Mar 31, 2015
Dear Members,
The Directors are pleased to present the Twenty-Fourth Annual Report
on the business and operations of the Company together with the audited
accounts for the financial year ended 31st March, 2015.
1. FINANCIAL SUMMARY
Financial Summary and performance Highlights of your Company, for the
financial year ended March 31, 2015 are as follows:
(Rs. in lacs)
PARTICULARS Year ended Year ended
31.03.2015 31.03.2014
Gross Sales and other Income 26,137.21 38,615.16
Profit before Interest, Depreciation
& Tax 4,683.33 8,153.34
Depreciation and amortization 628.79 930.90
Interest 420.18 1,128.79
Profit/(Loss) from Operations 3,634.36 6,093.65
Exceptional Items-Surplus on sale
of General Lighting Business - (3,990.92)
Provision for Tax 886.59 1,068.10
Profit/ (Loss) After Tax 2,747.77 9,016.47
Balance of Profit/(Loss) brought 5,754.35 2,884.52
forward
Amount available for appropriation 8,502.12 11,900.99
Interim Dividend on Equity Shares - 1,400.97
Special Dividend on Equity Shares - 2,801.93
Proposed Final Dividend on Equity
Shares - 280.19
Tax on Dividends on Equity Shares - 761.90
Transfer of Profits to General Reserve - 901.65
Transfer of Profits to Capital
Redemption Reserve 1,316.00 -
Balance of Profit carried forward 7,186.12 5,754.35
to next year
Previous year's figures have been regrouped/ rearranged wherever
considered necessary.
The figures above as at March 31, 2015 represent the full year results
of automotive business division only and the figures as at March 31,
2014 includes gross sales of automotive business for the full year and
general lighting business till 30.08.2013.
FINANCIAL AND OPERATIONAL PERFORMANCE
During the year under review, gross sales for the Automotive Business
have increased from Rs. 25,770.76 lacs in 2013-14 to Rs. 26,137.21 lacs
in 2014-15 i.e. an increase of 1.4% and the earnings before interest,
depreciation and taxes has decreased from Rs. 7,434.27 lacs to Rs.
4,683.33 lacs over 2013-14. The reason for decrease is due to
depreciation of Euro against Rupee & also as a result of this, exchange
variation loss of Rs. 497.23 lacs in 2014-15 as against exchange gain
of Rs. 1,714.53 lacs in 2013-14. The figures as at March 31, 2015
represent the full year results of automotive business only i.e.
manufacturing and sale of halogen lamps. The figures as at March 31,
2014 includes gross sales amounting to Rs. 12,844.39 lacs, earnings
before interest, depreciation and tax amounting to Rs. 719.08 lacs
pertaining to general lighting division which had been sold off on
slump sale basis.
RESERVES AND SURPLUS (Rs. in lacs)
PARTICULARS Year ended Year ended
31.03.2015 31.03.2014
Securities premium account 3,733.86 3,733.86
Capital subsidy 40.00 40.00
Capital redemption reserve 2,937.00 1,621.00
General reserve 925.22 925.22
Surplus in the Statement of profit and loss
Credit balance as per the last financial
statements 5,754.35 2,884.52
Add: Net profit/(loss) after tax trans-
ferred from Statement of profit
and loss 2,747.77 9,016.47
Less: Profit & Loss appropriation (1,316.00) (6,146.64)
Net surplus in the Statement of profit
and loss 7,186.12 5,754.35
Total 14,822.20 12,074.43
The Company has transferred an amount of Rs 1316 lacs to Capital
Redemption Reserve during the Financial year ended March 31, 2015, for
the purpose of redemption of 13,16,000 Redeemable Preference Shares of
Rs. 100/- each.
2. DIVIDEND
Your Board has deferred for the time being, the decision to recommend
any Dividend for the Financial Year 2014-15.
3. STATE OF THE COMPANY'S AFFAIRS
Your Company is the market leader in automotive halogen bulbs in India
with approximately 50% market share in passenger vehicle, 70% in
commercial vehicles and 70%- 80% in two wheeler Original Equipment
Manufacturers (OEMs). The Company is the largest manufacturer in India
controlling 50-60% of total manufacturing capacity in the Country and
among the top 5 globally with 20 years of manufacturing excellence and
institutionalized knowledge. The Company has well entrenched
relationships with the leading Japanese, Korean, European and Indian
OEMs. More than half of sales are under Company's own brands including
India's oldest domestic aftermarket brand and 90 year old European
brand for international markets.
There has been no change in the nature of business during the reporting
period.
4. MATERIAL CHANGES AND COMMITMENTS
Your Company has received a Public Announcement dated May 6, 2015 from
Karvy Investor Services Limited ("Manager to the Offer") on behalf of
Suprajit Engineering Limited ("Acquirer") to the shareholders of the
Company to acquire 72,85,018 equity shares of face value Rs.10/- each
constituting 26% of Issued and Subscribed Capital and Voting Capital of
the Target Company, which is your Company, in accordance with
Regulation 3(1) and Regulation 4 of the SEBI (Substantial Acquisition
of Shares and Takeovers) Regulations ("SAST Regulations"). This Public
Announcement was made pursuant to and in compliance with Regulations 13
(1) and 15(1) of the SAST Regulations. The Copy of Public Announcement
is available on the website of Stock exchanges (BSE Ltd and National
Stock Exchange of India Limited).
Further, on May 13, 2015, the Company has received a copy of the
Detailed Public Statement (DPS) dated May 12, 2015 and on May 18, 2015,
the Company has received the Draft Letter of Offer dated May 16, 2015
from M/s. Suprajit Engineering Limited. However, the said Open Offer
does not affect the financial position of your Company during the
financial year under review.
5. PARTICULARS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED OR
RESIGNED DURING THE FINANCIAL YEAR ENDED MARCH 31, 2015
Mr. Gurdeep Singh and Mr. Padmanabh P. Vora were appointed as
Independent Directors and Mr. Pranay D. Gandhi was regularized and
re-appointed as the Managing Director of the Company at the 23rd Annual
General Meeting of the Company, held on July 21,2014.
Mr. Pranay D. Gandhi, Managing Director; Mr. Gagandeep Singh, Chief
Financial Officer and Mr. Aditya Rungta, Company Secretary are the Key
Managerial Personnel as per the provisions of the Companies Act, 2013.
None of the Key Managerial Personnel has resigned or appointed during
the financial year ended March 31,2015. Ms. Sunita Mathur (DIN-
00008923) was appointed as Additional Director (Non-executive
Independent) of the Company with effect from March 23, 2015 in
accordance with the provisions under Sections 149 and 161 of the
Companies Act, 2013.
SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES
As on March 31,2015, the Company has one wholly owned subsidiary
company viz. "International Lamps Holding Company SA, Luxembourg" and
two step down subsidiaries viz. Luxlite Lamps S.A.R.L, Luxembourg and
Trifa Lamps GmbH, Germany.
Further, there has been no change in the number of subsidiaries or in
the nature of business of the subsidiaries, during the financial year
under review. The consolidated financial statement of the Company and
its subsidiaries are prepared in manner as provided under Section 129
of the Companies Act, 2013 read with rules made there under.
Performance and Financial Position of Subsidiary Companies
International Lamps Holding Company S.A., Luxembourg: During the year
under review, the losses before interest, depreciation and tax has
increased from Euro 0.29 lacs equivalent to Rs. 23.66 lacs to Euro 0.90
lacs equivalent Rs. 69.69 lacs.
