Transformers & Rectifiers India Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 25th Annual Report on the business and operations together with the Audited accounts for the financial year ended 31st March, 2019. The performance of the Company for the financial year ended on 31st March, 2019 is summarised below:

Financial Highlight

(र: in Lakhs)

Particulars Standalone
2018-2019 2017-2018
Net Revenue from Operations 83281.97 69309.92
Other Income 1023.06 698.26
Total Revenue 84305.03 70008.18
Cost of Raw Materials Consumed (includes decrease/(increase) in stock 65672.87 52680.76
Excise Duty - 815.57
Employee Benefits Expenses 2981.77 3023.34
Finance Costs 4489.50 4344.60
Depreciation and Amortization 1696.77 1470.05
Other Expenses 8672.24 6986.45
Total Expenses 83513.15 69320.77
Profit/(Loss) before exceptional items & tax 791.88 687.41
Exceptional Item - -
Profit/(Loss) before tax 791.88 687.41
Tax Expense 296.76 251.01
Net Profit/(Loss) after tax 495.12 436.40
Other Comprehensive Income/(Expenses) 19.89 (0.46)
Total Comprehensive Income for the year 515.01 435.94

Dividend

Your Directors do not recommend any dividend on Share Capital (Previous year - NIL).

Review of Operations

For the financial year ended 31st March, 2019, your Company has reported standalone total revenue of र: 84305.03 Lakhs and net Profit of र: 495.12 Lakhs as compared to previous years total revenue of र: 70008.18 Lakhs and net profit of र: 436.40 Lakhs.

Share Capital

The Paid up Equity Share Capital as at 31st March, 2019 stood at र: 1325.64 Lakhs.

MVA Production

During the financial year 2018-19, Your Company has manufactured 20451MVA, out of which Changodar unit produced 9442 MVA, Moraiya unit produced 10183MVA & Odhav unit produced 826 MVA, against the last years total production of 22740 MVA.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India are attached herewith this Annual Report.

Order Book

As on 30th June, 2019, the Company has Order Book position of Rs77508 Lakhs. The table below indicates the division of our order book between our business segments:

(र: in Lakhs)

Type of Transformers Order Book %
Power transformer 63411 81.80
Orders For Spares 8568 11.10
Reactors 867 1.10
Distribution Transformer 956 1.20
Furnace transformer 2019 2.60
Rectifier transformer 1687 2.20
Total 77508 100.00

Exports

During the financial year, the Company has achieved export sales of Rs5609.70 Lakhs.

Fixed Deposit

The Company has neither accepted nor invited any deposit from public, falling 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 the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement.

Achievements:

Order from Australia

During the financial year, your Company had received prestigious order from Australian Transmission Utility to supply multiple numbers of 40 MVA Low Noise Eco friendly transformers.

Export to Australia

During the financial year, your Company had manufactured and supplied 220 MVA transformer to Australian Transmission Utility successfully commissioned at Lily vale substation in December 2018.

220 kV Short circuit test

During the financial year, your Company successful dynamic short circuit test conducted for 30.24 and 42 MVA single phase 220 kV class track side transformers.

Subsidiary Companies and Joint Venture Company

As on 31st March, 2019, your Company has Five (5) Subsidiaries namely Transpares Limited (51% holding), Transweld Mechanical Engineering Works Limited (Wholly Owned Subsidiary), TARIL Infrastructure Limited (Wholly Owned Subsidiary), Savas Engineering Company Private Limited (Wholly Owned Subsidiary), Vortech Private Limited (Wholly Owned Subsidiary) and One (1) Joint Venture Companies T&R Jingke Electrical Equipments Private Limited (60% holding).Further there has been no material change in the nature of business of the subsidiaries.

Shareholders interested in obtaining a copy of the audited annual accounts of the Subsidiary Companies may write to the Company Secretary.

In terms of proviso to sub-section (3) of Section 129 of the Companies Act, 2013 the salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1, which forms part of this Board of Directors Report as Annexure - 1

The Performance of Subsidiary Companies and Joint Venture Company are as under

Transpares Limited

Transpares Limited (Transpares) is the Subsidiary of the Company. For the financial year ended archived sales of र: 3110.61 Lakhs against र: 2657.85 Lakhs during the previous financial year 2017-18. Total Profit before tax for the financial year 2018-19 is र: 196.68 Lakhs as against the total profit before tax of र: 235.81Lakhs for the previous financial year 2017-18.

Profit after Tax (PAT) was र: 120.17 Lakhs during the financial year as against र: 184.37 Lakhs for the previous financial year 2017-18.

