Your Directors have pleasure in presenting the 34thAnnual Report on thebusiness and operations of the Company and the Audited Accounts for the Financial Yearended 31st March 2020.
1. FINANCIAL RESULTS:
[Rupees in Lakhs]
| ||2019-20 ||2018-19 |
|Revenue from Operations ||7127.57 ||11838.51 |
|Other Income ||298.98 ||167.29 |
|Total Revenue ||7426.55 ||12005.80 |
|Less: Expenses before Interest and Depreciation ||6822.51 ||10415.22 |
|Less: (a) Interest ||146.08 ||280.38 |
|(b) Depreciation ||259.01 ||242.96 |
|Profit / (Loss) Before Tax ||198.95 ||1067.24 |
|Less: Tax Expenses || || |
|Current Tax ||34.99 ||238.38 |
|Deferred Tax ||13.51 ||56.59 |
|Short / (Excess) provision of earlier year ||0.67 ||(2.26) |
|Profit after Tax ||149.77 ||774.53 |
TRANSFER TO RESERVES:
No amount is transferred to the reserves by the Company.
Your Directors have recommended a dividend of Rs.1/- per share (i.e. 10%) on Company'spaid up equity share capital comprising of 3813400 equity shares of Rs. 10/- each.
Thus the total dividend outgo for the current fiscal will amount to Rs. 3813400/-.
3. OPERATIONAL HIGHLIGHTS AND PROSPECTS/ STATEMENT OF AFFAIRS:
The Company earned operational income of Rs.7127.57lacs compared to Rs. 11838.51lacsfor the previous year. The other income is Rs.298.98lacsas compared to Rs.167.29lacs inthe previous year.
The total revenue for the year is Rs.7426.55lacs against Rs.12005.80 lacs in theprevious year. Profit after tax is Rs.149.77lacsas compared to previous year figure of Rs.774.53lacs.
During the period under review your company was able to export transformers valuingRs.16.12 Crores as compared to previous year Rs.37.25Crores.
The Company has concentrated on catering needs of renewable energy sector includingsolar and wind energy in local market wherein the Company has been enjoying commendableposition being one of the top companies in India supplying transformers for renewableenergy.
There is no change in nature of business of the Company during the financial year.TheCompany has prepared the Financial Statements for the Financial Year 2019-2020 inaccordance with Indian Accounting Standards (IND-AS).
The Company has made preliminary assessment on adverse impact on the operations due toCOVID-19 pandemic and we are pro-actively taking measures to offset production loss duringnationwide lock down in FY 2020-21. However we believe that the impact is likelyto beshort term in nature.
We expect that post COVID-19 the current economic scenario would show positive signalof growth in power production sector cement sector construction service sectors etc.The Company also looks forward new business from local private sectors but it largelydepends on how the new power projects will take place under the initiatives taken by theCentral Government.
EXPANSION OF CAPACITY AT NEW FACTORY:-
The Companyhas made investment of around Rs. 35croresfor new production facilitylocated on Padra Jambusar highway. The new facility has state-of-the-artwith modernequipment and material handling system. The Company has already started manufacturingoperations at the new factory and would be able to achieve 100% capacity utilisation innext 2-3 years.
All the properties of the Company including buildings plant & machinery and stockshave been insured.
Your Company has taken BIS approval for many ratings of transformers during the year.The Company has also received ISO 9001:2015 Certificate for its new plant during year18-19.
5. CREDIT FACILITIES:
To fund expansion at new factory and for working operations the Company has availedworking capital loan and Foreign Currency Term loan from Standard Chartered Bank. Furtherthe Company has been optimally utilizing its fund based and non fund based working capitalrequirements as tied up with Bank of Baroda. During the year under review the Company wascomfortable in meeting its financial requirements. Effective financial measures have beencontinued to reduce cost of interest and bank charges.
6. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 any unclaimed or unpaid Dividendrelating to the financial year ended on 31/ 03/2012 was due for remittance on or before 04thNovember 2019 to the Investor Education and Protection Fund established by the CentralGovernment. Pursuant to the provisions of Section 125 of the Companies Act 2013 theCompany is under process of transfer of shares to IEPF Account of Central Government forwhich dividend has remain unclaimed/unpaid for consecutive 7 years.
7. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2020 was Rs. 38134000/-. During theyear under review the company has not issued any shares or any convertible instruments.
8. MATERIAL CHANGES
No material changes and commitments affecting the financial position of the Companyoccurred between the endsof the financial year to which this financial statement relate onthe date of this report.
9. 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 Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished inAnnexureIand is attached to this report.