Trifa Lamps Germany, GmbH: During the year under review, sales have
decreased from Euro 191.02 lacs equivalent to Rs. 15,499.56 lacs in the
financial year 2013-14 to Euro 187.47 lacs equivalent to Rs.14,523.87
lacs in the financial year 2014-15 and the earnings before interest,
depreciation and taxes has increased from Euro 5.80 lacs equivalent to
Rs. 471.15 lacs to Euro 6.03 lacs equivalent to Rs. 467.39 lacs over
2013-14.
Luxlite Lamps SARL, Luxembourg: During the year under review, sales
have increased from Euro 108.37 lacs equivalent to Rs. 8,793.47 lacs in
the financial year 2013- 14 to Euro 116.96 lacs equivalent to Rs.
9,061.25 lacs in the financial year 2014-15 and the Loss before
interest, depreciation and taxes has increased from Euro 8.62 lacs
equivalent to Rs. 699.74 lacs to Euro 9.72 lacs equivalent to Rs.
753.36 lacs over 2013-14.
A separate statement in form AOC-1, containing the salient features of
the financial statement of its subsidiaries has also been attached
along with the financials of the Company. The Annual Accounts and
related documents of the Subsidiary Companies shall be kept open for
inspection at the Registered Office of the Company. The aforesaid
documents will also be made available to the Members of the Company
upon receipt of written request from them.
6. EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in Form MGT-9 is enclosed as a part of
this report in compliance with Section 134(3) of the Companies Act,
2013. (Annexure-1)
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has entered into in following transactions pursuant to
Section 186 of the Companies Act, 2013:
Name of Particulars of Loans, Amount
the entity Guarantees or Investments (INR in Lacs)
Trifa Lamps Stand by letter of credit (Euro 1,215.19
Germany, 18 Lacs converted at March
GmbH 31, 2015 exchange rate of
1 Euro= Rs. 67.5104)
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013
All related party transactions that were entered during the financial
year were in the ordinary course of business and were on arm's length
basis. There were no material related party transactions entered by the
Company with Directors, KMPs or other persons which may have a
potential conflict with the interest of the Company.
All related party transactions, wherever applicable, are placed before
the Audit Committee. The quarterly disclosures of transactions with
related parties are made to the Audit Committee and also disclosed to
the Stock exchanges under Clause 49 of the Listing Agreement.
The policy on materiality of Related Party Transactions and also on
dealing with Related Party Transactions as approved by the Audit
Committee and the Board of Directors is uploaded on the website of the
Company- www.phoenixlamps.co.in.
In compliance with Section 134(3) of the Companies Act, 2013,
particulars of contracts or arrangements with related parties referred
to in Section 188(1) of the Companies Act, 2013 are enclosed, in the
Form AOC-2, as a part of this report (Annexure-2)
9. NUMBER OF BOARD MEETINGS HELD DURING THE FINANCIAL YEAR
During the financial year 2014-2015, Seven meetings of the Board of
Directors were held on 27th May, 2014, 21st July, 2014, 9th August,
2014, 29th September, 2014, 31st October, 2014, 14th February, 2015 and
23rd March, 2015.
10. DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act, 2013, your
directors hereby state and confirm that:
a. in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
b. they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit and loss
of the Company for that period;
c. they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls to be followed by
the Company and such internal financial control are adequate and were
operating effectively; and
f. they have devised proper systems to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
11 .COMMENTS BY THE BOARD ON AUDIT QUALIFICATION
There are no qualifications, reservations or adverse remarks or
disclaimers made by Statutory Auditors, in their report and by
Secretarial Auditor, in his secretarial audit report.
12. RISK MANAGEMENT POLICY
Your Directors have adopted a Risk Management Policy for the Company.
The Audit Committee and the Board of Directors of the Company review
the risks, if any involved in the Company from time to time, and take
appropriate measures to minimize the same. The Audit Committee ensures
that the Policy for Risk Management is adopted across the Company in an
inclusive manner.
13. ORDERS PASSED BY THE REGULATORS OR COURTS, IF ANY
No significant and material orders were passed by the Regulators,
Courts or Tribunals impacting the going concern status and Company's
operations in future
14. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH
REFERENCE TO THE FINANCIAL STATEMENTS
The Company's internal control systems are supplemented by an extensive
programme of internal audit by an independent professional agency and
periodically reviewed by the Audit Committee and Board of Directors.
The internal control system is designed to ensure that all financial
and other records are reliable for preparing financial statements,
other data and for maintaining accountability of assets.
15. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
In terms of the definition of 'Independent Director' as prescribed
under Clause 49 of the Listing Agreement entered with Stock Exchanges
and Section 149(6) of the Companies Act, 2013 and based on the
confirmation/ disclosures received, following Non-executive Directors
are Independent Directors:-
- Mr. Padmanabh P. Vora (DIN-00003192)
- Mr. Gurdeep Singh (DIN-00036922)
- Ms Sunita Mathur (DIN-00008923)
16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING
CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES,
INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS AS PROVIDED UNDER SECTION
178(3) OF THE COMPANIES ACT, 2013
Your Company has adopted a Nomination and Remuneration Policy on
Directors' Appointment and Remuneration including criteria for
determining qualifications, positive attributes, independence of a
director and other matters as provided under Section 178(3) of the
Companies Act, 2013. The Policy is enclosed as a part of this report in
compliance with Section 134(3) of the Companies Act, 2013. (Annexure-3)
17. PERFORMANCE EVALUATION OF THE BOARD
The Nomination and Remuneration Committee at its meeting held at
September 8, 2014 and the Board of Directors at its meeting held on
September 29, 2014 respectively, had laid down criteria for performance
evaluation of Directors, Key Managerial Personnels (KMPs) and Board &
its Committees as a whole. Further, self evaluation with respect to
performance of the Committees was done by the Committees and then
recommended to the Board for further evaluation. The Board of Directors
in its meeting held on May 22, 2015 has reviewed the performance of the
Committees, the Members and the Board as a whole. The criteria and
manner for performance evaluation is as per the Nomination and
Remuneration Policy, as annexed to this Report.
18. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In compliance with Section 135 of the Companies Act, 2013 read with the
rules made there under, the Company has formed Corporate Social
Responsibility (CSR) Committee. The Annual Report on CSR Activities
forms part of this Report as (Annexure-4). The Policy on Corporate
Social Responsibility as approved by the Board of Directors is uploaded
on the website of the Company- www.phoenixlamps.co.in.
The composition of the Corporate Social Responsibility Committee is as
under:
Name of Members DIN Composition of the CSR
Committee
Mr. Padmanabh 00003192 Chairman, Non-executive
P. Vora Independent Director
Mr. Gurdeep Singh 00036922 Non-executive Independent
Director
Mr. Shomik P. 02185373 Non-Executive Director
Mukherjee
19. AUDIT COMMITTEE
The Company complies with the provisions related to Audit Committee, as
provided under Clause 49 of the Listing Agreement and Section 177 of
the Companies Act, 2013. The composition of the Audit Committee is as
under:
Name of DIN Composition of the Audit
Members Committee
Mr. Padmanabh 00003192 Chairman, Non-executive
P. Vora Independent Director
Mr. Gurdeep 00036922 Non-executive Independent
Singh Director
Mr. Shomik 02185373 Non-Executive Director
P. Mukherjee
All Members of the Committee are financially literate. Mr. Padmanabh
P. Vora, is a qualified Chartered Accountant having the requisite
financial management expertise.