Transweld Mechanical Engineering Works Limited

Transweld Mechanical Engineering Works Limited ("Transweld") is the wholly owned subsidiary of the Company. For the financial year ended Transweld archived sales of र: 1298.96 Lakhs against र: 1077.70 Lakhs during the previous financial year 2017-18. Total loss before tax for the financial year 2018-19 is र: 25.81 Lakhs as against the total profit before tax of र: 8.63 Lakhs for the previous financial year 2017-18.

Loss after Tax (PAT) was र: 30.83 Lakhs during the financial year as against the total profit before tax of र: 3.32 Lakhs for the previous financial year 2017-18.

TARIL Infrastructure Limited

TARIL Infrastructure Limited ("TARIL") is the wholly owned subsidiary of the Company. For the financial year ended TARIL archived sales of र: 136.76 Lakhs against र: 358.92 Lakhs during the previous financial year 2017-18. Total loss before tax for the financial year 2018-19 is र: 54.50 Lakhs as against the total profit before tax of र: 3.30 Lakhs for the previous financial year 2017-18.

Loss after Tax (LAT) was र: 54.38 Lakhs during the financial year as against the total profit before tax of र: 2.02 Lakhs for the previous financial year 2017-18.

Savas Engineering Company Private Limited

Savas Engineering Company Private Limited ("Savas") is the wholly owned subsidiary of the Company. For the financial year ended Savas archived sales of र: 2336.77 Lakhs against र: 2467.33 Lakhs during the previous financial year 2017-18. Total loss before tax for the financial year 2018-19 is र: 73.34 Lakhs as against the total profit before tax of र: 161.72 Lakhs for the previous financial year 2017-18.

Loss after Tax (PAT) was र: 57.79 Lakhs during the financial year as against profit of र: 47.99 Lakhs for the previous financial year 2017-18.

Vortech Private Limited

Vortech Private Limited ("Vortech") is the wholly owned subsidiary of the Company. Total loss before tax for the financial year 2018-19 is र: 0.27 Lakhs as against the total Loss before tax of र: 22.33 Lakhs for the previous financial year 2017-18.

Loss after Tax (PAT) was र: 0.27 Lakhs during the financial year as against profit of र: 22.33 Lakhs for the previous financial year 2017-18.

T&R Jingke Electrical Equipments Private Limited

T&R Jingke Electrical Equipments Private Limited (formerly known as JingkeParth Electrical Equipments Private Limited) ("T&R Jingke") is the joint venture Company. For the financial year ended T&R Jingke archived sales of र: 55.34 Lakhs against र: 3.47 Lakhs during the previous financial year 2017-18. Total loss before tax for the financial year 2018-19 is र: 0.20 Lakhs as against the total Loss of र: 47.24 Lakhs for the previous financial year 2017-18.

Loss after Tax (PAT) was र: 0.20 Lakhs during the financial year as against profit of र: 47.24 Lakhs for the previous financial year 2017-18.

Directors

The Board of Directors of your Company comprises of Six (6) Directors of which Three (3) are Executive Directors and Three (3) are Non-Executive and Independent Directors as on 31st March, 2019.

In terms of the provision of Section 149 of the Companies Act, 2013 and Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Company shall have at least one Woman Director on the Board of the Company. Your Company has Mrs. Karuna Mamtora as Director on the Board of the Company since its inception, who is presently the Executive Director of your Company.

As per the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Karuna Mamtora being longest in the office shall retire at the ensuing Annual General Meeting and being eligible for re-appointment, offers herself for re-appointment.

Details of Director seeking re-appointment as required under the Listing Regulations are provided in the Notice forming part of this Annual Report. Their re-appointments are appropriate and in the best interest of the Company.

During the year under review, Mr. Vinod Masson (DIN: 00059587) has been resigned w.e.f 14th April, 2018, Mr. Rajendra Shah (DIN: 00061922) and Mr. Harish Rangwala (DIN: 00278062) has been resigned w.e.f 12th September, 2018 and Mr. Subirkumar Das (DIN: 02237356) has been appointed as Independent Director w.e.f 14th November, 2018.

