Your Directors have pleasure in presenting their Twenty Fifth Annual Report on thebusiness and operations of your Company and the audited Statement of Accounts for the yearended 31st March 2018.
|1. FINANCIAL HIGHLIGHTS || || || ||Rs in Million |
|Particulars || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Revenue ||8682 ||7337 ||3664 ||4092 |
|Profit before Depreciation and Interest ||363 ||779 ||21 ||535 |
|Depreciation ||336 ||232 ||120 ||80 |
|Interest ||162 ||89 ||93 ||46 |
|Profit/(-)Loss before tax ||-135 ||458 ||-192 ||409 |
|Profit after tax ||-145 ||372 ||-215 ||308 |
During the current year of operations your company has registered a consolidatedrevenue of Rs 8682 million an increase of about 13% compared to the previous financialyear. Your company posted Loss of Rs145 million for the year.
At standalone level a revenue of Rs 3664 million a decrease of about 10% compared tothe previous financial year. Your company posted Loss of Rs 215 million for the year.
3. Subsidiaries and Joint ventures a. Centum Adetel Group S.A.
During the year Centum Adetel Group S.A. the subsidiary company has registeredrevenue of Rs 5030 million and posted a profit of Rs142 million.
b. Centum Rakon India Private Limited
During the year Centum Rakon India Private Limited (CRI) the joint venture companyhas registered revenue of Rs 696 million and incurred a loss of Rs 52 million.
Based on the discussion with the Joint venture partner and the strategy of the companyit was decided to sell off the shares held in CRI for a consideration of US$ 5.50 Million.The transaction has been completed in May 2018 and as agreed 75% of the consideration isreceived and the remaining 25% will be received on completion of transition or eighteenmonths from the date of signing whichever is earlier.
Statement containing salient features of the financial statement of subsidiary isattached herewith as Annexure I
The company has adopted IND AS in preparation of financial statements with effect from1st April 2017 in pursuance of the requirements of Companies (Indian Accounting Standards(IND AS)) Rules 2015. The Consolidated financial statements were prepared by including thefinancials of Centum Adetel Group S.A. and the share of loss in the case of CRI.
Pursuant to the approval of the Board of Directors on 13th February 2018 your Companypaid an interim dividend of Rs1/- per equity share of face value of Rs 10/ -each toshareholders who were on the register of members as on 22nd February 2018 being therecord date fixed for this purpose. The total dividend payout was Rs12.86 million for theyear ended March 31 2018.
5. CONSOLIDATED FINANCIAL STATEMENTS AND SUBSIDIARY
The Consolidated Financial statements have been prepared by the Company in accordancewith the applicable Indian Accounting Standards (Ind AS') and the same together withthe Auditor's Report thereon is provided in the Annual Report.
The Financial Statements of the subsidiary and related detailed information will bekept at the Registered Office of the Company and will be available to investors seekinginformation at any time.
The Company has adopted a Policy for determining Material Subsidiaries in terms ofRegulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Policy as approved by the Board is available on the Investor page at Company'swebsite www.centum electronics.com.
6. RISK MANAGEMENT
Your Company has a robust Risk Management policy. Your Company regularly assess therisks and ensures that the risk mitigation plans are in place.
7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has appointed KPMG Chartered Accountants asits Internal auditor. The Audit Committee defines the scope and areas of internal audit.The Internal auditor audits the areas recommended by the committee every year.
The audit observations and corrective actions thereon are being presented to the AuditCommittee of the Board. Based on the report of Internal auditor process owners undertakecorrective action in their respective areas and thereby strengthen the controls. Duringthe year the internal audit was done on the areas recommended and no material weaknessobserved.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review there was no change in the composition of Board ofDirectors/Key Managerial Personnel.
Pursuant to the provisions of Section 152 of the
Companies Act 2013 and the Articles of Association of the Company Dr. SwarnalathaMallavarapu will retire by rotation at the 25th Annual General Meeting and being eligiblehas offered herself for re-appointment.
a. Declaration by independent directors
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he meets the criteria of independence aslaid down under Section 149 (6) of the Act and Regulation 25 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
b. Annual evaluation of Board its Committees and Individual Directors
The Board of Directors has carried out an annual evaluation of its own performance itsCommittees and individual Directors pursuant to the requirements of the Companies Act2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Further Independent directors have reviewed the performance of the Board its Chairmanand Non-Executive Directors and other items as stipulated under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
c. Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration as required under Section 178(3) of the Companies Act 2013. The policy isavailable on the company website www.centumelectronics.com. There has been no change inthe policy since the last fiscal year.
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year the company has convened five meetings of the Board of directors andfour meetings of the Audit Committee. The details of which are given in the CorporateGovernance Report. The Intervening gap between the meetings was within the periodprescribed under the Companies Act 2013.
9. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 your Directors confirm:
i. that in the preparation of annual accounts for the year ended March 31 2018 theapplicable Accounting Standards have been followed along with the proper explanationsrelating to material departures;
ii. that such accounting policies as mentioned in Note 1 of the Notes to the FinancialStatements have been adopted and applied consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2018 and of the profit of the Company for year ended onthat date;
iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
iv. that the annual financial statements have been prepared on a going concern basis.
v. that proper internal financial controls were in place and that the financialcontrols were adequate and operating effectively.
vi. that systems to ensure compliance with the provisions of all applicable laws werein place were adequate and operating effectively.
Further the Board of Directors confirms that the Company has complied with theSecretarial Standards on the Board Meetings issued by the Institute of Company Secretariesof India as applicable to the Company during the financial year ended 31 March 2018.