20. VIGIL MECHANISM
Your Company has formulated the Whistle Blower Policy with a view to
provide a mechanism for Employees and Directors of the Company to
approach the Whistle blower Compliance Officers/ the Audit Committee of
the Company
in compliance with Section 177(9) of the Companies Act, 2013 and Clause
49 of the Listing Agreement. Details of the Whistle Blower Policy are
explained in the Report on Corporate Governance and Whistle Blower
policy of the Company is available on the website of the Company i.e.
www.phoenixlamps.co.in.
21. DISCLOSURES UNDER SECTION 197 OF THE COMPANIES ACT, 2013 AND RULE 5
OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2014
In accordance with the provisions of Section 197(12) of the Companies
Act, 2013 and Rule 5(2) of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the names and other particulars of
employees are set out in the annexure to the Directors' Report and
forms part of this report. In terms of the provisions of Section 136(1)
of the Companies Act, 2013, the Directors' Report is being sent to the
shareholders without this annexure. Shareholders interested in
obtaining a copy of the annexure may write to the Company Secretary at
the Company's registered office.
The ratio of the remuneration of each director to the median employee's
remuneration and other details in terms of Section 197(12) of the
Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, are forming part
of this report as (Annexure-5).
22. EMPLOYEES STOCK OPTIONS DETAILS
The Company does not have any employees stock option schemes
23. AUDITORS STATUTORY AUDITOR
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration
No. 301003E) have been appointed as the Statutory Auditors of the
Company in the 23rd Annual General Meeting of the Company held on July
21, 2014, to hold the office till the conclusion of 28th Annual General
Meeting of the Company, subject to the ratification of shareholders at
every Annual General Meeting.
Further, the ratification in respect with the appointment of M/s. S. R.
Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of
the Company is proposed for the ratification of shareholders in the
Notice of 24th Annual General Meeting of the Company.
SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013, the Company had
appointed M/s Sanjay Grover & Associates, Practicing Company
Secretaries, New Delhi as its Secretarial Auditor to conduct the
Secretarial Audit of the Company for FY 2014-2015. The Report of
Secretarial Auditor (Form MR-3) for the FY 2014-2015 is annexed to the
report as (Annexure-6).
COST AUDITOR
On the recommendation of Audit Committee, the Board of Directors in its
meeting held on May 22, 2015 has appointed M/s. J. K. Kabra & Company,
Cost Accountants as the Cost Auditor of the Company for the financial
year 2015-16 on the aggregate remuneration of Rs. 1,25,000/ - (Rupees
One Lac twenty five Thousand only) plus taxes, as applicable and out of
pocket expenses, in accordance with the provisions under Section 148 of
the Companies Act, 2013 read with rules made there under.
The remuneration payable to the Cost Auditor of the Company has been
proposed for the ratification by the members of the Company and shall
form part of the notice of 24th Annual General Meeting.
24. PUBLIC DEPOSITS
Your Company has not accepted any deposits covered under Chapter V of
the Companies Act, 2013.
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORP- TION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information under Section 134(3)(m) of the Companies Act, 2013, read
with rule 8(3) of the Companies (Accounts) Rules, 2014 is given below:
A. CONSERVATION OF ENERGY
i. Steps taken or impact on conservation of energy:- The Company
continues its policy of giving priority to energy conservation measures
including regular review of energy conservation, consumption and
effective control of utilization of energy.
The following energy conservation measures were implemented during the
year under review.
- High wattage Sodium vapor and Mercury lamps replaced by low wattage
LED lamps, which can saved approx 29K power units per annum.
- Capacity of APFC (Auto Power Factor Correction) panel has been
increased to maintain the value of power factor nearby .99 to reduce
the reactive power loses.
- Up-gradation of machine by using VFDs (Variable Frequency Drives)
and TPRs (Thyristor Power Regulators) to increase the m/c efficiency
and reduction of power consumption.
- 29.34 lac units less consumed in comparison to the last year.
During the year under report, Company has consumed units of energy as
detailed below:
Electric Energy : (i) 64.38 (previous year 88.69) lac units supplied by
Power Corporation,
(ii) 4.81 (previous year 9.84) lac units generated by DG sets.
Diesel : 1.49 (previous year 3.12) lac liters for
running of DG sets.
ii. The steps taken by the Company for utilizing
alternate sources of energy - NIL
iii. Capital investment on energy conservation equipment
(a) Additional Investments - No major additional
and proposals, if any, investment was made
being implemented for
reduction of consumption of energy.
(b) Impact of the measures - Not applicable referred to above for
reduction of energy consumption and consequent impact on the cost of
production of goods
B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
i) Efforts in brief made towards technology absorption, adaptation and
innovation-NIL
ii) Benefits derived as a result of the above efforts: N.A.
iii) Details of technology imported during last five years
(a) Technology Imported: N.A.
(b) Year of Import: N.A.
(c) Has technology been fully absorbed: N.A.
(d) If not fully absorbed, area where this has not taken place: N.A.
Expenditure incurred on Research and Development
During the year under review, the Company has not incurred any expenses
on Research & Development. The Company's products viz. Halogen Lamps
are produced with well-established technologies and therefore do not
require any focused Research & Development efforts.
27. CORPORATE GOVERNANCE
Your Company is committed to achieve the highest standards of Corporate
Governance and adheres to the Corporate Governance requirements set by
the Regulators/ applicable laws. Our focus on corporate governance,
where investor and public confidence in companies is no longer based
strictly on financial performance or products and services but on a
company's structure, its Board of Directors, its policies and
guidelines, its culture and the behavior of not only its officers and
directors, but also all of its employees.
Our approach is proactive, starting with our Leadership Team. It is
also deeply ingrained in our corporate culture, guiding how we work and
how we do business. We apply and adhere to the rules-not just those
required by government, but also those we impose on ourselves (OSHAs,
ISO etc.) to meet the highest possible standards.
We continually discuss bylaws and governance practices, changing our
policies when necessary and pointing out areas where we need to improve
our performance. We also compare our practices to the criteria used by
outside organizations to evaluate corporate performance.
A separate section on Corporate Governance standards followed by the
Company, as stipulated under Clause 49 of the Listing Agreement with
the stock exchange is enclosed as an Annexure to this report. The
report on Corporate Governance also contains certain disclosures
required under the Companies Act, 2013.
A Certificate from M/s Sanjay Grover & Associates, Practicing Company
Secretaries, confirming compliance to the conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement, is
annexed to this Report.
28. LISTING OF SHARES
The Equity Shares of the Company are listed on BSE Limited and National
Stock Exchange of India Limited. The Listing Fees for the financial
year 2015-16 has been paid.
ACKNOWLEDGEMENT
Your Directors wish to place on record their gratitude to NSEZ
Authorities, Banks, Business Associates and Shareholders for their
unstinted support, assistance and co- operation. Your Directors place
on record their deep appreciation to employees at all levels for their
hard work, dedication and commitment. The enthusiasm and unstinting
efforts of the employees have enabled the Company to remain at the
forefront of the Industry.
For and on behalf of the Board
Sd/-
3lace : Noida Padmanabh P. Vora
Date : May 22, 2015 Chairman
DIN: 00003192
Mar 31, 2013
The Directors have pleasure in presenting the Twenty-Second Annual
Report on the business and operations of the Company together with the
Audited Statement of Accounts for the financial year ended 31st March,
2013.
