Transformers & Rectifiers India Ltd.
|BSE: 532928||Sector: Engineering|
|NSE: TRIL||ISIN Code: INE763I01026|
|BSE 10:34 | 17 Feb||9.35||
|NSE 10:29 | 17 Feb||9.35||
|Mkt Cap.(Rs cr)||124|
|Mkt Cap.(Rs cr)||123.98|
Transformers & Rectifiers India Ltd. (TRIL) - Director Report
Company director report
Your Directors have pleasure in presenting the 24th Annual Report onthe business and operations together with the Audited accounts for the financial yearended 31st March 2018. The performance of the Company for the financial year ended on31st March 2018 is summarised below:
Financial Highlight (Rs in Lakhs)
Your Directors do not recommend any dividend on Share Capital (Previousyear - NIL).
Review of Operations
For the financial year ended 31st March 2018 your Company hasreported standalone total revenue of Rs 70017.18 Lakhs and net Profit of Rs 435.94 Lakhsas compared to previous year's total revenue of Rs 87766.98 Lakhs and net profit of Rs2172.33 Lakhs.
The Paid up Equity Share Capital as at 31st March 2018 stood at Rs1325.64 Lakhs. During the financial year under review the Company had subdivided itsEquity Share from the face value of Rs 10/- per share to Rs 1/- per share.
During the financial year 2017-18 Your Company has manufactured 22740MVA out of which Changodar unit produced 4242 MVA Moraiya unit produced 17098 MVA& Odhav unit produced 1400 MVA against the last year's total production of 24428MVA.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company pursuant toRegulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and prepared in accordance with the Accounting Standards prescribed by the Instituteof Chartered Accountants of India are attached herewith this Annual Report.
As on 30th April 2018 the Company has Order Book position of Rs 89411Lakhs. The table below indicates the division of our order book between our businesssegments: (Rs in Lakhs)
During the financial year the Company has achieved export sales of Rs3281.50 Lakhs.
The Company has neither accepted nor invited any deposit from publicfalling within the ambit of Section 73 of the Companies Act 2013 and The Companies(Acceptance of Deposits) Rules 2014.
Particulars of Loans Guarantees and Investments
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statement.
Export to Russia
During the financial year your Company has received prestigious orderfrom Russia to supply 150 MVA Furnace transformer and 160 MVA Power Transformer.
Export to Australia
During the financial year your Company has received prestigious orderfrom Australian Transmission Utility to supply multiple numbers of 65 MVA 125 MVA and 220MVA Low Noise Eco friendly transformers. From this order 65 MVA and 125 MVA transformerssuccessfully manufactured tested and rolled out. First 65 MVA transformers aresuccessfully commissioned at Hamilton substation in March 2018.
Large rating transformers
During the financial year your Company has received multibillionsingle order to supply 15 Nos. of large rating transformers from Central Utitlity.
500 MVA rating transformers
During the financial year your Company has manufactured and rolled out27 numbers of 500 MVA rating transformers highest so far in single financial year.
During the financial year your Company has manufactured and rolled outaround 150 Nos. of solar transformers for pan India projects.
As on 31st March 2018 your Company has Four (4) Subsidiaries namelyTranspares Limited (51% holding) Transweld Mechanical Engineering Works Limited (WhollyOwned Subsidiary) TARIL Infrastructure Limited (Wholly Owned Subsidiary) SavasEngineering Company Private Limited (Wholly Owned Subsidiary) and Two (2) Joint VentureCompanies namely T&R Jingke Electrical Equipments Private Limited (60% holding) andVortech Private Limited (76% holding). Further there has been no material change in thenature of business of the subsidiaries.
Shareholders interested in obtaining a copy of the audited annualaccounts of the Subsidiary Companies may write to the Company Secretary.
In terms of proviso to sub-section (3) of Section 129 of the CompaniesAct 2013 the salient features of the financial statement of the subsidiaries is set outin the prescribed form AOC-1 which forms part of this Board of Director's Report as Annexure- 1 The Performance of Subsidiary Companies are as under: Transpares Limited
Transpares Limited (Transpares) is the Subsidiary of the Company. Forthe financial year 2017-18 achieved sales of Rs 2657.85 Lakhs against Rs 2571.51 Lakhsduring the previous financial year 2016-17. Total Profit before tax for the financial year2017-18 is Rs 235.81 Lakhs as against the total profit before tax of Rs 195.81 Lakhs forthe previous financial year 2016-17.
