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TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Forty Ninth Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2018.
FINANCIAL RESULTS AND OPERATIONS
|(Amt. in Rs.)|
|Particulars||Year ended 31.03.2018||Year ended 31.03.2017|
|Revenue from Operations (Net)||326,335,351||315,767,303|
|Less - (i) Finance Costs||13,639,888||11,543,059|
|(ii) Depreciation and Amortisation Expenses||14,832,676||11,461,607|
|Profit before Tax||11,430,464||8,995,567|
|Less - (i) Provision for Taxation||4,600,000||5,800,000|
|(ii) Deferred Tax Asset||(519,624)||(2,224,828)|
|(iii) Reversal of Excess provision||(588,629)||(1,310,349)|
|Profit for the year||7,938,717||6,730,744|
|Add - Other Comprehensive Income for the year||339,573||(149,045)|
|Add - Balance brought forward from previous year||89,416,036||82,834,337|
|Balance carried to Balance Sheet||97,694,326||89,416,036|
During the financial year 2017-18, your Company reported 3.35% increase in the topline. The total revenue for the financial year was Rs. 326,335,351/- as against Rs. 315,767,303/- last year. The Companys semiconductor devices and high power equipment business grew at a steady pace, however Companys export business registered de-growth, which in turn impacted overall growth of the Company. Earnings before Interest, Tax and Depreciation and Amortisation (EBITDA) for the year also increased proportionately by 3.75 % to Rs. 36,613,411/- as compared to Rs. 35,289,850/- last year. Net Profit for the year also increased by 17.95 % to Rs. 7,938,717/- as against Rs. 6,730,744/- last year.
There are no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of the report.
In order to plough back the accruals, your Directors do not recommend any dividend for the Financial Year ended 31st March, 2018. During the year under review, no amount from profits was transferred to General Reserve.
EQUITY SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2018 was Rs. 69,572,400/-. During the year under review, the Company has not issued any shares with differential voting rights nor has granted any stock options or sweat equity and does not have any scheme to fund its employees to purchase the shares of the Company.
DIRECTORSAND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 ("the Act") read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company, Mr. Hasmukh J. Shah, Director of the Company, will retire by rotation and being eligible, offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the members of the Company at the ensuingAnnual General Meeting.
During the year under review, Mr. Manoj P. Mehta, resigned from the Directorship of the Company effective 26th March, 2018. Your Directors place on record their appreciation for the contribution made by Mr. Manoj P. Mehta during his tenure as Director of the Company.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Mr. R. G. Trasi C.E.O. and Mr. Bhavin P. Rambhia Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51), 203 of theAct read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).
The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of Independent and Non Independent Directors. The board expressed their satisfaction with the evaluation process.
During the year under review, your Company has not accepted any deposits within the meaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has not made any investments, nor have given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.
(a) Statutory Auditors :
M/s.Ajmera Ajmera and Associates (Firm Regn. No.123989W), Chartered Accountants, Mumbai are the statutory auditors of the Company for the year ended 31st March, 2018. Their appointment as the statutory auditors will be ratified at the ensuing Annual General Meeting pursuant to the provisions of Section 139 of the Companies Act, 2013 and rules made thereunder.
There is no audit qualification, reservation or adverse remark for the year under review.
(b) Secretarial Auditors :
Pursuant to the provisions of Section 204 of the Act and the rules made thereunder, the Board of Directors of the Company has appointed M/s. Neetu Agrawal & Co., a firm of Company Secretaries in Practice (C.P. No. 9272) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure [B] to the Directors Report.
There is no secretarial audit qualification for the year under review.
ICRA Limited have reaffirmed their long term Credit rating of [ICRA]BB+ (pronounced ICRA double B plus) rating to the Companys Fund based limits and a short term rating of [ICRA]A4+ (pronounced ICRAA four plus) rating to the Companys Non fund based limits. The outlook on the long term rating has been maintained as Stable.
EXTRACT OFANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9, as required under the Act, is annexed as Annexure [A] and forms an integral part of this report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on arms length basis and in the ordinary course of the business and that the provisions of Section 188 of the Act and the Rules made thereunder are not attracted. Thus, disclosure in Form AOC 2 in terms of Section 134 of the Act is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions.
Details of the transactions with related parties are provided in the accompanying notes forming part of the financial statements.
The Company has in place adequate risk management system which takes care of risk identification, assessment and mitigation. Your Company has adopted a Risk Management Policy which establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk. The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of such risks.
There are no risks which in the opinion of the Board threatens the existence of your Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this report.
INTERNAL CONTROL SYSTEMSANDADEQUACY
The Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Companys internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to M/s. Bhandarkar & Kale, Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisals of risks and business processes, besides benchmarking controls with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board, Statutory Auditors and the Business Heads are periodically appraised of the internal audit findings and corrective action taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board.
