Mar 31, 2018
The Board is pleased to present the 26th Annual Report on the business and operations of Opto Circuits (India) Limited, together with the Audited Financial Statements of your Company for the year ended March 31, 2018.
FINANCIAL HIGHLIGHTS : (Rs. in Lakhs)
Particulars for the year ended March 31st |
STANDALONE |
CONSOLIDATED |
||
2018 |
2017 |
2018 |
2017 |
|
I. Revenue from operations |
6,346.46 |
5,038.01 |
22,836.29 |
21,529.19 |
II. Other Income |
24.57 |
16.99 |
120.76 |
69.51 |
III. Total Income ( I II) |
6,371.03 |
5,055.00 |
22,957.05 |
21,598.70 |
Expenses |
||||
Cost of materials consumed |
2,763.93 |
2,252.60 |
10,300.64 |
9,311.31 |
Purchase of stock in trade |
- |
- |
114.92 |
600.70 |
Changes in inventories of FG, WIP & Stock in trade |
6.42 |
(270.31) |
(30.06) |
13.29 |
Employee benefit expenses |
766.06 |
820.53 |
3,624.94 |
3,877.01 |
Finance cost |
136.32 |
785.21 |
575.99 |
1,707.14 |
Depreciation & Amortisation Expenses |
906.04 |
879.45 |
1,258.70 |
1,603.40 |
Other Expenses |
791.75 |
735.09 |
3,623.38 |
5,368.04 |
IV. Total Expenses |
5,370.52 |
5,202.56 |
19,468.51 |
22,480.88 |
V. Profit /(Loss) before exceptional items and tax ( III-IV) |
1,000.51 |
(147.56) |
3,488.54 |
(882.18) |
VI. Exceptional items |
- |
36,256.56 |
(160.29) |
49,867.30 |
VII. Profit /( Loss) before tax ( V-VI) |
1,000.51 |
(36,404.13) |
3,648.83 |
(50,749.48) |
VIII. Tax Expenses |
||||
1) Current tax |
- |
- |
89.43 |
81.29 |
2) Deferred tax |
- |
- |
0.43 |
0.29 |
IX. Profit /(Loss) for the period from continuing operations (VII-VIII) |
1,000.51 |
(36,404.13) |
3,558.98 |
(50,830.48) |
X. Profit /(Loss) from discontinued operations |
- |
- |
- |
- |
XI. Tax expenses of discontinued operations |
- |
- |
- |
- |
XII. Profit /(Loss) from discontinued operations after tax ( X-XI) |
- |
- |
- |
- |
XIII. Profit/(loss) for the period ( IX XII) |
1,000.51 |
(36,404.13) |
3,558.98 |
(50,830.48) |
XIV. Other Comprehensive Income/(loss) |
||||
a) Items that will not be reclassified subsequently to profit/loss |
- |
- |
- |
- |
b) Items that will be reclassified subsequently to profit/loss |
- |
- |
- |
- |
XV.Total Comprehensive income for the year (XIII XIV) |
1,000.51 |
(36,404.13) |
3,558.98 |
(50,830.48) |
Profit for the year attributable to: |
||||
Shareholders of the company |
1,000.51 |
(36,404.13) |
3,462.16 |
(51,007.24) |
Non-Controlling Interests |
NA |
NA |
96.82 |
176.76 |
Earnings Per Equity Share Basic |
0.39 |
(15.02) (15.02) |
1.34 |
(21.05) |
Diluted |
0.39 |
1.34 |
(21.05) |
COMPANYâS PERFORMANCE ON STANDALONE BASIS
Standalone total revenue was at Rs.6,346.46 Lakhs for the financial year ended 31st March 2018 as against Rs.5,038.01 lakhs for the corresponding financial year ended March 31, 2017, a incline of 26 %. Standalone profit/ (loss) after tax for the financial year ended 31st March 2018 is at Rs.1,000.51 lakhs as against â(36,404.13) lakhs for the corresponding period financial year ended March 31, 2017. Earnings per share for the year ended 31st March 2018 is at Rs.0.39 Basic.
ON CONSOLIDATED BASIS
Consolidated revenue is at Rs.22,836.29 lakhs for the financial year ended 31st March 2018 as against Rs.21,529.19 lakhs for the corresponding period of financial year 2017. Consolidated profit after tax for the year ended 31st March 2018 is at Rs.3,558.98 lakhs, as against â(50,830.48) lakhs for the corresponding period of financial year 2017. Earnings per share for the year ended 31st March 2018 is at Rs.1.34 Basic,
DIVIDEND
Your Directors have not recommended any dividend for the year ended 31st March 2018.
TRANSFER OF RESERVE
Your Directors have decided to retain the entire amount of Rs.1,000.51 lakhs in retained earnings.
CHANGES IN SHARE CAPITAL
There is no change in the authorized share capital of the Company.
During the year under review, issued and paid up capital stood revised as under:
As per the terms approved by the Share holders at their 25th Annual General Meeting held on September 05, 2017, The Board of director of the company at their meeting held on 23rd November 2017 has allotted 4,51,75,999 Equity shares of Rs.10/ each issued at a price of Rs.15/- per share (3,66,01,318 Eq. shares under stock swap basis (other than cash) and 85,74,681 Eq. Shares against loan conversion) to other than promoters on a preferential basis in accordance with provisions specified under Chapter VII of SEBI (ICDR) Regulations, 2009.
Consequent to above Preferential Allotment the Paid up Capital is revised as under;
Issued & paid up capital |
|
Before allotment |
Rs.242,31,94,070/- consisting of 242319407 equity shares of face value of Rs.10/- each fully paid. |
After allotment |
Rs.287,49,54,060/- consisting of 287495406 equity shares of face value of Rs.10/- each fully paid. |
DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS
During the year under review, the Company has not issued Shares with Differential Rights.
DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS
During the year under review, the Company has not issued Shares under Employee Stock Options.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES:
During the year under review, the Company has not issued Sweat Equity Shares,
SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES:
During the year under review, the Company continues to have Nine (9) direct subsidiaries. In accordance, with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which forms part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC - 1 is appended as Annexure -A to the consolidated financial statement and hence not repeated here for the sake of brevity.
The policy for determining material subsidiaries as approved may be accessed on the Companyâs website at the link: http//www.optoindia.com/pdf/0CIL%20-20on%20Material%20Subsidiariesx.pdf
There has been no material change in the nature of the business of the subsidiaries.
CONSERVATION OF ENERGY
Your Company does not fall under the category of power intensive industries. However, sustained efforts are taken toreduce energy consumption. The organization is an ISO 14001 certified Company which is an international Environmental Management System Standard. The Environmental policy ofyour Company aims at conservation of natural resources and minimization of pollution.
FOREIGN EXCHANGE EARNINGS AND OUTGO.
Your Company earned Rs.5599.53 Lakhs in foreign exchange in the year under review.
Foreign Exchange outflow was Rs.2284.34 Lakhs.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
There were no employees, who were in receipt of more or employed part of Rupees One Crore Two Lakhs or more or employed part of year and in receipt of remuneration in excess of Rupees Eight Lakhs Fifty Thousand or more, a month, under information as per Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.
Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the information on Disclosures pertaining remuneration and other details as required under Section 197(12) of the Act,read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on corporate governance as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the practicing company Secretary confirming compliance with the conditions of corporate governance is attached to the report on corporate governance.
DIRECTORSâ RESPONSIBILITY STATEMENT
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS).
YOUR DIRECTORS STATE THAT
a) In the preparation of the Annual Accounts for the year ended March 31, 2018 the applicable accounting standards have been followed and there are no material departures from the same.
b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 and loss of the company for that period;
c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance the provisions of the Act for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d) The Directors have prepared the annual accounts on the going concerns basis.
e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and
f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
LISTING OF SECURITIES
Your Companyâs Equity Shares continue to remain listedon BSE Limited and the National Stock Exchange of India Limited., Your Company has paid the listing fees as payable to the BSE Limited and the National Stock Exchange of India Limited., for the financial year 2018-19.
FIXED DEPOSITS
Your Company has not accepted any fixed deposits from the public during the financial year under review.
DIRECTORS APPOINTMENT
Based on recommendations of Nomination and Remuneration Committee the Board appointed Ms.Rangalakshmi Srinivasa (holding DIN: 08145970) as an additional Director in the category of Independent Director, with effect from June 06, 2018.
RETIREMENT
Mr. Jayesh Chandrakant Patel ( DIN:01338843) was appointed as a Director of the Company on 3rd April 2000. He is liable to retire by rotation at the 26th Annual General Meeting. Due to his pre-occupation he expressed his desire not to seek re-appointment. The Board places on record its appreciation for the long years of guidance, support and advise rendered by Mr. Jayesh Chandrakant Patel.The vacancy caused by his retirement is not proposed to be filled up in this meeting.
None of the Independent Directors will retire at the ensuing Annual General Meeting.
At the 23rd Annual General Meeting held on December 31st 2015, Dr. Suleman Adam Merchant (DIN:00475410), was appointed as an Independent Director of the Company to hold office till the conclusion of Annual General Meeting to be held in year 2018. The term of Dr.Suleman Adam Merchant as an Independent Director, comes to an end on conclusion of ensuing 26th AGM.
Due to his pre-occupation he expressed his desire not to seek re-appointment for the second term as an Independent Director of the Company.The Board places on record its appreciation for the guidance, support and advise rendered by Dr.Suleman Adam Merchant, during his tenure as an Independent Director of the Company.
The Company has received notices under section 160 from Member, along with the requisite deposit, signifying intention to propose appointment of Ms.Rangalakshmi Srinivasa. Accordingly, necessary resolutions are being placed for approval of the Members at the 26th Annual General Meeting of the Company.
The Directors seek your support in confirming the appointment of Ms.Rangalakshmi Srinivas as Director in capacity of an Independent Director of the company in the ensuing Annual General Meeting.
RESIGNATION
Dr.Suchitra Misra (DIN: 02254365) resigned as Non Executive Director with effect from close of business hours of April 01, 2018.
The Board places on record contributions made by Dr.Suchitra Misra during her tenure as Director.
DECLARATION BY INDEPENDENT DIRECTOR
The Company has received necessary declaration from Independent Directors that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and the provisions of Regulation 16(1) (b) of the Securities and Exchange Board of India (Listing Obligation sand Disclosure Requirements) Regulations, 2015.
TRAINING OF INDEPENDENT DIRECTORS.
To familiarize the new inductees with strategy operations and functions of our Company, Senior Managerial personnel make presentations on Companyâs strategy, organization structure, products, technology, quality, facilities. Further at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his or her role, function, duties.
Based on the confirmation received, none of the Directors are disqualified for being appointed/reappointed as directors in terms of Section 164 the Companies Act, 2013.
During the year under review, no stock options were issued to the Directors of the Company.
POLICY ON DIRECTORS APPOINTMENT REMUNERATION AND EVALUATION
Your Company has in place, the Nomination Remuneration and Evaluation Policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of Director and other matters provided under sub Section (3)of Section 178 of the Companies Act, 2013. The Policy also contains the evaluation frame work as stipulated under SEBI Listing Regulations, 2015 which mandates that the Board shall monitor and review the Board evaluation frame work. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board and as per Guidance Note on Board Evaluation issued by the Securities Exchange Board of India, During January 2017.
MEETING OF THE BOARD
Eight Meetings of the Board of Directors were held during the year. For further details, please refer Corporate Governance section in this Annual Report.
COMMITTEES OF THE BOARD
Currently, the Board has Five Committees: Audit and Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stake holders Relationship Committee and Finance Committee.
A detailed note on the composition and scope of the Committee is provided under the Corporate Governance Section in this Annual Report.
AUDITORS
At the 25th Annual General Meeting held on September 05, 2017, members have approved the appointment of M/s. B.V. Swamy & Co., Chartered Accountants, Bengaluru, as Statutory Auditors of the Company.
M/s. B.V. Swamy & Co., Statutory Auditors holds office till the conclusion of the Annual General Meeting to be held in the year 2020.
The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or reenactment^) for the time being in force).
SECRETARIAL AUDITOR
The Board has appointed Mr. Vijayakrishna K.T., Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed here with marked as Annexure 1 in the Form of MR 3 to this Report. The Board of Directors of the Company here by furnish following explanations and clarifications with respect the observations made by the Secretarial Auditors in their report dated August 31, 2018 under the heading observations in points (a) to (e). (a & c) Due to technical issues in making the requisite returns, digitally signing the same and uploading, delays occurred in filings of certain returns/ and updating registers. Extreme levels of care and caution will be exercised to ensure that such delays do not occuragain.
b) The Company has provided loans to Advanced Micronic Devices Limited, a subsidiary, which is making efforts to revive its business operations. The Company will ensure to comply with Section 185 of the Companies Act, 2013.
c) The Company will ensure & take corrective action to strengthen Secretarial standards & certain provisions of the Act.
d) Extreme levels of care and caution will be exercised to ensure that such delays do not occur again.
RISK MANAGEMENT
The Company has laid down risk assessment and minimization procedures which are in line with the best practices in the industry and as per its experience and objectives. The Risk Management system is reviewed periodically and updated.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an armâs length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The disclosure of Related Party transactions as required under Section 134(3)(h) of Companies Act, 2013 in Form AOC 2 is annexed here with marked as Annexure 2.
The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link http://www.optoindia.com/pdf/OCIL - Policy on Related Party Transaction.pdf
Your Directors draw attention of the members to Note No.33 to the financial statement which sets out related party disclosures.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
The particulars of loans, guarantees, and investments have been disclosed in the financial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee (CSR Committee) appointed by the Board, has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.The CSR Policy may be accessed on the Companyâs website at the link: http://www.optoindia.com/pdf/OCIL- CSR Policy.pdf
In terms of Section 134 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on Corporate Social Responsibility activities of the Company is given in Annexure3 to this report.
Due to non-availability of profits, the Company was not required to spend any amount on CSR activities during the financial year 2017-18.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company promoters ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The Company has a vigil mechanism and whistle blower policy under which the employee are free to report violations of applicable laws and regulations and the code of conduct, to chief vigilance officer and Audit and Risk Management Committee of the Board. The Company further confirms that no personal have been denied access to the Audit and Risk Management Committee.
The policy on vigil mechanism and whistle blower policy may be accessed on the Companyâs website at the link: http://http://www.optoindia.com/pdf/OCIL - Whistle Blower Policy.pdf
POLICY ON DISCLOSURE OF MATERIAL EVENT SAND INFORMATION
Your Company has adopted the Policy on Disclosure of Material Events and information, in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to determine the events and information which are material in nature and are required to be disclosed to the Stock Exchanges.
The said policy is available on the website of the Company at http://www.optoindia.com/pdf/OCIL - Policy on Disclosure of Material Event and Informationx.pdf
POLICY ON PRESERVATION OF DOCUMENTS AND RECORDS
Your Company has adopted the policy on Preservation of Documents and Records in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy ensures that the Company complies with the applicable document retention laws, preservation of various statutory documents and also lays down minimum retention period for the documents and records in respect of which no retention period has been specified by any law/rule/regulation. The policy also provides for the authority under which the disposal/ destruction of documents and records after their minimum retention period can be carried out.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed here with as Annexure 4 to this Report.
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 occurred during between the end of the financial year to which the financial statements relate and the date of this report.
SIGNIFICANT AND MATERIAL ORDERS
No order was passed by any court or regulator or tribunal during the year under review which impacts going concern status of the Company.
SECRETARIAL STANDARD
The Company compliances with all applicable Secretarial Standards.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY
a. During the year 2017-18, unclaimed Dividend for financial year 2009-10 Rs.6,75,905/- was transferred to the Investor Education and Protection Fund (âIEPFâ), as required under the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Authorityâ).
b. During the year 2017-18, 23,562 Equity Shares in respect of which dividend has not been claimed for the final dividend declared in financial year 2009-10 was transferred to the IEPF Authority pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and the rules thereunder.
RESPONSE TO AUDITORS OBSERVATIONS
The Board of Directors of the company furnish following response to the Qualifications/ observations made by the Auditors in their Report dated April 30, 2018 for the Standalone Financial Statements and Consolidated Financial Statements.
