To,

The Members

VOLTAMP TRANSFORMERS LIMITED

Makarpura, Vadodara – 390014, Gujarat.

Your Directors have pleasure in presenting the 49th Annual Report and Financial Statements for the Financial Year ended 31st March, 2016.

WORKING RESULTS:

(Rs in Lacs)
PARTICULARS 2015-2016 2014-2015
Sales & Services Income 56,330.32 51,688.75
Profit before Financial Charges and Depreciation 6,570.77 4,091.15
Financial Charges (Bank Charges) 43.91 30.03
Depreciation 597.77 721.79
Profit before Taxation 5,929.09 3,339.33
Provisions for Taxation : Current Tax 1,550.00 875.00
Excess Provision of earlier years written back (252.27)
Deferred Tax (18.92) (124.73)
Net Profit for the year 4,398.01 2,841.33
Add: Previous years’ surplus 1,066.01 957.91
Profits available for appropriation: 5,464.02 3,799.24
Appropriation therefrom:
A. Proposed Dividend 1,264.64 1,011.71
B. Dividend Tax on above 257.46 207.15
C. General Reserve 2,500.00 1,500.00
D. Surplus 1,441.92 1,066.01
E. Adjustment of Depreciation 14.37
5,464.02 3,799.24

DIVIDEND:

The Directors recommend payment of dividend @ 125 %, i.e. Rs 12.50 per equity share of Rs 10 each on 1,01,17,120 equity shares, for the year ended March 31, 2016.

PERFORMANCE REVIEW:

During the year under review, the Sales and Other Income increased to 591.59 crores as compared to Rs 538.05 crores in the previous year. The sales in terms of volume increased to 9202 MVA as compared to 8389 MVA in the previous year. The profit before tax (PBT) steeply increased to Rs 59.29 crores as compared to Rs 33.39 crores in the previous year and profit after tax (PAT) increased to Rs 43.98 crores as compared to Rs 28.41 in the previous year.

The performance of the Company exceeded the expectations both in terms of improvement in volumes as well as improvement in margins. The operating profit in year under review was much better than expected, largely due to fall in input material prices on fixed price orders. It is also due to volume getting lifted. The Company experienced high volatility in the prices of principal raw materials as well as currency exchange rates. The negative impact of the currency exchange rate fluctuation was compensated with the fall in the prices of Copper, Oil and Steel material. Since demand revival is not taking place on sustainable basis and under utilisation of industry capacity,the Company may not able to maintain the similar level of margins for financial year 2016-17.

The financial year 2016-2017 started with order backlog of Rs 239 crores (4642 MVA) with no sign of revival in Corporate Capex.

Timely collection of receivables has been the prime concerns of the Company. During the year, the collection drive has improved the realization of the old / stuck dues of the Company. With the Government thrust on investment revival, the position is expected to improve over a period of 12-18 months.

For detailed analysis of the performance, please refer to the Management Discussion and Analysis section of the Annual Report given in Annexure-IV.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND :

The unclaimed dividend amount aggregating to Rs 1,09,238for the financial year ended on 31st March, 2008 was transferred to the Investor Education and Protection Fund established by the Central Government, during the financial year ended March 31, 2016, pursuant to Section 205C of the Companies Act, 1956 (the relevant Section under theCompanies Act, 2013 is yet to be notified).

DISCLOSURE OF PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The disclosure of particulars relating to conservation of energy and technology absorption and foreign exchange earnings and outgo as required by Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is given in Annexure - I.

EMPLOYEES:

The industrial relations during the year under review have remained cordial and satisfactory. The Board thanks all the Employees for their valuable contribution to the working of the Company.

In accordance with the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees and the Disclosure pertaining to remuneration and other details are set out in the Annexure - II to the Directors’ Report. However, as per the provisions of Section 136(1) of the Companies Act, 2013, theDirectors’ Report is being sent to the shareholders without this Annexure. Shareholders interested in obtaining a copyof the Annexure may write to the Company Secretary at the Company’s Registered Office.

CORPORATE GOVERNANCE:

In line with requirement of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,Report on Corporate Governance is given in Annexure – III along with certificate from M/s. Chandulal M. Shah & Co., Chartered Accountants confirming compliance with the requirement of Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report is given in Annexure - IV.