Mr. Bhaskar Sen (DIN: 01776530) and Mr. Sureshchandra Agarwal (DIN: 00889931), Independent Directors of the Company has been reappointed w.e.f. 1st April, 2019 as their term has been expired as on 31st March, 2019.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms and conditions of the Independent Directors are incorporated on the website of the Company www.transformerindia.com

To familiarize the Independent Directors with the strategy, operations and functions of our Company, the Executive Directors/ Senior Managerial Personnel make presentations to the Independent Directors about the Companys strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management. Further, the Company has devised a Familiarization Program for Independent Director and same been placed on the web site of the Company at the Link: http://www.transformerindia.com/download/ Details%20of%20Familiarization%20Programme%20-%202018-19.pdf

None of the Directors of the Company is disqualified for being appointed 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. Satyen Mamtora, Managing Director, Mrs. Karunaben Mamtora, Executive Director, Mr. Devendra Kumar Gupta, Chief Financial Officer and Mr. Rakesh Kiri, Company Secretary of the Company are the Key Managerial Personnel as per the provisions 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, to review the quarterly results of the Company.

During the financial year 2018-19, the Board of Directors met Four(4) times i.e. 29th May, 2019, 3rd August, 2018, 14th November, 2018 and 13th February, 2019. Detailed information on the Board Meetings is included in the Corporate Governance Report, which forms part of this Annual Report.

The details of number of meetings of Committees held during the financial year 2018-19 forms part of Corporate Governance Report.

Committees of the Board of Directors

Your Company has several Committees which have been established as part of the best Corporate Governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board of Directors:

• Audit Committee

• Stakeholders Grievances and Relationship Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Management Committee

• Transfer Committee

The details with respect to the compositions, powers, terms of reference and other information of relevant committees are given in details in the Corporate 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 the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has established Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to CSR Committee and an Annual Report on CSR Activities forms part of this Board of Directors Report as Annexure-2.

Board Diversity

Your Company has over the years been fortunate to have eminent persons from diverse fields as Directors on its Board. The Nomination and Remuneration Committee has formalized a policyon Board Diversity to ensure diversity of experience, knowledge, perspective, background, gender, age and culture.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration of the various aspects of the Boards functioning, Composition of the Board and Committees, culture, execution and performance of specific duties, obligation and governance.The performance evaluation of the Independent Directors was completed.

During the financial year under review, the Independent Directors met on 13th February, 2019 interalia, to discuss:

• Performance evaluation of Non-Independent Directors and Board of Directors as a whole;

• Performance evaluation of the Chairman of the Company;

• Evaluation of the quality of flow of information between the Management and Board for effective performance by the Board.

The Board of Directors expressed their satisfaction with the evaluation process.

Policy on Directors Appointment and Remuneration

The Company has a Nomination and Remuneration Committee. The Committee reviews and recommend to the Board of Directors about remuneration for Directors and Key Managerial 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 Company other than sitting fee for attending the Meetings of the Board of Directors and Committees of the Board. Remuneration to Executive Directors is governed under the relevant provisions of the Act and approvals.

The Company has devised the Nomination and Remuneration Policy for the appointment, re-appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. All the appointment, re-appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel are as per the Nomination and Remuneration Policy of the company.

Vigil Mechanism

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy. The policy enables the employees to report to the management instances of unethical behavior, actual or suspected fraud or violation of Companys Code of Conduct. Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for adequate safe guards against victimization of Whistle Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle blowers has been denied access to the Audit Committee of the Board. The Whistle Blower Policy 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. It regularly analyses and takes corrective actions for managing/ mitigating the same.

The Company has framed a formal Risk Management Framework for risk assessment and risk minimization which is periodically reviewed to ensure smooth operation and effective management control. The Audit Committee also reviews the adequacy of the risk management framework of the Company, the key risks associated with the business and measure and steps in place to minimize the same.

Sexual Harassment of Women at Workplace

The Company has constituted Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the company has complied with provisions of the same.

There were no incidences of sexual harassment reported during the year under 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 the Companies Act, 2013, Directors subscribe to the "Directors Responsibility Statement", and confirm that:

a) In preparation of annual accounts for the year ended 31st March, 2019, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) The Directors 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 or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts for the year ended 31st March, 2019 on going concern basis.

e) The Directors had laid down the internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

Insurance

Assets of your Company are adequately insured against various perils.

Corporate Governance

The Company endeavors to maximize the wealth of the Shareholders by managing the affairs of the Company with pre-eminent level of accountability, transparency and integrity.

A separate section on Corporate Governance standards followed by your Company, as stipulated under Regulation 27 and 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as an annexure to this Report.

A Certificate from Mr. Tapan Shah, Practicing Company Secretary, conforming compliance to the conditions of Corporate Governance as stipulated under Regulation 27 and 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to this Report.

Secretarial Standards

Secretarial Standards for the Board of Directors and General Meetings (SS-1 & SS-2) are applicable to the Company. The Company has complied with the provisions of both Secretarial Standards.