RESPONSE TO AUDITORS OBSERVATION ON STANDALONE FINANCIAL STATEMENTS
The Board of Directors of the Company response to the Qualifications/ observations made by the Auditors in their Report dated 30th April 2018 for the Standalone Financial Statements under the heading Basis for Qualified Opinion in points [a] to [e.] and Response to Emphasis of Matter [1] & [2]]
RESPONSE TO QUALIFIED OPINION:
a-i] Receivables:
The Debtors represent the export bills receivables discounted with the banks and we are pursuing the same with the respective debtors for recovery; Meanwhile, we have also sought the requisite approvals for Write off of the said Receivables over 36 months [Rs.222.50 Crores] as per the Regulatory requirements with the respective AD banks and also taken up the same with RBI, while we have made a provision for write off the said amounts being considered Doubtful book debt in our Audited Financial Statements.
a-ii] Payables:
With regard to the payables over 3 years, the company had taken up with the vendors and addressed certain inadequacies in the quality specifications with respect to the materials supplies by these vendors and the negotiations are underway to sort these out to arrive at a mutually acceptable settlement. The Company is following up this matter.
b] Investment in subsidiary- Opto Cardiac Care Ltd [OCCL]
b-i] Auditorsâ Observation is Noted .
b-ii] The company has taken up the matter with the Honâble City Civil Court in Bangalore, Karnataka and obtained Mandatory Injunction against DBS Bank Ltd.
Further The Company also made a claim of USD 160.82 Million against DBS Bank Ltd vide its letter dated 24th January, 2017 and this claim is part of the above petition filed before the Honâble City Civil Court, Bangalore by the Company, and that the matter is sub-judice. The Company has also informed all the other lender Banks in the above matter.
The Company also has lodged a compliant with The Ombudsman, RESERVE BANK of INDIA, Bangalore and also with Debt Recovery Tribunal -2 [DRT-2] Bangalore on the companyâs claim against DBS Bank Ltd. DRT Bangalore had sought response / explanations from DBS Bank Ltd in this matter.
Further since the litigation is pending before the US Bank ruptcy Courts and that the Company is seeking appropriate legal relief to protect the rights of the share holders. Your company will take a decision to impair the investments when these legal cases are settled.
c] Bank Borrowings-NPA-Negotiated Settlement/ OTS etc:
c-i] Auditors Observation with respect to NPA on bank borrowings noted.
c-ii] With Bank of Nova Scotia Ltd the company has submitted proposal for One Time Settlement which was rejected by the bank. Thereafter Bank of Nova Scotia also has sought legal remedy for recovery of debt under the provisions of SARFAESI Act and the management had offered âoptionsâ inter alia among others to have the said security [viz 250 acres of Landed property in our SEZ, Hassan belonging to one of its subsidiary company, viz Opto Infrastructure Ltd] disposed off to appropriate towards the loan dues / or repay the dues through offers from prospective buyers/ investors in the said SEZ to liquidate the loan. Response from the bank is awaited.
c-iii] With HDFC Bank Ltd, the company has submitted proposals for Restructuring of the loan portfolio and that the company has offered to repay the entire dues [NO OTS] in 5 years & 3 months time frame and the negotiations with the bank are in the final stage.
As regards the Winding Up petitions filed or moved by HDFC Bank Ltd and Bank of Nova Scotia Ltd before the Honâble High Court, Karnataka, the company has filed its objections and also copies of the Settlement Proposals [OTS] / or Restructuring of the liabilities before the Honâble High Court Karnataka, Bangalore and the company is pursuing the matter through its Legal Counsels.
In the meanwhile, at the last hearing before the Honâble High Court Karnataka dated 27th July 2018 on a petition by HDFC Bank for Winding Up of the Company, and as per the Directive and Speaking. Order of the Honâble High Court, directing the company to pay Rs.50 Lakhs within one week of the Order, the company has paid Rs.50 Lakhs on 01st August 2018 to HDFC Bank towards the said Loan.
c-iv] With Standard Chartered Bank Ltd, [SCB] the company has already Repaid Rs.20.79 Crores in March 2017, towards part settlement of the Negotiated Settlement and the balance of Rs.62 Crores in a phased manner [3 years time] which is approved by the bank [SCB], being Agreement for Negotiated Settlement dated 06th March 2018 and that the company had commenced the repayment program as per the Negotiated Settlement Agreement .
c-v] With State Bank of India, the Company has submitted a Proposal for Compromise Settlement after protracted meetings and discussions for Rs.70 Crores and that the company had already repaid Rs.7 Crores as Up front money in SBIâs designated No Lien Account as per the requirements of the bank [SBI] and the balance Rs.63 Crores in 4 quarterly rests. Final Approval from SBI is awaited .
d] Observations of the Auditors is noted. Meanwhile, The Company is taking efforts with a Resurgence & Revival plan to revive the operations and will take stand on this matter during the course of the current financial year.
e] Impairment of Assets-AS 36
The Company continues to battle and survive amidst absence of working capital assistance, in view of the aforesaid facts, while trying its best & managing to repay the banks and to keep the operations of the company running and to meet the existing order. As mentioned in para [b] as above, there is inadequate working capital funds support for sustaining the operations, the company is not able to allocate further resources for this intangible assets.
EMPHASIS OF MATTER
1] Cardiac Science Corporation USA [ CSC] & DBS Bank-Matter
Please see and refer our Response vide point [b-ii] of the Response to Auditorsâ Qualified Opinion.
2] Standard Chartered Bank [SCB]
Please see & refer our Response to Auditorsâ qualified opinion in para [c-iv] as above, read with our Note 14 to Audited Accounts wherein as per the said Negotiated Settlement, the differential amount of Rs.153.217 Crores had been transferred to Capital Reserve.
RESPONSE TO ANNEXURE TO THE AUDITORS REPORT[ CARO] [I] TO [XVII]
[ii] The Company has taken note of the comments by the Auditors and that the company would carryout physical verification of inventories on a half yearly basis from this financial year.
[iii] [a], [b] & [c] The Company had granted unsecured loans to its subsidiaries to meet their working capital requirements and that no interest has been charged since the company is not incurring interest costs.
[viii] with respect to the Auditors Comments and observations in para [viii-a] to the Annexure, this is noted and in future no delays would occur as we ensure compliance of the time lines for making such statutory payments.
[viii b] The said amounts or demands are disputed and we have taken up the matter with CIT Appeals and with the Honâble High Court and are being followed up
[ix] Please refer to our Response to Auditorsâ Qualified Opinion vide para c-i to c-v as above.
[xv] During the Financial Year, the company has issued and allotted on 23rd November 2017, 4,51,75,999 No of Equity Shares [face value of Rs.10/- per share] at a premium of Rs.5/ per Equity shares [3,66,01,318 Equity Shares under Stock swap basis (other than cash) and 85,74,681 Equity shares against loan conversion] on preferential Allotment basis to Non Promoters, aggregating to Rs.67.76 Crores, and that the Paid Up Equity Capital has enhanced from Rs.242.31 Crores to Rs.287.49 Crores [28,74,95,406 no of Equity Shares of Rs.10- each face value]
The said issue and allotment is as per the requirements of the Companies Act and wasapproved by the Stock Exchanges as per the Listing obligations provisions under Chapter VII SEBI (ICDR) Regulations, 2009 and Regulatory requirements
AUDITORS OBSERVATION ON CONSOLIDATED FINANCIAL STATEMENTS FOR FY 2017-18
The Board of Directors of the Company response to the Qualifications/observations made by the Auditors in their Report dated 30th April 2018 for the Consolidated Financial Statements under the heading Basis for Qualified Opinion in points[1.] to [12] and Response to Annexure to the Auditors Report Point [1] to [13]
RESPONSE TO QUALIFIED OPINION
1. AMDL - Non moving stock :
The company is examining the quality of non moving stock wrt to its subsidiary company, AMDL and would take appropriate action in due course ;
2. Long outstanding Receivables/ Payables
i] Receivables:
The Company is constantly pursuing these long over dues with the Debtors and that the management has taken a stand for provisioning of receivables over 36 months, aggregating to Rs.22,250 Lakhs. The company will be sought the requisite Regulatory approvals for write off of these receivables with the respective AD Banks and also with Reserve Bank of India in this respect and await response.
ii] Payables:
With regard to the payables over 3 years, the company had taken up with the vendors and addressed certain inadequacies in the quality specifications with respect to the materials supplies by these vendors and the negotiations are underway to sort these out to arrive at a mutually acceptable settlement.
2. Advanced Micronic Devices Ltd-
Noted the observation on receivables over 360 days and the company would take effective steps to recover the same wrt to the Overseas Branch of AMDL, viz US Branch and also of AMDL Indian Operations. On payables, the company has taken up with the respective creditors seeking balance confirmation and awaiting response.
3. Investment in Opto Cardiac Care Ltd.-Subsidiary- Opto Cardiac Care Ltd [OCCL]
Auditorsâ Observation is Noted.
The company has taken up the matter with the Honâble Court in Bangalore, Karnataka and obtained Mandatory Injunction against DBS Bank Ltd.
Further The Company also made a claim of USD 160.82 Million against DBS Bank Ltd vide its letter dated 24th January, 2017 and this claim is part of the above petition filed before the Honâble Court, Bangalore by the Company and that the matter is is sub-judice. The Company has also informed all the other lender Banks in the above matter.
The Company also has lodged a compliant with The Ombudsman, RESERVE BANK of INDIA, Bangalore and also with Debt Recovery Tribunal -2 [DRT- 2] Bangalore on the companyâs claim against DBS Bank Ltd. DRT Bangalore had sought response / explanations from DBS Bank Ltd in this matter.
Further since the litigation is pending before the US Bankruptcy Courts and that the Company is seeking appropriate legal relief to protect the rights of the shareholders. Your company will take a decision to impair the investments when these legal cases are settled.
4. Bank Borrowings-NPA-Negotiated Settlement/ OTS etc:
4-i] Auditors Observation with respect to NPA on bank borrowings noted.
4-ii] With Bank of Nova Scotia Ltd the company has submitted proposal for One Time Settlement which was rejected by the bank. There after Bank of Nova Scotia also has sought legal remedy for recovery of debt under the provisions of SARFAESI Act and the management had offered âoptionsâ inter alia among others to have the said security [ viz 250 acres of Landed property in our SEZ, Hassan belonging to one of its subsidiary company, viz Opto Infrastructure Ltd] disposed off to appropriate towards the loan dues / or repay the dues through offers from prospective buyers/ investors in the said SEZ to liquidate the loan. Response from the bank is awaited.
4-iii] With HDFC Bank Ltd, the company has submitted proposals for Restructuring of the loan portfolio and that the company offered to repay the entire dues[ NO OTS] in 5 years & 3 months time frame and the negotiations are in the final stage.
4-iv] As regards the Winding Up petition by HDFC Bank Ltd and Bank of Nova Scotia Ltd before the Honâble High Court, Karnataka, the company has filed its objections and also copies of the Settlement Proposals [OTS] before the Honâble High Court Karnataka, Bangalore and the company is pursuing the matter through its Legal Counsels.
In the meanwhile, at the last hearing before the Honâble High Court Karnataka dated 27th July 2018 on a petition by HDFC Bank for Winding Up of the Company, and as per the Directive and Speaking Order of the Honâble High Court, directing the company to pay Rs.50 Lacs within one week of the Order, the company has paid Rs.50 Lacs on 01st August 2018 to HDFC Bank towards the said Loan.
4-v] With Standard Chartered Bank Ltd, [SCB] the company has already Repaid Rs.20.79 Crores in March 2017, towards part settlement of the Negotiated Settlement and the balance of Rs.61 Crores in a phased manner[ 3 years time] which is approved by the bank [SCB], being Agreement for Negotiated Settlement dated 06th March 2018 and that the company had commenced the repayment program as per the Negotiated Settlement Agreement .
4-vi] With State Bank of India, the Company has submitted a Proposal for Compromise Settlement after protracted meetings and discussions for Rs.70 Crores and that the company had already paid Rs.7 Crores as Up front money in SBIâs designated No Lien Account as per the requirements of the bank [SBI] and the balance Rs.63 Crores in 4 quarterly rests. Final Approval from SBI is awaited .
5. Advance to AMDL
Advanced Micronic Devices Ltd [AMDL] -Noted.
The Company is making efforts for revival of its operations and will take stand on this matter during the course of the current financial year.
6. Impairment of Non-Current Investment/ Intangible Assets
[i] & [ii] Please refer to our response in para[e] in Opto Circuits Stand alone Response to Auditorsâ Qualified Opinion.
Further as stated above, there is inadequate working capital funds support for sustaining the operations, the company is not able to allocate further resources for this intangible assets..
7. Advanced Micronic Devices Ltd -USA Branch
Advanced Micronic Devices Ltd has a branch at USA. There is no mandatory requirement for such branch audit in the USA. The company has adequate internal control systems, checks and mechanisms in place and is directly monitoring the same.
8. Advanced Micronic Systems Ltd
Noted . The company is taking effective steps to settle and clear the dues to its employees. The company is also following up the matter in the Honâble High Court. Un reconciled tax amount outstanding is out of the receipt of Rs.186 Lacs as Tax refund during the year.
9. Loans and Advances to Subsidiary Companies
The Company had granted unsecured loans to its subsidiaries to meet their working capital requirements and that no interest has been charged since the company is not incurring interest costs.
10. Auditors Observation is noted .
11. Please refer our Response under point 9 as above wrt to Opto Infrastructure Ltd.
12. Auditors Observation is noted . please also refer to point no 3 of our Response to Auditors qualified opinion in this respect.
EMPHASIS OF MATTER
1] Please refer Our Response to Auditorsâ Qualified Opinion - vide point no 3 of the Response.
2] Please refer our Response to Auditorsâ Qualified Opinion- vide point no 4[v] .
Further Please see & refer our Response to Auditorsâ qualified opinion in para [c-iv] as above, read with our Note 14 to Audited Accounts wherein as per the said Negotiated Settlement, the differential amount of Rs.153.21 Crores had been transferred to Capital Reserve.
3[ A]& [B] .
Please note that the Unaudited Management Certified Financial Statements for the Financial Year 2017-18 have been incorporated in the respective Holding Companies Consolidated Financial Statements which were Audited by the respective Statutory Auditors of the Respective Holding Companies with their Reports thereto for consolidating in the Indian Listed Holding Company, viz Opto Circuits[ India] Limited.
However, Going forward, the companyâs management/ Board would ensure audit of all the overseas entities/ subsidiaries and render Audited Financial Statements and Reports.
COMMENTS OF THE AUDITORS NOTE
INDUSTRIAL RELATIONS
Industrial relations have been cordial and constructive, which have helped your Company to achieve production targets.
DISCLOSURE UNDER THE SEXUAL HARSSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
Your company has always believed in providing a safe and harassment free work place for every individual working in Companyâs premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.
A policy on prevention of Sexual Harassment a work place has been released by the Company. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behavior. Three members internal complaints Committee (ICC) was set up from the senior management with women employees constituting majority. The ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. No complaints pertaining to sexual harassment was reported during the year.
ACKNOWLEDGEMENTS
Your Directors greatly appreciate the commitment and dedication of employees at all levels that have contributed to the growth and success of your company. Your Company also thanks all our stake holders, customers, vendors, Investors, bankers and other business associates for their continued support and encouragement during the year.
On behalf of the Board of Directors
Vinod Ramnani Somadas GC
Chairman, Managing Director
(DIN:01580173) (DIN:00678824)
Place: Bengaluru
Date: 31st August 2018
Mar 31, 2015
The Board is pleased to present the 23rd Annual Report on the business
and operations of Op to Circuits (India) Limited, together with the
financial statements of your Company for the financial period 1st April
2014 to 31st March 2015.
FINANCIAL HIGHLIGHTS: OPTO CIRCUITS Â STANDALONE
Rs, in Lacs
Particulars for the 2015 2014
year-ended March 31st
Total Revenues 14,092.24 26,110.89
Expenditure 16,036.52 20,937.86
Proft before Depreciation (19,111.48) 5,965.29
Depreciation 972.80 792.27
Proft before Tax (20,084.28) 5,173.02
Provision for Taxation 66.88 957.23
Proft for the year (20,151.16) 4,215.79
Surplus carried to Balance (20,151.16) 4,215.79
Sheet
OPERATIONS - STANDALONE
Standalone Total Revenues was at Rs, 14,092.24 lacs for the year ended
31st March, 2015 as against Rs, 26,110.89 lacs for the corresponding
period of FY2014, a decline of 46.03%. Standalone Profit/(Loss) after
Tax for the year ended 31st March, 2015 is at Rs, (20,151.16) lacs, as
against Rs, 4,215.79 lacs for the corresponding period of FY2014.