DIRECTORS’ RESPONSIBILITY STATEMENT UNDER SECTION 134 (5) OF THE COMPANIES ACT, 2013:

The Directors confirm that:

1) In the preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

2) Such accounting policies have been selected and consistently applied and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date;

3) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the applicable provisions of the Companies Act, 2013, for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;

4) Annual accounts have been prepared on a going-concern basis;

5) Internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively.

6) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As per the applicable provisions of the Companies Act, 2013, Shri Kunjalbhai L. Patel, retire by rotation, and being eligible offers himself for reappointment. Shri Kunjalbhai L. Patel, being re-appointed, have confirmed that he is not disqualified from being appointed as Directors in terms of section 164 of the Companies Act, 2013.

During the year, there is a change in Key Managerial Personnel of the Company; viz. Mr. Achal Thakkar, resigned from the post of Company Secretary and Mr. Sanket Rathod has been appointed as a Company Secretary from his earlier position of Assistant Company Secretary.

AUDITORS:

The present Auditors of the Company M/s. Chandulal M. Shah & Co. are retiring at the forthcoming Annual General Meeting of the Company and are eligible for reappointment. The Company has received the requisite certificate from them pursuant to Section 139 and 141 of the Companies Act, 2013 and rules framed thereunder, confirming their eligibility for re-appointment as Auditors of the Company.

COST AUDITORS:

Pursuant to provisions of section 148 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, The Board, on the recommendation of the Audit Committee, has approved the appointment of M/s. Y. S.Thakar & Co., Cost Accountants as the Cost Auditors and remuneration payable to them, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2017. The Company has received a letter from M/s. Y. S. Thakar & Co., Cost Accountant, Vadodara showing their willingness to be appointed as a cost Auditors stating that they are not disqualified under section 148(5) read with section 141(3) of the Companies Act, 2013.

SECRETARIAL AUDIT REPORT

The Board of Directors of the Company has appointed M/s. J. J. Gandhi & Company, Practicing CompanySecretaries, Vadodara, to conduct the Secretarial Audit, pursuant to section 204 of the Companies Act, 2013 and the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 and their report, viz. SecretarialAudit Report in Form MR-3 is appended to this Report as Annexure V.

NUMBER OF MEETINGS OF THE BOARD

The Company has complied with the provisions for holding Board Meetings and the gap between any twomeetings did not exceed 120 days. During the financial year under review, four Board Meetings were held, viz. on20th May, 2015, 14th August, 2015, 4th November, 2015, and 9th February, 2016.

INDEPENDENT DIRECTORS

The Independent Directors hold office for a fixed term and are not liable to retire by rotation.

In accordance with Section 149(7) of the Act, each Independent Director has given written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

The Policy of the Company on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is appended as Annexure - VI to this Report. The Policy has been posted on the website of the Company (http:// www.voltamptransformers.com/pdf/nomination_remuneration_policy.pdf)

COMMENTS ON STATUTORY AUDITORS’ REPORT & SECRETARIAL AUDITORS’ REPORT

Neither the statutory auditors nor the Secretarial Auditors of the Company, in their respective reports, have made any qualifications, reservations or adverse remarks.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

There areno loans, guarantees or investments falling under section186 of the Companies Act, 2013.However, investments not falling under purview of this, made by the Company are given in the Notes to the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)

There are no contracts or arrangements entered into with related parties, except payment of managerial remuneration to Whole-time Directors (MDs). Further, the policy on Related Party Transactions duly approved by the Board of Directors of the Company has been posted on the website of the Company. (http://www.voltamptransformers.com/pdf/ related_party_transactions_policy.pdf)

AMOUNT PROPOSED TO BE TRANSFERRED TO RESERVES

Amount proposed to be transferred to Reserves is Rs 25 crores.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

RISK MANAGEMENT POLICY AND INTERNAL FINANCE CONTROL ADEQUACY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks in achieving key objectives of the Company. The Company has developed and implemented Risk Management Policy of the Company to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage.

The internal control systems are commensurate with the nature, size and complexity of the business of the Company. These are routinely tested and certified by Statutory as well as Internal Auditors.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) Committee was constituted by the Board of Directors, pursuant to Section 135 of the Companies Act, 2013 and CSR policy has also been framed by the Board as per the said Section and the Rules made there under. The Policy on CSR has been posted on the website of the Company (http:// www.voltamptransformers.com/pdf/corporate_social_responsibility_policy.pdf).