Profit after Tax (PAT) was Rs 184.37 Lakhs during the financial year asagainst Rs 130.29 Lakhs for the previous financial year 2016-17.
Transweld Mechanical Engineering Works Limited
Transweld Mechanical Engineering Works Limited ("Transweld")is the wholly owned subsidiary of the Company. For the financial year 2017-18 achievedsales of Rs 1077.69 Lakhs against Rs 2376.00 Lakhs during the previous financial year2016-17. Total profit before tax for the financial year 2017-18 is Rs 8.63 Lakhs asagainst the total profit before tax of Rs 133.94 Lakhs for the previous financial year2016-17.
Profit after Tax (PAT) was Rs 3.32 Lakhs during the financial year asagainst Rs 94.67 Lakhs for the previous financial year 2016-17.
TARIL Infrastructure Limited
TARIL Infrastructure Limited ("TARIL") is the wholly ownedsubsidiary of the Company. For the financial year 2017-18 achieved sales of Rs 358.92Lakhs against Rs 558.86 Lakhs during the previous financial year 2016-17. Total profitbefore tax for the financial year 2017-18 is Rs 3.30 Lakhs as against the total profitbefore tax of Rs 30.79 Lakhs for the previous financial year 2016-17.
Profit after Tax (PAT) was Rs 2.02 Lakhs during the financial year asagainst Rs 21.75 Lakhs for the previous financial year 2016-17.
Savas Engineering Company Private Limited
Savas Engineering Company Private Limited ("Savas") is thewholly owned subsidiary of the Company. For the financial year 2017-18 achieved sales ofRs 2467.33 Lakhs against Rs 1799.81 Lakhs during the previous financial year 2016-17.Total profit before tax for the financial year 2017-18 is Rs 16.17 Lakhs as against thetotal Loss before tax of Rs 39.72 Lakhs for the previous financial year 2016-17.
Profit after Tax (PAT) was Rs 48.43 Lakhs during the financial year asagainst loss of Rs 31.07 Lakhs for the previous financial year 2016-17.
T&R Jingke Electrical Equipments Private Limited
T&R Jingke Electrical Equipments Private Limited (formerly known asJingkeParth Electrical Equipments Private Limited) ("T&R Jingke") is thejoint venture Company. For the financial year 2017-18 achieved sales of Rs 3.47 Lakhsagainst
Rs 11.00 Lakhs during the previous financial year 2016-17. Total lossbefore tax for the financial year 2017-18 is Rs 47.24 Lakhs as against the total Loss ofRs 119.82 Lakhs for the previous financial year 2016-17.
Loss after Tax was Rs 47.24 Lakhs during the financial year as againstloss of Rs 119.82 Lakhs for the previous financial year 2016-17.
Vortech Private Limited
Vortech Private Limited ("Vortech") is the joint ventureCompany (The JV partner has agreed to transfer his share to the Company vide MOU dated22nd March 2018 in view of which it is considered as Subsidiary for preparation ofStandalone and Consolidated Financial Statements). Financial year 2017-18 was first yearof Incorporation of the Company. Total Loss for the financial year 2017-18 is Rs 22.33Lakhs.
The Board of Directors of your Company comprises of Eight (8) Directorsof which Four (4) are Executive Directors and Four (4) are Non-Executive and IndependentDirectors as on 31st March 2018.
In terms of the provision of Section 149 of the Companies Act 2013 andRegulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a Company shall have atleast one Woman Director on the Board of theCompany. Your Company has Mrs. Karuna Mamtora as Director on the Board of the Companysince its inception who is presently the Executive Director of your Company.
As per the provisions of Section 152 of the Companies Act 2013 andArticles of Association of the Company Mr. Karuna Mamtora being longest in the officeshall retire at the ensuing Annual General Meeting and being eligible for re-appointmentoffers herself for re-appointment.
Details of Director seeking re-appointment as required under theListing Regulations are provided in the Notice forming part of this Annual Report. Theirre-appointments are appropriate and in the best interest of the Company.
