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Directors Report of Astra Microwave Products Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the 25th Annual Report and the Audited Financial Statements for the financial year ended March 31, 2016.

FINANCIAL RESULTS

A) STANDALONE:

The Standalone performance for the Financial Year ended March 31, 2016 is as under:

The Financial Summary

As of March 31(Amount in Rs,)

Particulars

2016 2015

Total Revenue 4,374,509,469 6,441,786,700

Profit before finance cost, depreciation and tax expense 1,037,248,453 1,124,596,558

Finance cost 87,883,632 94,829,127

Profit before depreciation and tax expense 949,364,821 1,029,767,431

Depreciation 235,844,594 215,385,153

Profit before tax expense 713,520,227 814,382,278

Tax expense 149,929,294 207,130,798

Net Profit for the year 563,590,933 607,251,480

Profit brought forward from earlier year 2,242,811,807 1,813,382,877

Profit available for appropriation 2,806,402,740 2,420,634,357 Appropriations:

Dividend (Including Tax on Dividend) 12,50,92,532 117,822,550

Transfer to general reserve 60,000,000 60,000,000

Transfer to Debenture redemption reserve 41,700,000 0

Surplus in Statement of Profit and Loss 2,579,610,208 2,242,811,807

B) CONSOLIDATED:

The Consolidated performance for the Financial Year ended March 31, 2016 is as under:

The Financial Summary

As of March 31 (Amount in Rs,)

Particulars

2016 2015

Total Revenue 4,366,969,605 6,434,059,924

Profit before finance cost, depreciation and amortization,

impairment loss, exceptional items and tax expense 1,043,375,577 1,168,000,411

Finance cost 91,286,857 99,679,290

Profit before depreciation and amortization, impairment loss,exceptional items and tax expense 952,088,720 1,068,321,121 Depreciation and amortization 240,420,430 220,467,308

Profit before impairment loss, exceptional items and tax 711,668,290 847,853,813

expense

Impairment loss 0 0

Profit before exceptional items, tax expense, share of 711,668,290 847,853,813

loss of Associates and Minority Interest

Exceptional items 250,957 636,927

Profit before tax expense, share of loss of Associates 711,919,247 847,216,886

and Minority interest

Tax expense 148,215,926 219,510,353

Profit after tax expense and before share of loss of 563,703,321 627,706,533

Associates and Minority interest

Share of Loss of Associates (1,084,466) (124,636)

Minority Interest(profit/loss) 28 (510)

Net Profit for the year 562,618,883 627,581,387

Profit brought forward from earlier year 2,260,844,493 1,811,085,656

Profit available for appropriation 2,823,463,376 2,438,667,043 Appropriations:

Dividend (Including Tax on Dividend) 12,50,92,532 117,822,550

Transfer to general reserve 60,000,000 60,000,000

Transfer to Debenture redemption reserve 41,700,000 0

Surplus in Statement of Consolidated Profit and Loss 2,596,670,844 2,260,844,493

For detailed analysis of the performance, please refer to management''s discussion and analysis section of the annual report.

State of the Company''s Affairs:

During the period under review, the Company has achieved revenue of Rs.437,45,09,469/- and net profit of Rs.56,35,90,933/- on a standalone basis. During the same period, the Company has achieved revenue of Rs.436,69,69,605/- and net profit of Rs.56,26,18,883/- on a consolidated basis.

Fund Raising

Equity - Qualified Institutional Placement

During the year under review, your Company successfully placed 47,86,450 equity shares through the process of Qualified Institutional Placement (QIP) and raised an amount of Rs. 64,99,99,910/-. The deployment of funds for the projects specified is yet to happen fully.

Consequent to the above, the paid up value of the equity share capital of the Company stands increased from Rs. 16.36 crores to Rs. 17.32 crores.

Debt

Secured Non-Convertible Debentures (NCD)

During the year under review, your Company issued Secured Non-Convertible Debentures (NCD) to the tune of Rs. 50.00 Crores.

Listing of Equity Shares:

The Company''s Equity shares are listed at the following Stock Exchanges:

(i) BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai-400 001; and

(I) National Stock Exchange of India Limited, Exchange Plaza, Floor 5, Plot No. C/1, G Block, Bandra-

Kurla Complex, Bandra (East), Mumbai - 400051.

The Company has paid the Annual Listing Fees to the said Stock Exchanges for the financial year 2015-16.

Awards

Your Company was awarded for outstanding achievements in Business Excellence for the year 2014-15 from ELCINA Electronic Industries Association of India, New Delhi.

Subsidiary Companies

As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies/ Associate Company in Form AOC-1 is enclosed as Annexure-1 to this Report.

