Your Directors have pleasure in presenting the 32nd Annual Report on thebusiness and operations of the Company and the Audited Accounts for the Financial Yearended 31st March 2018.
1. FINANCIAL RESULTS:
[Rupees in Lacs]
| ||2017-18 ||2016-17 |
|Revenue from Operations ||8800.50 ||11459.22 |
|Other Income ||115.04 ||341.40 |
|Total Revenue ||8915.53 ||11800.62 |
|Less: Expenses before Interest and Depreciation ||7857.75 ||9697.16 |
|Less: (a) Interest ||125.92 ||65.80 |
|(b) Depreciation ||115.84 ||136.38 |
|Profit / (Loss) Before Tax ||816.03 ||1901.28 |
|Less: Tax Expenses || || |
|Current Tax ||281.13 ||688 |
|Deferred Tax ||(41.58) ||(13.83) |
|Short / (Excess) provision of earlier year ||(10.09) ||(1.48) |
|Profit after Tax ||586.57 ||1228.59 |
TRANSFER TO RESERVES:
No amount is transferred to the reserves by the Company.
Your Directors have recommended a dividend of Rs.2/- per share (i.e.20%) 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.7626800/-plus dividend distribution tax of Rs.1552664/-.
3. OPERATIONAL HIGHLIGHTS AND PROSPECTS/ STATEMENT OF AFFAIRS:
The Company earned operational income of Rs.8800.50 lacs compared to Rs. 11459.22 lacsfor the previous year. The other income is Rs.115.04 lacs compared to Rs.341.40 lacs inthe previous year.
The total revenue for the year is Rs. 8915.53 lacs against Rs. 11800.62 lacs in theprevious year. Profit after tax is Rs.586.57 lacs as compared to previous year figure ofRs. 1228.59 lacs.
During the period under review your company was able to export transformers valuingRs.13.86 crores as compared to previous year Rs.44.36 crores.
The results were not comparable with previous year. This is mainly due toimplementation of GST which has impacted on costs and rates. The government had earlierexempted excise duty in case of solar transformers; benefit of such exemption is notavailable in GST regime. The Government has not reviewed its policy timely in thisdirection.
The Company has not received any order for windmill transformers since beginning of thefinancial year mainly due to Government policies. This has largely impacted on turnoverof the Company as compared with previous year.
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.
The Company has prepared the Financial Statements for the Financial Year 2017-2018 inaccordance with Indian Accounting Standards.
The current economic scenario shows positive signal of growth in power productionsector cement sector construction service sectors etc. The Company also looks forwardnew business from local private sectors but it largely depends on how the new powerprojects will take place under the initiatives taken by the Central Government.
EXPANSION OF CAPACITY AT NEW FACTORY:-
The Company is investing heavily on new production facility located on Padra Jambusar highway. The new facility will be state-of-the-art with modern equipments andmaterial handling system. Company is investing approximately Rs.36 crores in this facilitywhich will increase revenue by three folds once utilized 100%. The commencement ofproduction at new facility will start from beginning of financial year 2018-2019.
All the properties of the Company including buildings plant & machinery and stockshave been insured.
Your Company has taken BIS approval for many ratings during the year.
The Company is also holding ISO 9001:2000 Certificate since September 2004 for qualitysystems in relation to its factory located at village Bil District Vadodara in the Stateof Gujarat.
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 31/03/2010 was due for remittance on or before28-07-2017 to the Investor Education and Protection Fund established by the CentralGovernment. Pursuant to the provisions of Section 125 of the Companies Act 2013 theCompany transferred 15400 shares to IEPF Account of Central Government for which dividendhas remain unclaimed/unpaid for consecutive 7 years.
7. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2018 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 ends of the financial year to which this financial statement relateon the date of this report.
9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
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 in AnnexureI and 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 OF THECOMPANIES
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 as Annexure-III.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthereunder and the Listing Agreement. This Policy was considered and approved by the Boardhas been uploaded on the website of the Company at www.shilchargroup.com under investors/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 Shah Managing Directorshall retire by rotation and he is eligible for re-appointment. There is no change inconstitution of the Board during the year under review.
The term of Mr. Om Prakash Khanna and Mr. Mukesh Patel as Independent Directors willexpire on 31.03.2019 and are eligible for re-appointment for further term. Accordingly ithas been proposed to make their re-appointment at this Annual General Meeting throughSpecial Resolution for further term of five consecutive years from April 01 2019 up toMarch 31 2024.
14.1 BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Audit Nomination & Remuneration andCompliance Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance 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 theyfulfill 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 and the relevant rules.
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.shilchargroup.com under investors/policydocuments/Vigil Mechanism 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 theannual accounts the applicable accounting standards had been followed along with properexplanation relating to material departures; (b) the directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the (c) financial year and of the profit and loss of the companyfor that period; (d) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities; (e) the directors had prepared the annual accounts on a goingconcern basis; and (f) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.
(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 extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure-IVand the same is attached to this Report.
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 31 Annual General Meeting held on 11.08.2017 made an appointment of M/s.CNK & Associates LLP Chartered Accountants Vadodara as Statutory Auditors to holdthe office for term of 5 years until the conclusion of the 36th Annual General Meeting.The auditors have also confirmed that they hold a valid certificate issued by the PeerReview Board of the Institute of Chartered Accountants of India and have conveyed theireligibility to continue to hold the office for remaining term.
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 qualifications reservations or adverse remarks made by the Auditors.Observations of auditors are self explanatory and do not call for further information.
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 OPTIONPLAN
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 Governance on 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.12324042/- |
|Nature of Employment whether contractual / otherwise ||Permanent |
|Qualification and experience of the Employee ||26 years |
|Date of commencement of employment ||1990 |
|The age of the employee ||52 Years |
|The last employment held by such employee before joining ||NA |
|the Company || |
|The percentage of equity shares held by the employee in ||NA |
|the company within the meaning of clause (iii) of sub - || |
|rule (2) of Rule 5 || |
|Whether any such employee is a relative of any director ||NO |
|or manager of the company and if so name of such || |
|director or manager || |
The information required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and 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 2017-18 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2017-18 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Sr. No. ||Name of Director/ KMP and Designation ||% increase/decrease (-) in Remuneration in the Financial Year 2017-18 ||Ratio of remuneration of each Director / to median remuneration of employees |
|1. ||Mr. Alay Shah ||-37.91% ||97.70:1 |
| ||Managing Director || || |
|2. ||Mr. Prajesh Purohit ||7.31% ||79.71:1 |
| ||Chief Financial Officer || || |
|3 ||Ms. Niki Kandoi ||N.A. ||46.21:1 |
| ||Company Secretary || || |
| ||(w.e.f. 25.12.2017) || || |
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 wasRs 2.24 lacs. iii) In the financial year there was increase of 33.33 % in the medianremuneration of employees; iv) There were 105 permanent employees on the rolls of Companyas on March 31 2018 v) Average percentage increase made in the salaries of employeesother than the managerial personnel in the last financial year i.e. 2017-18 was 9% whereasthe decrease in the managerial remuneration for the same financial year was 37.91%. 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 anycommission from the Company.
27. COST AUDIT
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 Year2017-18.
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. Allfemale employees are covered under the policy. There was no complaint received from anyemployee during the financial year 2017- 18 and hence no complaint is outstanding as onMarch 31 2018 for redressal.
30. SIGNIFICANTAND 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 ||JITENDRA SHAH |
|Date: 28.05.2018 ||CHAIRMAN |
| ||(DIN- 00257348) |