All Independent Directors have given declarations that they meet thecriteria of Independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The terms and conditions of the Independent Directors are incorporated on thewebsite of the Company www.transformerindia.com
To familiarize the Independent Directors with the strategy operationsand functions of our Company the Executive Directors/ Senior Managerial Personnel makepresentations to the Independent Directors about the Company's strategy business modeloperations service and product offerings markets organization structure finance humanresources technology quality facilities and risk management. Further the Company hasdevised a Familiarization Programme for Independent Director and same been placed on theweb site of the Company at the Link: http://www.transformerindia.com/download/Details-of-Familiarization-programme%20-%202017-18.pdf
None of the Directors of the Company is disqualified for beingappointed as Director as specified in Section 164 (2) of the Companies Act 2013.
Appointments and Resignations of the Key Managerial Personnel
Mr. Jitendra Mamtora Chairman and Whole-time Director Mr. SatyenMamtora Managing Director Mr. Devendra Kumar Gupta Chief Financial Officer and Mr.Rakesh Kiri Company Secretary of the Company are the Key Managerial Personnel as per theprovisions of the Companies Act 2013
Number of the Meetings of the Board of Directors
Regular Board Meetings are held once in a quarter inter-alia toreview the quarterly results of the Company.
During the financial year 2017-18 the Board of Directors met Five (5)times i.e. 5th May 2017 3rd August 2017 13th September 2017 25th November 2017 and12th February 2018. Detailed information on the Board Meetings is included in theCorporate Governance Report which forms part of this Annual Report.
The details of number of meetings of Committees held during thefinancial year 2017-18 forms part of Corporate Governance Report.
Committees of the Board of Directors
Your Company has several Committees which have been established as partof the best Corporate Governance practices and are in compliance with the requirements ofthe relevant provisions of applicable laws and statutes.
The Company has following Committees of the Board of Directors:
Stakeholder's Grievances and Relationship Committee
Corporate Social Responsibility Committee
The details with respect to the compositions powers terms ofreference and other information of relevant committees are given in details in theCorporate Governance Report which forms part of this Annual Report.
Corporate Social Responsibility Committee
In Compliance with Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Company hasestablished Corporate Social Responsibility (CSR) Committee and statutory disclosures withrespect to CSR Committee and an Annual Report on CSR Activities forms part of this Boardof Director's Report as Annexure-2.
Your Company has over the years been fortunate to have eminent personsfrom diverse fields as Directors on its Board. The Nomination and Remuneration Committeehas formalized a policy on Board Diversity to ensure diversity of experience knowledgeperspective background gender age and culture.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a structured questionnaire was prepared after taking into considerationof the various aspects of the Board's functioning Composition of the Board andCommittees culture execution and performance of specific duties obligation andgovernance. The performance evaluation of the Independent Directors was completed.
During the financial year under review the Independent Directors meton 12th February 2018 interalia to discuss:
Performance evaluation of Non-Independent Directors and Board ofDirectors as a whole;
Performance evaluation of the Chairman of the Company;
Evaluation of the quality of flow of information between theManagement and Board for effective performance by the Board.
The Board of Directors expressed their satisfaction with the evaluationprocess.
Policy on Director's Appointment and Remuneration
The Company has a Nomination and Remuneration Committee. The Committeereviews and recommend to the Board of Directors about remuneration for Directors and KeyManagerial Personnel and other employee up to one level below of Key Managerial Personnel.The Company does not pay any remuneration to the Non-Executive Directors of the Companyother than sitting fee for attending the Meetings of the Board of Directors and Committeesof the Board. Remuneration to Executive Directors is governed under the relevantprovisions of the Act and approvals.
The Company has devised the Nomination and Remuneration Policy for theappointment re-appointment and remuneration of Directors Key Managerial Personnel andSenior Management Personnel. All the appointment re-appointment and remuneration ofDirectors Key Managerial Personnel and Senior Management Personnel are as per theNomination and Remuneration Policy of the company.
The Company has established a vigil mechanism and accordingly framed aWhistle Blower Policy. The policy enables the employees to report to the managementinstances of unethical behavior actual or suspected fraud or violation of Company's Codeof Conduct. Further the mechanism adopted by the Company encourages the Whistle Blower toreport genuine concerns or grievances and provide for adequate safe guards againstvictimization of Whistle Blower who avails of such mechanism and also provides for directaccess to the Chairman of the Audit Committee in exceptional cases. The functioning ofvigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistleblowers has been denied access to the Audit Committee of the Board. The Whistle BlowerPolicy of the Company is available on the website of the Company www.transformerindia.com.
Risk Management Policy
The Company is aware of the risks associated with the business. Itregularly analyses and takes corrective actions for managing/ mitigating the same.