10. CONTRACTS AND ARRANGEMENTS WITH
All related party transactions that were entered into during the financial year were inthe ordinary course of business and were at an arm's length basis. There were nomaterially significant related party transactions made by the company during the year withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the company at large.
All the related party transactions were placed before the Audit Committee and also theBoard for approval. Prior omnibus approval of the Audit Committee is being obtained forthe transactions which are of a foreseen and repetitive nature in terms of Regulation23(3)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The company has framed a policy on dealing with the related party transactions and thesame is available on the company website.
Your directors draw attention of the members to Note 40 to financial statement whichsets out the related party disclosures.
a. Statutory auditors
The members at the 24th Annual General Meeting of the Company held on July 11 2017approved the appointment of M/s. S.R Batliboi & Associates LLP Chartered Accountants(Firm registration number: 101049W/E300004) as Statutory Auditors of the Company to holdoffice for a period of five years from the conclusion of 24th Annual General Meeting tillthe conclusion of the 29th Annual General Meeting.
The statutory audit report for the year 2017-18 does not contain any qualificationreservation or adverse remark or disclaimer made by statutory auditor.
b. Secretarial audit
The Board has appointed Ms. Aarthi G Krishna
Practicing Company Secretary to conduct Secretarial Audit for the financial year2017-18. The Secretarial Audit Report for the financial year ended March 31 2018 isannexed herewith as Annexure II to this report.
The said secretarial audit report does not contain any qualification reservation oradverse remark or disclaimer made by the secretarial auditor.
12. CORPORATE GOVERNANCE
Your Company believes in adopting best practices of corporate governance. A report oncorporate governance along with a certificate from a Practicing Company Secretaryconfirming the compliance for the year ended 31 March 2018 as required under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed (Annexure III) andforms part of this report.
13. CONSERVATION OF ENERGY TECHNOLOGY
ABSORPTION RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO.
The particulars prescribed under subsection (3) (m) of Section 134 of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are provided inAnnexure - IV attached to this report.
14. PARTICULARS OF EMPLOYEES
The ratio of remuneration of each whole-time director and key managerial personnel(KMP) to the median of employees' remuneration as per Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended as Annexure - IX.
Further the information on the employees drawing salary more than the limits asprescribed under the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 will be provided upon request.
However as per the provisions of Section 136 of the Act the Report and Accounts arebeing sent to the
Members and others entitled thereto excluding the information on employees'particulars. The same is available for inspection by the Members at the Registered Officeof the company during business hours on working days of the Company up to the date ofensuing Annual General meeting. If any Member is interested in obtaining a copy thereofsuch Member may write to the Company Secretary in this regard.
15. PARTICULARS OF LOANS GUARANTEES AND
The details of loans guarantees and investments within the meaning of Section 186 ofthe Companies Act 2013 are provided under Note 40 of the audited financial statements.
16. CORPORATE SOCIAL RESPONSIBILITY
As part of the Company's initiatives under "Corporate Social Responsibility(CSR)" the Company has funded several projects that aid and improve educationliteracy and healthcare for children. It has also funded and participated in projects thatsupport and aid children with disabilities.
The Annual Report on CSR activities is annexed herewith as Annexure V.
17. DETAI LS O F ESTABLISHMENT O F VI GI L
In accordance with Section 177(9) and (10) of the Companies Act 2013 and Regulation 22of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Companyhas established a Vigil Mechanism and has a Whistle Blower Policy. The policy is availableat the Company's website.
During the year under review there are no such instances to report.
18. PREVENTION PROHIBITION AND REDRESSAL
OF SEXUAL HARASSMENT AT WORK PLACE
The Company has zero tolerance for sexual harassment at workplace and has formulated aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.
The Company has also constituted an Internal Complaints Committee to inquire intocomplaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2017-18.
19. EXTRACT OF ANNUAL RETURN
The extract of the Annual Return as at 31 March 2018 in Form MGT-9 is annexed and formspart of this Report as Annexure VI.
20. MANAGEMENT DISCUSSION AND ANALYSIS
In compliance with the requirements of the listing agreement the Management Discussionand Analysis Report giving details of the company's business and operating results isattached to this report as Annexure VII.
21. EMPLOYEE STOCK OPTION PLAN
As a measure of rewarding the employees your company had introduced an Employee StockOption Plan (ESOP) during year 2007 & 2013.
The particulars prescribed under Guideline 12.1 of the SEBI (Employee Stock Optionscheme and Employee Stock Purchase Scheme) Guidelines 1999 are given in the Annexure -VIII attached to this report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions with regard to the following during the yearunder review: a. Details relating to deposits covered under Chapter V of the CompaniesAct 2013.
b. Issue of equity shares with differential rights as to dividend voting or otherwise.
c. Issue of shares (including sweat equity shares) to employees of the company underany scheme save and except ESOP referred to in this report.
d. There is no remuneration received by the Managing Director from the subsidiarycompany.
e. No significant or material orders were passed by the regulators or courts ortribunals which impact the going concern status and the company's operations in future.
Your Directors thank the customers for their continued patronage and the investorsbankers and vendors for their continued support.
Your Directors acknowledge and thank the invaluable contributions of all the employeeswho have demonstrated their skill teamwork and commitment through their competence hardwork cooperation and support.
Your Directors would also like to place on record the support received from theElectronic Hardware Technology Park the Customs and Excise Departments the Reserve Bankof India the Department of Industries and Commerce Karnataka the Karnataka Udyog Mitraand all the other Central and State Governmental agencies.
By the order of the Board
For Centum Electronics Limited
|Apparao V Mallavarapu ||S. Krishnan |
|Chairman & Managing Director ||Director |
|DIN : 00286308 ||DIN : 01807344 |
Date: May 30 2018