REMUNERATIONAND NOMINATION POLICY
A Committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of Section 178 of the Companies Act, 2013 and to recommend a policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, payment of remuneration to them and evaluation of their performance and to recommend the same to the Board from time to time.
BOARDAND COMMITTEE MEETINGS
Four meetings of the board were convened and held during the year.
The Board has constituted an Audit Committee with Mr. Kisan R Choksey as Chairman and Mr. Venkitaraman Iyer and Mr. Pravin G. Shah as members. Mr. Pravin G. Shah has been appointed as a new member of Audit Committee on account of vacancy caused due to resignation of Mr. Manoj P. Mehta from the Directorship of the Company.
There has not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Act, the directors of your Company confirm that :
i) in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) the directors have 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 as at 31st March, 2018 and of the profit of the Company for the financial year ended 31st March, 2018;
iii) the directors have 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;
iv) the directors have prepared the annual accounts on a going concern basis;
v) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi) the directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.
As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. The Policy aims to provide protection to female employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee to inquire into complaints of sexual harassment and recommend appropriate action.
During the year under review, no complaints were reported to the Board.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
SIGNIFICANTAND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.
CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGSAND OUTGO
The information under Section 134 (3)(m) of the Act read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 for the year ended 31st March, 2018 is given below and forms part of the Directors Report.
(a) Conservation of Energy :
(i) Steps taken or impact on conservation of energy :
1. Adequate steps for energy conservation, power factor improvement have been taken wherever feasible.
2. For effective treatment of effluents the Company has constructed an effluent treatment plant. Waste water generated from manufacturing process is treated/recycled at Effluent Treatment Plant and used for internal consumption and plantation.
3. There is adequate provision for the treatment of fumes resulting from the use of Sulphuric, Nitric, Hydrofluoric and other acids required for production.
4. Replacement of the conventional light fittings with LED lighting has resulted in lower power consumption for lighting.
(ii) Steps taken by the Company for utilizing alternative source of energy :
The Company has installed 10Kva three phase Roof Top Solar Panels at Baska Factory along with with online Inverter based system as an alternate means of power and to encourage energy conservation. This solar power plant is based on SPV (Solar Photovoltaic Cells) connected to grid.
(iii) Capital Investment on energy conservation equipments :
The Company continuously makes investments in its facility for better maintenance and safety of the operations. The Company has undertaken efforts to rectify the shortfalls in the existing facilities in order to reduce the energy consumption by setting up efficient facilities.
(b) Technology Absorption
(i) Efforts made towards technology absorption and benefits derived like product improvement, cost reduction, product development or import substitution : The Company has received complete technical know how for Silicon Rectifiers and Silicon Controlled Rectifiers upto 30 mm devices from M/s. International Rectifier Corporation, California, U.S.A. The erstwhile Orient Semiconductors Pvt.Ltd., now amalgamated with the Company, received technical know how from Silicon Power Corporation, U.S.A. (an ex. General Electric facility) for manufacturing semiconductor devices upto 125 mm.
Efforts towards technology absorption include continued efforts for process improvements and improved product types/ designs in order to improve the efficiency, productivity and profitability of the Company.
(ii) Information regarding technology imported, during last 3 years : Nil (iii) Expenditure incurred on Research and Development : Nil
|(c) Foreign Exchange Earnings and Outgo|
|(i) Foreign Exchange earned during the year||||Rs. 39,596,237/-|
|(ii) Outgo of Foreign Exchange during the year||||Rs. 105,248,851/-|
PARTICULARS OF EMPLOYEES
In terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company does not have any employee who is employed throughout the financial year and in receipt of remuneration of Rs. 60 Lacs or more, or employees who are employed for part of the year and in receipt of Rs. 5 Lacs or more per month.
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the Company up to the date of forthcoming Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.
MANAGEMENT DISCUSSIONANDANALYSIS REPORT
The Management Discussion and Analysis Report forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Companys businesses and other material developments during the financial year 2017-18.
CORPORATE GOVERNANCE REPORT
Since the paid up equity capital of the Company is less than Rs. 10 Crores and the networth of the Company is less than Rs. 25 Crores, the provisions of Regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation 2 of Regulation 46 and para C, D & E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to Corporate Governance are not applicable to the Company.
The Board wishes to place on record its sincere appreciation for assistance and co-operation received from customers, bankers, regulatory and government authorities during the year. The Directors express their gratitude to the shareholders for reposing their faith and confidence in the Company. The directors also acknowledge the contribution made by the Companys employees at all levels. Our consistent growth was made possible by their hard work, solidarity and support.
|For and on behalf of the Board of Directors|
|Place : Mumbai||Hasmukh J. Shah|
|Date : 24th May, 2018||Chairman|