No material changes and commitments afecting the financial position of
the Company have occurred between the end of the financial year 2014-15
and the date of this report.
DIVIDENDS
Your Directors have not recommended any dividend for the year ended
31st March 2015.
TRANSFER TO RESERVES
An amount of Rs, (20,151.16) lacs is proposed to be retained in the
Profit and Loss Account.
CHANGES IN SHARE CAPITAL.
Increase in Authorized Share capital. During the year under review,
The Authorized Share capital of the Company was increased from Rs, 300
Crores divided into 30 Crores of Equity Shares of Rs, 10 each to Rs,
375 Crores comprising of Rs, 37.5 Crores of Equity Shares of Rs, 10
each.
DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS
During the year under review, the Company has not issued Shares with
Differential Rights.
DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS:
During the year under review, the Company has not issued Shares
Employee Stock Options.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES:
During the year under review, the Company has not issued Sweat Equity
Shares.
GROUP FINANCIAL HIGHLIGHTS: OPTO CIRCUITS Â CONSOLIDATED
Rs, in Lacs
Particulars for the 2015 2014
year-ended March 31st
ToTal Revenues 121,191.72 147,132.58
Expenditure 127,270.08 128,361.01
Profit before Depreciation (6,078.36) 18,771.57
Depreciation 9,455.28 7,570.14
Profit before Tax (15,533.64) 11,201.43
Provision for Taxation 171.28 2,197.43
Proft for the year (15,704.92) 9,004.00
appropriations
Proposed Dividend 0 0
Tax on Dividend 0 0
Minority Interest (67.47) (93.23)
Surplus carried to Balance (15,637.45) 9097.23
Sheet
OPERATIONS - CONSOLIDATED
Consolidated Revenue is at Rs, 121,191.72 lacs for the year ended 31st
March, 2015 as against Rs, 147,132.58 lacs for the corresponding period
of Financial Year 2014. Consolidated Proft after Tax for the year ended
31st March, 2015 is at Rs, (15,704.92) lacs, as against Rs, 9,004.00
lacs for the corresponding period of Financial Year 2014. Earnings per
Share for the year-ended 31st March 2015 is at Rs, (6.45)(Basic).
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE
COMPANIES
During the year under review, company continues to have Nine (9) direct
subsidiaries. In accordance with Section 129 (3) of the Companies Act,
2013, we have prepared Consolidated Financial Statements of the Company
and all its subsidiaries, which forms part of the Annual Report.
Further, a Statement containing the salient features of the financial
statement of our subsidiaries in the prescribed format AOC- 1 is
appended as Annexure A to the consolidated financial Statement and
hence not repeated here for the sake of brevity.
The Policy for determining material subsidiaries as approved may be
accessed on the Company's website at the link: http://www.optoindia.
com/pdf/OCIL-Policy on Material Subsidiaries.pdf.
CONSERVATION OF ENERGY
Your Company does not fall under the category of power intensive
industries. However, sustained efforts are taken to reduce energy
consumption. The organization is an ISO 14001 certified Company which
is an international Environment Management System Standard. The
environmental policy of your company aims at conservation of natural
resources and minimization of pollution.
FOREIGN EXCHANGE EARNINGS AND OUTGO. Your Company earned Rs, 11,574.37
lacs in foreign exchange in the year under review. Foreign Exchange
Outflow was Rs, 7,416.16 Lacs.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
A Statement containing the names of every employee employed throughout
the financial year and in receipt of remuneration in excess of Rs, 60
Lakhs or more or employed part of year and in receipt of remuneration
in excess of Rs,5 Lakhs or more, a month, under Information as per
Section 197(12) of the Act read with Rules 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, is as follows
name Mr. vinod Ramnani
Designation and Nature of Chairman and Managing Director / Duties
Managerial
Rs, 5,247,024
Remuneration Received
perquisites Rs, 2,623,512
Qualification and Experience Bachelor of Engineering / 36 years
Date of commencement of 08.06.1992
employment
Age 59 years
Last employment held Elekon Industries Pet Limited
Apart from above, there were no employees were covered under the above
mentioned provisions. Having regard to the provisions of the first
proviso to Section 136(1) of the Act and as advised, the Annual Report
excluding the information on Disclosures pertaining to remuneration and
other details as required under Section 197(12) of the Act read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is being sent to the members of the Company.
The said information is available for inspection at the registered
office of the Company during working hours and any member interested in
obtaining such information may write to the Company Secretary and the
same will be furnished on request.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements set out
by SEBI. The report on Corporate Governance as stipulated under the
Listing Agreement forms an integral part of this Report. The requisite
certificate from the Auditors of the Company confirming compliance with
the conditions of corporate governance is attached to the report on
Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENT Your Directors state that:
a) in the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards read with requirements
set out under Schedule III to the Act, have been followed and there are
no material departures from the same;
b) 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, 2015 and of the profit of the Company
for the year ended on that date;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a 'going concern'
basis;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
LISTING OF SECURITIES
Your Company's securities are listed on The Bombay Stock Exchange
Limited (BSE) and The National Stock Exchange of India Limited (NSE).
FIXED DEPOSITS
Your Company has not accepted any fixed deposits from the public during
the financial year under review.
DIRECTORS AND KEY MANEGERIAL PERSONNEL
Induction
On the recommendation of Nomination and Remuneration Committee, The
Board appointed Ms.Suchitra Misra (DIN 02254365) as Non Executive
Director with effect from March 31, 2015. We seek your support in
confirming the appointment of Ms.Suchitra Misra, in the ensuing Annual
General Meeting.
On the recommendation of Nomination and Remuneration Committee and
Audit and Risk Management Committee, The Board appointed
Mr.Venkataraman Sundar as Chief Financial Officer (CFO) and Ms.Supriya
kulkarni, as Company Secretary of the Company, with effect from
September 12, 2015.
RETIREMENT AND REAPPOINTMENTS As per the provisions of the Companies
Act, 2013, Mr. Jayesh Chandrakant Patel (DIN:01338843), retires by
rotation and being eligible, offers himself for re- appointment at the
ensuing Annual General Meeting. The Board of Directors recommends his
appointment. None of the Independent Directors will retire at the
ensuing Annual General Meeting.
The Company had appointed Mr. Suleman Adam Merchant (DIN: 00475410) as
Non-Executive Director, liable to retire by rotation under the
Companies Act, 1956. He is also Independent Director pursuant to Clause
49 of the Listing Agreement In terms of provisions of Companies Act,
2013, Independent Directors are not liable to retire by rotation. It is
proposed to appoint the aforementioned Director as Independent Director
at the AGM for a period of three years with effect from the date of the
AGM.
Appropriate resolutions and Brief resume of the Directors seeking
appointment / re-appointment at the Annual General Meeting, as required
under Clause 49 of the Listing Agreement and Companies Act 2013, forms
part of the Notice convening the Annual General Meeting.
MANAGING DIRECTOR.
The tenure of office of Mr. Vinod Ramnani as Managing Director expired
on 31st May 2015.
Based on the recommendation of the Nomination and Remuneration
Committee, your Board of Directors at its meeting held on 29th May
2015, re-appointed him as Managing Director for a period of 5 years
with effect from 1st June 2015, Member's support is sought in
confirming the re appointment of Mr. Vinod Ramnani, in the ensuing
Annual General Meeting.
RESIGNATIONS
During the period under review, Mr.Balasubramaniam. V (DIN 01177493)
Independent Director resigned with effect from December 23, 2014 and
Mr. Bhaskar Bodapati Director (DIN 02210156) resigned with effect from
January 09, 2015.
Mr.P V Rao Chief Financial Officer resigned with effect from May 12,
2015. Mr. Venkataraman Sundar, Company Secretary resigned with effect
from September 12, 2015.
The Board places on record its appreciation for the services rendered
by them during their tenure with the Company.
DECLARATION BY INDEPENDENT DIRECTORS. The Company has received
necessary declaration from Independent Directors that they meet the
criteria of independence laid down in section 149 (6) of the Companies
Act, 2013 and Clause 49 of the Listing Agreement.
Training of Independent Directors.
To familiarize the new inductees with strategy operations and functions
of our Company, senior managerial personnel make presentations on
Company's strategy, Organization structure, Products, technology,
quality, facilities. Further at the time of appointment of an
Independent Director, the Company issues a formal letter of appointment
outlining his or her role, function, duties and responsibilities as a
Director.
POLICY ON DIRECTORS APPOINTMENT REMUNERATION AND EVALUATION. The
Nomination Remuneration and Evaluation Policy of the Company on
directors' appointment and remuneration, including criteria for
determining qualifications, positive attributes, independence of
director and other matters provided under Sub section (3) of Section
178 of the Companies Act, 2013 adopted by the Board, is appended as
Annexure 1 to the Board's Report. The Policy also contains the
evaluation framework as stipulated under the Clause 49 of the Listing
Agreement which mandates that the Board shall monitor and review the
Board evaluation framework. The Companies Act, 2013 states that a
formal annual evaluation needs to be made by the Board of its own
performance and that of its committees and individual directors. The
evaluation of all the directors and the Board as a whole was conducted
based on the criteria and framework adopted by the Board.
MEETINGS OF THE BOARD
Eleven Meetings of the Board of Directors were held during the year.
For further details, please refer report on Corporate Governance on
page No. 32 of this Annual Report.
COMMITTEES OF THE BOARD.
Currently, the Board has Five Committees: Audit and Risk Management
Committee, Nomination and Remuneration Committee, Corporate Social
Responsibility Committee, Stakeholders Relationship Committee and,
Finance Committee.
A detailed note on the Composition and Scope of the Committees is
provided under the Corporate Governance Section in this Annual Report.
AUDITORS
At the Annual General Meeting held on September 30, 2014 M/s Anand
Amarnath & Associates, Chartered Accountants, Bengaluru, were appointed
as Statutory Auditors of the Company, hold office till the conclusion
of the Annual General Meeting to be held in the calendar year 2017. In
terms of First proviso to Section 139 of Companies Act, 2013, the
appointment of auditors shall be placed for ratification at every
Annual General Meeting. Accordingly, the appointment of M/s Anand
Amarnath & Associates, Chartered Accountants as Statutory Auditors of
the Company is placed for ratification of shareholders.
The Company has received letter from the Statutory Auditors to the
effect that their reappointment, if made, would be in accordance with
provisions of Section 141 of the Companies Act, 2013.
SECRETARIAL AUDITOR
The Board has appointed Mr. Vijayakrishna kT, Practicing Company
Secretary, to conduct Secretarial Audit for the financial year 2014-15.
The Secretarial Audit Report for the financial year ended March 31,
2015 is annexed herewith marked as Annexure 2 to this Report. The Board
of Directors of the Company hereby furnish following explanations and
clarifications with respect the observations made by the Secretarial
Auditors in their report dated November 18th 2015 under the heading
observations in points (a) and (b):
(a) The Company will take necessary steps to comply the appointment of
Internal Auditor.
(b) Due to technical issues in making the requisite returns, digitally
signing the same and uploading, delays occurred in filings of certain
returns. Extreme levels of care and caution will be exercised to ensure
that such delays do not occur again.
RISK MANAGEMENT
The Company has laid down risk assessment and minimization procedures
which are in line with the best practices in the industry and as per
its experience and objectives. The risk management system is reviewed
periodically and updated.
INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal
financial controls with reference to financial statements. During the
year, such controls were tested and no reportable material weakness in
the design or operation were observed.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an arm's length basis. During the year, the
Company had not entered into any contract / arrangement / transaction
with related parties which could be considered material in accordance
with the policy of the Company on materiality of related party
transactions.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company's website at the link: http://www.
optoindia.com/pdf/OCIL-Policy on Related Party Transactions.pdf.
Your Directors draw attention of the members to Note No.28 to the
financial statement which sets out related party disclosures.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND
SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given and
securities provided along with the purpose for which the loan or
guarantee or security is proposed to be utilized by the recipient are
provided in the standalone fnancial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR) The Corporate Social
Responsibility Committee (CSR Committee) appointed by the Board, has
formulated and recommended to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company, which has been approved by the Board. The
CSR Policy may be accessed on the Company's website at the link:
http://www.optoindia.com/pdf/OCIL - CSR Policy.pdf
In terms of Section 134 of the Companies Act, 2013 read with The
Companies (Corporate Social Responsibility Policy) Rules, 2014, the
annual Report on Corporate Social Responsibility activities of the
Company is given in Annexure 3 to this report.
This being the first year of implementation of the Companies Act, 2013,
owing to the operational challenges and fund constraints, your Company
was unable to undertake CSR activities for the financial year 2014 -15.
VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company promotes ethical
behavior in all its business activities and has put in place a
mechanism for reporting illegal or unethical behavior. The Company has
a vigil mechanism and Whistle Blower Policy under which the employees
are free to report violations of applicable laws and regulations and
the Code of Conduct to Chief Vigilance Ofcer and Audit & Risk
Management Committee of the Board. The Company further confirms that no
personal have been denied access to the Audit & Risk Management
Committee.
The Policy on vigil mechanism and whistle blower policy may be accessed
on the Company's website at the link: http:// www.optoindia.
com/pdf/OCIL - Whistle Blower Policy.pdf
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure
4 to this Report.
SIGNIFICANT AND MATERIAL ORDERS.
No order was passed by any court or regulator or tribunal during the
year under review which impacts going concern status of the Company.
AUDITORS OBSERVATIONS
AUDITORS OBSERVATION ON STANDALONE FINANCIAL STATEMENTS
The Board of Directors of the Company would like to give the following
explanations and clarifications with respect to the Qualifications/
observations made by the Auditors in their Report dated 01st December,
2015 for the Stand alone Financial Statements under the heading Basis
for Qualified Opinion in points [1] to [4], under Emphasis Matters in
points [a] to [b] and Response to Annexure to the Auditors Report point
[7]
Response to Qualified Opinion
[1] Receivables: The Company is constantly pursuing this long overdue
with the debtors and that the progress is encouraging. We are
confident that good progress will be made in this Financial Year.
[2] [i] Bank Borrowings-[Working Capital] Default in
Repayment:
Bank of Nova Scotia  The Bank has fled a petition in the Hon'ble High
Court of karnataka for Winding up and the Company is contesting the
case. The Company has also submitted a Proposal for Repayment of the
Loan as approved by the Board of Directors seeking time for Repayment
in a phase manner; Response from the bank to the Company's proposal is
awaited.
[ii] HDFC Bank Ltd - The Bank has fled a petition in the Honeble High
Court of karnataka for Winding up and the Company is contesting the
case. The Company has also submitted a Proposal for Repayment of the
Loan as approved by the Board of Directors seeking time for Repayment
in a phase manner; Response from the bank to the Company's proposal is
awaited.
[iii] State Bank of India - The Bank has issued a Notice under the
SARFESAI Act for recovery of its dues from the company and also fled a
petition before the Debt Recovery Tribunal, karnataka. The Company is
having discussions and meetings with the bank on an 'on-going' basis
with respect to the repayment of the overdoes.
[3] Advances to Advanced Micronics Devices Ltd [59% subsidiary of the
Company]- Advanced Micronics Devices Ltd [AMDL]has reduced its
activities in one of the SBUs in July 2015 only due to slowing down of
the business and delay in collection of its Receivables. AMDL has plans
to revive its Lines of Business and operations, while it has cleared
all its secured debts to the banks. The Company's Board is confident of
its revival which would enable the Company to recover the Advances from
AMDL in a phased manner. [4] Vishakapatnam SEZ Plant- Hud-Hud Cyclone
and its Impact - The Company has engaged a professional Firm of
Insurance surveyor to reassess the losses and quantify the same to
prefer and Resubmit an Insurance Claim with the Insurance Company and
it is in an advanced stage; The Company has also assessed the quantum
of the Loss to the tune of Rs, 181.40 Crores and the same was provided
in December 2014 and for the Financial year ending March 2015. The
Company is working with the Insurance Company towards getting its claim
settled.
