MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Overview
Accurate Transformers Limited has its registered office at Delhi and manufacturing
units located at the following locations:
|
1. Meerut Road, Opp. Raj Nagar Chowki, Ghaziabad, U. P. |
| Works |
2. D-16-17, UPSIDC Industrial Area, Greater Noida, U. P. |
|
3. A-97, UPSIDC Industrial Area, Sikandrabad, U. P. |
|
4. 1394/2, M. Langha Road, Dehradun, Uttaranchal |
|
5. Plot No. 2, Sector 8A, Integrated Industrial Area, Ranipur, Haridwar and
Uttaranchal |
The Directors Report gives in detail the performance of your Company and therefore,
please refer to "Review of operations" in this regard.
A number of opportunities exist for Transformer Industry. The need of the hour is to
take proactive steps both internal and external to the Organization and Management of your
Company is planning for the same and your Company is leaving no stone unturned to utilize
every opportunity.
The demand for transmission and distribution equipments is expected to be high in the
coming years. This is because the Government is striving to bridge the widening gap
between the demand for and supply of power in the country by adding new generating
capacities.
The power transformers market revenues in India are expected to grow at the CAGR of 14%
till 2018. Under the 12th Five Year Plan (2012-17), the government plans to spend USD 200
Billion on developing and strengthening power infrastructure in India. Similarly, IEEMA
(Indian Electrical and Electronics Manufacturers Association) along with government framed
a policy to limit the imports of transformers from China and Korea along with changing
government policies on import duty for CRGO steel is likely to further promote the
domestic transformers industry in India. Indian transformer industry continues to face
tough competition from the Chinese manufacturers. However, with the continuous support
from the government to promote the power transformer industry through investments, tax
benefits, subsidies etc. will help the industry to grow over the coming years. We believe
that the above plans of the Government of India for generation capacity addition and
facilitation of investments in the T & D system would provide buoyant conditions for
growth, especially for Transformer Sector.
OPPORTUNITIES IN POWER SECTOR
Recognizing the fact that the power sector is of vital importance for development of
the economy, the Government of India has taken many policies initiatives in the recent
past like:
(a) The National Power Policy, 2005
(b) The Electricity Act, 2003
(c) Setting up of Central Electricity Regulatory Commission in 1998
(d) Guidelines for private investment in Transmission, 2006
(e) Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)
(f) Launching o f Re-structured Accelerated Power Development and Reforms Programme.
(g) Clean-up of State Electricity Board losses.
Likely upswing in the Indian Economy, high GDP growth, thrust on development of
infrastructure etc, have also contributed significantly for growth of electrical equipment
industry.
Additional capacity of 78,577 Mega Watt is being implemented through several
initiatives of Government of India for setting up of several new projects in public and
private sectors. Seven Ultra Mega Projects of 4000 MW each are at various stages of
implementation.
Industry size, Growth rate
The Transformer Industry in India has been in the forefront for over 50 years and has a
well matured technology base up to 800 KV class. There is a strong base of about 150
Transformer Companies in India. Besides meeting the domestic requirement, India is
exporting Transformers to over 50 Countries covering USA, Europe, South Africa, Cyprus,
Syria, Iraq and other Middle East and Far East Countries all over the world.
Transformer industry growth due to:
• Captive power
• Replacement demand
• Huge Government spending in Power Sector
• Exports
• Industrial Demand
• Huge infrastructure Development
With every Megawatt of generating capacity being added, an additional requirement of 5
times transformer capacity is needed. This provides opportunity for players in the
transformer manufacturing space to benefit to the most. This demand coupled with demand
arising out of the replacement market also shows a promising future for the players in the
sector. The average life of a transformer is 20-30 years, which means that the
transformers installed during the Vth - VIIIth plan would be replaced now.
Indian Power Scenario
The power sector is one of the crucial inputs to the growth of other industrial sectors
and overall economic growth of India. It has been rightly awarded the status of an
infrastructure sector and can avail of a tax holiday and priority status in bank lending.
India has fourth largest installed generating capacity in world but the per capita
consumption of electricity is very low, owing to a huge gap between demand and supply of
power. Traditionally the power sector was dominated by the public sector but has now been
opened for competition from private and foreign players by the government sector.
The power sector is highly regulated by the government and is dependent on the policies
framed regarding bidding for power projects. Regulations regarding transmission of the
power between states and pricing for power supply to consumers is also decided by the
government. While other infrastructure sectors such as telecom, roads, and airports have
seen much progress in the last few years as India embarked on a fast growth track, the
power sector has lagged behind with not much progress.
Strength of your Company
• Companys major customers are various SEBs who have initiated restructuring for
better efficiency hence the business prospects of the Company good. In most of the cases,
payments are made out of Word Bank Funds.
• Rural Electrification Projects is another profitable area where Company has
gained substantial growth.
• The Company has a proven track record of successfully operating in the power
sector, hence continue to be in the priority list of various State Electricity Boards.
