Focus Lighting & Fixtures Ltd Directors Report.
Focus Lighting and Fixtures Limited our Directors take pleasure in presenting the 14 th Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31 st March, 2019.
The financial perfomance of your Company for financial Year 2018-19 and 2017-18 is summrized as below:
(Rs in Lacs)
|For Financial Year Ended||For Financial Year Ended|
|31st March 2019||31st March 2018||31st March 2019||31st March 2018|
|Profit before Tax||1,343.25||985.19||1,340.71||976.53|
|Provision for Tax||367.68||389.07||367.68||389.07|
|Profit/ (loss) After Tax||975.57||596.12||973.03||587.46|
FINANCIAL PERFORMANCE AND STATE OF COMPANY AFFAIRS
During the year under review, your Company has recorded total revenue of Rs. 12,175.18 Lacs against Rs. 9,263.04 Lacs in the previous year resulting in 31.44% growth over previous year. Profit before Taxation for the financial year ended 31 st March, 2019 increased to Rs. 1,343.25 Lacs as compared to Rs. 985.19 Lacs in the previous year resulting in 36.34% growth. Profit after Tax is Rs. 975.57 Lacs as compared to Rs. 596.12 Lacs in the previous year resulting in 63.65% growth.
During the year under review, your Company has recorded total revenue of Rs. 11,048.33 Lacs against Rs. 9,169.25 Lacs in the previous year resulting in 20.49% growth over previous year. Profit before Taxation for the financial year ended 31 st March, 2019 increased to Rs. 1,340.71 Lacs as compared to Rs. 976.53 Lacs in the previous year resulting in 37.29% growth. Profit after Tax is Rs. 973.03 Lacs as compared to Rs. 587.46 Lacs in the previous year resulting in 65.63% growth.
Transfer to Reserves
The Board of Directors of your Company, has decided not to transfer any amount to the Reserves for the year under review.
PARTICULARS OF LOANS, GUARANTEES, SECURITIES AND INVESTMENTS
Details of loans, guarantees and investments under section 186 of the companies Act, 2013 have been disclosed in the Financial Statements.
In line with its dividend policy, Board of Directors of your Company declared Interim dividends aggregating to 10%, i.e. Rs. 1/- per Equity Share of face value of Rs. 10/- each for the financial year 2018-19. The Board, after considering holistically the relevant circumstances and keeping in view the Companys dividend distribution policy, has decided that it would be prudent, not to recommend any Final Dividend for the year under review.
As on March 31, 2019, your Companys (Standalone) Term Loan availed was Nil and short term loan availed were Rs. 279.11 Lacs.
CHANGE IN THE NATURE OF BUSINESS
For sustained growth in the future, Company wants to rely on the main businesses of Company; there is no change in the nature of the business of the Company during the year.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company have established Plus Light Tech F.Z.E., (UAE) and Focus Lighting & Fixtures Pte. Ltd (Singapore) as wholly owned subsidiaries. The Company does not have any joint venture or Associate Company as on 31 st March, 2019.
CHANGE IN CAPITAL STRUCTURE OF THE COMPANY
There is no change in the capital structure of the Company during the Financial year ended 31 st March, 2019.
DIRECTORS AND KEY MANAGERIAL PERSONS The Composition of the Board and Key Managerial Persons of the Company as on 31 st March, 2019 were as follows:
|Sr. No.||Name||Category||Date of Appointment|
|1||Amit Vinod Sheth||Manging Director (Key Managerial Person)||11/08/2005|
|2||Deepali Amit Sheth||Executive Director||11/08/2005|
|3||Nalini Sheth||Non-Executive Director||11/08/2005|
|4||Chetan Navinchandra Shah||Non-Executive & Independent Director||29/12/2017|
|5||Mahesh Rachh||Non-Executive & Independent Director||29/12/2017|
|6||Chetan Pravin Trivedi||Chief Financial Officer (Key Managerial Person)||15/10/2016|
|7||Preeti Saxena||Company Secretary (Key Managerial Person)||01/02/2018|
DISCLOSURES BY DIRECTORS
The Directors on the Board have submitted notice of interest under Section 184(1) i.e. in Form MBP 1, intimation under Section 164(2) i.e. in Form DIR 8 and declaration as to compliance with the Code of Conduct of the Company. All Independent Directors have also given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
RETIRE BY ROTATION
Ms. Deepali Amit Sheth, (DIN: 01141083), Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting and, being eligible, offers herself for re-appointment. Your Directors recommends her re-appointment.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The manner in which the evaluation has been carried out has been covered in the Corporate Governance Report.
POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
Policy for selection and appointment of Directors and their remuneration is provided as Annexure A to this report.
The details of the number of Board and Committee meetings of your Company held during the financial year, indicating the number of meetings attended by each Director is set out in the Corporate Governance Report.
The Composition of various committees of the Board of Directors is provided in the Corporate Governance Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System including Internal Financial Controls, commensurate with the size, fiscale and complexity of its operations as approved by the Audit Committee and the Board. The Internal Financial Controls are adequate and working effectively. The scope and authority of the Internal Audit is laid down by the Audit Committee and accordingly the Internal Audit Plan is laid out to maintain its objectivity and independence, the Internal Auditors reports to the Chairman of the Audit Committee of the Board.
The Internal Auditors monitors and evaluates the efficiency and adequacy of internal control system in the Company. Based on the report of internal audit, process owners/concerned departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.
Further, the Board of each of the Group Companies has carried out comprehensive analysis of its business activities and processes carried out by them and laid down Internal Financial Controls which are adhered to by the Group Companies.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established/formed a vigil mechanism to deal with genuine concerns of the employees and Directors. All employees and Directors are made aware of the mechanism. The Company has established a system to ensure effective functioning of the mechanism.
COMMITTEE AND POLICY UNDER 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 & Redressal) Act, 2013 and an Internal Complaints Committee has been set up to redress complaints received regarding Sexual Harassment at workplace, with a mechanism of lodging & redress the complaints. All employees (permanent, contractual, temporary, trainees etc.) are covered under this policy.
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with Rules thereunder, the Company has not received any complaint of sexual harassment during the year under review.
The Company being listed on the Small and Medium Enterprise platform is exempted from provisions of corporate governance as per Regulation 15 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. It is pertinent to mention that the Company follows majority of the provisions of the corporate governance voluntarily and report on corporate governance is provided as Annexure B to this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is disclosed separately as part of the annual report.
The Company complies with all applicable secretarial standards.
EXTRACT OF ANNUAL REPORT
As required pursuant to section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, (as amended) is furnished in the Form MGT-9.
The Extract of Annual Return are displayed on the website of the Company:
M/s. N P Patwa & Co., Chartered Accountants, Firm Registration No. 107845W were appointed as Statutory Auditors of the Company by members in the last Annual General Meeting of the Company held on 28th September 2018 to hold Office from the conclusion of 13 th AGM till the conclusion of 14 th AGM to be held for the year ending 31 st March, 2019 as per the provisions of Section 139 of the Companies Act, 2013 and being eligible have consented and offered themselves for re-appointment. It is proposed to appoint M/s. N P Patwa & Co., Chartered Accountants as Auditors of the Company from the conclusion this Annual General Meeting till the conclusion of next Annual General Meeting of the Company to be held in year 2020.
They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder. As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
Necessary resolution to consider above re-appointment is included in the Notice of the 14th Annual General Meeting.
In terms of Section 204 of the Companies Act, 2013, the Board of Directors of your Company has appointed M/s. Anubhuti Tripathi & Associates., Practicing Company Secretaries, Mumbai as a Secretarial Auditors to conduct an Audit of secretarial records and compliances in accordance with the provisions of Section 204 of the Companies Act, 2013 for the financial year ended on March 31, 2019. The Secretarial Audit Report given by M/s. Anubhuti Tripathi & Associates., Company Secretaries, Mumbai is enclosed as Annexure C, to this report.
During the Financial Year 2018-19 under review, the Company has neither invited nor accepted any public deposits within the meaning of Section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014. As such, no specific details prescribed in Rule (8)(1) of the Companies (Accounts) Rules, 2014 (as amended) are acquired to be given or provided.
