Voltamp Transformers Ltd Directors Report.

VOLTAMP TRANSFORMERS LIMITED

To,

Dear Shareholders,

Your Directors have pleasure in presenting the 53rdDirectors Report and Audited Accounts for the Financial Year ended 31st March, 2020.

FINANCIAL RESULTS:

( in Lakhs)
PARTICULARS 2019-2020 2018-2019
Net Sales and Service Income 85,857.58 82,882.80
Profit before Finance cost and Depreciation 12,235.32 12,983.67
Finance Cost 0.46 0.49
Depreciation 899.24 715.37
Profit Before Tax 11,335.60 12,267.81
Current Tax 2,990.48 3,450.28
Deferred Tax (619.57) 321.98
Income Tax of earlier year 26.98 11.66
Net profit after Tax before comprehensive Income / (loss) 8,937.72 8,483.89
Other Comprehensive Income / (loss) (43.86) 5.31
Net Profit after Tax 8,893.85 8,489.20

PERFORMANCE REVIEW & IMPACT OF COVID-19:

During the year under review, the Company has posted a ever highest sales and service revenue of 858.57 crores as compared to 828.82 crore in the previous year in spite of inspection and despatches got impacted from 20th March, 2020 due to imposition of countrywide lockdown.The sales in terms of volume decreased to 10297 MVA as compared to 11053 MVA in the previous year. The sales in terms of volume reduced on account of selling of more numbers of smaller rating transformers in comparison to higher rating transformers. In spite of healthy improvement inoperating profit, the profit before tax (PBT) decreased to investment. As per IND AS 109 Financial Instruments , the investment ofthe Company are valued at market prices and the difference between the cost and market value of the investments area113.35 crores, as compared to 122.67 crores in the previous year mainly due to mark to market losses of ccounted as part of other income. The break up of the reported figures are arrived as per working given hereunder.

Particulars Quarter Quarter Quarter Year ended Year ended
ended 31st March, 2020 ended 31st December, 2019 ended 31st March, 2019

31st March, 2020

31st March, 2019

Other Income (A) (1458.58) 1257.22 1347.14 1456.23 3624.87
Adjustment for fair value of investments (1993.15) 524.53 649.68 (984.13) 1580.93
(Marked to Market price) (B)
Other income after adjustment (A-B) 534.57 732.69 697.46 2440.36 2043.94

Profit After Tax (PAT) increased to 88.93 crores, as compared to 84.89 crores in the previous year.

In March, 2020, the World Health Organization declared COVID-19 outbreak to be a pandemic and consequent to this, the Gujarat Government had imposed curfew from 23rd March, 2020 before countrywide lockdown announcement from 25th March, 2020. So Company s operations came to standstill since 23rd March, 2020. All the manufacturing units of the Company, and marketing offices were shut down during the lockdown period. Partial opening of factories operations were permitted from last week of April, 2020 but no worthwhile production activities could commencetill 31st May, 2020. All safety protocols related to COVID-19, as advised by the Government are being strictly adhered toand Company has enabled working from home option, social distance measures, sanitization and thermal screening of employees and all defensive actions as a part of daily functioning of factory offices/ operations. The Company has adopted, wherever feasible, work from home policy during the lockdown period for limited functions. During the lockdown period the Company accorded paramount priority to employee health and safety and ensured that its commitment towards payment to the vendors and work force are duly met.

Focused efforts are made on cash conservation, cost reductions and tightly controlling inventory and receivables levels. It is difficult at this stage to assess the impact of Covid-19 on the revenue and profitability of FY:2020- 2021. However the Company anticipate its net sales and profitability to contract during the first half of FY:2020-21 with sub optimal level of operations.

The financial year 2020-2021 started with an order backlog of 388.32 crores (5797 MVA).

The Company has initiated action to revisit all pending orders by obtaining fresh confirmation fromcustomers about their preparedness to accept delivery and release payments as per the agreed delivery schedule.

Currently there is uncertainty on pace of recovery, but management is making sure that Organization remains fully energized during the period and ready to bounce back on the next opportunity.

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

DIVIDEND:

The Board of Directors in its meeting held on 11th May, 2020 declared an interim dividend of 25 per equity share of face value of 10 each for FY 2019-20 to all the shareholders whose name appeared on the register of members as on19th May, 2020 being the record date fixed for this purpose. The interim dividend had been declared and paid.

AMOUNT PROPOSED TO BE TRANSFERRED TO RESERVES :

Directors do not propose to transfer any amount to reserves.

AMALGAMATION :

The Board of Directors of the Company, at its meeting held on 11th May, 2020 have considered and approved a Scheme of Amalgamation (the Scheme) between the Voltamp Transformers Limited (VTL or Company) and Kunjal Investments Private Limited (KIPL), under Sections 230 to 232 read with section 66 and other applicable provisions of the Companies Act, 2013 (2013 Act).

The Scheme is subject to the receipt of requisite approval from the statutory authorities includingSEBI, Stock Exchanges, the National Company Law Tribunal, Reserve Bank of India and the respective shareholders and creditors of the Company and Kunjal Investments Pvt. Ltd (KIPL).

The scheme contemplates the amalgamation of KIPL with the Company and the dissolution without winding up of KIPL pursuant thereto. The appointed date for the scheme is 1st June, 2020 or such other date as may be fixed or approved by the National Company Law Tribunal (NCLT) as and when applicable.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There is no change in the nature of business during the financial year 2019-20.

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.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

During the year 2019-20 no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company s operations in future.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

Your Company has no Subsidiary/Joint Ventures/Associate Companies.

DEPOSITS:

Your Company has not accepted any deposit during the year and there was no deposit at the beginning of the year. Therefore, Chapter V of the Companies Act 2013 relating to acceptance of deposits is not applicable and hence, no detail of the deposit is given in the report.

