TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Fiftieth Annual Report on the businessand operations of the Company together with the Audited Accounts for the financial yearended 31st March 2019.
FINANCIAL RESULTS AND OPERATIONS
(Amt in Rs.)
|Particulars ||Year ended 31.03.2019 ||Year ended 31.03.2018 |
|Revenue from Operations (Net) ||435761768 ||326335351 |
|EBITDA ||56356630 ||36613411 |
|Less - (i) Finance Costs ||9961711 ||13639888 |
|(ii) Depreciation and Amortisation Expenses ||10753751 ||11543059 |
|Profit before Tax ||35641168 ||11430464 |
|Less - (i) Provision for Taxation ||11034000 ||4600000 |
|(ii) Deferred Tax Asset ||(1978479) ||(519624) |
|(iii) Short / (Excess) provision for Income Tax ||587386 ||(588629) |
|Profit for the year ||25998261 ||7938717 |
|Add - Other Comprehensive Income for the year ||33307 ||339573 |
|Add - Balance brought forward from previous year ||97694326 ||89416036 |
|Balance carried to Balance Sheet ||123725894 ||97694326 |
During the financial year 2018-19 your Company reported 33.53% increase in thetopline. The total revenue for the financial year was Rs. 435761768/- as against Rs.326335351/- last year. The Company's semiconductor devices high power equipment andexport business grew at a steady pace thereby report strong overall growth of the Company.Earnings before Interest Tax and Depreciation and Amortisation (EBITDA) for the year alsoincreased by 53.92 % to Rs.56356630/- as compared to Rs. 36613411/- last year onaccount of increase in Top line better operational controls and optimum utilization offixed overheads. Net Profit for the year increased by 3.27 times to Rs. 25998261/-asagainst Rs. 7938718/-last year.
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thereport.
DIVIDEND AND RESERVES
The Board of Directors of your Company are pleased to recommend a final dividend ofRs.1/- (10%) per Equity Share ofRs. 10/- each for the Financial Year 2018-19; and on theoccasion of completion of 50 years (1969-2019) of business of the Company subject to theapproval of shareholders at the 50th Annual General Meeting of the Company.
During the year under review no amount from profits was transferred to GeneralReserve.
The paid up Equity Share Capital as on 3151 March 2019 was Rs.69572400/-. During the year under review the Company has not issued any shares withdifferential voting rights nor has granted any stock options or sweat equity and does nothave any scheme to fund its employees to purchase the shares of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 ("theAct") read with the Companies (Appointment and Qualification of Directors) Rules2014 and the Articles of Association of the Company Mrs. Bhavna H. Mehta Director of theCompany will retire by rotation and being eligible offers herself for re-appointment.The Board recommends her re-appointment for the consideration of the members of theCompany at the ensuing Annual General Meeting.
During the year under review Mrs. Bhavna H. Mehta was appointed as a ManagingDirector of the Company without remuneration for a period of 5 years from 16thMay 2019 to 151" May 2024 as recommended by the Nomination andRemuneration Committee.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the Act readwith the Schedules and Rules issued thereunder as well as Regulation 16(1 )(b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
Mr. R. G. Trasi - C.E.O. and Mr. Bhavin R Rambhia - Company Secretary are the KeyManagerial Personnel of your Company in accordance with the provisions of Section 2(51)203 of the Act read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 (including any statutory modification(s) or re-enactment(s) for thetime being in force).
The Company has devised a policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of Independent and Non Independent Directors. The board expressed theirsatisfaction with the evaluation process.
During the year under review your Company has not accepted any deposits within themeaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits)Rules 2014 (including any statutory modification(s) or re-enactment(s) for the time beingin force).
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The company has not made any investments nor have given any loans or guaranteescovered under the provisions of section 186 of the Companies Act 2013.
(1) Statutory Auditors:
M/s. Ajmera Ajmera and Associates (Firm Regn. No.123989W) Chartered AccountantsMumbai Statutory Auditors of the Company have tendered their resignation as StatutoryAuditors due to expiration of their Peer review certificate and being unable to review theUn-audited financial results for June 2019 quarter. In order to fill up the casualvacancy the Board recommended appointment of M/s. Kirtane & Pandit LLP CharteredAccountants Mumbai (Firm Regn. No. 105215W/W100057) to hold office as the StatutoryAuditors of the Company till the conclusion of 50th AGM and to fill the casualvacancy caused by the resignation of M/s. AjmeraAjmera and Associates CharteredAccountants Mumbai (Firm Regn. No. 123989W).