FINANCIAL RESULTS
(Rs. in lacs)
PARTICULARS Year ended year ended
31.03.2013 31.03.2012
Gross Sales and
other Income 45,517.30 46,883.58
Profit before Interest,
Depreciation & Tax 2,560.47 4,340.47
Depreciation 1,419.88 1,409.30
Gross Profit 1,140.59 2,931.18
Interest 1,996.04 2,176.71
Profit/ (Loss) Before Tax (855.45) 754.46
Less Capital advances
written off 389.43
Provision for Tax (205.64)
Profit/ (Loss) After Tax (855.45) 570.67
Balance of Profit / (Loss)
brought forward 3,739.97 3,169.30
Balance of Profit carried
forward to next year 2,884.53 3,739.97
Previous year''s figures have been regrouped/ rearranged wherever
considered necessary.
FINANCIAL AND OPERATIONAL PERFORMANCE
During the year under review, Gross Sales was recorded at Rs. 45,078.90
lacs as against Rs. 46,512.10 lacs in 2011-2012, a decrease of 3.08%
over 2011-12. Sales for the Automotive Business in 2012-2013 have
decreased from Rs. 24,086.87 lacs in 2011-2012 to Rs. 21,466.88 lacs
i.e. a fall of 10.88% and the Earnings before interest, depreciation
and taxes has decreased from Rs. 5,048.77 lacs to Rs. 4,379.15 lacs
i.e. a decrease of 13.26% over 2011-2012. In case of General Lighting
Business, the sales in 2012-2013 have increased from Rs. 22,425.23 lacs
in 2011-2012 to Rs. 23,612.02 lacs i.e. by 5.29% and the Loss before
interest, depreciation and taxes has increased from Rs. (708.29) lacs
in 2011-2012 to Rs. (1,818.69) lacs in 2012-2013. Profit/ (Loss) before
tax was Rs. (855.45) lacs against Rs. 754.46 lacs and Net Loss after
tax at Rs. 855.45 lacs as against profit of Rs. 570.67 lacs in
2011-2012.
DIVIDEND
Your Board has not recommended any Dividend for the financial year
2012-2013.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors Confirm that:-
- in the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
- they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the Profit of the
Company for the year under review;
- they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- they have prepared the annual accounts on a going concern basis.
BUSINESS/OPERATIONS
Auto Business:
Domestic OEM sales of the Company continued to grow in spite of flat
industry level sales volumes for Passenger Vehicle and Two Wheeler. The
Company''s growth was achieved by gaining market share from competitors
in both Passenger Vehicle and Two Wheeler segments. New customers /
markets were also tapped to increase current and future business
volumes. Branded sales in the aftermarket have been adversely hit, in
line with the auto industry trend. However, export sales have come back
strongly in the last quarter, driven by the business from the overseas
subsidiaries, acquisition of which was completed in the IIIQ.
General Lighting Business:
2012-2013 was a challenging year for General Lighting Business with the
overall economic slowdown reflected in low growth in retail and overall
sales. The 20% depreciation in the rupee against the US Dollar over the
last two financial years has resulted in huge cost escalation on
account of increase in prices of imported materials. To compensate for
the cost increases, the Company was forced to take price increases
which impacted sales volumes and growth. The product improvement
initiatives taken by the Company have resulted in some improvement in
Warranty Claims. The Government business improved due to the orders
executed for the CDM projects. Private labeling business continued to
see declining numbers as per the strategy of the Company to move away
from this business. The Company has introduced some LED lighting
products during the year to capitalize on the market shift towards
LEDs.
CORPORATE GOVERNANCE
Our focus on corporate governance are, where investor and public
confidence in companies is no longer based strictly on financial
performance or products and services but on a company''s structure, its
Board of Directors, its policies and guidelines, its culture and the
behavior of not only its officers and directors, but also all of its
employees.
Our approach is proactive, starting with our Leadership Team. It is
also deeply ingrained in our corporate culture, guiding how we work and
how we do business. We apply and adhere to the rules-not just those
required by government, but also those we impose on ourselves (OSHAs,
ISO etc.) to meet the highest possible standards.
We continually discuss bylaws and governance practices, changing our
policies when necessary and pointing out areas where we need to improve
our performance. We also compare our practices to the criteria used by
outside organizations to evaluate corporate performance.
As an organization we are proud of our strong commitment for
maintaining the highest standards of corporate governance. As a listed
Company, necessary measures are taken and systems put in place to
comply with the Listing Agreement with Stock Exchanges.
A separate Report on Corporate Governance along with a Certificate of
Compliances of conditions of Corporate Governance from the Practicing
Company Secretary forms part of this Report.
PUBLIC DEPOSITS
The Company has not accepted any deposits from Public, during the year
under review.
DIRECTORS
Mr. Padmanabh P. Vora and Mr. Shomik Mukherjee, are liable to retire by
rotation at the forthcoming Annual General Meeting, and being eligible
offer themselves for re- appointment.
Mr. Jaideep Wadhwa was appointed as an Additional Director of the
Company with effect from 18th day of January, 2013. The Company has
received notice(s) under Section 257 of the Companies Act, 1956 for his
appointment at the ensuing Annual General Meeting. The Board recommends
the same for your approval.
In terms of Clause 49 of the Listing Agreement with Stock Exchanges,
the details of the Directors to be appointed/ re-appointed are
contained in the accompanying Notice for convening the ensuing Annual
General Meeting.
AUDITORS
M/s. Arun K. Gupta & Associates, one of the Joint Auditors of the
Company has expressed their unwillingness to be appointed as Auditors
of the Company.
M/s. S. R. Batliboi & Co. LLP, one of the Joint Auditors of the Company
retire at the forthcoming Annual General Meeting of the Company, and
being eligible offer themselves for re-appointment. The Company has
received an eligibility letter under Section 224(1B) of the Companies
Act, 1956 from the Auditors and recommends their appointment for your
approval.
AUDITORS'' COMMENT IN THE AUDITORS REPORT:
The Auditors Report of the Company does not carry any comment/
qualification to the Audited Financial Results for the financial year
ended 31st March, 2013.
LISTING OF SHARES
The Equity Shares of the Company are listed on BSE Ltd. and National
Stock Exchange of India Ltd. The Listing Fees for the financial year
2013-2014 has been paid.
COST AUDIT
The Board of Directors, in pursuance of an order made under Section
233B of the Companies Act, 1956, has appointed M/s. J. K. Kabra & Co.,
Cost Accountants, New Delhi as Cost Auditors for conducting audit of
the cost accounts maintained by the Company for the financial year
ended 31st March, 2013.
SUBSIDIARY COMPANIES
The Company has following subsidiary companies.
One Indian unlisted subsidiary Company is "Halonix Technologies
Limited". There are no operations during the year in the Company. The
Balance Sheet, Profit and Loss Account and schedules thereto along with
the Statement in terms of Section 212 of the Companies Act, 1956 forms
part of this Annual Report.
During the year, Company completed the acquisition of 100% shareholding
of International Lamps Holding Company SA, Luxembourg and with this
International Lamps Holding Company SA, Luxembourg, has become a 100%
wholly owned subsidiary of Halonix Limited. With this acquisition
Halonix has acquired assets and business of its distributors (Luxlite
Lamps Sarl and Trifa Lamps Germany GmbH) in Europe, including of brands
''Luxlamps'' and ''Trifa''.