Response to Emphasis of Matters:
[a] Payment of Dividend- This amount represents dividends to promoters/
associates and would be paid in due course.
[b] Investment in Indian and Overseas subsidiaries - Share
Certificates- As regards some of the overseas subsidiaries, including
Cardiac Science Corporation, USA and Criticare Systems Inc, USA, the
said Share certificate/s representing the Equity shares have been under
Pledge with DBS Bank, Singapore and that the copy of the Pledge
Agreement with the Bank and copies of the Share certificates have been
provided. As regards, Unitex is Vascular Inc, USA the Shares are under
security to Inducing Bank and that the same has been disclosed and
provided. With respect to the other Overseas and Indian subsidiaries
the share certificates, copies would be provided again and the same is
noted. Every Investment made in Overseas subsidiary was madethro'
Authorized Dealer as per FEMA/ RBI guidelines thro' ODI forms etc and
all such related documentation were provided.
Response to Annexure to the Auditors Report
[7] Regarding fling of Income Tax return: The Company is in the process
of fling belated return under section 139(4) of the Income Tax Act,
1961.
AUDITORS OBSERVATION ON CONSOLIDATED FINANCIAL STATEMENTS
The Board of Directors of the Company would like to give the following
explanations and clarifications with respect to the Qualifications/
observations made by the Auditors in their Report dated 1st December,
2015 for the Consolidated Financial Statements under the heading Basis
for Qualified Opinion in points [1] to [16]
Response to Qualified Opinion
[1]Payment of Dividend: Refer point No. [a] under our reply to Auditors
Standalone observations listed above. [2] Investment in Indian and
Overseas subsidiaries: Refer point No. [b] under our reply to Auditors
Standalone observations listed above. [3] Non-moving Stock:
[a] Advances Micronics Devices Ltd [AMDL] had reduced its activities in
one of the SBUs due to slowing down of the business and slowdown in
collecting its Receivables. AMDL has plans to revive its Lines of
Business and operations, while it has cleared all its secured debts to
the banks. The Company's Board is confident of its revival. The
operations of this subsidiary is being revamped; those business lines
that do not generate profit are being closed and good one pursued; the
Company is continuing its efforts to dispose these stocks.
[b], [c] & [d] Non-moving stock of Op to Eurocor Healthcare Ltd, Euro
or Malaysia & Eurocor Singapore: We will take a call on the quality of
these stocks and take necessary action in this financial year.
[4] [a] & [b] Receivables: The Company is constantly pursuing these
long over dues with the debtors and that the progress is encouraging.
[4] [c] Advances Micronics Devices Ltd [AMDL] had reduced its
activities in one of the SBUs due to slowing down of the business and
slowdown in collecting its Receivables. AMDL has plans to revive its
Lines of Business and operations, while it has cleared all its secured
debts to the banks. The Company's Board is confident of its revival.
The operations of this subsidiary is being revamped; those business
lines that do not generate profit are being closed and good one
pursued; the Company is continuing its efforts to recover the pending
receivables in phased manner. [5] Default in repayments to Banks:
Refer point No. [2] under our reply to Auditors Standalone observations
listed above. [6] Regarding wholly owned subsidiary Cardiac Science
Corporation: Information relating to the above entity has been
explained elsewhere in the Directors' Report which may please be
referred to.
[7] & [8] Advances to Advanced Micronics Devices Ltd: Refer point No.
[3] under our reply to Auditors Standalone observations listed above.
[9] AMDL has a branch at USA. Since there is no mandatory requirement
for such branch audit in USA and also considering the cost involved,
the company had deferred its audit plans of this US Branch, but,
however, have instituted adequate internal control systems, checks and
mechanisms in place and is directly monitoring the same.
[10] & [11] Audit of Eurocor GmbH, Eurocor Malaysia &Eurocor Singapore:
We are in the process of arranging to have accounts audited and the
same will be completed in the due course.
[12] Payment of Dividend from Advanced Micronic Devices Ltd to its
Holding Company: The dividend will be paid in due course.
[13] Service Tax Liability in Advanced Micronic Devices Ltd: The
Company will take a legal opinion and take an appropriate decision on
this matter.
[14]Eurocor Malaysia and Eurocor Singapore Operations: The business in
both these entities will be revived in due course.
[15] Cardiac Science Corporation and Critic are Systems Inc.: Refer to
the observations made in the Directors report elsewhere.
[16] Vishakapatnam SEZ Plant: Refer point No. [4] under our reply to
Auditors Standalone observations listed above.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
Your Company has always believed in providing a safe and harassment
free workplace for every individual working in Company's premises
through various interventions and practices. The Company always
endeavors to create and provide an environment that is free from
discrimination and harassment including sexual harassment.
A policy on Prevention of Sexual Harassment at Workplace has been
released by the Company. The policy aims at prevention of harassment of
employees and lays down the guidelines for identification, reporting
and prevention of undesired behavior. Three member Internal Complaints
Committee (ICC) was set up from the senior management with women
employees constituting majority. The ICC is responsible for redressal
of complaints related to sexual harassment and follows the guidelines
provided in the Policy.
No complaints pertaining to sexual harassment was reported during the
year.
ACKNOWLEDGEMENTS
Your Directors greatly appreciate the commitment and dedication of
employees at all levels that have contributed to the growth and success
of your Company. Your Company also thank all our stakeholders,
customers, vendors, investors, bankers and other business associates
for their continued support and encouragement during the year.
For and on behalf of the Board
VINOD RAMNANI
Chairman & Managing Director
Place: Bengaluru
Date: 3rd December, 2015
Mar 31, 2014
The Members,
We are pleased to present the 22nd Annual Report of OPTO CIRCUITS
(INDIA) LIMITED, together with the Audited Financial Statements and the
Auditor''s Report of your Company for the year ended 31st March 2014.
FINANCIAL HIGHLIGHTS:
OPTO CIRCUITS - STANDALONE OPERATIONS
Rs.in Lacs
Particulars for 2014 2013
year-ended March 31st
TOTAL REVENUES 26,110.89 69,698.08
Expenditure 20,937.86 45,210.72
Profit before Depreciation 5,965.29 25,148.51
Depreciation 792.27 661.15
Profit before Tax 5,173.02 24,487 36
Provision for Taxation 957.23 382.99
Profit for the year 4,215.79 24,104.37
Surplus carried to
Balance Sheet 4,215.79 24,104.37
OPERATIONS
Standalone Total Revenues are at Rs. 26,110.89 lacs for the year ended
31st March, 2014 as against Rs. 69,698.08 lacs for the corresponding
period of Financial Year 2013. Standalone Profit after Tax for the year
ended 31st March, 2014 is at Rs. 4,215.79 lacs, as against Rs. 24,104.37
lacs for the corresponding period of Financial Year 2013.
No material changes and commitments affecting the financial position of
the Company have occurred between the end of the financial year 2013-14
and the date of this Report.
DIVIDENDS
Your Directors have not recommended any dividend for the year ended
31st March 2014.
TRANSFER TO RESERVES
An amount of Rs 4,215.79 lacs is proposed to be retained in the Profit
and Loss Account.
GROUP FINANCIAL HIGHLIGHTS:
OPTO CIRCUITS - CONSOLIDATED
Rs. in Lacs
Particulars for the 2014 2013
year-ended March 31st
TOTAL REVENUES 147,132.58 240,666.39
Expenditure 128,361.01 192,522.88
Profit before Depreciation 18,771.57 48,143.52
Depreciation 7,570.14 9,595.14
Profit before Tax 11,201.43 38,548.38
Provision for Taxation 2,197.43 312.19
Profit for the year 9,004.00 38,236.19
APPROPRIATIONS
Proposed Dividend 0 0
Tax on Dividend 0 0
Minority Interest (93.23) 254.72
Surplus ramed to Balance 9097.23 37,981.47
Sheet
As stipulated in the Listing Agreement with the Stock Exchanges, the
consolidated financial statements have been prepared by the Company in
accordance with the relevant Accounting Standards issued by the
Institute of Chartered Accountants of India. The Audited Consolidated
Financial Statements, together with the Auditor''s Report, thereon,
form part of the Annual Report.
OPERATIONS
Consolidated Revenue is at Rs. 147,132.58 lacs for the year ended 31st
March, 2014 as against Rs. 240,666.39 lacs for the corresponding period
of Financial Year 2013. Consolidated Profit after Tax for the year
ended 31st March, 2014 is at Rs. 9,004.00 lacs, as against Rs. 38,236.19
lacs for the corresponding period of Financial Year 2013. Earnings per
Share for the year-ended 31st March 2014 is at Rs. 3.75 (Basic).
INVESTMENT BY OPTO CIRCUITS (INDIA) LTD.
As on 31st March 2014, your Company had nine direct subsidiary
companies, listed as under:
SUBSIDIARY COMPANY ACCOUNTS Ministry of Corporate Affairs, Government
of India, vide General CircularNo.2/2011, dated 8th February 2011,
granted a general exemption from attaching various documents in respect
of subsidiary companies, as set out in sub-section (1) of Section 212
of the Companies Act, 1956. Accordingly, the Balance Sheet, Statement
of Profit and Loss and other documents of the subsidiary companies are
not being attached with the Annual Report of the Company. However,
Financial information of the subsidiary companies, as required under
the said Circular, have ben furnished under "Details of Subsidiaries"
forming part of the Annual Report. The Company will make available the
annual accounts of subsidiary companies and the related detailed
information to any investor, of holding and of subsidiary companies,
seeking such information at any point of time. The annual accounts of
the subsidiary companies will also be kept open for inspection by any
investor at the registered office of the Company and that of the
respective subsidiary companies. The Consolidated Financial Statements
presented by the Company include financial results of its subsidiaries.
CONSERVATION OF ENERGY
Your Company does not fall under the category of power intensive
industries. However, sustained efforts are taken to reduce energy
consumption. The organization is an ISO 14001 certified Company which
is an international Environment Management System Standard. The
environmental policy of your Company aims at conservation of natural
resources and minimization of pollution.
FOREIGN EXCHANGE EARNINGS
Your Company earned Rs. 22,867.16 lacs in foreign exchange in the year
under review.
Apart from above, there were no employees were covered under the
provisions of Section 217(2A)(a)(iii) of the Companies Act, 1956.
CORPORATE GOVERNANCE REPORT Corporate Governance Report, and the
Certificate dated 12th August 2014 from the Auditors of your Company
regarding compliance to the conditions for Corporate Governance as
stipulated in Clause 49 of the Listing Agreement with the Stock
Exchanges are enclosed.
DIRECTOR''S RESPONSIBILITY STATEMENTS Pursuant to the requirement under
section 217 (2AA) of the Companies Act, 1956, with respect to the
Directors Responsibility Statement, it is hereby confirmed:
a) That in the preparation of the Annual Accounts for the financial
year ended 31st March 2014, the applicable Accounting Standards have
been followed along with proper explanation relating to material
departures, if any.
b) That the Directors have selected such appropriate accounting
policies and applied them consistently and made judgments and estimates
that were 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 that financial year.
c) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d) That the Directors have prepared the annual accounts on a going
concern basis.
LISTING OF SECURITIES
Your Company''s securities are listed on The Bombay Stock Exchange
Limited (BSE) and The National Stock Exchange of India Limited (NSE).
FIXED DEPOSITS
Your Company has not accepted any fixed deposits from the public during
the financial year under review.
DIRECTORS
Mr. Jayesh Chandrakant Patel (DIN: 01338843), and Mr. Thomas Dietiker
(DIN: 01424625) retires by rotation and being eligible, offers
themselves for re-appointment at the ensuing Annual General Meeting.
The Board of Directors recommend their appointment.
Mr. Vivek Ramnani and Mr. Ashwin Khemani ceased to be an Alternative
Directors of the Company with effect from 30.09.2013.
The Company had appointed Mr. Rajkumar Tulsidas Raisinghani (DIN:
01411084) and Dr.Anvay Vinayak Mulay (DIN: 01479415) as Non-Executive
Directors, liable to retire by rotation under the Companies Act, 1956.
These Directors are also Independent Directors pursuant to Clause 49 of
the Listing Agreement.
In terms of provisions of Companies Act, 2013, Independent Directors
are not liable to retire by rotation. It is proposed to appoint the
aforementioned Directors as Independent Directors at the AGM for a
period of three years with effect from the date of the AGM.
Appropriate resolutions seeking your approval for the appointment of
above persons as Independent Directors of the Company, forms part of
the Notice calling the AGM.
Brief resume of the Directors seeking appointment / re- appointment at
the Annual General Meeting, as required under Clause 49 of the Listing
Agreement and Companies Act 2013, forms part of the Notice convening
the Annual General Meeting.
AUDITORS
M/s Anand Amarnath & Associates, Chartered Accountants, Bengaluru,
Statutory Auditors of the Company, hold office until the conclusion of
the ensuing Annual General Meeting and are eligible for reappointment.
In terms of Section 139 of the Companies Act, 2013, they can be
appointed for a remaining term of three years starting from the
conclusion of the ensuing Annual General Meeting until the conclusion
of the Twenty Fifth Annual General Meeting of the Company to be held in
the year 2017 (subject to ratification of re- appointment by the
members at every AGM held after this AGM) The Company has received
letter from the Statutory Auditors to the effect that their
reappointment, if made, would be within the prescribed limits under
Section 139 of the Companies Act, 2013 and that they are not
disqualified for reappointment.
AUDITORS OBSERVATION
The Board of Directors of the Company would like to give following
explanations and clarifications with respect the Qualifications
/observations made by the Auditors in their report dated 30th May, 2014
for Consolidated Financial Statements under the heading Opinion in
points (a) to (f) and under other matters.
a) Company has already paid part of the dividend; balance representing
to promoters / associates is being paid in due course.
b) (i) With regard to the observations of Stock Auditors of Advanced
Micronic Devices Limited: Company has assessed the entire Terminals and
Multi Para Patient Monitors inventory. During the Financial year,
written-off inventory was worth Rs.328.81 Lacs. Efforts are in
progress to sell the remaining inventory including Terminals and Multi
Para Patient Monitors.
b) (ii) & d) Advanced Micronic Devices Limited confirm that the
receivables of Rs.1967 Lacs over a period of 180 days are good. Company
is awaiting for certification from our principles for the powerlines
and other surveys done. We expect to receive the payments before
December 2014. In other cases, where there has been undue delay,
Company is aggressively pursuing for the payment or return of the
inventory.
c) Advanced Micronic Devices Limited has a branch at USA. Since there
is no mandatory requirement for such branch audit in USA, and also
considering the cost involved, the Company has deferred its Audit plans
of this US branch, but however, have instituted adequate internal
control systems, checks and mechanism in place and is directly
monitoring the same.
e) Cardiac Science Corporation has incurred losses in F.Y 2012- 13 due
to a loss making division, Cardiac Monitoring division. The same has
since been hived off and the resultant losses have been cut down during
F.Y.2013-14. In addition various cost cutting measures have been
deployed to keep the Company running smoothly which were effective in
2013- 14. Further Parent Company support is always available for any
exigency. In view of the above facts, company is of the opinion that
Cardiac Science Corporation is a going concern which has been proved
beyond doubt by its operations in 2014 in which year the Company has
obtained FDA clearance for Powerheart AED G5 equipment.
f) Opto Eurocor Gmbh is a step down subsidiary of Opto Circuits (India)
Limited. There is no specific requirement of independent audit in the
country of Operations for a company of that size & operations. However
adequate internal controls and systems are in place for effective
monitoring by the parent Company.
Further a reference to Note 30 B of Notes to accounts refers to a
provision not made for Minimum Alternate Tax. Note 30 B is self
explanatory and no further explanation is needed.
Under Other Matters of Auditors Report for Consolidated Financial
Statements:
The Company has step down subsidiaries in overseas and the completion
of audit some times goes beyond the time required under the statutes
and regulatory frame work in India, to file audited consolidated
accounts by 60 days from the end of the Financial year. In this respect
the Audited Financial Accounts for Cardiac Science Corporation,
Criticare systems Inc and Unitexis Vascular Inc have been received
subsequent to 30-5-2014. All the above step-down subsidiaries have
contributed to the extent of Rs.121,293 Lacs in assets and Rs. 77,042
Lacs in Revenue.
Under annexure to Auditors report for Standalone financial statements
not covered above;
The Company has made representations for waiver of Cost Audit through
the relevent trade bodies, as its operations are predominantly in SEZ.