The Company has framed a formal Risk Management Framework for riskassessment and risk minimization which is periodically reviewed to ensure smooth operationand effective management control. The Audit Committee also reviews the adequacy of therisk management framework of the Company the key risks associated with the business andmeasure and steps in place to minimize the same.
Sexual Harassment at Workplace
The Company has constituted Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the company has complied with provisions of the same.
There were no incidences of sexual harassment reported during the yearunder review in terms of the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
Directors' Responsibility Statement
As stipulated in Section 134(3)(c) read with sub section 5 of theCompanies Act 2013 Directors subscribe to the "Directors' ResponsibilityStatement" and confirm that: a) In preparation of annual accounts for the year ended31st March 2018 the applicable accounting standards have been followed and that nomaterial departures have been made from the same; 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 financial year and of the profit or loss of the Company forthat year; c) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) The Directors had prepared the annual accounts for the year ended31st March 2018 on going concern basis. e) The Directors had laid down the internalfinancial controls to be followed by the Company and that such Internal Financial Controlsare adequate and were operating effectively; and f ) The Directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.
Assets of your Company are adequately insured against various perils.
The Company endeavours to maximize the wealth of the Shareholders bymanaging the affairs of the Company with pre-eminent level of accountability transparencyand integrity.
A separate section on Corporate Governance standards followed by yourCompany as stipulated under Regulation 27 and 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is enclosed as an annexure to this Report. ACertificate from Mr. Tapan Shah Practicing Company Secretary conforming compliance tothe conditions of Corporate Governance as stipulated under Regulation 27 and 34 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed tothis Report.
Secretarial Standards for the Board of Directors and General Meetings(SS-1 & SS-2) are applicable to the Company. The Company has complied with theprovisions of both Secretarial Standards.
Termination of Joint Venture Agreements
During the financial year under review the Company has terminated aJoint Venture Agreement with Mr. Gopal Sanasy as on 23rd March 2018 for the purpose ofproviding site services and maintenance of transformer and other oils. The Company willhold majority of share in the Joint venture.
Issue of Equity Shares by way of private placement to QIB
The Company has taken approval from the shareholders in 23rd AnnualGeneral Meeting held on 30th August 2017 to the issue of Equity Shares by way of privateplacement to QIB up to an aggregate amount of Rs 250 Crores. However the Company has notmaterialized the same. Hence the Board of Directors seeks shareholders's approval to theissue of Equity Shares by way of private placement to QIB up to an aggregate amount of Rs250 Crores as per SEBI regulation.
Management Discussion and Analysis
The Management Discussion and Analysis Report for the financial yearunder review as stipulated under Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented in the separate section formingpart of this Annual Report.
Material Changes and Commitment affecting Financial Position of theCompany
There are no material changes and commitments affecting the financialposition of the Company which has occurred between the end of financial year as on 31stMarch 2018 and the date of Director's Report i.e. 3rd August 2018.
Particular of Employees
The information required pursuant to Section 197 of the Companies Act2013 read with Rule 5 of the Companies (Appointment and remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In term of Section 136 of the Companies Act 2013 the Report is being sent toall shareholders and others entitled thereto excluding the aforesaid information and thesaid particulars are available for inspection by the Members at the Registered Office ofthe Company during the business hours on working days of the Company. The membersinterested in obtaining such particulars may write to the Company Secretary.
The ratio of remuneration of each Director to the median employee'sremuneration and other details in terms of sub-section 12 of Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this Board of Director's Report as Annexure-3.
Extract of Annual Return
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) ofSection 92 of the Companies Act 2013 read with Rule 12 of Companies (Management andAdministration) Rules 2014 the extract of the Annual Return as on 31st March 2018 inForm MGT-9 forms part of this Board of Director's Report as Annexure-4. Form MGT-9is available in Annual Report on the website of the Company www.transformerindia.com
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
Information relating to Conservation of Energy Technology Absorptionand Foreign Exchange Earning and Outgo required under Section 134 (3) (m) of theCompanies Act 2013 forms part of this Board of Director's Report as Annexure-5.
Contracts or Arrangements with Related Parties
All the related party transactions that were entered during thefinancial year were in the Ordinary course of business of the Company and were on arm'slength basis. There were no materially significant related party transactions entered bythe Company with its Promoters Directors Key Managerial Personnel or other persons whichmay have potential conflict with the interest of the Company.
