DIRECTORS' REPORT TO THE SHAREHOLDERS Dear Members, Your Directors have pleasure in presenting the Forty Sixth Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31s1 March, 2015 PERFORMANCE During the financial year 2014-15, your Company reported a to pline growth of 24% over the previous year, against the backdrop of economic uncertainties and challenging business environment. The revenue from Operations for the financial year was Rs. 270,561,312/- as against Rs. 218,135,796/- last year. The growth in revenues during the year were mainly attributable to resilient orders from our regular clients, boost in export sales and execution of large equipments orders during the year. Earnings before Interest, Depreciation and Tax (EBIDTA) for the year increased by 24.56% to Rs. 27,901,517/- as compared to Rs. 22,400,468/- last year. The Company reported Net Profit of Rs. 31,41,546/- for the year as against Net Loss of Rs. 29,30,713/-. DIVIDEND In order to plough back the accruals, your Directors do not recommend any dividend for the financial year ended 31st March, 2015. SHARE CAPITAL The paid up Equity Share Capital of the Company as on 31st March, 2015 is 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. DIRECTORS In terms of the provisions of Section 152 of the Companies Act 2013 ("the Act"), Mr. Manoj P. Mehta, Director of the Company, is liable to retire by rotation and being eligible, offers himself for re-appointment at the forthcoming Annual General Meeting 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 both under the Act and Clause 49 of the Listing Agreement with the Bombay Stock Exchange. 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. DEPOSERS Your Company has not accepted any fixed deposits from the public during the year 2014-15 and there are no outstanding fixed deposits as on 315' March, 2015. *"»x. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. AUDITORS (a) Statutory Auditors : M/s. Ajay Shobha & Co., Chartered Accountants, the Statutory Auditors of the Company, holds office until the conclusion of the 48"1 Annual General Meeting of the Company. Their appointment is subject to ratification at the 46th Annual General Meeting. The Company has received a certificate from the retiring auditors, confirming that their re-appointment, if made, will be in accordance with Section 139 read with Section 141 of the Act. Members are requested to consider the re-appointment of Statutory Auditors - M/s. Ajay Shobha & Co. and authorise the Board of Directors to fix their remuneration. (b) Secretarial Auditor : Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Neetu Agrawal & Co., a firm of Company Secretary in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure B to the Directors Report. The Auditors' Report and the Secretarial Audit Report for the financial year ended 31st March, 2015 do not contain any qualification, reservation, adverse remark or disclaimer. CREDIT RATING ICRA Limited have reaffirmed their long term Credit rating of [ICRAJBB+ (pronounced ICRA double B plus) rating to the Company's Fund based limits and a short term rating of [ICRA]A4+ (pronounced ICRA A four plus) rating to the Company's Non fund based limits. The outlook on the long term rating has been revised from Negative to Stable. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Act is included in this report 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 arm's length basis and were in the ordinary course of the business and were in compliance with the applicable provisions of the Act and the Listing Agreement. Details of the transactions with related parties are provided in the accompanying notes forming part of the financial statements. RISK MANAGEMENT The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It 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. INTERNAL CONTROL SYSTEMS AND ADEQUACY The Company's internal audit systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Company's policies, identifying areas of improvement, evaluating the reliability of financial statements, ensuring compliances with applicable laws and regulations and safeguarding of assets from unauthorized use. Details of the internal control system are given in the Management Discussion and Analysis Report, which forms part of the Directors' Report. REMUNERATION AND NOMINATION POLICY The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company, This policy also lays down criteria for selection and appointment of Board members. The details of this policy are explained in the Corporate Governance Report BOARD AND 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. Manoj P. Mehta as members. There has not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board. Details of the composition of the Board and its Committees, number of the meetings held and attendance of the Directors at such meetings, are provided in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Agreement. DIRECTORS' RESPONSIBILITY STATEMENT In terms of Section 134 (5) of the Act, the directors would like to state that : (i) In the preparation of the annual accounts, 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 at the end of the financial year and of the profits of the Company for the year under review; (iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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 have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; (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. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE The Company has zero tolerance for sexual harassment at wor<place and has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under. 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. The Company has not received any complaint of sexual harassment during the financial year 2014-15. 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 Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimisation 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 have been denied access to the Audit Committee. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND 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 31s1 March, 2015 is given below and forms part of the Directors' Report. (a) Conservation of Energy (i) Step taken or impact on conversation 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 tor the treatment of fumes resulting from the use of Sulphuric, Nitric, Hydrofluoric and other acids required for production. (ii) Steps taken by the Company for utilizing alternative source of energy : The Company has installed 10Kva three phase Roof Top Solar Plant at Baska Factory alongwith 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 conversation 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 up to 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 - ^ 47,535,610/- (ii) Outgo of Foreign Exchange during the year - Rs. 85,004,503/- PARTICULARS OF EMPLOYEES There were no employees who were in receipt of remuneration exceeding the limits specified in Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 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 DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE The Management Discussion Analysis Report and the Report on Corporate Governance, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report. ACKNOWLEDGEMENTS 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 Company's 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 Hasmukh J. Shah Chairman Place : Mumbai Date : 271h May, 2015 |