10. RISK MANAGEMENT
The Company has framed a sound Risk Management Policy to identify and evaluate businessrisks and opportunities and the same has become integral part of Company's day to dayoperations. The key business risks identified by the Company are as follows viz. IndustryRisk Management and Operations Risk Market Risk Government Policy risk Liquidity riskand Systems risk. The Company has in place adequate mitigation plans for the aforesaidrisks.
11. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As per the provisions of Companies Act 2013 regarding Corporate Social ResponsibilityCompany have spent CSR expenditure as per Annexure- II attached.
12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OFTHECOMPANIES ACT 2013
There were no loans guarantees made by the Company under Section 186 of the CompaniesAct 2013 during the year under review and hence the furnishing above information is notapplicable.Particulars of Investments are mentioned in Schedule 8 of the FinancialStatements.
13. RELATED PARTY TRANSACTIONS
Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee for its omnibus approval andthe particulars of contracts entered during the year as per Form AOC-2 is enclosed asAnnexure-III. The Board of Directors of the Company has on the recommendation of theAudit Committee adopted a policy to regulate transactions between the Company and itsRelated Parties in compliance with the applicable provisions of the Companies Act 2013the Rules thereunder and the Listing Agreement. This Policy was considered and approved bythe Board has been uploaded on the website of the Company at www.shilchar.com underinvestors/ policy documents/Related Party Policy link.
In accordance with the provisions of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company Mr.Alay J. Shah Director shallretire by rotation and he is eligible for re-appointment.Our founder Promoter and DirectorMr.Jitendrabhai Shah passed away on 07.06.2019 due to advance age. The Board places onrecord its sincere appreciation for his immense contribution for successfully placing theCompany on the path of growth and success.
Mr. Rajesh Rama Varma (DIN-01034325) has been appointed as an Additional Director Non Executive (Independent) for a tenure of 5 years effective from 08.02.2020. Mr.Rajesh Rama Varma is a Fellow Chartered Accountant and has rich experience in InternalControl system and Risk assessment. It is proposed to regularise his appointment asNon-Executive- Independent Director at ensuing Annual General Meeting.
It is proposed to re-appoint Ms.ZarksisParabia (holding DIN 02667359) IndependentDirector of theCompany for further term of five consecutive years from March 14 2021 upto March 23 2026 Mr.ZarksisParabia has rich experience in Transportation of Super HeavyOver Dimensioned equipments material management and Erection of Power Transformers. He iswell averse of nitty-gritty of corporate matters and the Company will be immenselybenefited from his association.
14.1 BOARD EVALUATION
Pursuant to the provisions of the CompaniesAct 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout anannual performance evaluation of its ownperformance the directors individuallyaswell as the evaluation of the workingof its Audit Nomination & RemunerationandCompliance Committees. The mannerin which the evaluation has been carriedout has beenexplained in the CorporateGovernance Report.
14.2 REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Independent Directors SeniorManagement and their remuneration. The Remuneration Policy is stated in the CorporateGovernance Report attached herewith.
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year four Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
The required particulars of various Committees are stated in the Corporate GovernanceReport attached herewith.
14.4 DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfil 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 Listing Regulations and the relevant rules. The IndependentDirectors confirm that they are not aware of any circumstanceor situation which exist ormay be reasonably anticipated that couldimpair or impact their ability to discharge theirduties with an objectiveindependent judgment and without any external influence andthathe/she is independent of the management.
During the year under review the Board of Directors ofthe Company has adopted/approved changes policies in compliance with the recent amendmentsin the Act and SEBIListing Regulations.
14.5 WHISTLE BLOWER POLICY
The Whistle Blower Policy (Vigil Mechanism) was constituted by the Board of Directorspursuant to Section 177 of the Companies Act 2013 and the Rules made thereunder to reportgenuine concerns of Directors and Employees. The Policy has been uploaded on the Company'swebsite and can be accessed at theweblinkhttp://www.shilchar.com/power-distribution/investors-desk.aspx?pg=cm&id=10.
15. AUDIT COMMITTEE AND VIGIL MECHANISM
The composition and other particulars of Audit Committee are provided in the CorporateGovernance Report attached herewith. In pursuant to the provisions of section 177(9)& (10) of the Companies Act 2013 a Vigil Mechanism for directors and employees toreport genuine concerns has been established. The Vigil Mechanism Policy has been uploadedon the website of the Company at www.shilchar.com under investors/policy documents/VigilMechanism Policy link.
16. 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
(c) financial year and of the profit and loss of the company for that period;
(d) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(e) the directors had prepared the annual accounts on a going concern basis; and
(f) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(g) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
17. ANNUAL RETURN
The Annual Return will be placed at the website of the Company at Investors Desk inAnnual Reportsoption on www.shilchar.com.
18. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.No Unsecured loan availed from Directors during the year.