All Related Party transactions are placed before the Audit Committeefor approval wherever applicable. Prior omnibus approval for normal business transactionsis also obtained from the Audit Committee for the related party transactions which are ofrepetitive nature and accordingly the required disclosures are made to the Committee onquarterly basis in terms of the approval of the Committee.
The policy on Related Party Transactions as approved by the Board ofDirectors is uploaded on the website of the Company www.transformerindia.com
The particulars of contracts or arrangements with related partiesreferred to in Section 188(1) of the Companies Act 2013 as prescribed in Form AOC - 2which forms part of this Board of Director's Report as Annexure-6
Internal financial control systems and their adequacy
Your Company has laid down the set of standards processes andstructure which enables to implement internal financial control across the Organizationand ensure that the same are adequate and operating effectively. To maintain theobjectivity and independence of Internal Audit the Internal Auditor reports to theChairman of the Audit Committee of the Board.
The Internal Auditor monitors and evaluates the efficacy and adequacyof internal control system in the Company its compliance with the operating systemsaccounting procedures and policies of the Company. Based on the report of InternalAuditor the process owners undertake the corrective action in their respective areas andthereby strengthen the Control. Significant audit observation and corrective actionsthereon are presented to the Audit Committee of the Board.
The provision of Cost Audit as per sub-section (1) of section 148 ofthe Companies Act 2013 applicable to the Company and the Company has maintained properrecords and account of the same as required under the Act.
AUDITORS Statutory Auditors
The Statutory Auditors K.C. Mehta & Co. (Firm Registration No.106237W) Chartered Accountants has been appointed to hold the office from the conclusionof this 23rd Annual General Meeting till the conclusion of 28th Annual General Meeting ofthe Company. The Company has received the consent from the Auditors and confirmation tothe effect that they are not disqualified to be appointed as the Auditors of the Companyin the terms of the provisions of the Companies Act 2013 and the Rules made thereunder.
Manubhai and Shah LLP Chartered Accountants Ahmedabad has beenappointed as Internal Auditors of the Company. Internal Auditors are appointed by theBoard of Directors of the Company on a yearly basis based on the recommendation of theAudit Committee. The Internal Auditor reports their findings on the Internal Audit of theCompany to the Audit Committee on a quarterly basis. The scope of internal audit isapproved by the Audit Committee.
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany had appointed Mr. Tapan Shah Practicing Company Secretary to undertake theSecretarial Audit of the Company for the financial year 2017-18. The Report of theSecretarial Audit Report for the financial year 2017-18 is annexed to this Board ofDirector's Report as Annexure-7.
Your Company has appointed Kushal & Co. Cost AccountantsAhmedabad as Cost Auditor of your Company to audit the cost accounts for the financialyear 2018-19.
As per Section 148 read with Companies (Audit & Auditors) Rules2014 and other applicable provisions if any of the Companies Act 2013 the Board ofDirectors of your Company has appointed Kushal & Co. Cost Accountants as the CostAuditor of your the Company for the financial year 2018-19 on the recommendations made bythe Audit Committee subject to the approval of the Central Government. The remunerationproposed to be paid to the Cost Auditors subject to the ratification by the members atthe ensuing Annual General Meeting would be Rs 35000/- (Rupees Thirty Five Thousandsonly) excluding out of pocket expenses if any.
The Cost Audit report for the financial year 2017-18 was filed withinthe due date. The due date for submission of the Cost Audit Report for the financial year2017-18 is within 180 days from 31st March 2018.
Statutory Auditor's Report
The Statutory Auditors' Report on the accounts of the Company for theaccounting year ended 31st March 2018 is self-explanatory and do not call for furtherexplanations or comments that may be treated as adequate compliance of Section 134 of theCompanies Act 2013.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:
1. Details relating to deposits covered under Chapter V of theCompanies Act 2013.
2. Issue of Equity Shares with differential rights as to dividendvoting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme save and ESOS.
4. Neither the Managing Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture.
Your Directors would like to express their appreciation for theassistance and co-operation received from the financial institutions banks Governmentauthorities customers vendors and members during the year under review. Your Directorsalso wish to place on record their deep sense of appreciation for the committed servicesby the executives staff and workers of the Company.
By Order of the Board of Directors
Chairman and Whole-time Director (DIN : 00139911)
Place : Ahmedabad
Date : 3rd August 2018