Issue of Equity Shares by way of private placement to QIB

The Company has taken approval from the shareholders in 24th Annual General Meeting held on 28th September, 2018 to the issue of Equity Shares by way of private placement to QIB up to an aggregate amount of र: 250 Crores. However, the Company has not materialized the same. Hence, the Board of Directors seeks again shareholderss approval to the issue of Equity Shares by way of private placement to QIB up to an aggregate amount of र: 250 Crores as per SEBI regulation.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the financial year under review as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in the separate section forming part of this Annual Report.

Material Changes and Commitment affecting Financial Position of the Company

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year as on 31st March, 2019 and the date of Directors Report i.e. 13th August, 2019.

Particular of Employees

The information required pursuant to Section 197 of the Companies Act, 2013 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 term of Section 136 of the Companies Act, 2013, the Report is being sent to all shareholders and others entitled thereto, excluding the aforesaid information and the said particulars are available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. The members interested in obtaining such particulars may write to the Company Secretary.

The ratio of remuneration of each Director to the median employees remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forming part of this Board of Directors Report as Annexure-3.

Extract of Annual Return

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014 the extract of the Annual Return as on 31st March, 2019 in Form MGT-9 forms part of this Board of Directors Report as Annexure-4. Form MGT-9 is available in Annual Report on the website of the Company www.transformerindia.com

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 134 (3) (m) of the Companies Act, 2013 forms part of this Board of Directors Report as Annexure-5.

Contracts or Arrangements with Related Parties

All the related party transactions that were entered during the financial year were in the Ordinary course of business of the Company and were on arms length basis. There were no materially significant related party transactions entered by the Company with its Promoters, Directors, Key Managerial Personnel or other persons which may have potential conflict with the interest of the Company.

All Related Party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal business transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature and accordingly the required disclosures are made to the Committee on quarterly basis in terms of the approval of the Committee.

The policy on Related Party Transactions as approved by the Board of Directors is uploaded on the website of the Company www.transformerindia.com

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, as prescribed in Form AOC - 2 which forms part of this Board of Directors Report as Annexure-6

Internal financial control systems and their adequacy

Your Company has laid down the set of standards, processes and structure which enables to implement internal financial control across the Organization and ensure that the same are adequate and operating effectively. To maintain the objectivity and independence of Internal Audit, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with the operating systems, accounting procedures and policies of the Company. Based on the report of Internal Auditor, the process owners undertake the corrective action in their respective areas and thereby strengthen the Control. Significant audit observation and corrective actions thereon are presented to the Audit Committee of the Board.

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 conclusion of this 23rd Annual General Meeting till the conclusion of 28th Annual General Meeting of the Company. The Company has received the consent from the Auditors and confirmation to the effect that they are not disqualified to be appointed as the Auditors of the Company in the terms of the provisions of the Companies Act, 2013 and the Rules made thereunder.

Internal Auditor

Manubhai and Shah LLP, Chartered Accountants, Ahmedabad has been appointed as Internal Auditors of the Company. Internal Auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports their findings on the Internal Audit of the Company, to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2018-19. The Report of the Secretarial Audit Report for the financial year 2018-19 is annexed to this Board of Directors Report as Annexure-7.

Cost Auditor

Your Company has appointed Kushal & Co., Cost Accountants, Ahmedabad, as Cost Auditor of your Company to audit the cost accounts for the financial year 2019-20.

As per Section 148 read with Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013 the Board of Directors of your Company has appointed Kushal & Co., Cost Accountants as the Cost Auditor of your the Company for the financial year 2019-20 on the recommendations made by the Audit Committee subject to the approval of the Central Government. The remuneration proposed to be paid to the Cost Auditors, subject to the ratification by the members at the ensuing Annual General Meeting, would be र: 35,000/- (Rupees Thirty Five Thousands only) excluding out of pocket expenses, if any.

The Cost Audit report for the financial year 2017-18 was filed within the due date. The due date for submission of the Cost Audit Report for the financial year 2018-19 is within 180 days from 31st March, 2019.

Statutory Auditors Report

The Statutory Auditors Report on the accounts of the Company for the accounting year ended 31st March, 2019 is self-explanatory and do not call for further explanations or comments that may be treated as adequate compliance of Section 134 of the Companies Act, 2013.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

Acknowledgment

Your Directors would like to express their appreciation forthe assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

By Order of the Board of Directors
Jitendra Mamtora
Place : Ahmedabad Chairman and Whole-time Director
Date : 14th August, 2019 (DIN : 00139911)