Performance and financial position of the Subsidiaries, Associate and Joint Venture Companies:

Report on the performance and financial position of the subsidiary and associate company of the Company is prepared and same is enclosed as Annexure -1 to this Report.

Consolidated Financial Statements

Consolidated financial statements have been prepared by the Company''s Management in accordance with the requirements of Accounting Standards 21 issued by Institute of Chartered Accountants of India (ICAI) and as per the provisions of Companies Act, 2013. The audited consolidated financial statement is provided in the Annual Report.

Number of Meetings of the Board of Directors

During the year ended March 31, 2016, seven Board Meetings were held.

The dates on which the Board meetings were held are April 02, 2015, April 30, 2015, July 30, 2015, October 29, 2015, December 04, 2015, December 26, 2015, and January 29, 2016.

Management Discussion and Analysis

The Management Discussion and Analysis forms an integral part of this Report and gives details of the overall industry structure, developments, performance and state of affairs of the Company and other material developments during the financial year.

Directors Responsibility Statement

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors'' Responsibility Statement, the Board of Directors of the Company hereby confirms:

I) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

ii) 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 affairs of the Company as at March 31, 2016 and of Profit and Loss Account of the Company for that period;

iii) that 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) that the Directors have prepared the Annual Accounts for the Financial Year ended March 31, 2016 on a going concern basis;

v) that 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; and

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

Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149

The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub- section(6).

Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of the following Directors namely Dr. G.Sabarinathan, Chairman, Dr.Shiban K Koul, Mr. T.Ramachandru, IAS.

Brief description of terms of reference:

a. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

b. Formulation of criteria for evaluation of Independent Directors and the Board.

c. Devising a policy on Board diversity.

d. Identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal.

Nomination and Remuneration policy

The objectives of the Policy

1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

2. To determine remuneration based on the Company''s size and financial position and trends and practices on remuneration prevailing in peer companies.

3. To carry out evaluation of the performance of Directors.

4. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

Particulars of Loans, Guarantees or Securities or Investments under Section 186

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in Note 2.11, 2.34 and 2.35 of the Notes to the financial statements.

Particulars of Contracts or Arrangements with Related Parties

All transactions entered by the Company with Related Parties were in the ordinary course of business and at Arm''s Length pricing basis. The audit committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the audit committee and the Board of Directors.

Your Directors draw attention of the members to Note 2.35 to the financial statement which sets out related party disclosures.

Transfer of Amount to Reserves

Your Directors have proposed to transfer Rs.600 lacs to the General Reserve for the Financial Year ended 31st March, 2016.

Dividend

The Board of Directors of the Company at its meeting held on April 29, 2016 have declared Final Dividend @ 60% on the paid up Equity share capital of the Company i.e., Rs.1.20 per Equity share on face value of Rs.2 each.

Extracts of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure - 2 to this Report.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Act, are provided in Annexure - 3 to this Report.

Corporate Social Responsibility (CSR) initiatives

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your company approved a Policy on CSR and the policy was hosted on the website of the Company.

The Board of Directors of the Company have constituted Corporate Social Responsibility Committee consisting of following persons namely Mrs. C.Prameelamma, Chairman, Dr.Shiban K Koul, and Mr. M. V. Reddy, as Members.

Report on CSR activities is enclosed as Annexure - 4 to this Report.

Mechanism for Evaluation of Board

Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

Directors and Key Managerial Personnel

During the year under review, Mr.J.Venkatdas, Independent Director and Mr.Atim Kabra and Mr.U.K.Kalyanaramudu, Non-Executive Directors stepped down from the Board. The Board wishes to place on record its deep sense of appreciation for the valuable contribution made by them to the Board and the Company during their tenure as Directors.

Mrs. C.Prameelamma and Mr. M.V. Reddy, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

Prof. Arun Kumar Tiwari, Mr. Vadlamani Venkata Rama Sastry and Mr. Buddharaju Lakshmi Narayana Raju were appointed as Additional Directors (Independent) on the Board with effect from January 29, 2016.

Deposits

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.

Statutory Auditors

The Shareholders of the Company at the Annual General Meeting held on July 30, 2015 have appointed M/s. Amar & Raju, Chartered Accountants as Statutory Auditors of the Company.

The term of M/s. Amar & Raju, Chartered Accountants, Statutory Auditors shall hold the office from the conclusion of this Annual General Meeting until the conclusion of the next Annual general Meeting of the Company.

It is proposed to re-appoint them as Statutory Auditors of the Company for a period of one consecutive year. The members are requested to consider their re-appointment and authorize the Board of Directors to fix their remuneration.