The details about initiatives taken by the Company on Corporate Social Responsibility during the year is appended at Annexure - VII of the report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form MGT-9 as on 31.03.2016 is appended to this Report as Annexure VIII.

ANNUAL EVALUATION BY THE BOARD

The evaluation framework for assessing the performance of Board including the individual Directors are based on certain key measures, viz. Attendance of Board Meetings and the Committee Meetings, qualitative contributionin deliberations on agenda items, long term view in the inputs regarding development and sustainability of the Company and consideration of shareholders and other stakeholders’ interests.

The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Boardof Directors. A member of the Board does not participate in the discussion of his / her evaluation. The Board of Directors has expressed their satisfaction to the evaluation process.

WHISTLE BLOWER POLICY

The Whistle Blower Policy (Vigil Mechanism) was constituted by the Board of Directors, pursuant to Section 177 of the Companies Act, 2013 and the Rules made there under and Clause 49 of the Listing Agreement, to report genuine concerns of directors and Employees. The Policy has been posted on the website of the Company (http:// www.voltamptransformers.com/pdf/whistle_blower_policy.pdf). No person has been denied access to Audit Committee.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, no complaints were reported to the Board.

APPRECIATION AND ACKNOWLEDGEMENT:

Your Directors wish to convey their thanks to all the Company’s valued Customers, Bankers, Vendors, Business Associates, Government Authorities, and Shareholders for their continued support and patronage to the Company.

The Board also expresses its appreciation towards the contribution made by all the Employees of theCompany.

FOR AND ON BEHALF OF THE BOARD
Place : Vadodara KANUBHAI S. PATEL
Date : May 30, 2016 CHAIRMAN & MANAGING DIRECTOR

ANNEXURE - I TO THE DIRECTORS’ REPORT

A] CONSERVATION OF ENERGY:

[a] Energy conservation measures taken :

1. Closely monitoring use of heating ovens.

2. Use of energy efficient LED lighting and modernization in distribution system.

3. Systematic studies of power consumption to avoid unwanted energy losses.

4. Close monitoring and control of Diesel consumption.

5. Creating awareness among all employees to conserve energy.

6. Use of energy efficient motors.

[b] Additional investments and proposal if any, being implemented for reduction of consumption of energy:

Installation of Vacuum Ovening for distribution transformers manufacturing facility.

[c] Impact of the measures at [a] and [b] above for reduction of energy consumption and consequent impact on the cost of production of goods:

The various measures taken by the Company have resulted in reduction in consumption of energy and efforts are going on to further reduce the consumption of energy and the consequent impact on the cost of production.

[d] Total energy consumption and energy consumption per unit of production as per Form-A: Not Applicable.

B] TECHNOLOGY ABSORPTION:

Research and Development (R&D):

[a] Specific areas in which R&D carried out by the Company:

1. Developed in house foil winding machine.

2. Use of Special Bunch & CTC Conductors to minimize losses.

3. Use of special CTC Conductor bending tools.

4. Developed in house Tinning Plant for copper bus-bar.

[b] Benefits derived as a result of the above R&D :

1. Transformer is able to withstand severe short circuit conditions without deformation, hence reliability is ensured.

2. Foil wound windings are better in mechanical stability even during abnormal forces.

3. Price Competitiveness.

4. Improvement in quality with cost saving.

[c] Further plan of action:

1. Continued emphasis on development of cost effective components and work on import substitution.

2. Identification and narrowing down the gaps in the areas of product, process, manufacturing and information technologies.

3. Wastage reduction / control by implementation of 5-S.

Technology Absorption, Adaptation an Innovation:

[a] Efforts, in brief, made towards technology absorption, adaptation and innovation :

Extensive training in technical and management fields with a special emphasis on Total Quality Management.

[b] Benefits derived as a result of the above efforts: Improvement in product quality.

[c] Technology imported during the last five years:

The Company has executed technical license agreement with PROCOM, Germany for getting Aluminum

Foil Winding Technology.

C] FOREIGN EXCHANGE EARNINGS AND OUTGO:

[a] Foreign Exchange used : Rs 99,58,317
[b] Foreign Exchange earned : Rs 1,73,31,382