In terms of General Exemption, under Section 212(8) of the Companies
Act, 1956, granted by Ministry of Corporate Affairs vide its circular
no. 02/2011 dated 8th February, 2011 and in compliance with the
conditions enlisted therein, the Audited Statement of Accounts,
Auditors'' Reports thereon and the Reports of the Board of Directors of
the Company''s subsidiaries for the financial year ended 31st March,
2013 have not been annexed. The Annual Accounts and related documents
of the Subsidiary Companies shall be kept open for inspection at the
Registered Office of the Company. The Company will also make available
these documents upon request by any Member of the Company interested in
obtaining the same. However, as directed by the said circular, the
financial data of the Subsidiaries have been furnished under
''Subsidiary Companies Particulars'' forming part of the Annual Report
(refer page no. 43). Further, pursuant to Accounting Standard AS-21
issued by the Institute of Chartered Accountants of India, Consolidated
Financial Statements presented by the Company in this Annual Report
includes the financial information of its subsidiaries.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information under section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is given below:
A. Conservation of Energy
(a) The Company continues its policy of priority to energy conservation
measures including regular review of energy conservation, consumption
and effective control of utilization of energy.
The following energy conservation measures were implemented during the
year under review.
- Heavy duty 200 KVA UPS has been extended in Noida unit to take care
of critical plant load during tripping of state electricity power. This
will help to increase the machine efficiency and power quality.
- AC drives (VFD) has been installed for induction motors to improve
power efficiency of AC motors.
- Periodical inspection and testing of DG sets and transformers has
been done as per Indian electricity rule 1956 by Assistant Director
Electrical Safety.
- 17.65 lac Units less consumed in comparison to the last year.
During the year under report, Company has consumed units of energy as
detailed below:- Electric Energy  119.73 (previous year 138.55) lac
units supplied by Power Corporation
16.87 (previous year 15.7) lac units generated by DG sets.
Diesel  5.18 (previous year 4.64) lac liters for running of DG sets.
(b) Additional Investments  No major additional and proposals, if any,
investment is required. being implemented for reduction of consumption
of energy
(c ) Impact of the measures  Not applicable at(a) and (b) above for
reduction of energy consumption and consequent impact on the cost of
production of goods.
B. Technology Absorption
Particulars regarding Research & Development, Technology Absorption,
Adaptation and Innovation are given under in prescribed Form ''B''.
FORM ''B''
1. Research & Development (R & D) :
During the year under review the Company did not pursue any projects on
Research & Development. The Company''s products viz. Halogen Lamps and
Compact Flurocent Lamps are produced with well-established technologies
and therefore does not require any focused Research & Development
efforts.
2. Technology Absorption, Adaptation and Innovation
(i) Efforts in brief made A number of product towards technology
adaptations and absorption, adaptation innovations have been and
innovation undertaken to improve product life and lumen output as well
as to develop special products for specific applications. (ii)
Benefits derived : Stabilized Operations as a result of the and
improved life of above efforts. lamp
(iii) Details of technology imported during last five years
(a) Technology Imported : N.A.
(b) Year of Import : N.A.
(c) Has technology been fully absorbed : N.A.
(d) If not fully absorbed, area where this : N.A. has not taken place.
C. Foreign Exchange Earnings and Outgo
Current Year Previous Year
PARTICULARS (Rs. in Lacs) (Rs. in Lacs)
1. Foreign Exchange Earnings 8,810.14 9,741.31
2. Foreign Exchange Outgo
(a) Raw Materials 10,828.09 13,354.37
(b) Traded Goods 521.52 285.05
(c) Capital Goods Nil
(d) Spare Parts 138.77 223.83
(e) Foreign Traveling/ 536.33 487.77
Selling Expenses
(f) Dividend Nil
Activities relating to export, initiative taken to increase the export,
development of new export markets for products and export plan.
The Company taking necessary steps to increase export activities. The
Company is having a unit in NSEZ.
PERSONNEL
Information as per Section 217(2A) of the Companies Act, 1956, read
with the Companies (Particulars of Employees)
Rules, 1975, forms part of this Report. However, as per the provisions
of Section 219(1) (b) (iv) of the Act, the Report and Accounts are
being sent excluding the statement containing the particulars to be
provided under Section 217 (2A) of the Act. Any member interested in
obtaining such particulars may inspect the same at the Registered
Office of the company or write to the Compliance Officer for a copy
thereof.
ACKNOWLEDGEMENT
Your Directors wish to place on record their gratitude to NSEZ
Authorities, Banks, Business Associates and Shareholders for their
unstinted support, assistance and co-operation.
Your Company and its Directors also acknowledge with thanks the full
fledged co-operation received from the employees at all levels.
For and on behalf of the Board
Place: Noida PADMANABH P. VORA
Date : May 28, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the Twenty-First Annual
Report on the business and operations of the Company together with the
Audited Statement of Accounts for the financial year ended 31st March,
2012.
FINANCIAL RESULTS (Rs. in lacs)
PARTICULARS Year ended Year ended
31.03.2012 31.03.2011
Gross Sales and other Income 46,733.51 43,430.71
Profit before Interest,
Depreciation & Tax 4,448.69 1,996.21
Depreciation 1,409.30 1,344.73
Gross Profit 3,039.39 651.48
Interest 2,284.93 1,659.56
Profit Before Tax 754.46 (1008.08)
Less : Capital advances
written off 389.43 -
Provision for Tax (205.64) 123.85
Profit After Tax 570.67 (884.23)
Balance of Profit / (Loss)
brought forward 3,169.30 4,053.52
Balance of Profit carried
forward to next year 3,739.97 3,169.30
Previous year's figures have been regrouped/ rearranged wherever
considered necessary.
FINANCIAL AND OPERATIONAL PERFORMANCE
During the year under review, Gross Sales was recorded at Rs. 46,667.02
lacs as against Rs. 43,269.12 lacs in 2010-2011, an increase of 7.85%
over 2010-11. The sales for the Automotive Business in 2011-2012 has
decreased from Rs. 24,870.16 lacs in 2010-2011 to Rs. 24,387.34 lacs
i.e. a fall of 1.95% and the Earning before interest, depreciation and
taxes has increased from Rs. 5,029.68 lacs to Rs. 5,108.18 lacs i.e.
an increase of 1.56 % over 2010-2011. In case of General Lighting
Business, the sales in 2011-2012 have increased from Rs. 18,398.96 lacs
in 2010-2011 to Rs. 22,279.68 i.e. by 21.09% and the Earning before
interest, depreciation and taxes has improved from Rs. (3,033.47) lacs
in 2010-2011 to Rs. (659.49 lacs) in 2011-2012. Profit before tax (PBT)
was Rs.754.46 lacs against Rs. (1,008.08) lacs and Net Profit after tax
at Rs. 570.67 lacs as against Rs. (884.23) lacs in 2010-2011.
BUSINESS/OPERATIONS
Auto Business:
The Auto ancillary business saw average growth globally. The domestic
market which rides on the back of auto industry saw a low double digit
growth. Halonix sales grew 17% YOY on domestic front driven by a strong
performance by the OEM segment. The OEM sales grew by 20% and Halonix
Branded sales grew by 13%. Exports sales were subdued mainly on account
of low sentiment caused by the Eurozone crisis. Halonix gained market
share in OEM segment from competitors in both 2 wheelers as well as 4
wheelers. New customers / markets were developed in Latin America,
Middle-East, and CIS region as well.
General Lighting Business:
The General Lighting Business grew by 30% year on year aided by rapid
growth in retail sales.
The Company has taken a strategic decision to get out of the Private
labeling business. Company is only selling Non-Integrals which are not
prone to high warranty levels in the private label and saw a 27% dip in
the sales for this segment. The Company had to provide for the warranty
for private labels this year also, on the lamps sold earlier.
The CDM based CFL projects had a set-back this year on account of the
un-certainty with the Climate change treaty post 2012 and the economic
turmoil in Eurozone. There were hardly any new projects executed and
the financing for these projects was also difficult. The CDM based CFL
distribution is expected to restart in 2012 based on the clarification
that CER's will be valid post 2012 also for projects registered prior
to 2012.