SHARE CAPITAL:

During the year under review, the Company has neither issued any securities nor has taken any Corporate Action for cancellation of issued securities, hence, there is no change in share capital structure of the Company.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The unclaimed dividend amount aggregating to 1,62,090 for the financial year ended on 31st March, 2012 was transferred to the Investor Education and Protection Fund established by the Central Government, during the financial year ended March 31, 2020, pursuant to Section 124 of the Companies Act, 2013.

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 compliance with Regulation 34 of the SEBI (Listing Obligation and Disclosures Requirement) Regulations 2015, a separate report on Corporate Governance is given in Annexure –III along with certificate from M/s. CNK & Associates LLP, Chartered Accountant (FRN : 101961W), confirming compliance with the requirement of Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS:

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

STATUTORY AUDITORS:

At the 50th Annual General Meeting held on 12th August, 2017, M/s. CNK & Associates LLP, Chartered Accountant (FRN: 101961W), were appointed as Statutory Auditors of the Company to hold the office till the conclusion of the Annual General Meeting to be held in the year 2022 subject to ratification by the shareholders everyyear, if so required under law. Pursuant to the recent amendment to Section 139 of the Act effective 7th May, 2018, ratification by Shareholders every year for the appointment of the Statutory Auditors is no longer required and accordingly the Notice of ensuing Annual General Meeting does not include the proposal for seeking Shareholders approval for ratification of Statutory Auditors appointment.

AUDIT COMMITTEE:

Powers and role of the Audit Committee are included in Corporate Governance Report.

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, 2021. 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(2) read with section 141(3) of the Companies Act, 2013.

SECRETARIAL AUDITORS:

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.

STATUTORY AUDITORS REPORT & SECRETARIAL AUDITORS REPORT:

Neither the Statutory Auditor nor the Secretarial auditor of the Company, in their respective reports, have made any qualifications, reservations or adverse remarks.

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.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Board of Directors of the Company at their meeting held on 14th August, 2019 have appointed Shri Vallabh N. Madhani as a Whole Time Director & CFO of the Company for the period from 14.08.2019 to 31.03.2022.Appropriate resolution for the appointment of Shri Vallabh N. Madhani as a Whole Time Director & CFO of the Company is being placed for the approval of shareholders of the Company at this AGM. The brief resume and other related information has been detailed in the Notice convening 53rd AGM of the Company.

The tenure of appointment of Shri Kanubhai S. Patel as a Chairman and Managing Director of the Company, has expired on 10.02.2020, he has been reappointed as a Chairman and Managing Director, liable to retire by rotation, for a further period of five (5) years, w.e.f. 11.02.2020 to 10.02.2025, by the Board of Directors at their meeting held on 10th February, 2020, subject to approval of the shareholders. The brief resume and other related information has been detailed in the Notice convening 53rd AGM of the Company.

The Board of Directors of the Company at their meeting held on 10th February, 2020 have reappointed Shri Hemantbhai P. Shaparia as an Independent Director of the Company for tenure of further 5 years from 18.03.2020to 17.03.2025. Appropriate resolution for the reappointment of Shri Hemant P Shaparia as an Independent Director ofthe Company is being placed for the approval of shareholders of the Company at this AGM. The brief resume and otherrelated information has been detailed in the Notice convening 53rd AGM of the Company.

During the year, there is no other change in Key Managerial Personnel of the Company.

RETIREMENT BY ROTATION AND SUBSEQUENT RE-APPOINTMENT:

Shri Kunjalbhai L. Patel, Vice Chairman and Managing Director of the Company is liable to retire byrotation at this 53rd AGM, pursuant to section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with Companies (Appointment and Qualification of Directors) Rule, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and being eligible, has offered himself for re-appointment. Appropriate resolution for his reappointment is being placed for the approval of shareholders of the Company at this AGM.

DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

(a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) that 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 affairsof the company at the end of the financial year and of the profit and loss of the company for that period; (c) proper and sufficient care has been taken 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) annual accounts have been prepared on a going concern basis; (e) internal financial controls to be followed by the company have been laid down and that such internal financial controls are adequate and are operating effectively. and (f) proper systems to ensure compliance with the provisions of all applicable laws are in place and thatsuch systems are adequate and operating effectively.

INDEPENDENT DIRECTORS:

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

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 regulation 16(1)(b) of the Listing Obligations and Disclosures Requirements Regulations, 2015. The Independent Directors have also submitted a declaration that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence, pursuant to Regulation 25 of the Listing Obligations and Disclosures Requirements Regulations, 2015.

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. on29th May, 2019, 14th August, 2019, 11thNovember, 2019, and 10th February, 2020.

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)

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.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

There are no loans, guarantees or investments falling under section 186 of the Companies Act, 2013.Investments not falling under purview of this and made by the Company are given in the Notes to the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED UNDER SECTION 188(1):

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

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 thereunder. 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 31.03.2020 is appended to this Report as Annexure VIII.

In compliance with section 134(3)(a) of the Act, Annual Return of the Company can be accessed at http:// www.voltamptransformers.com.

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 thereunder 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).

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 werereported to the Board.

BUSINESS RESPONSIBILITY REPORT:

As stipulated under the requirement of the clause f of sub regulation (2) of Regulation 34 of SEBI (LODR), the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached in the format prescribed as Annexure IX and forms integral part of the Annual Report.

APPRECIATION AND ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation for the continued support & co-operation by Banks, Govt. Authorities, Vendors, Customers & other Stakeholders.

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

Place : Vadodara Date : June 10, 2020

FOR AND ON BEHALF OF THE BOARD

KANUBHAI S. PATEL CHAIRMAN & MANAGING DIRECTOR