Further pursuant to recommendation of Audit Committee the Board also approvedappointment of M/s. Kirtane & Pandit LLP as Statutory Auditors of the Company to holdoffice for a period of five years from the conclusion of 50th Annual General Meeting uptothe conclusion of 55th Annual General Meeting (AGM) of the Company to be heldin the year 2023.
The Company has received consent letter and eligibility certificate from M/s. Kirtane& Pandit LLP Chartered Accountants Mumbai (Firm Regn. No. 105215W/W100057) to act asStatutory Auditors of the Company alongwith a confirmation that their appointment ifmade would be within the limits prescribed under The Companies Act 2013.
The Board recommends the appointment of M/s. Kirtane & Pandit LLP CharteredAccountants Mumbai as Statutory Auditors of the Company.
The Board also places on record its appreciation for the services rendered by M/s.Ajmera Ajmera and Associates Chartered Accountants Mumbai.
(2) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and the rules made thereunder theBoard of Directors of the Company has appointed M/s. Neetu Agrawal & Co. a firm ofCompany Secretaries in Practice (C.P. No. 9272) to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is annexed as Annexure B to the Directors Report.
The Auditors Report and the Secretarial Audit Report for the financial year ended 31stMarch 2019 donot contain any qualification reservation adverse remark or disclaimer.
ICRA Limited have reaffirmed their long term Credit rating of [ICRAJBB+ (pronouncedICRA double B plus) rating to the Company's Fund based limits and a short term rating of[ICRAJA4+ (pronounced ICRAAfour plus) rating to the Company's Non fund based limits. Theoutlook on the long term rating has been revised from stable to positive.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder the Act is annexed as Annexure-A and forms an integral part of this report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and in the ordinary course of the business and that the provisions ofSection 188 of the Act and the Rules made thereunder are not attracted. Thus disclosurein Form AOC-2 in terms of Section 134 of the Act is not required. Further there are nomaterial related party transactions during the year under review with the PromotersDirectors or Key Managerial Personnel. The Company has developed a framework throughStandard Operating Procedures for the purpose of identification and monitoring of suchRelated PartyTransactions.
Details of the transactions with related parties are provided in the accompanying notesforming part of the financial statements.
The Company has in place adequate risk management system which takes care of riskidentification assessment and mitigation. Your Company has adopted a Risk ManagementPolicy which establishes various levels of accountability and overview within the Companywhile vesting identified managers with responsibility for each significant risk. The riskmanagement framework defines the risk management approach of the Company and includesperiodic review of such risks and also documentation mitigating controls and reportingmechanism of such risks.
There are no risks which in the opinion of the Board threatens the existence of yourCompany. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis which forms part of this report.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal and operational audit is entrusted to M/s. Bhandarkar &Kale Chartered Accountants. The main thrust of internal audit is to test and reviewcontrols appraisals of risks and business processes besides benchmarking controls withbest practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Audit Committee of the Board Statutory Auditors and the Business Heads areperiodically appraised of the internal audit findings and corrective action taken. Auditplays a key role in providing assurance to the Board of Directors. Significant auditobservations and corrective actions taken by the management are presented to the AuditCommittee of the Board.
REMUNERATION AND NOMINATION POLICY
A Committee of the Board named as "Nomination and Remuneration Committee" hasbeen constituted to comply with the provisions of Section 178 of the Companies Act 2013and to recommend a policy of the Company on Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence of adirector and other matters and to frame proper systems for identification appointment ofDirectors & KMPs payment of remuneration to them and evaluation of their performanceand to recommend the same to the Board from time to time.
BOARD AND COMMITTEE MEETINGS
Four meetings of the board were convened and held during the year.
The Board has constituted an Audit Committee with Mr. Kisan R Choksey as Chairman andMr. Venkitaraman Iyer and Mr. Pravin G. Shah as members.
There has not been any instance during the year when recommendations of the AuditCommittee were not accepted by the Board.