DIVIDEND
Your Board has not recommended any Dividend for the financial year
2011-2012.
CORPORATE GOVERNANCE
Our focus on corporate governance are, where investor and public
confidence in companies is no longer based strictly on financial
performance or products and services but on a company's structure, its
Board of Directors, its policies and guidelines, its culture and the
behavior of not only its officers and directors, but also all of its
employees.
Our approach is proactive, starting with our Leadership Team. It is
also deeply ingrained in our corporate culture, guiding how we work and
how we do business. We apply and adhere to the rules-not just those
required by government, but also those we impose on ourselves (OSHAs,
ISO etc.) to meet the highest possible standards.
We continually discuss bylaws and governance practices, changing our
policies when necessary and pointing out areas where we need to improve
our performance. We also compare our practices to the criteria used by
outside organizations to evaluate corporate performance.
As an organization we are proud of our strong commitment for
maintaining the highest standards of corporate governance. As a listed
Company, necessary measures are taken and systems put in place to
comply with the Listing Agreement with Stock Exchanges.
A separate Report on Corporate Governance along with a Certificate of
Compliances of conditions of Corporate Governance from the Practicing
Company Secretary forms part of this Report.
QUALITY POLICY / CERTIFICATION
The Company is committed to provide consistent good quality products to
its customers worldwide and for achievement of world class quality in
the products manufactured, Management on its part is fully committed to
further improve quality and provide all resources to accomplish this
task. The Company is also committed to continuously improve safety and
health of employees and working environment through institutionalizing
proactive safety, health and environmental management strategies.
CERTIFICATION(S)
The organization was first certified ISO 9002 in year 1994 and QS
9000:1998/ISO9001:1994 in Jan 2002 and ISOTS 16949:2002 in May 2003 by
RWTUV. The organization was also certified for ISO 14001:2004 and OHSAS
18001:1999 in April 2005 by RWTUV.
The organization is certified for ISO9001:2008 and ISO/ TS16949:2009
for all units located in Noida valid until July 2012 and ISO14001:2004
and OHSAS 18001:2007 is valid until April 2014 BY TUV-NORD.
The Dehradun Plant certification of ISO 9001:2008 and ISO/ TS
16949:2009 are valid until Feb 2014. For Haridwar plant certification
of ISO 9001:2008 is valid until August 2014.
The testing lab of 59A Noida is NABL accredited until Oct. 2012.
DIRECTORS' RESPONSIBILITY STATEMENT Board of Directors of your Company
state:
i. that in the preparation of the annual accounts, applicable
accounting standards had been followed along with proper examination
relating to material departures, if any;
ii. that the directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
Profit of the Company for the year under review;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. that the directors have prepared the annual accounts on a going
concern basis.
PUBLIC DEPOSITS
The Company has not accepted any deposits from Public, during the year
under review.
DIRECTORS
Mr. Gurdeep Singh, is liable to retire by rotation at the forthcoming
Annual General Meeting, and being eligible offer himself for
re-appointment.
Mr. Gurvikram Singh was appointed as an Additional Director and
Managing Director of the Company with effect from 29th day of
September, 2011. The Company has received notice(s) under Section 257
of the Companies Act, 1956 for his appointment at the ensuing Annual
General Meeting. The Board recommends the same for your approval.
In terms of Clause 49 of the Listing Agreement with Stock Exchanges,
the details of the Directors to be appointed/ re-appointed are
contained in the accompanying Notice for convening the ensuing Annual
General Meeting.
During the period, Mr. Raj Krishan Sahgal, Chairman as well as
Director, resigned and was relieved from the Board of the Company with
effect from 11th October, 2011. Mr. Rajesh Kochhar, Managing Director,
resigned and was relieved from the Board as well as from the office of
the Company with effect from 30th June, 2011 and Mr. Susanta Kumar
Neogi, Director resigned and was relieved from the Board as well as
from the office of the Company with effect from 7th September, 2011.
Mr. Steven Mark Enderby has resigned as director with effect rom May
26, 2012. Your Board of Directors wish to place on record their sincere
appreciation for the guidance and valuable contribution made by Mr. Raj
Krishan Sahgal, Mr. Rajesh Kochhar, Mr. Susanta Kumar Neogi and Mr.
Steven Mark Enderby in the deliberations of the Board during their
tenure as Directors of the Company.
AUDITORS
M/s. Arun K. Gupta & Associates, Auditors of the Company, retire at the
forthcoming Annual General Meeting, and being eligible offer themselves
for re-appointment. The Company has received an eligibility letter
under Section 224(1B) of the Companies Act, 1956 from the Auditors and
recommend their appointment for your approval.
AUDITORS' COMMENT IN THE AUDITORS REPORT
The Auditors Report of the Company do not carry any comment/
qualification to the Audited Financial Results for the financial year
ended 31st March, 2012.
LISTING OF SHARES
The Equity Shares of the Company are listed on Bombay Stock Exchange
Ltd. and National Stock Exchange of India Ltd. The Listing Fees for the
financial year 2012-2013 has been paid.
COST AUDIT
The Board of Directors, in pursuance of an order made under Section
233B of the Companies Act, 1956, has appointed M/s. J.K. Kabra & Co.,
Cost Accountants, New Delhi as Cost Auditors for conducting audit of
the cost accounts maintained by the Company for the financial year
ended 31st March, 2012.
SUBSIDIARY COMPANY
The Company has one unlisted 100% wholly owned subsidiary company
"Halonix Technologies Limited". There are no operations during the year
in the Company. The Balance Sheet, Profit and Loss Account and
schedules thereto along with the Statement in terms of Section 212 of
the Companies Act, 1956 forms part of this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information under section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is given below:
A. Conservation of Energy
The Company continues its policy of priority to energy conservation
measures including regular review of energy conservation, consumption
and effective control of utilization of energy.
The following energy conservation measures were implemented during the
year under review.
- APFC (Auto Power Factor correction Panel) 360 KVAR has been
installed to control the reactive power losses now the power factor
reading is completely controlled.
- Low wattage lamps replaced in place of high wattage lamps like 250W
MHL lamps have been replaced by T5 (28W) and spiral lamps (55W) to
reduce the power consumption of lights.
- Motion sensors and time based sensors installed for auto switching
of plant and boundary lights to control the unusual working of lights.
During the year under report, Company has consumed units of energy as
detailed below:-
Electric Energy - 138.55 (previous year 137.43) lac units supplied by
Power Corporation,
15.7 (previous year 21.47) lac units generated by DG sets.
Diesel - 4.64 (previous year 7.09) lac liters for running of DG sets.
(b) Additional - No major
Investments additional investment is required. and proposals, if any,
being implemented forreduction of consumption of energy
(c ) Impact of the measures at(a) - Not applicable and (b) above for
reduction of energy consumption and consequent impact on the cost of
production of goods.
B. Technology Absorption
Particulars regarding Research & Development, Technology Absorption,
Adaptation and Innovation are given under in prescribed Form 'B'.
FORM B' 1. Research & Development (R & D) :
During the year under review the Company did not pursue any projects on
Research & Development. The Company's products viz. Halogen Lamps and
Compact Flurocent Lamps are produced with well established technologies
and therefore does not require any focused Research & Development
efforts.
2. Technology Absorption, Adaptation and Innovation
(i) Efforts in brief : Technology to manufacture made towards Halogen
Lamps and technology CFL Lamps has been fully absorption, absorbed.
adaptation and innovation
(ii) Benefits derived : Stabilized Operations as a result of the above
efforts.
(iii) Details of technology imported during last five years
(a) Technology Imported : N.A.