M/s. Amar & Raju, Chartered Accountants (ICAI Registration No: 000092S) have confirmed that their appointment, if made, shall be in accordance with the provisions of Section 139 of the Companies Act, 2013.

Auditors Report

M/s. Amar & Raju, Chartered Accountants (ICAI Registration No: 000092S) has issued Auditors Report for the Financial Year ended 31st March, 2016 and there are no qualifications in Auditors'' Report.

Internal Auditors

The Board of Directors of the Company have appointed M/s. PricewaterhouseCoopers Private Limited, to conduct Internal Audit of the Company for the Financial Year ended 31st March, 2016.

Audit Committee

Audit Committee consists of the following Directors namely Dr. G. Sabarinathan, Chairman, Dr.Shiban K Koul, and Mr. S.Gurunatha Reddy as members of the committee. Except Mr.S.Gurunatha Reddy, all the members of the Audit Committee are Independent Directors.

There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.

Corporate Governance

A separate report on Corporate Governance is annexed as part of the Annual Report along with the Auditor''s Certificate on its compliance.

Vigil Mechanism

The Board of Directors have adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairman of the audit committee in exceptional cases.

Secretarial Auditor Report

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed

Mr. L. Dhanamjay Reddy, Practicing Company Secretary (C.P.No: 3752) as Secretarial Auditor to conduct

Secretarial audit of the company for the Financial year ended on March 31, 2016.

Secretarial Audit Report issued by Mr. L. Dhanamjay Reddy, Practicing Company Secretary in form MR-3 is enclosed as Annexure - 5 to this Annual Report.

There were no qualifications, reservation or adverse remarks in the Secretarial Audit Report of the Company.

Statement of particulars of appointment and remuneration of managerial personnel

The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - 6 to this Annual Report.

Insurance

All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.

Internal Financial Controls

The company has in place adequate internal financial controls with reference to financial statements. The Company maintains all its records in SAP System and the work flow and approvals are routed through SAP.

Change in the nature of business

There is no change in the nature of business of the Company.

The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future

No Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

Material changes and commitments

There are no Material changes and commitments in the business operations of the Company from the financial year ended 31st March, 2016 to the date of signing of the Director''s Report.

Human Resources

The Industrial relations of the Company continued to be harmonious during the year under review.

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year ended 31st March, 2016, the Company has not received any Complaints pertaining to Sexual Harassment.

Acknowledgments:

Your Directors express their gratitude to all investors, customers, vendors, banks and regulatory and the State and the Central governmental authorities / departments for their continued support.

For and on behalf of the Board of Directors

Place: Hyderabad Mr. B. Malla Reddy Mr. P. A. Chitrakar

Date: 28.05.2016 Managing Director COO

DIN: 00003154 DIN: 00003213


Mar 31, 2013

To the members,

The are delighted to present the report on our business and operations for the year ended March 31, 2013.

FINANCIAL PERFORMANCE

Amount in Rs.

Particulars 2012-13 2011-12

Net Sales 2,274,712,034 2,037,507,783

Profit before depreciation 637,927,498 562,559,589

Depreciation 133,548,063 124,452,665

Profit before tax 504,379,435 438,106,925

Provision for taxation 132,524,427 106,098,494

Profit after tax 371,855,008 332,008,431

EPS 4.54 4.06

Paid up Equity Share capital 163,650,450 163,650,450

Reserves 1,845,173,280 1,549,397,730

Dividend ( in percentage) 40 35

For detailed analysis of the performance, please refer to management''s discussion and analysis section of the annual report.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.80/- per equity share of Rs. 2/- for the financial year 2012-13. The dividend, if approved at the ensuing Annual General Meeting, will be paid to those shareholders whose name appear on the register of members of the Company as on 30th September, 2013.

TRANSFER TO RESERVES

As stipulated under the provisions of the Companies Act, 1956 read with Companies (Transfer to Reserves) Rules, 1975, your Directors have proposed to transfer Rs.400 lcas to the General Reserve out of the profits earned by the Company. A sum of Rs.2558 lacs is proposed to be retained as surplus.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 205A read with Section 205C of the Companies Act, 1956, an amount of Rs.3,42,239/- being unclaimed dividend pertaining to the financial year 2004-05 was transferred to the Investor Education and Protection fund (IEPF) on August 3, 2012.