The Company is confident that its representations are being heard and
that the request seeking waiver of Cost Audit would be accepted.
With regard to term loan, the Company could not repay the last two
instalments due to temporary liquidity issues in Quarter 4, as it has
to meet statutory payments in priority. However Company is making
efforts to repay the overdue instalments during the current financial
year.
ACKNOWLEDGEMENTS
Your Directors greatly appreciate the commitment and dedication of
employees at all levels that have contributed to the growth and success
of your Company. Your Company also thank all our stakeholders,
customers, vendors, investors, bankers and other business associates
for their continued support and encouragement during the year.
For and on behalf of the Board
ViNOD RAMNANI
Chairman & Managing Director
Place: Bengaluru
Date: 12th August 2014
Mar 31, 2013
To The Members,
The are pleased to present the 21st Annual Report on the business and
operations of Opto Circuits (India) Limited, together with the audited
financial statements and the Auditor''s Report of your Company for the
financial period 1st April 2012 to 31st March 2013
FINANCIAL HIGHLIGHTS: OPTO CIRCUITS - STANDALONE
Rs.in Lacs
Particulars for the 2013 2012
year-ended March 31st
TOTAL REVENUES 69,698.08 67,108.00
Expenditure 45,210.72 43,310.95
Profit before Depreciation 25,148.51 24,402.23
Depreciation 661.15 605.19
Profit before Tax 24,487.36 23,797.04
Provision for Taxation 382.99 320.51
Profit for the year 24,104.37 23,476.54
APPROPRIATIONS
Proposed Dividend 7,269.58
Tax on Dividend 1,179.31
Surplus carried to Balance 24,104.37 15,02765
Sheet
OPERATIONS
Standalone Total Revenues are at Rs. 69,698.08 lacs for the year ended
31st March, 2013 as against Rs. 67,108.00 lacs for the corresponding
period of FY2012, a growth of 3.86%. Standalone Profit after Tax for
the year ended 31st March, 2013 is at Rs. 24,104.37 lacs, as against
Rs. 23,476.54 for the corresponding period of FY2012.
No material changes and commitments affecting the financial position of
the Company have occurred between the end of the financial year 2012-13
and the date of this report.
DIVIDENDS
Your Directors have not recommended any dividend for the year ended
31st March 2013.
ISSUE OF PREFERENTIAL SHARES
During the year, the Company had approved to issue and allot upto
20,00,000 (Twenty Lakh) share warrants to Mr. Vinod Ramnani, promoter
of the Company, on Preferential basis. Each share warrant convertible
into one equity share of the Company. Pursuant to Sec 192A of the
Companies Act, 1956, read with the Companies (Passing of the Postal
Ballot) Rules, 2011 approval of the shareholders was sought through
Postal Ballot in respect to issuance of share warrants to Mr. Vinod
Ramnani, promoter of the Company. The said resolutions had been passed
by the Shareholders of the Company with the requisite majority. Due to
non-receipt of in-principal approval from Stock Exchange, the Company
has not issued Share warrants to Mr. Vinod Ramnani.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 2,500 lacs to General Reserves out
of the amount available for appropriation. An amount of Rs. 67,342.01
lacs is proposed to be retained in the Profit and Loss Account.
GROUP FINANCIAL HIGHLIGHTS: OPTO CIRCUITS - CONSOLIDATED
Rs. in Lacs
Particulars for the 2013 2012
year-ended March 31st
TOTAL REVENUES 240,666.39 237,041.59
Expenditure 192,522.88 179,955.24
Profit before Depreciation 48,143.52 57,086.35
Depreciation 9,595.14 5,462.75
Profit before Tax 38,548.38 51,623.60
Provision for Taxation 312.19 -5,716.42
Profit for the year 38,236.19 57,340.02
APPROPRIATIONS
Proposed Dividend 0 7,290.86
Tax on Dividend 0 1,18787
Minority Interest 254.72 152.07
Surplus ramed to Balance 37981.47 48,709.22
Sheet
As stipulated in the listing agreement with the stock exchanges, the
consolidated financial statements have been prepared by the Company in
accordance with the relevant accounting standards issued by the
Institute of Chartered Accountants of India. The audited consolidated
financial statements, together with the Auditor''s Report, thereon,
form part of the Annual Report.
OPERATIONS
Consolidated revenue are at Rs. 240,666.39 lacs for the year ended 31st
March, 2013 as against Rs. 237,041.59 lacs for the corresponding period
of FY2013, a growth of 1.52%. Consolidated Profit after Tax for the
year ended 31st March, 2013 is at Rs. 38,236.19 lacs, as against Rs.
57,340.02 lacs for the corresponding period of FY2012 a degrowth of
33%. Earnings per Share for the year-ended 31st March 2013 is at Rs.
15.67 (Basic).
INVESTMENT BY OPTO CIRCUITS (INDIA) LTD.
As on 31st March 2013, your Company had nine direct subsidiary
companies, listed as under:
Sl Name of the Company Country of % Holding
No. Incorporation
1. Advanced Micronic India 59.71%
Devices Ltd.
2. Opto Eurocor Healthcare Ltd. India 96.85%
3. Mediaid Inc. USA 100%
4. Ormed Medical India 100%
Technology Ltd.
5. Devon Innovations Pvt. Ltd. India 100%
6. Opto Infrastructure Ltd. India 87.20%
7. Orti Cirts (Malaysia) Malaysia 100%
Sdn. Bhd
8. Maxcor Life Science Inc USA 100%
9. Opto Cardiac Care Ltd. India 100%
SUBSIDIARY COMPANY ACCOUNTS
Ministry of Corporate Affairs, Government of India, in their vide
General Circular No.2/2011, dated 8th February 2011, granted a general
exemption from attaching various documents in respect of subsidiary
companies, as set out in sub-section (1) of Section 212 of the
Companies Act, 1956. Accordingly, the Balance Sheet, Profit and Loss
Accounts and other documents of the subsidiary companies are not being
attached with the Annual Report of the Company. Financial information
of the subsidiary companies, as required under the said Circular, is
disclosed in the Annual Report.
The Company will make available the annual accounts of subsidiary
companies and the related detailed information to any investor, of
holding and of subsidiary companies, seeking such information at any
point of time. The annual accounts of the subsidiary companies will
also be kept open for inspection by any investor at the registered
office of the Company and that of the respective subsidiary companies.
The Consolidated Financial Statements presented by the Company include
financial results of its subsidiaries.
CONVERSATION OF ENERGY
The Company does not fall under the category of power intensive
industries. However, sustained efforts are taken to reduce energy
consumption. The organization is an ISO 14001 certified Company which
is an international Environment Management System Standard. The
environmental policy of the Company aims at conservation of natural
resources and minimization of pollution.
During the year, the Bengaluru unit of the Company is using CFL lamps
for general lighting purposes; this has resulted in savings of 14,000
units of electrical energy per annum. Further, the Company has also
taken measures to save water; 75% of water consumed in the Company is
now recycled and reused for landscaping purposes.
FOREIGN EXCHANGE EARNINGS
The Company earned Rs. 37,700.62 lacs in foreign exchange in the year
under review.
PARTICULARS OF EMPLOYEES
Information as per Section 217 (2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules 1975, as amended, is as
follows
Ms. Usha Ramnani ceased to be an executive Director with effect from
1st March 2013.
Apart from above there were no employees were covered under the
provisions of Section 217 (2A)(a)(iii) of the Companies Act, 1956.
Mr. Vinod Ramnani and Ms. Usha Ramnani, being husband and wife, are
related to each other.
CORPORATE GOVERNANCE REPORT
Corporate Governance Report, and Certificate dated 13th August 2013
from the auditors of your Company regarding compliance to the
conditions for Corporate Governance as stipulated in Clause 49 of the
Listing Agreement with the stock exchanges are enclosed.
DIRECTOR''S RESPONSIBILITY STATEMENTS
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956, with respect to the Directors Responsibility Statement, it
is hereby confirmed:
a) That in the preparation of the Annual Accounts for the financial
year ended 31st March 2013, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any.
b) That the Directors have selected such appropriate accounting
policies and applied them consistently and made judgments and estimates
that were 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 that financial year.
c) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d) That the Directors have prepared the annual accounts on a going
concern basis.
LISTING OF SECURITIES
The Company''s securities are listed on The Bombay Stock Exchange
Limited (BSE) and The National Stock Exchange of India Limited (NSE).
FIXED DEPOSITS
The Company has not accepted any fixed deposits from the public during
the financial year under review.
DIRECTORS
Mr. Thomas Dietiker, Mr. V Balasubramaniam and Dr. William Walter O''
Neill, Directors of the Company, Liable to retire by rotation in the
ensuring Annual General Meeting. Mr. Thomas Dietiker and Mr. V
Balasubramaniam being eligible, offers themselves for re-appointment as
Directors and Dr. William Walter O'' Neill has not offered himself for
re-appoinment.
Ms. Usha Ramnani ceased to be a Director of the Company with effect
from 1st March 2013. Mr. Bhaskar Bodapati was appointed as an
Additional Director with effect from 22nd May 2013 who would hold the
office upto the date of the ensuing Annual General Meeting. Further, it
is proposed to appoint Mr. Bhaskar Bodapati as a Director of the
Company in the forthcoming Annual General Meeting.
AUDITORS
The Auditors, M/s. Anand Amaranth & Associates, Chartered Accountants,
Bengaluru, retire at the conclusion of the ensuing Annual General
Meeting. Your Company has received a letter from them to the effect
that that their appointment, if made, will be in accordance with the
provisions of Section 224(1B) of the Companies Act 1956.
AUDITORS OBSERVATION
The Board of Directors of the Company would like to give following
explanation and clarification with respect to observations made by the
Auditors in their report dated 30th May 2013 in point (a) and (b) under
heading Opinion
(a) The Auditors remark on the MAT is self explanatory.
(b) The Company will clear the dividend dues shortly.
The observation made under item No.11 of Annexure to the Audit Report,
the Board of Directors would like to state that, the Company has made
the payment subsequently.
The Board of Directors of the Company would like to give following
explanation and clarification with respect to observations made by the
Auditors in their Report on the Consolidated Financial Statements dated
30th May 2013 in point (c) under heading Opinion:
1. Advanced Micronic Devices Limited is working on liquidation of
Terminals and Multi Para Patient Monitors, which are most slow moving
and the Company is confident of liquidating the same by modifying the
products in the current financial year.
2. We confirm that, receivables of Rs.1522.54 Lakhs over a period of
180 days in Advanced Micronic Devices Limited are good and the Company
is confident of recovering it shortly. Cost Audit
In conformity with the directives of the Central Government contained
in the Ministry of Corporate Affairs circular No.15/2011 dated 11 April
2011, as amended, the Company is accordingly required to get its cost
accounting records in respect of the financial year 2012-13 audited by
a Cost Auditor. The Cost Audit Report is required to be filed within
180 days from the end of the financial year. The due date for filing
the Cost Audit Report for the financial year 2012-13 is 30th September
2013. The Company has not appointed Cost Auditor for the financial year
2011-12 and has not filed the cost audit report as required under above
said circular.
ACKNOWLEDGEMENTS
Your Directors greatly appreciate the commitment and dedication of
employees at all levels that have contributed to the growth and success
of the Company. We would also thank all our stakeholders, customers,
vendors, investors, bankers and other business associates for their
continued support and encouragement during the year.
For and on behalf of the Board
VINOD RAMNANI
Chairman & Managing Director
Place: Bengaluru
Date: 13th August 2013
Mar 31, 2012
The are pleased to present the 20th Annual REPORT on the business and
operations of Opto Circuits (India) Limited, together with the audited
financial statements and the Auditor's REPORT of your Company for the
financial period 1st April 2011 to 31st March 2012.
FINANCIAL HIGHLIGHTS:
OPTO CIRCUITS Ã STANDALONE
Rs. in Lacs
Particulars for the
2012 2011
year-ended March 31st
TOTAL REVENUES 67,108.00 63,927.17
Expenditure 42,705.76 38,631.26
Profit before Depreciation 24,402.24 25,295.92
Depreciation 605.19 590.62
Profit before Tax 23,797.04 24,705.30
Provision for TAXATION 320.51 267.78
Profit for the year 23,476.54 24,437.52
APPROPRIATIONS
Proposed Dividend 7,269.58 8,402.98
Tax on Dividend 1,179.31 1,395.69
Surplus carried to Balance 15,027.65 14,638.85
Sheet
OPERATIONS
Standalone Total Revenues are at Rs. 67,108.00 lacs for the year ended
31st March, 2012 as against Rs. 63,927.17 lacs for the corresponding
period of FY2011, a growth of 4.98%.
Standalone profit after Tax for the year ended 31st March, 2012 is at Rs.
23,476.54 lacs, as against Rs. 24,437.52 lacs for the corresponding
period of FY2011.
No material changes and commitments affecting the financial position of
the Company have occurred between the end of the financial year 2011-12
and the date of this REPORT.
DIVIDENDS
Considering the performance of the Company and its resources to meet
its future requirements, your Directors are pleased to recommend a
Dividend at the rate of Rs. 3.00/- per equity share of face value Rs. 10/-
for the year ended 31st March 2012.
ISSUE OF BONUS SHARES
During the year, the Company had approved the issue of Bonus Shares in
the ratio of 3 equity share for every 10 fully paid-up equity share
held , to the existing equity shareholders of the Company.
Pursuant to Sec 192A of the Companies Act, 1956, read with the
Companies (Passing of the Resolution by Postal Ballot) Rules 2011,
approval of the shareholders was sought through Postal Ballot in
respect of amendment to the Memorandum of Association and Articles of
Association of the Company for increase in Authorized Share Capital,
and for Issue of Bonus Shares in the ratio of 3:10 (i.e.3 fully paid
Equity share for every 10 fully paid-up Equity share held). The said
resolutions had been passed by the Shareholders of the Company with the
requisite majority. On 31st March 2012, as approved by the
shareholders, the Board of Directors of the Company has allotted
55,919,863 bonus equity shares of Rs. 10/- each in the ratio of 3:10
(Three bonus equity share for every Ten equity shares held) to the
members, whose names appeared on the Register of Members on the Record
Date fixed for the purpose. The Bonus shares were listed on the National
Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange
Limited (BSE), where the equity shares of the Company are listed.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 2,400.00 lacs to General Reserves
out of the amount available for appropriation. An amount of Rs. 45,737.63
lacs is proposed to be retained in the profit and Loss Account.
GROUP FINANCIAL HIGHLIGHTS: OPTO CIRCUITS Ã CONSOLIDATED
Rs. in Lacs
Particulars for the
2012 2011
year-ended March 31st
TOTAL REVENUES 237,041.59 161,599.62
Expenditure 185,417.99 122,236.07
Profit before Depreciation 57,086.35 44,443.33
Depreciation 5,462.75 5,079.78
Profit before Tax 51,623.59 39,363.55
Provision for TAXATION (5,716.42) 2,508.95
Profit for the year 57,340.02 36,854.60
APPROPRIATIONS
Proposed Dividend 7,290.86 8,434.90
Tax on Dividend 1,187.87 1,409.95
Minority Interest 152.07 129.68
Surplus carried to Balance 48,709.22 26,880.07
Sheet
As stipulated in the listing agreement with the stock exchanges, the
consolidated financial statements have been prepared by the Company in
accordance with the relevant accounting standards issued by the
Institute of Chartered Accountants of India. The audited consolidated
financial statements, together with the Auditor's REPORT, thereon, form
part of the Annual REPORT.
OPERATIONS
Consolidated revenue are at Rs. 237,041.59 lacs for the year ended 31st
March, 2012 as against Rs. 161,599.62 lacs for the corresponding period
of FY2011, a growth of 47%. Consolidated profit after Tax for the year
ended 31st March, 2012 is at Rs. 57,340.02 lacs, as against Rs. 36,854.60
lacs for the corresponding period of FY2011, a growth of 56%. Earnings
per Share for the year-ended 31st March 2012 is at Rs. 23.6 (Basic).
INVESTMENT BY OPTO CIRCUITS (INDIA) LTD.
Sl. Country of
Name of the company % holding
No. Incorporation
Advanced Micronic
1. India 59.71%
Devices Ltd.
