your Directors also express their deep appreciation of the devoted and unstintedservices tendered by workers staff and executive at all levels.
For and on behalf of the
Board of Directors
Chairman & Managing Director
Place: New Delhi
ANNEXURE TO DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH 2017
Particular required under the Companies (Accounts) Rules 2014 of Companies Act 2013.
A. CONSERVATION OF ENERGY
Energy Conservation Measures Taken
(i) The conventional lighting fixtures have been replaced by LED lights which conservethe energy as well as improve power factor. Further 125KVA generator has been madefunctional and is run when the load requirement is less instead of 340KVA generator.
The corporate office block has been shifted to the ground floor to reduce the coolingcost and to save energy.
(ii) Shifts timings have been aligned in a manner to maximize output during day time tosave energy consumption resulting in low power costs.
B. TECHNOLOGY ABSORPTION
(a) Research & Development
(i) Specific area in which R&D is carried by the company.
Design and development of Lighting Electronic Products will help in conserving energynot only for us but for all the users of our products. Your company is now focusing onlyon LED products.
(ii) Benefits derived as a result of the above R&D.
We have developed new products which will result in additional business in years tocome.
(iii) Future Plan of Action
The Company plans to focus on developing more products for Osram Germany in the fieldof Specialty Lighting both in Professional and Entertainment areas. It also plans to workin Automotive Lighting.
(iv) Expenditure on R&D
| ||(Rs. In Lacs) |
|i) Capital || |
|ii) Recurring || |
|a) Deferred Revenue || |
|b) Current Year ||85.53 |
|Total ||85.53 |
|(b) Technology Absorption Adoption & Innovation || |
|(i) Efforts in brief made towards the technology adoption and innovation. ||None |
|(ii) Benefits derived ||N.A. |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
| ||Current Year ||Previous Year |
|Foreign Exchange earned (Rs. in Lacs) ||165.48 ||- |
|Foreign Exchange used (Rs. In Lacs) (for import of components and capital equipments) ||350.04 ||187.27 |
ANNEXURE - II
|Name(s) of the related party and nature of relationship ||Nature of contracts/arr angements/tr ansactions ||Du ration of th e contracts / arrangeme nts/transac tions ||Salient terms of the contracts or arrangements or transactions including the valu e if any ||Date(s) of ap proval by the Board ||Amount p aid as advances if any |
|1 Calcom Electronics Limited ||Sale & Purchase of Goo ds ||12 Months ||Upto Rs.20000000/- for the Year ||30/05/2016 ||NIL |
|2 Calcom Institute of Management Development and Training Associates ||Reimburseme nt to Trainee ||NA ||NA ||30/05/2016 ||NIL |
|3 S.K. Malik HUF relative of Key Management personnel ||Rent of Registered Office ||12 Months ||Upto Rs.300000 P.M. ||30/05/2016 ||NIL |
|4 Calcom Electronics Limited ||Rent of Building and Fu rn itu re ||12 Months ||Rs.70000/-- P.M. ||30/05/2016 ||NIL |
|5 Calcom Electronics Limited ||Job work Service ||12 Months ||Rate as per Schedule I of Agreement ||30/05/2016 ||NIL |
|6 Calcom Electronics Limited ||Hire of Machinery ||12 Months ||204500/- P.M ||30/05/2016 ||NIL |
|7 Calcom Electronics Limited ||Bu si ness Transfer Agreement ||N/A ||10 Crores* ||31/03/2017 ||NIL |
*The price was revalued at Rs. 7.25 Crores approved in the Board meeting held on27.05.2017.