FIXED DEPOSITS

Your Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

AWARDS AND RECOGNITIONS

Your company was awarded TOP INDIAN SME in the 2nd edition of the Aerospace and Defense Awards 2013 organized by International Aerospace magazine.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per Clause 49 of the Listing Agreements entered into with the Stock Exchanges, Corporate Governance Report with auditor''s certificate thereon and a management Discussion and Analysis Report are attached and form part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

(i) In the preparation of the annual accounts for the financial year 2012-13, the applicable accounting standards have been followed and there are no material departures;

(ii) they 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 profit of the Company for the financial year ;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Mrs. C. Prameelamma and Mr. J. Venkatadas, Directors retire by rotation and being eligible, offer themselves for re-appointment.

Mr. S. Gurunatha Reddy was appointed as an additional director and as Whole Time Director designated as Director - Finance with effect from April 29, 2013 and will hold office upto the date of the ensuing annual general meeting.

Mr. M. V. Reddy was appointed as an additional director and as Whole Time Director designated as Director -(Mktg. & Operations) with effect from April 29, 2013 and will hold office upto the date of the ensuing annual general meeting. AUDITORS

The Statutory Auditors M/s Amar & Raju, Chartered Accountants, Hyderabad, retire at this Annual General Meeting. The Company is in receipt of confirmation from the Statutory Auditors that in the event of their reappointment as Statutory Auditors of the Company at ensuing Annual General Meeting, such reappointment will be in accordance with the limits specified in sub-section (1B) of Section 224 of the Companies Act, 1956.

As regard Auditors observations, relevant notes on accounts are self explanatory and therefore, do not call for any further comments.

"Cost audit is applicable to the Company in terms of Central Government order F.No.52/26/CAB -2010 dated 24th January, 2012. Accordingly, the Board of Directors have appointed M/s. G.S. & Associates, Cost Accountants as Cost auditors of the Company for auditing costing records maintained by the Company for the financial year 2012-13."

DISCLOSURES

Disclosures in terms of Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo are attached (Annexure I ) and forms part of this report.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended the names and other particulars of employees are set out in Annexure II to the Directors'' Report.

EMPLOYEE RELATIONS

Employee relations were cordial during the year and the Board would like to place on record its appreciation to all the employees of the Company for their dedicated services and performance in qualitative and quantitative parameters.

ACKNOWLEDGMENTS:

Your Directors express their gratitude to all investors, customers, vendors, banks and regulatory and the State and the Central governmental authorities /departments for their continued support.

For and on behalf of the Board of Directors

Hyderabad Mr. B. Malla Reddy Mr. P. A. Chitrakar

29th April, 2013 Managing Director COO


Mar 31, 2012

The are delighted to present the report on our business and operations for the year ended March 31, 2012.

FINANCIAL PERFORMANCE

Particulars Rs in Lacs 2011-12 2010-11

Sales 20375 16120

Profit before depreciation 5409 3684

Depreciation 1244 1242

Profit before tax 4381 2438

Provision for taxation 1061 578

Profit after tax 3320 1860

EPS (in Rs) 4.06 2.27

Paid up Equity Share capital 1636 1636

Reserves 15494 12839

Dividend ( in percentage) 35 25

For detailed analysis of the performance, please refer to management's discussion and analysis section of the annual report.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs 0.70/- per equity share of Rs 2/- for the financial year 2011-12. The dividend, if approved at the ensuing Annual General Meeting, will be paid to those shareholders whose name appear on the register of members of the Company as on 30th July, 2012.

TRANSFER TO RESERVES

Your Directors have proposed to transfer Rs 350 lcas to the General Reserve retaining Rs 2304 lacs in the Profit and Loss account.

DEPOSITS

Your Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Mr.PA.Chitrakar, and Mr. Atim Kabra, Directors retire by rotation and being eligible, offer themselves for re-appointment.

The brief resume/details relating to directors who are to be re-appointed are furnished in the Corporate Governance section.

DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

- In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- 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 period;

- The Directors had 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;

- The Directors had prepared the annual accounts on a going concern basis.

PARTICULARS REGARDING SUBSIDIARY COMPANY

The Company sold entire investments held in the subsidiary company during the financial year.

AUDITORS

The Statutory Auditors M/s Amar & Raju, Chartered Accountants, Hyderabad, retire at this Annual General Meeting. The Company is in receipt of confirmation from the Statutory Auditors that in the event of their reappointment as Statutory Auditors of the Company at ensuing Annual General Meeting, such reappointment will be in accordance with the limits specified in sub-section (1B) of Section 224 of the Companies Act, 1956.

As regard Auditors observations, relevant notes on accounts are self explanatory and therefore, do not call for any further comments.

DISCLOSURES

Disclosures in terms of Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo are attached (Annexure I) and forms part of this report.

CORPORATE GOVERNANCE

The Company has complied with the provisions of Clause 49 of the Listing Agreement relating to Corporate Governance. A report on corporate governance along with the statutory auditors' certificate and a management discussion and analysis report forms part of this annual report.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended the names and other particulars of employees are set out in Annexure II to the Directors' Report.