RELATED PARTY TRANSACTIONS
All related party transactions entered during the period under review were on arms length basis and in the ordinary course of business. In terms of Section 134(3)(h) of the Companies Act, 2013. There are no materially Significant Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel, which may have a potential con ict with the interest of the Company at large.
As per applicable provisions of the Companies Act, 2013, the details of contracts and arrangements with related parties in Form AOC 2 are annexed herewith as Annexure D.
The details of the transactions with Related Parties are provided in the accompanying financial statements as required under Accounting Standard 18.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no Significant & material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.
RISK MANAGEMENT POLICY
The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;
b) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for that period;
c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they had prepared the annual accounts on a going concern basis;
e) they had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;
f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the statutory and external consultants and the reviews of the management and the relevant Board committees, including the audit committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the year under review.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has earned net Profit of Rs. 596.12 Lacs during the Financial year ended 31 st March 2018 and therefore it is required to constitute CSR committee and make expenses towards CSR activities. As per the requirements of Section 135 of the Companies Act read with Companies (Corporate Social Responsibility Policy) Rules 2014, any Company having net Profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee and the said Committee shall formulate Corporate Social Responsibility Policy and shall ensure that the Company spends, in every financial year, at least two per cent. of the average net profits of the Company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.
The Company has constituted a Corporate Social Responsibility (CSR) Committee, as per the provisions of Section 135 of the Companies Act, 2013, vide resolution passed in the meeting of the Board of Directors held on June 29, 2018.
The Company has in place a CSR policy which provides guidelines to conduct CSR activities of the Company. The CSR policy is available on the website of the Company www.pluslighttech. com.
During the Financial Year 2018-19, the Committee met one time viz. on December 03, 2018.
Explanations for shortfall in expenditure towards Corporate Social Responsibility:
In terms of the CSR Policy of the Company, the initiatives and identified areas include skill development, Eradicating hunger, poverty and malnutrition, Women empowerment and Contribution to eligible government fund (State and Central Government) for social developments and socio-economic reliefs funds including natural disasters and calamities.
Keeping in view requirements of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules 2014, within the overall ambit of CSR on a sustainable basis, discussions on an on-going basis is being held with several implementing partners. Your Company is committed towards the CSR activity and would be taking up a suitable CSR projects/ activities in FY 2019-20.
The Annual Report on CSR activities is annexed herewith as Annexure E.
THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING OUTGO
Information on conservation of energy, technology absorption, Foreign Exchange earnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules,2014 are provided hereunder:
A. Conservation of Energy:
The steps taken or impact on conservation of energy and utilizing alternate sources of energy:
As per the international standards we use 1600 lux 6000 K in our factory. Whereas, standard lux level is 500 for factory. With 6000 K & bright lux levels workers working are more active which is not the case with poor Lighting & wrong color temperature and white light is proved to keep humans more active.
When we use such high lux levels energy cost goes high because of higher wattage and to reduce energy cost we have all the fixtures in bathroom passages on IOT (Internet of Things) which is smart wireless BLE technology designed & patented system from Wisilica. It also has wireless motion sensors which sense motion & switch on & switch off light if no body present in the bathrooms.
We also use high efficient lamp technology with optical technology in our factory to increase the efficiency. All the lights used in our Ahmedabad Factory are LED lights which leads in reduction of energy consumption & reduces air conditioning load. Whereas, Rapid Rolling Shutters are installed at our Ahmedabad as well as Bhiwandi Factory to reduce air conditioning load and save energy.
The Company is not using any alternate source of energy.
The capital investment on energy conservation equipments: The capital investment on the above led lights and rapid rolling shutters amounts to approx. Rs. 24.15 Lakhs.
8 Technology Absorption
We have done first installation in our factory and it is successfully serving its purpose. Its disruptive technology as it is wireless. This technology is now helping Company in saving energy and cost.
The Company took over complete laboratory for testing efficiency of light fittings from Sheth Vinod Lighting Private Limited in financial year 2018-19.
In case of imported technology (imported during the last three years reckoned from the beginning of the Financial year:
a. The details of technologies imported. Nil
b. The year of import NA
c. Whether the technology been fully absorbed. NA
d. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof.