2. Opto Eurocor Healthcare
Ltd. India 96.85%
3. Mediaid Inc. USA 100%
Ormed Medical
4. India 100%
Technology Ltd.
5. Devon Innovations
Pvt. Ltd. India 100%
6. Opto Infrastructure Ltd. India 87.20%
Opto Circuits (Malaysia)
7. Malaysia 100%
Sdn. Bhd
8. Maxcor LifeScience Inc USA 100%
9. Opto Cardiac Care Ltd. India 100%
SUBSIDIARY COMPANY ACCOUNTS
Ministry of Corporate Affairs, Government of India, in their vide
General Circular No.2/2011, dated 8th February 2011, granted a general
exemption from attaching various documents in respect of subsidiary
companies, as set out in sub-section (1) of Section 212 of the
Companies Act, 1956. Accordingly, the Balance Sheet, profit and Loss
Accounts and other documents of the subsidiary companies are not being
attached with the Annual REPORT of the Company. Financial information
of the subsidiary companies, as required under the said Circular, is
disclosed in the Annual REPORT. The Company will make available the
annual accounts of subsidiary companies and the related detailed
information to any investor of holding and of subsidiary companies
seeking such information at any point of time. The annual accounts of
the subsidiary companies will also be kept open for inspection by any
investor at the registered office of the Company and that of the
respective subsidiary companies. The Consolidated Financial Statements
presented by the Company include financial results of its subsidiaries.
GLOBAL ECONOMY AND MEDICAL DEVICES
The global economy witnessed a challenging phase in 2011- 12,
characterized by instability, recession and financial crisis in Europe
and US. Several major developing countries also witnessed deceleration
in economic growth owing to a variety of factors including domestic
policies. The Medical devices Industry covers a wide spectrum of
products and encompasses everything from simple Band Aids to large and
complex magnetic resonance imaging systems. Today, thousands of
different kinds of medical devices are used to diagnose, treat and
monitor patients in different and diverse settings, from the comforts of
your home to critical care operation theaters in hospitals. Medical
technology innovations have altered the healthcare delivery mechanism,
aided by medical devices that constantly challenge existing paradigms
and revolutionize the way treatments are administered.
Last year was also a challenging year for the medical devices industry.
Austerity measures by governments across the globe, challenging
regulatory environment, declining pricing, decreasing hospital
admissions, procedure volume concerns, and reimbursement pressures were
some of the pressures that the industry faced. Despite the uncertain
public policy environment, increased regulatory and pricing pressure,
the industry is poised for growth.
An ageing population, lifestyle and diet-related chronic diseases,
increased life expectancy, greater focus to developing healthcare
infrastructure in developing economies continue to create a demand for
healthcare services and thereby for medical devices. The industry is
expected to touch a staggering USD 350Bn in size, with an average
growth of 5% from 2011, states the REPORT on 'Outlook for Medical
devices, Espicom Business Intelligence'.
INDUSTRY DYNAMICS
Stringent regulatory and approval process continues to remain one of
the key drivers of business dynamics in this industry. The companies
and their products go through a rigorous process of approval, clinical
trials, audits, inspections and registrations for every new market and
for every product type/size. This has the potential of impacting the
very performance of companies operating in this space considering it
influences everything from product innovation, product pipeline to
product marketing.
Innovation and new product development is the cornerstone of any
medical device company and is imperative to stay contemporary in the
competitive context, counter technological obsolescence, remain
relevant to the needs of diverse markets and customer groups since
different sensitivities exist in terms of price points and design
complexity.
US continues to be the largest market for medical devices, holding in
excess of 40% of the world medical device market and also creates about
half of the global market demand, REPORTs Exvere Private Investment
Bank.
Over the past decade, the industry has shifted focus from the
traditionally lucrative developed markets to the more promising
emerging markets. A NOTEworthy portion of organic activities of the
companies are channeled towards building resources, both capacity and
people, to expand their customer base in these high growth markets. The
expansion of these emerging economies, government funding and reforms,
changing consumer lifestyles, increasing penetration of medical
insurance products, and a rise in awareness and disposable income, has
increased the demand for quality healthcare services. This, in turn, is
expected to increase the demand for medical equipment and other support
services. Today, the medical devices market in the BRIC countries,
alone, accounts for nearly USD 10Bn and is growing at an average CAGR
of 8%.
INDUSTRY DEVELOPMENTS
Passing of the healthcare reform bill in the US: The US Supreme Court
upheld the Patient Protection and Affordable Care Act which was created
to address the inefficiencies of the existing US healthcare structure.
The reform now brings more than 32 million uninsured Americans into the
insurance net. The bill also includes an excise tax of 2.3% to be
levied on the revenues of medical device sales beginning January 2013.
While the industry is still analyzing the impact of this reform, at the
outset it is fair to estimate that the reform while providing a fillip
to revenues through an expansion in the insured customer base, could
potentially be a drag on the profits of medical device companies.
Revamp of the FDA approval process: In August 2010, the U. S. Food and
Drug Administration (FDA) announced a set of proposals for revamping
the 510 (k) device approval protocols. The proposal outlined the FDA's
new vision to streamline the device review process and to make it more
predictable and transparent. A detailed draft guidance which aims to
provide detailed information about the current review practices for
510(k) submissions was circulated in December 2011. The FDA is
currently seeking public comments on the draft guidance and, if
finalized, it will replace the old documents which have long defined the
approval pathway.
CONSOLIDATED BUSINESS PERFORMANCE
ANALYSIS
In FY 12, the consolidated revenues of Rs. 2,370 crores grew 47% over
revenues of FY 11.
Net profit for FY 12 was Rs. 572 crores, growth of 56% over FY 11. The
total assets of the consolidated group grew by 18% to Rs. 3531.26 crores.
profit and Loss account statements of FY 2011 and FY 2012 are not
directly comparable because FY 2011 included the financials of entities
that were acquired at different points in time during the year whereas
the FY 2012 profit and loss account included the complete 12 month
financials of the same entities (wholly owned subsidiaries). This could
impact the understanding and analysis of line items of the profit and
Loss account when a YOY(year on year) comparison is made and could
impact ratios that use items from the profit and loss account.
During the year, we engaged in activities that we believe are central
to defining the manner in which the group would conduct its business
going forward. These activities were "Entity restructuring" where our
two primary revenue segments took the form of legal entities and
"Integration of our entities in the US" where a major portion of tasks
that required synergizing business resources and process were executed.
In the context of the above, we believe a further discussion on specific
matters relevant for 2012 would enable better understanding of our
business performance.
REVISED ENTITY STRUCTURE:
As previously shared with you in the FY 11 Annual REPORT, the group
undertook the "entity restructuring" where investments held in FY 11 by
the ultimate parent company OCI were transferred to Opto Cardiac Care
Ltd. (OCCL) and Opto Eurocor Healthcare Ltd. (OEHL) in FY 12.
The above altered the entity hierarchy from a single-level to
multi-level and rendered direct subsidiaries to 9 in number as against
14 in FY 11.
The new entity structure not only altered the numbers of entities
involved in the process of consolidation but also impacted the process
of consolidation. In FY 12, consolidation was first done at an OCCL and
OEHL level and Consolidation at the ultimate parent Opto Circuits
(India) Ltd. level included 9 entities unlike the 14 in the FY11
financials. Due to this reason the 'audited' numbers for the
consolidated entities OCCL and OEHL are not comparable for the prior
period. Any measures /numbers/statistics provided in this REPORT at
OCCL and OEHL entity level are those collated specifically and only for
comparative and management REPORTing purposes.
CURRENCY DEPRECIATION IN FY 12 AND IMPACT
ON BUSINESS RESULTS:
Treatment of foreign exchange in the Financials OCI financials
Opto Circuits India (OCI), the operating parent entity domiciled in
India, invoices revenues in USD and its expenses are largely transacted
in the same currency with some expenses being invoiced in rupees.
However, it REPORTs its financials in INR. As per Accounting Standard
11, the exchange differences, arising out of the company's foreign
currency transactions & translations, are recognized in the profit and
Loss Statement under the item 'Other Income'. Opto Group financials
1. The group's (OCI and its subsidiaries) operations substantially
comprise currencies USD and Euro and consolidated financials are
REPORTed in INR. These three currencies, therefore, become key
influencers on the consolidated financial "result" for the financial year
and on the "balance sheet position" as of financial year-end.
2. Owing to operations from various global locations gives rise to
multi-currency cash flows and assets/ liabilities that have the
potential to generate net income/loss from foreign exchange
transaction/ translation.
3. At the stage where subsidiary financials are consolidated to arrive
at Group financials, as per Accounting Standard 11, the non-rupee
denominated financials of the entities domiciled outside India are
converted into INR. The net positive or negative impact of the exchange
differences are represented in the Foreign Currency Translation Reserve
(FCTR), categorized under 'Reserves and Surplus' in the Balance Sheet.
AN UPDATE FROM OUR KEY ENTITIES: opto Circuits india: Opto Circuits
India (OCI) offers quality and cost-effective solutions across various
proprietary medical equipment technologies. In FY12, this entity
contributed 28% to the group consolidated revenues and 41% to the
consolidated net profit.
Concerted efforts at growing this business through focused marketing to
add more long term and strategic customers has steadily borne fruit.
This entity's net sales grew 11% over FY11. efforts to broad base the
revenue profile of this entity across newer product and customer
segments had an impact on the gross margins in the short term which in
turn impacted the net profit which declined 4% over FY11. Today, OCI
employs around 500 people, which accounts for 28% of the global
workforce.
The entity's customer base includes an impressive lineup of
multi-national companies, large US based group purchase organizations
and distributors of international repute.
OCCl: With global brand salience, spanning patient monitoring to
automated external defbrillators, this group of companies, services a
wide variety of customers including OEMs, group purchase organizations
and international distributors, across 100 countries globally. In the
last year, we took decisive steps to combine back-end operations, doing
away with multiple executive management structures thereby removing
redundant costs. Streamlining R&D functions, sharing and distributing
it across capabilities in India and US helped achieve cost efciency. We
also integrated and expanded manufacturing outside the US, thereby
de-risking global manufacturing abilities. Today, OCCL possesses a
strong brand product portfolio, larger addressable market with the
inclusion of AEDs in the portfolio, a large customer base with marquee
names, backed by operational and structural efficiencies that enable
increased resilience to garner business in developed and emerging
markets alike.
OEHL: This entity houses recognized brands, established technology,
large customer base, manufacturing abilities in emerging market
geographies which are backed by innovative minimally invasive
technologies and a quality manufacturing base.
Revenues for this entity grew by 46% in FY12, over the prior year due
to successful forays into newer geographies alongside expanding
customer base in existing geographies
CONCLUSION
Activities that the group undertook during the year gone by has
provided a repositioned and dovetailed resource pool, which will going
forward help the group become a more focused contender in the medical
devices space. The restructured Group now has within it clearly defined
entities equipped with a cohesive product portfolio, manufacturing and
distribution abilities that cumulatively contribute to profit and asset
goals of the group alongside addressing the challenges of growth in an
increasingly competitive market.
The Company will continue to focus on improving its profitability model
through its strategic manufacturing presence alongside efficient supply
chain and cost management initiatives. The Company expects to sustain
the momentum it has established in the developed markets and continue
its aggressive emerging market penetration strategy. These initiatives
hold promise of a sustained growth trajectory for the group in the
years to come leading to significant value creation.
RESULTS OF OPERATIONS
PROFIT AND LOSS ACCOUNT Ã STANDALONE
The following table sets forth selected financial data from our audited
standalone Profit and loss statement, the components of which are also
expressed as a percentage of our Total income for the periods
indicated:
Particulars for the year ended
2012 % of Total
Income 2011 % of
Total
Income
March 31st
INCOME
Sales 66974.17 99.80% 60320.27 94.36%
Other Income 133.83 0.20% 3606.90 5.64%
Total 67108.00 100.00% 63927.17 100.00%
EXPENDITURE
Manufacturing Expenses 38155.14 - 39300.77 -
Increase/Decrease in WIP&FG (1345.65) - (4883.49) -
Net Manufacturing Expenses 36809.49 54.85% 34417.28 53.84%
Administrative & Selling
Expenses 2230.80 3.32% 1721.16 2.69%
Financial Expenses 3665.47 5.46% 2492.82 3.90%
Depreciation 605.19 0.90% 590.62 0.92%
Total 43310.95 64.42% 39221.88 61.40%
Profit before Tax 23797.04 35.46% 24705.29 38.65%
Provision for TAXATION 320.51 0.48% 267.78 0.42%
Profit after Tax 23476.54 34.98% 24437.51 38.23%
INCOME
Total Turnover
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Sales 66974.17 60320.27
Other Income 133.83 3606.90
Total income 67108.00 63927.17
Sales increase of 11% FY 2012 over FY 2011 is driven by a strong growth
in the supply of consumable sales to OEM partners and for the Mediaid
and Criticare brands of patient monitors.
OTHER INCOME
Other Income which was Rs. 3606.90 lakhs in FY 2011 has an income of Rs.
133.83 lakhs in FY 2012. Major components of other income comprise of
income from foreign exchange fluctuations.
EXPENDTIURE
NET MANUFACTURING EXPENSES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Manufacturing Expenses 37701.89 38642.40
Less: (Inc)/Dec in WIP & (1345.65) (4883.49)
Finished Goods
Factory Expenses 453.25 658.37
Total expenses 36809.49 34417.28
Total expenses as
% of income 54.85% 53.84%
ADMINISTRATIVE AND SELLING EXPENSES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Administrative Expenses 899.39 677.29
Staf Expenses 825.49 664.22
Selling Expenses 505.92 379.65
Total expenses 2230.80 1721.16
Total expenses as % of income 3.32% 2.69%
FINANCIAL EXPENSES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Financial charges 3665.47 2492.82
Total 3665.47 2492.82
Total expenses as 5.46% 3.90%
% of income
In FY 2012, financial expenses largely comprised interest cost on
working capital. Borrowing costs driven by exchange fluctuation; has
resulted in 5.46% financial expense to income FY 2012 vs. 3.90% in FY
2011.
PROFIT BEFORE DEPRECIATION, INTEREST AND TAX (PBDIT)
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Profit before
Depreciation, 28067.71 27788.73
Interest & Tax
profit before
depreciation, 41.82% 43.47%
interest & Tax as %
of Total income
NET PROFIT AFTER TAx
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Net Profit after Tax 23476.54 24437.52
Net profit after
Tax as % of Total 34.98% 38.23%
income
The decrease of net profit after tax % is mainly due to increase in
finance cost.
BALANCE SHEET - STANDALONE
Rs. in Lacs
Particulars As at March 31 As at March 31
2012 2011
EQUITY AND LIABILITIES
Share holders funds
(a) Share capital 24231.94 18639.95
(b) Reserve and surplus 97078.88 87643.22
121310.82 106283.18
Non -Current Liabilities
(a) Long term borrowing 800.40 14812.65
800.40 14812.65
Current liabilities
(a) Short- term borrowings 64124.48 56865.29
(b) Trade payables 1212.60 668.36
(c) Other current liabilities 4587.04 15910.16
(d) Short-term provisions 8523.18 9859.03
78447.30 83302.85
Total 200558.52 204398.67
ASSETS
NON-CURRENT ASSETS
(a) Fixed assets
(i) Tangible assets 7389.33 7858.79
(ii) Intangible assets 0.49 70.53
(iii) Capital work-in-progress 128.39 119.51
(iv) Intangible assets under development 0.00 0.00
7518.21 8048.83
(b) Non-current investments 38166.46 111438.91
(c) Deferred tax assets (net) 30.19 40.03
(d) Other non current assets 15468.14 4448.31
53664.80 115927.33
Current assets
(a) Inventories 26544.73 24521.44
(b) Trade receivables 25733.40 22877.69
(c) Cash and cash equivalents 4559.74 11746.40
(d) Short-term-loans and advances 82537.64 21276.98
139375.51 80422.51
Total 200558.52 204398.67
NET WORTH
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Particulars 31.03.2012 31.03.2011
Share Capital 24231.94 18639.95
Reserves & Surplus 97078.88 87643.22
Net Worth 121310.82 106283.18
The Increase in networth is Rs. 15027.65 lacs. This amount comprises of
current year profit after providing for Dividend and Dividend Tax.