• The exposure falls under SSI sector which is a thrust area.
• Two of our manufacturing units are located in tax exemption zone leading to
noteable tax savings.
Threats
• The entry of multi-nationals companies in the field of power and distribution
transformers Sector. This may result in cut throat competition.
• Though the SEBs are under restructuring process, they are still facing with
liquidity constraint resulting in delayed payments to their suppliers.
• Major customers of the Company are various SEBs.
• Higher commodity and oil price both locally and international.
• Destabilization of European and USA economics.
Disclosure of Material Transactions
Considering the size and nature of operations there were no related party transactions
of a materially significant nature in terms of the Listing Agreement with Stock Exchanges
that could have potential conflict with the interests of the Company at large.
Accounting Policies
The Company has adopted accounting treatments which are in conformance with those
prescribed by the Accounting Policies.
Insider Trading
The Company has comprehensive guidelines in accordance with the SEBI Regulations in
this regard which advise and caution the Directors, Management and Executives on the
procedures to be followed, while dealing with the securities of the Company. The insider
Trading Guidelines framed by the Company helps in ensuring compliance with these
requirements.
Communication to Shareholders
Full and complete disclosure of information regarding the Companys financial situation
and performance is an important part of the Companys Corporate Governance ethics. The
Company has demonstrated this commitment by sending its shareholders a full version of its
Annual Report, despite a Regulatory exemption.
The Companys quarterly results in the format prescribed by the Stock Exchanges are
approved and taken on record by the Board within the prescribed timeframe and sent
immediately to all Stock Exchanges on which Companys shares are listed. These results are
published in leading newspapers in English and Hindi.
Company Website
www.accuratetransformers.com
Information on Annual General Meetings
The details of the last three Annual General Meetings are as under:
List of Last 3 years AGM / EGM
| AGM / EGM |
DATE |
SPECIAL BUSINESS |
| AGM |
30-09-2013 |
None |
| AGM |
29-09-2012 |
Special Business |
|
|
(a) Passing of resolution under section 81(1). |
| AGM |
30-09-2011 |
Special Business |
|
|
(a) Modification in the remuneration payable to Shri |
|
|
Deepak Sharma, Managing Director of the Company. |
Details of Capital Market Non-Compliance, if any
The Company has complied with all requirements of the Listing Agreement with Stock
Exchanges as well as the regulations and guidelines prescribed by SEBI. There were no
penalties or strictures imposed on the Company by any statutory authorities for non -
compliance on any matter related to capital markets.
Shareholders / Investors Grievance Committee
The Committee was re-constituted on 29th January, 2011 and now comprises of Shri
Subhash Chand Sharma (Chairman) and Mr. Bhupal Singh & Mr. Gaurav Rajoriya the Company
Secretary of the Company has been designated as Compliance Officer of the Company. During
F.Y. 2013-14, the Shareholders / Investors Grievance Committee met on 4 times on
23-5-2013, 30-7-2013, 05-11-2013, 25-01-2014, at which all Members were present.
The Committee reviews the redressal of Investors complaints related to Transfers and
Transmission of shares, non-receipt of Annual Reports, Dividends and other share related
matters, the periodicity and effectiveness of the share transfer process, statutory
certification, depositary related issues and activities of the Registrar and Share
Transfer Agent.
Report on corporate governance
This chapter, read together with the information given in the chapter titled Additional
Shareholder transfer process, statutory certifications, depository related issues and
activities of the Registrar and Share Transfer Agent.
The Company has received 02 complaints from shareholders during the financial year
2013-14 and as on now none of the Complaints are pending.
CEO Certification
The Managing Director has certified to the Board with report to the financial
statements, internal controls and other matters, as required by Clause 49 of Listing
Agreement with Stock Exchanges and the said Certificate is contained in this Annual
Report. Information, constitute the compliance report on Corporate Governance during FY
2013-14.
Auditors Certificate on Corporate Governance
The Company has obtained a certificate from the Auditors of the Company regarding
Compliance with the provisions relating to Corporate Governance prescribed by Clause 49 of
the Listing Agreement with Stock Exchanges, which is attached at the end of this report.
Industrial Relations
Industrial relations remained peaceful during the year under review.
Enhancing Shareholders Value
The Company continues its relentless focus on strengthening its competitiveness in the
transformer and Rural Electrification businesses. The Company would strive to deploy its
resources in the most judicious and optional manner so as to secure the interest of its
shareholders in the near and long term.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Companys
objectives, expectations, or predictions may be forward looking within the meaning of
applicable Securities Laws and Regulations. Actual results may differ materially from
those expressed in the statement; important factors that could influence the Companys
operations include global and domestic supply and demand conditions affecting selling
prices of finished goods, input availability prices, changes in Government Regulations,
Tax Laws, and Economic Developments within the country and other factors such as
litigation and industrial relations.
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