20.1 STATUTORY AUDITORS
The Company at 32ndAnnual General Meeting held on 13.08.2018 made anappointment of M/s. CNK & Associates LLP Chartered Accountants Vadodara as StatutoryAuditors to hold the office for term of 5 years until the conclusion of the 37thAnnualGeneral Meeting. The auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India andhave conveyed their eligibility to continue to hold the office for remaining term.
20.2 SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Kashyap Shah & Co. a Practicing Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit Report is annexedherewith as "Annexure-V '.
20.3 INTERNAL AUDITORS
M/s. C G Pradhan& Co Chartered Accountants performs the duties of internalauditors of the Company and their report is reviewed by the audit committee from time totime.
21. OBSERVATION OF AUDITORS
There are no material qualifications reservations or adverse remarks made by theAuditors. Observations of auditors are self explanatory and do not call for furtherinformation.
22. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control/ Internal Finance Control tosafeguard and protect from loss unauthorized use or disposition of its assets. All thetransactions are properly authorized recorded and reported to the Management. The Companyis following all the applicable Accounting Standards for properly maintaining the books ofaccounts and reporting financial statements. The internal auditor of the company checksand verifies the internal control and monitors them in accordance with policy adopted bythe company.
The Company continues to ensure proper and adequate systems and procedures commensuratewith its size and nature of its business.
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. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
24. CORPORATE GOVERNANCE:
As per Regulation 34(3) and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate Section on Corporate Governanceon corporategovernance practices followed by the Company together with a certificate from theCompany's Auditors confirming compliance forms an integral part of this Report.
25. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report is appended as Annexure-VI to thisReport.
26. PARTICULARS OF EMPLOYEES:
Disclosure under the provisions of Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014with reference to remuneration of employees in excess of the limits prescribed arehereunder:
|Particulars ||Name of the Employee: Mr Alay Shah |
|Designation of the Employee ||Managing Director* |
|Remuneration Received ||Rs.10253403/- |
|Nature of Employment whether contractual / otherwise ||Permanent |
|Qualification and experience of the Employee ||29 years |
|Date of commencement of employment ||1990 |
|The age of the employee ||54 Years |
|The last employment held by such employee before joining the Company ||NA |
|The percentage of equity shares held by the employee in the company within the meaning of clause (iii) of sub - rule (2) of Rule 5 ||NA |
|Whether any such employee is a relative of any director or manager of the company and if so name of such director or manager ||NO |
The information required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointmentand Remuneration of managerial personnel) Rules2014 as amended has been furnished herein below.
The percentage increase in remuneration of each Director Chief Financial Officer andCompany Secretary during the financial year 2019-20 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2019-20 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Sr. Name of Director/ KMP and No. Designation ||% increase/decrease (-) in Remuneration in the Financial Year 2019-20 ||Ratio of remuneration of each Director / to median remuneration of employees |
|1. Mr. Alay Shah ||(0.47%) ||47.05:1 |
|Managing Director || || |
|2. Mr. Prajesh Purohit Chief Financial Officer ||23.6% ||5.87:1 |
|3 Ms. Niki Tiwari Company Secretary ||(0.6.45%) ||0.88:1 |
Note: Independent Directors are paid only sitting fees and hence not included in theabove table.
ii) The median remuneration of employees of the Company during the financial year wasRs2.03lacs.
iii) In the financial year there was an increase of 3.2% in the median remuneration ofemployees;
iv) Therewere 126 permanent employees on the rolls of Company as on March 31 2020
v) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2019-20 was 5.80% whereas thedecrease in the managerial remuneration for the same financial year was 0.47%.
vi) Remuneration paid is as per the Remuneration Policy for Directors Key ManagerialPersonnel and other Employees.
None of the Directors of the Company are in receipt of any commission from the Company.
27. COST AUDIT& COST RECORDS
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 dated 31/12/2014 the activity of your Companyfalls under Non-regulated sectors and hence maintenance of cost records as well as thecost audit as the case may be has been applicable to the Company for the Financial Year2019-20.
28. HUMAN RESOURCES:
During the period under review the personal and industrial relations with theemployees remained cordial in all respects. The management has always carried outsystematic appraisal of performance and imparted training at periodic intervals. TheCompany recognizes talent and has judiciously followed the principle of rewardingperformance.
29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.
The Company has zero tolerance for sexual harassment at its workplace. The Company hasadopted an Anti-harassment Policy in line with the requirements of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. InternalComplaint Committee are set up to redress complaints received regularly and are monitoredby women line supervisors who directly report to the Chairman & Managing Director. Nocomplaint is outstanding as on March 31 2020 for redressal.
(i) number of complaints filed during the financial year:- Nil
(ii) number of complaints disposed of during the financial year:- Nil
(iii) number of complaints pending as at the end of the financial yea: Nil
30. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS/ COURTS
During the year no significant and material order was passed by the Regulators orcourts.