LOAN FUNDS
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Short Term Borrowings 64124.48 56865.29
Long Term Borrowings 1624.07 15535.47
Total loan Funds 65748.55 72400.76
The decrease in total borrowing owes to transfer of one of the bank
borrowing to OPTO CARDIAC CARE LIMITED due to restructuring of
subsidiaries. The short term loans comprise of working capital that has
increased to fund growth in busi- ness operations.
FIXED ASSETS
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Total net Block 7518.21 8048.83
The decrease of net profit after tax % is mainly due to increase in
finance cost.
RAW MATERIAL INVENTORY
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Raw Materials & Consumables 18222.35 17544.70
number of days to Consumption 176 166
FINISHED GOODS (FG) AND WORK-IN-PROCESS (WIP)
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Finished Goods and WIP 8322.39 6976.74
Number of days to sales 45 42
DEBTORS
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Debtors 25733.40 22877.69
Number of days to sales 140 138
CURRENT LIABILITIES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Trade payables 1212.60 668.36
Other current liabilities 3763.37 15187.33
Short-term provisions 8523.18 9859.03
Total Current liabilities 13499.15 25714.72
Number of days to sales 74 156
The current liabilities reffected as at 31st March 2011 include amounts
that relate to liabilities for expenses attributable to the acquisition
of CSC. Such are not included in the balanc- es above as at 31st March
2012 owing to them being paid / transferred to Opto Cardiac Care
Limited as part of the entity restructuring initiative which has
already been explained in the NOTEs to Stand Alone Financials (NOTE 11A
and NOTE 15)
Previous year's figures have been regrouped /reclassified as per the new
schedule VI format wherever necessary to correspond with the current
year's classification / disclosure.
PROFIT AND LOSS ACCOUNT - CONSOLIDATED
Rs. in Lacs
Year ended March 31
Particulars 2012 % To Total
Income 2011 % To Total
Income
INCOME
Sales 2,35,685.43 99.43% 1,58,683.22 98.20%
Other Income 1,356.15 0.57% 2,916.40 1.80%
Total 2,37,041.58 100.00% 1,61,599.62 100.00%
EXPENDITURE
Cost of materials
consumed 1,23,351.34 87,634.08
Increase/Decrease
in W I P &
Finished Goods (2,163.50) (4,098.55)
Net Manufacturing
Expenses 1,21,187.84 51.13% 83,535.54 51.69%
Employee benefit
expense 18,658.94 7.87% 11,007.36 6.81%
Financial Cost 5,919.75 2.50% 3,205.87 1.98%
Depreciation/
Amortisation 5,462.75 2.30% 5,079.78 3.14%
Other Expenses 34,188.72 14.42% 19,407.52 12.01%
Total 1,85,417.99 78.22% 1,22,236.07 75.64%
profit for the year
before Tax 51,623.59 21.78% 39,363.55 24.36%
Provision for TAXATION (5,716.42) -2.41% 2,508.95 1.55%
Profit after Tax 57,340.02 24.19% 36,854.60 22.81%
INCOME
Total Turnover Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Sales 2,35,685.43 1,58,683.22
Other Income 1,356.15 2,916.40
Total income 2,37,041.58 1,61,599.62
EXPENDTIURE
NET MANUFACTURING EXPENSES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Manufacturing Expenses 1,23,351.34 87,634.08
Less: (Inc)/Dec in WIP & (2,163.50) (4,098.55)
Finished Goods
Total expense 121,187.84 83,535.55
Total expense as % of income 51.13% 51.69%
STAFF AND OTHER EXPENSES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Staff Expenses 18,658.94 11,007.36
Other Expenses 34,188.72 19,407.52
Total 52,847.64 30,414.87
Total expense as % of income 22.29% 18.82%
FINANCIAL EXPENSES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Financial Charges 5,919.75 3,205.87
Total 5,919.75 3,205.87
Financial expense 2.50% 1.98%
as % of income
DEPRECIATION & AMORTISATION
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Depreciation & 5,462.75 5,079.78
Amortisation
Total 5,462.75 5,079.78
Depreciation &
amortisation as % 2.30% 3.14%
of income
PROFIT BEFORE DEPRECIATION, INTEREST AND
TAX (PBDIT)
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Profit before
Depreciation, 63,006.10 47,649.20
Interest & Tax
PBDIT as % of 26.58% 29.49%
income
BALANCE SHEET Ã CONSOLIDATED
Rs. in Lacs
Particulars As at 31.03.2012 As at 31.03.2011
EQUITY AND LIABIlITIES
Shareholder's Funds
(a) Share Capital 24,231.94 18,639.95
(b) Reserves and Surplus 1,45,700.76 1,18,046.06
1,69,932.70 1,36,686.01
Minority Interest 1,804.17 2,189.43
Non-Current Liabilities
(a) Long-term borrowings 29,686.90 26,254.26
(b) Deferred tax
liabilities (Net) - 2,335.53
(c) Long term provisions 292.20 192.00
29.979.09 28,781.78
Current liabilities
(a) Short-term borrowings 76,446.03 62,958.42
(b) Trade payables 20,672.36 22,880.39
(c) Other current liabilities 32,710.00 24,316.82
(d) Short-term provisions 21,581.26 22,154.72
1,51,409.64 1,32,310.35
Total 3,53,125.61 2,99,967.57
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets 45,645.41 22,728.68
(ii) Intangible assets 25,459.72 21,385.31
(iii) Capital work-in-progress 4,294.97 3,396.43
75.400.10 47,510.42
Goodwill on Consolidation 44,913.35 62,643.13
(a) Non-current investments 1.09 1.09
(b) Deferred tax assets (net) 5,816.29 -
(c) Long term loans and advances 8.34 8.34
(d) Other non-current assets 25,259.75 13,550.23
31,085.48 13,559.66
Current assets
(a) Inventories 51,177.05 43,251.93
(b) Trade receivables 84,657.33 67,842.01
(c) Cash and Cash Equivalents 17,430.58 23,417.86
(d) Short-term loans and
advances 44,603.71 39,531.39
(e) Other current assets 3,858.01 2,211.17
2,01,726.68 1,76,254.35
Total 3,53,125.61 2,99,967.57
NET WORTH
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Share Capital 24,231.94 18,639.95
Reserves & Surplus 1,45,700.76 1,18,046.06
Net Worth 1,69,932.70 1,36,686.01
LOAN FUNDS
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Total loan Funds 117,232.07 89,972.93
FIXED ASSETS
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Net block of Tangible Assets 45,645.41 22,728.68
Net block of Intangible
Assets 25,459.72 21,385.31
Total net Block 71,105.13 44,114.00
GOODWILL Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Opening Balance 62,643.13 23,744.93
Additions /(Deletions) during (17,729.78) 38,898.20
the year net of Capital Reserve
Closing Balance 44,913.35 62,643.13
RAW MATERIAL INVENTORY
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Raw materials & Consumables 39,730.21 33,968.59
Number of days to Consumption 118 142
FINISHED GOODS (FG) AND WORK-IN-PROCESS (WIP)
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Finished Goods 3,041.71 2,217.51
Work in Process 8,405.13 7,065.83
Stock of Finished Goods and 11,446.84 9,283.34
Work in process
number of days to Sales 18 21
DEBTORS
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Debtors 84,657.33 67,842.01
Number of days to Sales 131 156
CURRENT LIABILITIES
Rs. in Lacs
Particulars 31.03.2012 31.03.2011
Current Liabilities 63,864.47 68,591.67
Number of days to sales 99 158
CONSERVATION OF ENERGY
The company does not fall under the category of power in- tensive
industries. However, sustained efforts are taken to re- duce energy
consumption. The organization is an ISO 14001 certified company which is
an international Environment Management System Standard. The
environmental policy of the company aims at conservation of natural
resources and minimization of pollution.
During the year, the Bengaluru unit of the company is using CFL lamps
for general lighting purposes; this has resulted in savings of 14,000
units of electrical energy per annum. Further, the company has also
taken measures to save water; 75% of water consumed in the Company is
now recycled and reused for landscaping purposes.
FOREIGN EXCHANGE EARNINGS
The Company earned Rs. 69,470.66 lacs in foreign exchange in the year
under review.
Apart from above there were no employees covered under the provisions
of Section 217 (2A)(a)(iii) of the Companies Act, 1956.
Mr. Vinod Ramnani and Ms. Usha Ramnani, being husband and wife, are
related to each other.
CORPORATE GOVERNANCE REPORT Corporate Governance REPORT, and Certificate
dated 14th August 2012 from the auditors of your Company regarding
compliance to the conditions for Corporate Governance as stipulated in
Clause 49 of the Listing Agreement with the stock exchanges are
enclosed.
DIRECTORS' RESPONSIBILITY STATEMENTS Pursuant to the requirement under
section 217 (2AA) of the Companies Act, 1956, with respect to the
Directors Respon- sibility Statement, it is hereby confirmed:
a) that in the preparation of the Annual Accounts for the f- nancial
year ended 31st March 2012, the applicable account- ing standards have
been followed along with proper expla- nation relating to material
departures, if any.
b) that the Directors have selected such appropriate ac- counting
policies and applied them consistently and made judgments and estimates
that were 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 that financial year.
c) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in ac- cordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d) that the Directors have prepared the annual accounts on a going
concern basis.
LISTING OF SECURITIES
The Company's securities are listed on The Bombay Stock Exchange
Limited (BSE) and The National Stock Exchange of India Limited (NSE).
FIXED DEPOSITS
The Company has not accepted any fixed deposits from the public during
the financial year under review.
DIRECTORS
Mr. Vinod Ramnani, Ms. Usha Ramnani and Dr. Suleman Adam Merchant,
Directors of the Company, liable to retire by rotation in the ensuing
Annual General Meeting and being eligible for re-appointment ofer
themselves for re-appoint- ment as directors.
AUDITORS
The Auditors, M/s. Anand Amaranth & Associates, Chartered Accountants,
Bengaluru, retire at the conclusion of the ensuing Annual General
Meeting. Your Company has received a letter from them to the effect that
that their appointment, if made, will be in accordance with the
provisions of Section 224(1B) of the Companies Act 1956.
ACKNOWLEDGEMENTS
Your Directors greatly appreciate the commitment and dedication of
employees at all levels that have contributed to the growth and success
of the Company. We would also thank all our stakeholders, customers,
vendors, investors, bankers and other business associates for their
continued support and encouragement during the year.
For and on behalf of the Board
Vinod Ramnani
Chairman & Managing Director
Place: Bengaluru
Date : 14th August 2012
Mar 31, 2011
To the members,
We are pleased to present the 19th annual report on the business and
operations of Opto Circuits (india) Limited, together with the audited
financial statements and the auditor's report of your Company for the
financial period 1st april 2010 to 31st march 2011.
FINANCIAL HIGHLIGHTS:
OPTO CIRCUITS Ã STANDALONE
Rupees in Lacs
Particulars for the year Ã
ended march 31st 2011 2010
Total revenues 63,927.17 46,092.50
Expenditure 39,253.82 29,576.67
Profit before depreciation 25,263.97 16,825.54
Depreciation 590.62 309.71
Profit before tax 24,673.35 16,515.83
Provision for taxation 267.78 1,648.72
Prior year adjustment 31.95 (163.53)
Profit for the Year 24,437.52 14,703.58
Appropriations
Proposed dividend 8,402.98 8,173.20
Tax on dividend 1,395.69 1,389.04
Surplus carried to Balance 14,638.85 5,141.34
sheet
OPERATIONS
Standalone total revenues are at rs. 63,927.17 lacs for the year
ended 31st march, 2011 as against rs. 46,092.50 lacs for the
corresponding period of FY2010, a growth of 39%. standalone profit
after tax for the year ended 31st march, 2011 is at rs. 24,437.52
lacs, as against rs. 14,703.58 lacs for the corresponding period of
FY2010, a growth of 66%.
No material changes and commitments affecting the financial position of
the Company have occurred between the end of FY2011 and the date of
this report.
DIVIDENDS
Considering the performance of the Company and its resources to meet
its future requirements, your directors are pleased to recommend a
dividend at the rate of rs. 4.50 per equity share of face value Rs. 10
for the year ended 31st march 2011.
TRANSFER TO RESERVES
The Company proposes to transfer rs. 2,500.00 lacs to General reserves
out of the amount available for appropriation. an amount of rs.
33,109.99 lacs is proposed to be retained in the profit and Loss
account.
GROUP FINANCIAL HIGHLIGHTS:
OPTO CIRCUITS Ã CONSOLIDATED
Rupees in Lacs
Particulars for the year Ã
ended march 31st 2011 2010
Total revenues 161,599.62 106,999.76
Expenditure 122,356.62 77,676.06
Profit before depreciation 44,322.78 32,103.63
Depreciation 5,079.78 2,779.93
Profit before tax 39,243.00 29,323.70
Provision for taxation 2,508.95 2,963.73
Prior year adjustment 120.55 (319.12)
Profit for the Year 36,854.60 26,040.85
Appropriations
Proposed dividend 8,434.90 8,194.48
Tax on dividend 1,409.95 1,396.44
Minority interest 129.68 10.42
Unrealised profit 140.83
Surplus carried to Balance 26,880.07 16,298.68
sheet
As stipulated in the Listing agreement with the stock exchanges, the
consolidated financial statements have been prepared by the Company in
accordance with the relevant accounting standards issued by the
institute of Chartered accountants of india. the audited consolidated
financial statements, together with the auditor's report, thereon, form
part of the annual report.
OPERATIONS
Consolidated total revenues are at rs. 161,599.62 lacs for the year
ended 31st march, 2011 as against rs. 106,999.76 lacs for the
corresponding period of FY2010, a growth of 51%. Consolidated profit
after tax for the year ended 31st march, 2011 is at rs. 36,854.60
lacs, as against rs. 26,040.85 lacs for the corresponding period of
FY2010, a growth of 41%. earnings per share for the year-ended 31st
march 2011 is at rs. 19.70 (Basic).
CAPITAL STRUCTURE:
CONVERTIBLE SHARE WARRANTS
The Company had allotted 3,179,000 and 1,500,000 Convertible share
Warrants at the rate of rs. 210.00 per warrant, to its promoters ,
employees of the Company/subsidiaries and others on 29th July, 2009 and
9th april 2010 respectively. Out of these, 3,500,000 share warrants
were converted and an allotment of 3,500,000 equity shares was made
during the financial year.
Details of allotment of equity shares:
Allottee No. of equity shares allotted
mr. Vinod ramnani 1,000,000
ms. usha ramnani 1,000,000
mr. Gautam G Gumnani 1,500,000
The Company allotted 1,500,000 convertible share warrants to
non-resident indian (nri) mr. Gautam G Gumnani on 9th april, 2010, on
receipt of Foreign investment promotion Board (FipB) approval dated 6th
april, 2010.
SUBSIDIARIES
ACQUISITIONS BY OPTO CIRCUITS (INDIA) LTD:
During the year, the Company acquired three companies (one domestic and
two overseas):
- N.s. remedies pvt. Ltd., an advanced stent manufacturing company
based in West Bengal, india.
- Unetixs Vascular inc., a specialist in vascular diagnostics based in
rhode island, usa.
- Cardiac science Corporation, owner of reputed cardiology product
brands like quintonî, Burdickî and powerheartî based in Washington,
usa.
(The above three acquisitions have been discussed in detail in the
management discussion & analysis segment, later in this report.)
INVESTMENT BY OPTO CIRCUITS (INDIA) Ltd :
During the year, Opto Circuits invested into the following wholly owned
subsidiaries:
OPTO CIRCUITS (MALAYSIA) SDN. BHD.:
Opto Circuits invested rs. 4,463.00 lacs in a highly scalable, world
class facility in Johor Bahru, malaysia. this facility enjoys strategic
advantages from a supplier- logistic perspective, enables better access
to our customers in asian markets, while simultaneously augmenting our
global manufacturing abilities. this facility is located within a
technology park and enjoys tax exemption on income for the next 10
years subject to the statute/rules applicable in its country of
domicile. Going forward, it is proposed that the facility be utilized
to launch some of our new products or products that are presently in
the pipeline.
opto eurocor healthcare ltd. (oehl):
Altron industries pvt. Ltd., an Opto Circuits subsidiary, was renamed
as Opto eurocor Healthcare Ltd. during the year 2010 - 2011. Opto
eurocor Healthcare Ltd., will house the minimally invasive product
portfolio within the Group. Opto Circuits invested rs. 1,400.00 lacs in
OeHL during the last fiscal.