DIRECTORS' RESPONSIBILTY STATEMENT
In terms of Section 134 (5) of the Act the directors of yourCompany confirm that:
i) in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures;
ii) the directors have 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 as at 3181 March 2019 and ofthe profits of the Company forthe financial year ended 315t March 2019;
iii) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the 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; and
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.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
As required by the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 the Company has formulated and implemented a policy on prevention ofsexual harassment at workplace with a mechanism of lodging complaints. The Policy aims toprovide protection to female employees at the workplace and prevent and redress complaintsof sexual harassment and for matters connected or incidental thereto with the objectiveof providing a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee to inquire into complaints of sexualharassment and recommend appropriate action.
During the year under review no complaints were reported to the Board.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis affirmed that no personnel of the Company has been denied access to the AuditCommittee.
SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information under Section 134 (3)(m) of the Act read with Rule 8 (3) of theCompanies (Accounts) Rules 2014 for the year ended 31st March 2019 is givenbelow and forms part of the Directors' Report.
(a) Conservation of Energy:
(i) Steps taken or impact on conservation of energy:
1. Adequate steps for energy conservation power factor improvement have been takenwherever feasible.
2. For effective treatment of effluents the Company has constructed an effluenttreatment plant. Waste water generated from manufacturing process is treated/recycled atEffluent Treatment Plant and used for internal consumption and plantation.
3. There is adequate provision for the treatment of fumes resulting from the use ofSulphuric Nitric Hydrofluoric and other acids required for production.
4. Replacement of the conventional light fittings with LED lighting has resulted inlower power consumption for lighting.
(ii) Steps taken by the Company for utilizing alternative source of energy:
The Company has installed 10Kva three phase Roof Top Solar Panels at Baska Factoryalongwith with online Inverter based system as an alternate means of power and toencourage energy conservation. This solar power plant is based on SPV (Solar PhotovoltaicCells) connected to grid.
(iii) Capital Investment on energy conservation equipments:
The Company continuously makes investments in its facility for better maintenance andsafety of the operations. The Company has undertaken efforts to rectify the shortfalls inthe existing facilities in order to reduce the energy consumption by setting up efficientfacilities.
(b) Technology Absorption
(i) Efforts made towards technology absorption and benefits derived like productimprovement cost reduction product development or import substitution:
The Company has received complete technical know how for Silicon Rectifiers and SiliconControlled Rectifiers upto 30 mm devices from M/s. International Rectifier CorporationCalifornia U.S.A. The erstwhile Orient Semiconductors Pvt. Ltd. now amalgamated with theCompany received technical know how from Silicon Power Corporation U.S.A. (an ex.General Electric facility) for manufacturing semiconductor devices upto 125 mm.
Efforts towards technology absorption include continued efforts for processimprovements and improved product types/ designs in order to improve the efficiencyproductivity and profitability of the Company.
(ii) Information regarding technology imported during last 3 years: Nil
(iii) Expenditure incurred on Research and Development: Nil
(c) Foreign Exchange Earnings and Outgo
|(i) Foreign Exchange earned during the year ||- Rs. 51194466/- |
|(ii) Outgo of Foreign Exchange during the year ||- Rs. 115971025/- |
PARTICULARS OF EMPLOYEES
In terms of Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company does not have any employee who is employed throughoutthe financial year and in receipt of remuneration of Rs. 60 Lacs or more or employees whoare employed for part of the year and in receipt ofRs. 5 Lacs or more per month.
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office of the company during business hours on working days of theCompany up to the date of forthcoming Annual General Meeting. If any member is interestedin inspecting the same such member may write to the company secretary in advance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report forms an integral part of this report andgives details of the overall industry structure economic developments performance andstate of affairs of your Company's businesses and other material developments during thefinancial year 2018-19.
CORPORATE GOVERNANCE REPORT
Since the paid up equity capital of the Company is less than Rs. 10 Crores and thenetworth of the Company is less than Rs. 25 Crores the provisions of Regulations1718192021222324252627 and clauses (b) to (i) of sub-regulation 2 of Regulation46 and para C D & E of Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 pertaining to Corporate Governance are not applicable tothe Company.
The Board wishes to place on record its sincere appreciation for assistance andco-operation received from customers bankers regulatory and government authoritiesduring the year. The Directors express their gratitude to the shareholders for reposingtheir faith and confidence in the Company. The directors also acknowledge the contributionmade by the Company's employees at all levels. Our consistent growth was made possible bytheir hard work solidarity and support.
| ||For and on behalf of the Board of Directors |
|Place : Mumbai ||Hasmukh J. Shah |
|Date : 12th August 2019 ||Chairman |