31. STATEMENT OF COMPLIANES OF APPLICABLE SECRETARIAL STANDARDS
The Company has complied with the provisions of Secretarial Standards (I & II)issued by the Institute of Company Secretaries of India and approved by the CentralGovernment under section 118(10) of the Companies Act 2013.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.
| ||For and on behalf of the Board of Directors |
| ||For SHILCHAR TECHNOLOGIES LIMITED |
|Place: Bil District Vadodara ||ALAY SHAH |
|Date: 27.06.2020 ||MANAGING DIRECTOR |
| ||(DIN- 00263538) |
Annexure-I to the Director s Report 2019-20
Particulars under the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules
1988 for the year ended 31stMarch 2020
|Sr. No. Particulars |
|[A] Conservation of Energy: |
|(a) Energy conservation measures taken: |
|1. Application of Gas based Ovens. |
|2. The lighting changed to Picture Tube Lights (PL) |
|3. The Company set up a wind mill project to generate eco friendly electricity being used for captive consumption. |
|4. The numbers as well as capacity of capacitors changed to achieve improved power factor. |
|5. The consumption of Diesel is under close supervision. |
|6. Putting thrust on developing energy efficient transformers. |
|(b) Additional investments and proposals if any being implemented for reduction of consumption of energy:- |
|(c) Impact of measures at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: Saving in power cost |
|(d) Total energy consumption and energy consumption per unit of production as per prescribed Form A: |
|A. Power & Fuel Consumption ||2019-20 ||2018-19 |
|1. Electricity: || || |
|a) Purchased || || |
|Unit ||1011053 ||1234010 |
|Total Amount (in Rs.) ||8075.888 ||9592933 |
|Rate/ Unit ||7.99 ||7.78 |
|b) Own Generation: || || |
|i) Through Diesel Generator || || |
|Diesel Qty (in Ltr) ||1911 ||680 |
|No. of Units Generated ||6936 ||2380 |
|Total Amount (inRs.) ||129965 ||49799 |
|Unit per Ltr of Diesel Oil ||3.63 ||3.50 |
|Total Cost per Unit ||18.70 ||20.92 |
|ii) Through Steam ||Nil ||Nil |
|Turbine/ Generator ||- ||- |
|Unit ||- ||- |
|Units per Ltr. of Fuel Oil/ Gas ||- ||- |
|2. Coal (Specify quantity and - where used) ||NIL ||NIL |
|3. Furnace Oil: || || |
|Quantity in Liters ||NIL ||NIL |
|Total Amount ||NIL ||NIL |
|Average Rate/ Liter ||NIL ||NIL |
|a) Light Diesel Oil: || || |
|LDO Consumed in Liters ||NIL ||NIL |
|Total Amount ||NIL ||NIL |
|Average Rate/ Liter ||NIL ||NIL |
|b) Wind Generation: || || |
|Generated Units ||462782 ||465172 |
|Total Amount ||2549829 ||3174588 |
|Average Rate/ Unit ||5.50 ||6.82 |
B. CONSUMPTION PER UNIT OF PRODUCTION:
Since the Company manufactures different types of transformers it is not practicableto give consumption per unit of production.
[B] Technology Absorption:
(a) Research & Development:
(1) Specific area in which R & D is carried out by the Company:
1.1 The Company is in the process of establishing state of the art facilities forresearch.
1.2 The Company has been investing in setting up optimum testing facilities at variousstages of production process.
(2) Benefits derived as a result of the above R & D Improvement in quality andbetter product mix
(3) Future plan of action:
To invest more in R & D activities.
(4) Expenditure on R & D:
During the financial year ended on 31.03.2019 the Company spent Rs.54.60lacs on R& D activities being 0.72%of its total turnover as compared to Rs.44.75lacs being0.36% in the previous year.
(b) Technology Absorption Adaptation & innovation:
(1) Efforts in brief made towards technology absorption adaptation and innovation.
Your Company has continued its efforts to upgrade its manufacturing facilities ofElectronics & telecommunication transformers.
[C] Foreign Exchange earnings and outgo:
|Sr. No. Particulars ||2019-20 ||2018-19 |
|01. Earning from Export during the year ||161270561 ||372528739 |
|02. Outgo:a) CIF value of Imports ||16393581 ||15566375 |
|b) Expenditure in foreign currency ||478565 ||1209150 |
|c) Travelling ||1256655 ||1454640 |
| ||For and on behalf of the Board of Directors |
| ||For SHILCHAR TECHNOLOGIES LIMITED |
|Place: Bil District Vadodara ||ALAY SHAH |
|Date: 27.06.2020 ||CHAIRMAN & MD |
| ||(DIN- 00263538) |