(b) Year of Import : N.A.
(c) Has technology been fully absorbed : N.A.
(d) If not fully absorbed, area where this : N.A. has not taken place.
Activities relating to export, initiative taken to increase the export,
development of new export markets for products and export plan.
The Company taking necessary steps to increase export activities. The
Company is having a unit in NSEZ.
PERSONNEL
Report on particulars of the employees required in terms of Section 217
(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975, is as under:
Employed throughout the year
Sr. Name Age Designation Remuneration Qualification
No. Received
(Rs)
1. Mr. Rakesh
Zutshi 44 Director Sales & 1,17,51,608 BSc., MBA
Marketing
2. Mr. Amar
Singh
Saini 61 Director 1,12,46,196 D M E
Operations
3. Mr. Lalit
Ramsharan
Bhatia 45 General 62,36,776 BSc, (Power
Manager-SCM Electronics)
Name Experience Date of Last
(Years) Comm. of Employment
Employment
Mr.Rakesh
Zutshi 22 09.07.2007 Gujarat Glass Ltd
Mr.Amruth
Singh
saini 40 03.05.1991 ECE Industries Ltd.
Mr.Lalit
Ramsharan 15 05.02.2009 Supreme
Industries
Employed for part of the year
Sr. Name Age Designation Remuneration Qualification
No. Received
(Rs.)
1. Mr. Rajesh
Kochhar* 55 Managing 29,38,933 B.E.
Director (Electronics)
2. Mr. S K
Neogi** 67 Executive 31,82,632 M.Tech
Director
Name Experience Date of Last
(Years) Comm. of Employment
Employment
Mr.Rajesh
Kochhar 34 16.11.2009 Landis Gyyr Ltd..
Mr.S.K.Neogi** 41 03.06.1993 HMT Ltd.
*Ceased to be employed with effect from June 30, 2012 **Ceased to be
employed with effect from September 30, 2012
Nature of Employment
- The employment is contractual.
Other Terms and Conditions
- The terms and conditions of employment are based on the board
resolution, shareholders resolution and appointment letter. Nature of
Duties
- All the above personnel look after day-to-day activities of the
Company under the supervision of Board of Directors of the Company.
- No employee as mentioned above are related to each other.
The above employees are not holding any shares in the Company.
ACKNOWLEDGEMENT
Your Directors wish to place on record their gratitude to NSEZ
Authorities, Banks, Business Associates and Shareholders for their
unstinted support, assistance and co-operation.
Your Company and its Directors also acknowledge with thanks the full
fledged co-operation received from the employees at all levels.
For and on behalf of the Board
Place: Noida PADMANABH P. VORA
Date : May 26, 2012 Chairman
Mar 31, 2011
The Directors have pleasure in presenting the Twentieth Annual Report
on the business and operations of the Company together with the Audited
Statement of Accounts for the financial year ended 31st March, 2011.
FINANCIAL RESULTS (Rs. in lacs)
PARTICULARS Year ended Year ended
31.03.2011 31.03.2010
Gross Sales and other Income 43,430.71 45,113.37
Profit before Interest,
Depreciation & Tax 3,105.56 2,372.92
Depreciation 1,334.73 1,300.36
Gross Profit 1,760.82 1,072.56
Interest 1,494.22 1,445.83
Profit Before Tax 266.62 (327.26)
Less : Provision for Obsolete
Inventories, Doubtful Debts and
Warranty Claims 1,193.01 1,135.88
Less: Adjustments relating to
earlier years (Net) 81.68 421.11
Provision for Tax 123.85 (3.12)
Profit After Tax (884.22) (1,927.13)
Balance of Profit / (Loss)
brought forward 4,053.52 5,980.66
Balance of Profit carried
forward to next 3,169.30 4,053.52
year
Previous years figures have been regrouped/ rearranged wherever
considered necessary.
FINANCIAL AND OPERATIONAL PERFORMANCE
During the year under review, Gross Sales was recorded at Rs. 43,269.12
lacs as against Rs. 45,077.74 lacs in 2009-2010, a decrease of 4.01%
over 2009-10. The Gross Sales for the Automotive Business in 2010-2011
has increased from Rs. 21,980.26 lacs in 2009-2010 to Rs. 24,897.88
lacs i.e. by 13.3% and the Earning before interest, depreciation and
taxes has increased from Rs. 4,939 lacs to Rs. 5,304 lacs i.e. 7.4%
over 2009-2010. In case of General lighting business, the gross sales
before discount & warranties in 2010-2011 have decreased from Rs.
25,615 lacs in 2009- 2010 to Rs. 22,336 lacs i.e. by 12.8%. The Earning
before interest, depreciation and taxes for general lighting business
has improved from Rs. (2,164) lacs in 2009-2010 to Rs. (2,033) lacs
i.e. 6% in 2010-2011. Profit before tax (PBT) after providing for
Obsolete Inventories, Doubtful Debts, Warranty Claims and prior period
adjustments was Rs. (1,008.07) lacs against Rs. (1,930.26) lacs and Net
Profit after tax at Rs. (884.22) lacs as against Rs. (1927.13) lacs in
2009-2010 respectively. The Company produced 910.44 lacs electric lamps
as against 923.79 lacs electric lamps last year, a decrease of 1.44%.
The operating results of the Company have been lower on account of: -
1) High Warranty Returns in CFL business.
2) Withdrawal of exposure from the OLM business and focusing on own
brand for CFL business.
3) Reduction of exposure from high warranty prone areas/ markets in the
CFL business.
BUSINESS/OPERATIONS
AUTO BUSINESS
The Auto ancillary business saw robust growth but there was a shortage
of halogen capacity globally. Halonix sales grew 15% YOY driven by a
strong performance by the OEM segment. The OEM sales grew by 37% and
Halonix Branded sales grew by 27%. Exports grew by 3% and were hampered
mainly on account of capacity constraints. Halonix gained market share
in OEM segment from competitors in both 2 wheelers (5%) as well as 4
wheelers (4%). New customers / markets have been developed in Latin
America, MiddleÃEast as well as new International OEM customers. During
the year, three new production lines were commercialized and the full
benefit of these will be accruing this year.
GENERAL LIGHTING BUSINESS
The General Lighting branded business had a flat year with the retail
sales growing by 2% year on year. The industry was plagued by the
infusion of low price LPF lamps despite their production being illegal,
which put price pressure on HPF lamps. However by the end of the year
the situation had improved substantially and going forward we see
stabilization in prices and sales volumes.
There is a rapid shift taking place from Ordinary Incandescent Lamps to
energy efficient Compact Fluorescent Lamps (CFLs) also in turn because
of the efforts of the Government to replace Ordinary Incandescent Lamps
with energy saving Lamps under the CER / Bachat lamp Yojana scheme.
Halonix executed one such project in Chattisgarh and in the coming
years, the CFL market is set to show tremendous growth driven by the
carbon credits. With our installed capacity, we are poised to benefit
from the increasing usage of CFLs.
The company has taken a strategic decision to get out of the Private
labeling business as such saw a 68% dip in the sales for this segment.
The company had to provide in this year, the warranty of the CFL lamps
sold earlier which impacted the bottomline adversely. However this is a
one time cost and the company expects to rebound strongly here-after
based on the growth in the branded retail sales. The company has also
focused on increasing the product basket in the general lighting
business which will help the company to achieve better top and bottom
line.
LUMINAIRES BUSINESS
Luminaries business has grown by nearly 30% over the previous year.