EMPLOYEE RELATIONS

Employee relations were cordial during the year and the Board would like to place on record its appreciation to all the employees of the Company for their dedicated services and performance in qualitative and quantitative parameters.

ACKNOWLEDGMENTS:

Your Directors express their gratitude to all investors, customers, vendors, banks and regulatory and governmental authorities for their continued support.



For and on behalf of the Board of Directors

Hyderabad Mr. B. Malla Reddy Mr. P. A. Chitrakar

26th April, 2012 Managing Director COO


Mar 31, 2011

We are delighted to presentthe report on ourbusiness and operations for the year ended March 31.2011.

FINANCIAL PERFORMANCE (Rs in lacs)

Particulars 2010-11 2009-10

Sales 16133 10678

Profit before depreciation 3679 2221

Depreciation 1242 1119

Profit before tax 2437 1102

Provision for taxation 578 286

Profit aftertax 1859 816

EPS(inRs.) 2.27 1.32

Paid up Equity Share capital 1636 1083

Reserves 12839 11723

Dividend (in percentage) 25 25

For detailed analysis of the performance, please refer to managements discussion and analysis section of the annual report.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.0.50/- per equity share of Rs.2/- for the financial year 2010-11. The dividend, if approved at the ensuing Annual General Meeting, will be paid to those shareholders whose name appear on the register of members of the Company as on 28th July, 2011.

TRANSFERTO RESERVES

Your Directors have proposed to transfer Rs.200 leas to the General Reserve retaining Rs.1185 lacs in the Profit and Loss account.

DEPOSITS

Your Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Dr.Shiban K Koul, and Mr.B.Malla Reddy, Directors retire by rotation and being eligible offer themselves for re- appointment.

The brief resume/details relating to directors who are to be re-appointed are furnished in the Corporate Governance section.

DIRECTORS RESPONSIBIUTYSTATEMENT

As required under section217(2AA)of the Companies Act,1956, the Directors confirm that:

- In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relatingto materialdepartures;

- 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 financialyear and of the profit or loss of the Company forthat period;

- The Directors had 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 detectingfraud and other irregularities;

- The Directors had prepared the annualaccounts on a goingconcern basis.

PARTICULARS REGARDING SUBSIDIARY COMPANY

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors report, Balance sheet and Profit and Loss account of our subsidiary i.e., Komoline Electronics Private Limited. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated February 8,2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2010-11 does not contain the financial statements of our subsidiary. The auditedannualaccountsand related information of oursubsidiary,whereapplicable,willbemadeavailable upon request. These documents will also be available for inspection during business hours at our registered office in Hyderabad.

The Company is in the process of selling its investment sheold in the subsidiary company.

INCREASE IN SHARE CAPITAL

The Board of Directors allotted during the year 2,72,75,075 Equity shares of Rs.2/- each as Bonus Shares in the proportion of one bonus share for every two shares held. The allotment of the Bonus shares was done on 31st December, 2010. As a result of this, the outstanding issued, subscribed and paid up equity shares increased from 5,45,50,150 to 8,18,25,225 shares as at March 31,2011.

AUDITORS

The Statutory Auditors M/s Amar & Raju, Chartered Accountants, Hyderabad, retire at this Annual General Meeting. The Company is in receipt of confirmation from the Statutory Auditors that in the event of their reappointment as Statutory Auditors of the Company at ensuing Annual General Meeting, such reappointment will be in accordance with the limits specified in sub-section (IB) of Section 224of the Companies Act, 1956.

As regard Auditors observations, relevant notes on accounts are self explanatory and therefore, do not call for any furthercomments.

DISCLOSURES

Disclosures in terms of Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo are attached (Annexure I) and forms part of this report.

CORPORATEGOVERNANCE

The Company has complied with the provisions of Clause 49 of the Listing Agreement relating to Corporate Governance. A report on corporate governance along with the statutory auditors certificate and a management discussion and analysis report forms part of this annual report.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended the names and other particulars of employees are set out in Annexure II to the DirectorsReport.

EMPLOYEE RELATIONS

Employee relations were cordial during the year and the Board would like to place on record its appreciation to all the employees of the Company fortheirdedicated services and performance in qualitative and quantitative parameters.

ACKNOWLEDGMENTS:

Your Directors express their gratitude to all investors, customers, vendors, banks and regulatory and governmental authoritiesfortheircontinued support.

For and on behalf of the Board of Directors

Mr. B. Malla Reddy Mr. P. A. Chitrakar

Managing Director COO

Hyderabad 27th April, 2011

 
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