Opto cardiac care ltd. (occl):
OCCL was founded as a subsidiary of Opto Circuits (india) Ltd. OCCL
will house a significant part of the noninvasive product portfolio
within the Group. Opto Circuits invested rs. 4,000.00 lacs in OCCL
during the last fiscal.
INVESTMENTS BY SUBSIDIARIES:
During the year, the Company, through its subsidiaries, Criticare
systems, inc. , mediaid, inc. and eurocor GmbH made investments into
Criticare à malaysia, mediaid - dubai and eurocor à malaysia
respectively. these were rendered as wholly owned subsidiaries and
thereby the step-down subsidiaries of Opto Circuits (india) Limited.
TRANSFER OF INVESTMENTS WITHIN THE GROUP:
During the year, advanced micronic devices Ltd. (amdL) transferred its
investment in micronic Healthcare pvt. Ltd., to Opto infrastructure
Ltd. (OiL), for a value of rs. 1.00 lac.
During the year, OeHL transferred the assets net of liabilities related
to the Company's hotel line of business for a value of rs 60.00 lacs to
micronic Healthcare pvt. Ltd. (mHpL), a wholly owned subsidiary of OiL.
Consequently, mHpL became the owner of such net assets and would carry
on the business going forward.
As on 31st march 2011, your Company had fourteen subsidiary companies,
listed as under:
Country of
Name of the Company incorporation % Holding
1. Advanced micronic devices Ltd. India 59.71%
2. Mediaid, inc. USA 100%
3. Opto eurocor Healthcare Ltd. India 100%
4. Eurocor GmbH Germany 100%
5. Ormed medical technology Ltd. India 100%
6. Devon innovations pvt. Ltd. India 100%
7. Criticare systems, inc. USA 100%
8. Opto infrastructure Ltd. India 87.06%
9. Maxcor Lifescience inc. USA 100%
10. N. s. remedies pvt. Ltd. India 100%
11. Unetixs Vascular, inc. usa 100%
12. Opto Circuits (malaysia) sdn. Bhd. Malaysia 100%
13. Cardiac science Corporation USA 100%
14. Opto Cardiac Care Ltd. India 100%
Ministry of Corporate affairs, Government of india, vide General
Circular no.2/2011, dated 8th February 2011, granted a general
exemption from attaching various documents in respect of subsidiary
companies, as set out in sub-section (1) of section 212 of the
Companies act, 1956. accordingly, the Balance sheet, profit and Loss
accounts and other documents of the subsidiary companies are not being
attached with the annual report of the Company. Financial information
of the subsidiary companies, as required under the said Circular, is
disclosed in the annual report. the Company will make available the
annual accounts of the subsidiary companies and the related detailed
information to any investor of holding and of subsidiary companies
seeking such information at any point of time. the annual accounts of
subsidiary companies will also be kept open for inspection by any
investor at the registered offce of the Company and that of the
respective subsidiary companies. the consolidated financial statements
presented by the Company include financial results of its subsidiaries.
EVENTS AFTER THE BALANCE SHEET DATE
CORPORATE RESTRUCTURING: THE WAY FORWARD
The Company has undertaken a restructuring initiative to align
complementary business lines to achieve cost effectiveness and
operational efficiencies. investments of three us-based subsidiaries:
Cardiac science Corporation, Criticare systems inc. and unetixs
Vascular, inc., were transferred to Opto Cardiac Care Ltd. investments
of subsidiaries, eurocor GmbH and n.s. remedies pvt. Ltd. were
transferred to Opto eurocor Healthcare Ltd. Both Opto Cardiac Care Ltd.
and Opto eurocor Healthcare Ltd. are wholly owned subsidiaries of Opto
Circuits (india) Ltd. each consolidated business will operate with
shared resources and will bundle product offerings, augmenting
possibilities for enhanced shareholder valuation.
CONSERVATION OF ENERGY
The Company does not fall under the category of power intensive
industries. However, sustained efforts are taken to reduce energy
consumption. the organization is an isO 14001 certified Company which is
an international environmental management system standard. the
environmental policy of the Company aims at conservation of natural
resources and minimization of pollution. during the year, the
Bengaluru unit of the Company has replaced incandescent lamps with CFL
lamps for general lighting purposes; this has resulted in savings of
14,000 units of electrical energy per annum. Further, the Company has
also taken measures to save water; 75% of water consumed in the Company
is now recycled and reused for landscaping purposes.
RESEARCH & DEVELOPMENT
Our life sciences and engineering teams, working out of facilities in
usa, Germany and india, collaborate on projects and leverage on each
others' domain expertise. We also join forces with universities and
research fellows interested in defning the next generation of medical
devices.
Our teams, across functions, collaborate to identify trends and seek to
implement the latest and clinically relevant engineering and design
systems. every year, we endeavour to bring out new products and
products with new features that are designed to complement the changing
clinical requirements of our customers. Currently, we hold 168
international patents and have many more in the pipeline. some of our
key innovations have been drug- eluting balloons, anesthetic gas
benches, combination angioplasty devices and many pulse oximetry sensor
technologies. some of our current projects are in the realm of the
following:
i) Developing minimally-featured value equipment for hospital use in
emerging markets, ii) converting high acuity hospital- use products
into low acuity home use medical gadgets, iii) connecting medical
equipment to hospital electronic systems and encouraging collaboration
amongst systems, iv) extending clinical applications of drug coated
balloons and offering alternative drugs on drug eluting stents.
As of 31st march 2011 the Group employed more than 100 people (around
7% of the total workforce) to design, develop and research on products
and technologies of the future. each wholly owned subsidiary is headed
by a CeO and has a technology manager who manages r&d. Opto Circuits'
r&d division works for subsidiaries and also works on projects to be
marketed by subsidiaries. to enhance our future growth and strengthen
our market position, we have made and will continue to make significant
investments in research and development. the Group's total investment
in r&d for FY2011 has been at 4% of Consolidated total sales.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company earned rs. 57,257.94 lacs in Foreign exchange in the year
under review. Foreign exchange outgo including expenditure on capital
goods was rs. 53,051.12 lacs.
PARTICULARS OF EMPLOYEES
Information as per section 217 (2a) of the Companies act, 1956, read
with Companies (particulars of employees) rules 1975, as amended, is as
follows:
Name Mr. Vinod ramnani Ms. Usha Ramnani
Chairman and Executive director/
Designation and
Managing director/ Managerial
Nature of duties Managerial
Rs. 52,47,027/- Rs. 52,47,027/-
Remuneration received perquisites rs. perquisites rs.
26,23,513/- 26,23,513/-
Bachelor of engi- Masters in Com-
qualifcation and experience. neering/ 32 years merce/ 28 years
Date of commencement of 08.06.1992 08.06.1992
employment
Age 55 years 54 years
Elekon industries United india insur-
Last employment held. Pvt. Ltd. ance Company Ltd.
Employed for part of the year - NIL
Apart from the above there were no employees covered under the
provisions of section 217 (2a)(a)(iii) of the Companies act, 1956. mr.
Vinod ramnani and ms. usha ramnani, being husband and wife, are related
to each other.
CORPORATE GOVERNANCE REPORT
Corporate Governance report and Certifcate dated 22nd august 2011 from
the auditors of your Company regarding compliance to the conditions for
Corporate Governance as stipulated in Clause 49 of the Listing
agreement with the stock exchanges are enclosed.
DIRECTORS' RESPONSIBILITY statements pursuant to the requirement under
section 217 (2aa) of the Companies act, 1956, with respect to the
directors responsibility statement, it is hereby confirmed:
a) That in the preparation of the annual accounts for the financial
year ended 31st march 2011, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any.
b) That the directors have selected such appropriate accounting
policies and applied them consistently and made judgments and estimates
that were 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 that financial year.
c) That the directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d) That the directors have prepared the annual accounts on a going
concern basis.
LISTING OF SECURITIES
The Company's securities are listed on the Bombay stock exchange
Limited (Bse) and the national stock exchange of india Limited (nse).
FIXED DEPOSITS
The Company has not accepted any fixed deposits from the public during
the financial year under review.
DIRECTORS
Dr. anvay mulay, mr. rajkumar raisinghani and mr. Jayesh C. patel
retire by rotation and offer themselves for re-appointment.
AUDITORS
The auditors, m/s. anand amaranth & associates, Chartered accountants,
Bengaluru, retire at the conclusion of the forthcoming annual General
meeting. Your Company has received a letter from them to the effect
that their re-appointment, if made, will be in accordance with the
provision of section 224 (B) of the Companies act 1956.
With respect to observation made by the statutory auditors in Clause
xvi of annexure to auditor's report on the standalone financials, your
directors state as below:
Your Company acquired Cardiac science Corporation (CsC) during FY2011.
this acquisition was completed in december 2010, which was close to
year end FY2011. as an interim measure, short term funds were used
towards integration and stabilization of operations of CsC without
impacting customer orders and revenue growth. the Company has since
rectifed the fund position.
ACKNOWLEDGEMENTS
Your directors greatly appreciate the commitment and dedication of
employees at all levels that have contributed to the growth and success
of the Company. We would also thank all our stakeholders, customers,
vendors, investors, bankers and other business associates for their
continued support and encouragement during the year.
For and on behalf of the Board,
VINOD RAMNANI
Chairman & managing director
Opto Circuits (india) Ltd.
Place: Bengaluru
Date: 22nd august 2011
Mar 31, 2010
We are pleased to present the 18th Annual Report on the business and
operations of Opto Circuits (India) Ltd., together with the audited
financial statements and the Auditors Report of your company for the
financial year ended 31st March 2010.
FINANCIAL HIGHLIGHTS
The financial highlights for Opto Standalone for the year under review
are given below.
Rs. In Lacs
Particulars for the year-ended March 31st 2010 2009
Total Revenue 46,092.51 42,915.72
Expenditure 29,576.68 28,656.92
Profit before Depreciation 16,825.54 14,546.72
Depreciation 309.71 287.92
Profit before Tax 16,515.83 14,258.81
Provision for Tax 1,648.72 87.15
Prior year Adjustment (163.53) (178.30)
Profit for the Year 14,703.58 13,993.35
Appropriations
Proposed Dividend 8,173.20 6,403.76
Tax on Dividend 1,389.03 1,088.32
Surplus carried to Balance Sheet 5,141.34 6,501.27
OPERATIONS
The journey of growth for the company continued during the year. The
total revenue raised to Rs.46,092.51 Lacs for the year ended 31st March
2010 as against Rs. 42,915.72 Lacs of the previous year. The profit of
the company for the year is Rs.14,703.58 Lacs as against Rs.13,993.35
Lacs for the corresponding previous year.
Your company, subsequent to 31st March 2010 incorporated a wholly owned
subsidiary in Malaysia viz. Opto Circuits (Malaysia) SDN BHD and
acquired N. S. Remedies Pvt. Ltd., in India and Unetixs Vascular Inc.
in USA. Other than the above, there were no material changes and
commitments affecting the financial position of the company, which have
occurred between the end of the financial year 2009-2010 and the date
of this report.
DIVIDEND
Considering the performance of the company and its resources to meet
its future developmental requirements, your Directors are pleased to
recommend a dividend at the rate of Rs. 4/- per equity share of Rs. 10
each for the year ended 31st March 2010.
TRANSFER TO RESERVES
The company proposes to transfer Rs. 1,500.00 Lacs to General Reserve
out of the amount available for appropriation. An amount of Rs.
20,971.14 Lacs is proposed to be retained in the Profit and Loss
Account.
CONSOLIDATED FINANCIAL STATEMENT
Rupees in Lacs
Particulars for the year-ended March 31st 2010 2009
Total Revenue 1,06,999.76 84,728.70
Expenditure 74,893.81 61,316.77
Profit before Depreciation 32,105.92 23,411.92
Depreciation 2,779.92 1,380.95
Profit before Tax 29,326.00 22,030.98
Provision for Tax 2,963.73 749.56
Prior year Adjustment (319.12) (352.90)
Profit for the Year 26,043.15 20,928.52
Appropriations
Proposed Dividend 8,194.48 6,456.57
Tax on Dividend 1,396.44 1,095.73
Minority Interest 10.42 55.48
Surplus carried to Balance Sheet 16,441.81 13,320.74
As stipulated in the Listing Agreement with the Stock Exchanges, the
consolidated financial statements have been prepared by the company in
accordance with the relevant accounting standards issued by the
Institute of Chartered Accountants of India. The audited consolidated
financial statements together with Auditors Report thereon form part of
the Annual Report. The consoli- dated net profit of the Group for the
year ended 31st March 2010 amounted to Rs. 26,043.15 Lacs as compared
to Rs. 20,928.52 Lacs during the previous year.
PREFERENTIAL ISSUES
During the year, on 29th July 2009, the company has allotted 31,79,000
Convertible Share Warrants to the promoters and em- ployees of the
company/subsidiaries and the same is pending for conversion. The
company has allotted 15,00,000 Convertible Share Warrants to an NRI on
9th April, 2010 against the amount received during the Financial Year
2009-10. Further, on 15th September 2009, the company has allotted
2,14,30,484 Equity Shares under Qualified Institutional Placements at
Rs.186.65 per Share.
SUBSIDIARY COMPANY ACCOUNTS
Ministry of Corporate Affairs, Government of India, vide letter
No.47/479/2010-CL-III dated 26th July 2010, has granted approval that
the requirements to attach various documents in respect of subsidiary
companies pursuant to Section 212 of the Companies Act, 1956, shall not
be applicable to the company. Accordingly, the Balance Sheet, Profit
and Loss Account and other documents of the subsidiary companies are
not being attached with the Balance Sheet of the company. Financial
information of the sub- sidiary companies, as required by the said
letter is disclosed in the annual report. The company will make
available the annual accounts of the subsidiary companies and the
related detailed information to any investor of holding and of
subsidiary companies seeking such information at any point of time. The
annual accounts of the subsidiary companies will also be kept open for
inspec- tion by any investor at the registered office of the company
and that of the respective subsidiary companies. The consolidated
financial statements presented by the company include financial results
of its subsidiaries.
CORPORATE GOVERNANCE REPORT
Corporate Governance Report, and Certificate of the Statutory Auditors
dated 9th August, 2010 of your company regarding compliance of the
conditions for Corporate Governance as stipulated in Clause 49 of the
listing agreement with stock ex- changes, is enclosed.
DIRECTORSÃ RESPONSIILITY STATEMENTS
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956, with respect to the Directors Responsi- bility Statement, it
is hereby confirmed:
a) That in the preparation of the Annual Accounts for the Fi- nancial
Year ended 31st March 2010, the applicable account- ing standards have
been followed along with proper explana- tion relating to material
departures, if any.
b) That they have selected such appropriate accounting poli- cies and
applied them consistently and made judgments and estimates that were
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 that period.
c) That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguard- ing the assets of the company and
for preventing and detect- ing fraud and other irregularities.
d) That the Directors have prepared the annual accounts on a going
concern basis.
LISTING OF SECURITIES
The companyÃs securities are listed on the Bombay Stock Ex- change
Limited (BSE) and the National Stock Exchange of In- dia Limited (NSE).
FIXED DEPOSITS
The company has not accepted any fixed deposits from the public during
the financial year under review.
DIRECTORS
Mr. Thomas Dietiker, Mr. V. Bala Subramaniam and Dr. Wil- liam Walter
OÃNeill, retire by rotation and offer themselves for re-appointment.
AUDITORS
The auditors M/s. Anand Amarnath and Associates, Chartered Accountants,
Bangalore, retire at the conclusion of the forth- coming Annual General
Meeting. Your company has received a letter from them to the effect
that their re-appointment, if made, will be in accordance with the
provisions of Section 224 (1B) of the Companies Act 1956.
ACKNOWLEDGEMENTS
Your Directors greatly appreciate the commitment and dedi- cation of
all the employees at all levels that has contributed to the growth and
success of the company. We would also like to thank all our clients,
vendors, investors, bankers and other business associates for their
continued support and encour- agement during the year.
For and on behalf of the Board
Vinod Ramnani
Chairman and Managing Director
Place: Bengaluru, Karnataka, India
Date: 9th August, 2010
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