The expenditure incurred on research and development:
No expenses incurred on research and development in financial year 2018-19.
C. Foreign Exchange Earnings and Outgo
The Foreign Exchange earned in terms of actual in flows during the year and the Foreign Exchange outgo during the year in terms of actual out flows:
The Company has earned foreign exchange on export of goods as follows:
Export Sales Rs. 1011.20 Lakhs
The Company has expended foreign exchange on import of goods as follows:
Imports of Goods/ Material Rs. 1328.47 Lakhs
Exhibition Expenses Rs. 27.44 Lakhs
PARTICULARS OF EMPLOYEES AND REMUNERATION
The information required under Section 197 & Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given below.
a) Ratio of remuneration of each Director to the employees median remuneration:
|Director||Designation||Remuneration p.a. (Rs. in Lacs)||Ratio|
|Mr. Amit Vinod Sheth||Managing Director||64.00||N.A.|
|Mrs. Deepali Amit Sheth||Executive Director||42.00||N.A.|
|Mrs. Nalini Vinod Sheth||Non-executive Director||NIL||N.A.|
b) Percentage increase in the median remuneration of employees in the financial year 2018-19:
|Director||Remuneration||Revenue||Percentage increase in remuneration||Percentage increase in revenue|
|In year||In year||In year||In year|
|Mr. Amit Vinod Sheth||54.00||64.00||9,169.25||11,048.33||18.52%||20.49%|
|Mrs. Deepali Amit Sheth||42.00||42.00||9,169.25||11,048.33||0.00%||20.49%|
Note: Considering the increase in turnover as well as enlargement of roles and responsibilities handled by Directors, thus it was essential to provide them remuneration in lines to the scope of work performed by them.
c) Number of permanent employees on the rolls of the Company as on 31 st March, 2019: 126
d) Relationship between average increase in remuneration and Company performance:
The increase in remuneration is in line with the market trends in the respective Industry. In order to ensure that the remuneration reflects Companys performance, the performance pay is also linked to organization performance, apart from an individuals performance.
e) Comparison of the remuneration of the Key Managerial Personnel (KMP) against the performance of the Company: Remuneration of KMP is in line with the performance of the Company.
f) Variation in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company:
g) Average percentile increase made in the salaries of employees other than key managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Average percentile increase made in the salaries of employees -10% to 20% (Depending on individuals performance.)
h) The key parameters for the variable component of remuneration availed, if any, by the Directors: Not applicable.
i) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None
j) It is hereby affirmed that the remuneration paid during the year is as per the Remuneration policy of the Company.
k) There is no employee covered under the provisions of section 197(14) of the Act.
l) There was no employee in the Company who drew remuneration of Rs. 5,00,000/ - per month or Rs. 60,00,000/ - per annum during the period under review. Hence, the Company is not required to disclose any information as per Rule 5(2) of the Companies (Appointment and Remuneration) Rules, 2014.
MATERIAL CHANGES AND COMMITMENTS
The Company has incorporated a wholly owned Subsidiary on May 9, 2019 in Delaware, USA, there are no investments made for the capital requirements of said wholly owned subsidiary as on the date of this report. The Company had declared interim dividend of 10% i.e. Re. 1/- (Rupee One) for One Equity Share of Rs. 10/- (Rupees Ten Only) each amounting to Rs. 40,85,566/- (Rupees Forty Lacs Eighty-Five Thousand Five Hundred Sixty Six Only) including Dividend Distribution Tax for financial year 2018-19. Except as stated above there were no material changes and commitments affecting the financial position of the Company between the end of financial year and date of the report.
Your Directors would like to express their sincere appreciation of the co-operation and assistance received from Shareholders, Bankers, regulatory bodies and other business constituents during the year under review.
Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, Officers and staff, resulting in successful performance of the Company during the year.
|For and on behalf of the Board of Directors of|
|Focus Lighting and Fixtures Limited|
|Amit Vinod Sheth||Deepali Amit Sheth|
|Place: Mumbai||Managing Director||Executive Director|
|Date: May 29, 2019||DIN: 01468052||DIN: 01141083|