TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Forty Ninth Annual Report on thebusiness and operations of the Company together with the Audited Accounts for thefinancial year ended 31st March 2018.
FINANCIAL RESULTS AND OPERATIONS
| || ||(Amt. in Rs.) |
|Particulars ||Year ended 31.03.2018 ||Year ended 31.03.2017 |
|Revenue from Operations (Net) ||326335351 ||315767303 |
|EBITDA ||36613411 ||35289850 |
|Less - (i) Finance Costs ||13639888 ||11543059 |
|(ii) Depreciation and Amortisation Expenses ||14832676 ||11461607 |
|Profit before Tax ||11430464 ||8995567 |
|Less - (i) Provision for Taxation ||4600000 ||5800000 |
|(ii) Deferred Tax Asset ||(519624) ||(2224828) |
|(iii) Reversal of Excess provision ||(588629) ||(1310349) |
|Profit for the year ||7938717 ||6730744 |
|Add - Other Comprehensive Income for the year ||339573 ||(149045) |
|Add - Balance brought forward from previous year ||89416036 ||82834337 |
|Balance carried to Balance Sheet ||97694326 ||89416036 |
During the financial year 2017-18 your Company reported 3.35% increase in the topline.The total revenue for the financial year was Rs. 326335351/- as against Rs.315767303/- last year. The Company's semiconductor devices and high power equipmentbusiness grew at a steady pace however Company's export business registered de-growthwhich in turn impacted overall growth of the Company. Earnings before Interest Tax andDepreciation and Amortisation (EBITDA) for the year also increased proportionately by 3.75% to Rs. 36613411/- as compared to Rs. 35289850/- last year. Net Profit for the yearalso increased by 17.95 % to Rs. 7938717/- as against Rs. 6730744/- 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.
In order to plough back the accruals your Directors do not recommend any dividend forthe Financial Year ended 31st March 2018. During the year under review no amount fromprofits was transferred to General Reserve.
EQUITY SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2018 was Rs. 69572400/-. Duringthe year under review the Company has not issued any shares with differential votingrights nor has granted any stock options or sweat equity and does not have any scheme tofund its employees to purchase the shares of the Company.
DIRECTORSAND 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 Mr. Hasmukh J. Shah Director of theCompany will retire by rotation and being eligible offers himself for re-appointment.The Board recommends his re-appointment for the consideration of the members of theCompany at the ensuingAnnual General Meeting.
During the year under review Mr. Manoj P. Mehta resigned from the Directorship of theCompany effective 26th March 2018. Your Directors place on record their appreciation forthe contribution made by Mr. Manoj P. Mehta during his tenure as Director of the Company.
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 P. Rambhia Company Secretary arethe Key Managerial Personnel of your Company in accordance with the provisions of Section2(51) 203 of theAct 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.
(a) Statutory Auditors :
M/s.Ajmera Ajmera and Associates (Firm Regn. No.123989W) Chartered Accountants Mumbaiare the statutory auditors of the Company for the year ended 31st March 2018. Theirappointment as the statutory auditors will be ratified at the ensuing Annual GeneralMeeting pursuant to the provisions of Section 139 of the Companies Act 2013 and rulesmade thereunder.
There is no audit qualification reservation or adverse remark for the year underreview.
(b) 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.
There is no secretarial audit qualification for the year under review.
ICRA Limited have reaffirmed their long term Credit rating of [ICRA]BB+ (pronouncedICRA double B plus) rating to the Company's Fund based limits and a short term rating of [ICRA]A4+(pronounced ICRAA four plus) rating to the Company's Non fund based limits. Theoutlook on the long term rating has been maintained as Stable.
EXTRACT OFANNUAL 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 thereare no material related party transactions during the year under review with thePromoters Directors or Key Managerial Personnel. The Company has developed a frameworkthrough Standard Operating Procedures for the purpose of identification and monitoring ofsuch Related Party Transactions.
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 SYSTEMSANDADEQUACY
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.
REMUNERATIONAND 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.
BOARDAND 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. Mr. Pravin G. Shah has beenappointed as a new member of Audit Committee on account of vacancy caused due toresignation of Mr. Manoj P. Mehta from the Directorship of the Company.
There has not been any instances during the year when recommendations of the AuditCommittee were not accepted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Act the directors of your Company confirm that :
i) in the preparation of the annual accounts for the financial year ended 31st March2018 the applicable accounting standards have been followed along with proper explanationrelating 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 31st March 2018 and of the profitof the Company for the financial year ended 31st March 2018;
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.
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.
SIGNIFICANTAND MATERIAL ORDERS PASSED BY THE 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 TECHNOLOGYABSORPTION FOREIGN EXCHANGE EARNINGSAND 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 2018 is given below andforms part of the Director's 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 Factoryalong with 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 hasreceived complete technical know how for Silicon Rectifiers and Silicon ControlledRectifiers upto 30 mm devices from M/s. International Rectifier Corporation CaliforniaU.S.A. The erstwhile Orient Semiconductors Pvt.Ltd. now amalgamated with the Companyreceived technical know how from Silicon Power Corporation U.S.A. (an ex. GeneralElectric 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. 39596237/- |
|(ii) Outgo of Foreign Exchange during the year || ||Rs. 105248851/- |
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 of Rs. 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 DISCUSSIONANDANALYSIS 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 2017-18.
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 Regulations 17 1819 20 21 22 23 24 25 26 27 and clauses (b) to (i) of sub-regulation 2 ofRegulation 46 and para C D & E of Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 pertaining to Corporate Governance are notapplicable to the 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 : 24th May 2018 ||Chairman |