There has been significant progress in the network expansion and most
of the major metro cities have exclusive showrooms put up by the
channel partners. Thus providing our customers an opportunity to
experience the product before purchasing them.
The basic foundation has been laid for an aggressive growth ahead in
Infrastructure and Domestic segments of the market. The company has
been making rapid strides in LED business segment. The strong technical
team in the division has been able to develop and offer high quality
and high performance products in the LED space. This has led to the
positioning of our brand in the institutional segment as a premium one.
With strong growth being witnessed in Domestic and institutional
segments, our luminaries division is poised for greater heights in the
months ahead.
DIVIDEND
Due to loss and inadequacy of profits in the Company, your Board has
decided not to recommend any Dividend for the year 2010-2011.
RESTRUCTURING OF OPERATIONS OF THE COMPANY
The Board of Directors of the Company in its meeting held on 06.05.2010
approved the sale and transfer of its General Lighting Business, on a
Slump Sale and Going concern basis, to its wholly owned subsidiary,
Halonix Technologies Limited (HTL), with effect from 01.04.2010. The
company bifurcated its operations into Automotive and General Lighting
businesses and obtained two independent valuation reports for the
General Lighting business as on 31.03.2010. The shareholders of the
Company also accorded their approval for the sale of General Lighting
business to HTL and its subsequent sale. In terms of the Accounting
Standard-24 on "Discontinuing Operations", the company made requisite
disclosures and reported its financial results for the quarters ended
September 30, 2010 and December 31, 2010 since the proposed sale of
business constituted "discontinuing operation" within the meaning of
this Accounting Standard. The Slump Sale Agreement for sale of General
Lighting business has not been executed as on 31.03.2011. The Board of
Directors of the Company, in its meeting held on 20.05.2011 i.e. before
signing of the Accounts, has decided not to Sell and transfer its
General Lighting business and continue both Automotive and General
Lighting businesses as two separate and distinct lines of business ie.
Strategic Business units to continue to avail economies of scale and
synergies between the two businesses.
ACQUISITION OF ASSETS AND TRADEMARKS OF COMPANIES IN EUROPE
During the year 2010-11, the company acquired 100% shareholding of
International Lamps Holding Company S.A
(ILHC) and through ILHC two downstream subsidiaries namely Luxlite
Lamps Sarl in Luxembourg and Trifa Lamps GmbH in Germany. The Company,
including through its wholly owned subsidiary ILHC and downstream
subidiaries Luxlite Lamp Sarl and Trifa Lamps GmbH, entered into an
Agreement to acquire their business, with Luxlite Sarl and Trifa
Gluhlampenwerk am Trifels GmbH. Halonix Limited has extended Corporate
guarantee and SBLC aggregating to Euro 2.7 million to Trifa Lamps Gmbh
for its working capital requirements.
Since the terms & conditions of the various agreements entered into by
the parties could not be fulfilled either in terms of spirit or by
action, the Board of Directors decided that the acquisition of overseas
entities be called off. Further, as per the terms of the Agreements,
the transaction shall get RESTITUTED and the Seller shall be required
to refund the purchase price towards sale and purchase of the Sale
Shares / equity investment and / or unsecured loans made by the
Purchaser to the Company. Accordingly, the accounts of the subsidiaries
have not been consolidated with the Companys accounts as on 31.03.11.
The Directors of the Company are also of the opinion that all the dues
from overseas companies are fully recoverable, including the Corporate
guarantee and SBLC aggregating to Euro 2.7 million.
CORPORATE GOVERNANCE
Our focus on corporate governance are, where investor and public
confidence in companies is no longer based strictly on financial
performance or products and services but on a companys structure, its
board of directors, its policies and guidelines, its culture and the
behavior of not only its officers and directors, but also all of its
employees.
Our approach is proactive, starting with our Leadership Team. It is
also deeply ingrained in our corporate culture, guiding how we work and
how we do business. We apply and adhere to the rulesÃnot just those
required by government, but also those we impose on ourselves (OSHAs,
ISO etc) to meet the highest possible standards.
We continually discuss bylaws and governance practices, changing our
policies when necessary and pointing out areas where we need to improve
our performance. We also compare our practices to the criteria used by
outside organizations to evaluate corporate performance.
As an organization we are proud of our strong commitment for
maintaining the highest standards of corporate governance. As a listed
Company, necessary measures are taken and systems put in place to
comply with the Listing Agreement with Stock Exchanges.
A separate Report on Corporate Governance along with a Certificate of
Compliances of conditions of Corporate Governance from the Practicing
Company Secretary forms part of this Report.
QUALITY POLICY / CERTIFICATION
The Company is committed to provide consistent good quality products to
its customers worldwide and for achievement of world class quality in
the products manufactured, every employee is involved in ensuring
quality of products at all times. Management on its part is fully
committed to further improve quality and provide all resources to
accomplish this task. The Company is also committed to continuously
improve safety and health of employees and working environment through
institutionalizing proactive safety, health and environmental
management strategies.
CERTIFICATION(S)
The Company is certified for ISO 9002 since Nov. 1994 & QS
9000:1998/ISO 9001:1994 since Jan. -2002, ISO/TS 16949:2002 since May,
2003 by RWTUV, Germany. The Company has also certified for ISO
14001:2004 and OHSAS 18001: 1999 since Apr. -2005 by RWTUV, Germany.
The Company is certified for ISO:9001:2008 and ISO/TS 16949:2009 for
all units located in Noida, valid until 2012 and ISO: 14001:2004,
OHSAS: 18001:2007 is valid until 2014 for all units by TUV NORD INDIA
PVT. LTD., Germany.
The Certification of ISO 9001:2008 and ISO/TS 16949:2009 are valid
until Feb., 2014. For Dehradun plant and Haridwar plant certification
of ISO 9001:2008 is valid until Aug., 2011.
The Companys (59-A) testing lab is NABL accredited in July 2010 and SA
8000 Certified.
The Companys units at A1, Phase-II, Noida and Haridwar are certified
for RoHS compliance and the audit was performed by Intertek. Your
Company was the first Company in India to be certified with RoHS
compliance through certification audit and this certification is valid
till 2013 and also approved by BIS for the CFL products.
DIRECTORS RESPONSIBILITY STATEMENT
Board of Directors of your Company state:
i. that in the preparation of the annual accounts, applicable
accounting standards had been followed alongwith proper examination
relating to material departures, if any;
ii. that the directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year under review;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. that the directors have prepared the annual accounts on a going
concern basis.
PUBLIC DEPOSITS
The Company has not accepted any deposits from Public, during the year
under review.
DIRECTORS
Mr. Raj Krishan Sahgal, and Mr. Ganapati Rathinam, Director(s), are
liable to retire by rotation at the forthcoming Annual General Meeting,
and being eligible offer themselves for re-appointment.
Mr. Susanta Kumar Neogi has been appointed as an Executive Director for
a period of one year with effect from 8th day of September, 2010.
Mr. Padmanabh Pundrikray Vora, Independent and Non- Executive has been
appointed as an Additional Director with effect from 20th May, 2011.
The Company has received notice along with requisite deposit under
section 257 of the Companies Act, 1956 for his appointment at the
ensuing Annual General Meeting. The Board recommends the same for your
approval.
Mr. Shomik Mukherjee, Non-Executive and representative of Argon India
Limited and Argon South Asia Limited has been appointed as an
Additional Director with effect from 20th May, 2011. The Company has
received notice along with requisite deposit under section 257 of the
Companies Act, 1956 for his appointment at the ensuing Annual General
Meeting. The Board recommends the same for your approval. In terms of
Clause 49 of the Listing Agreement with Stock Exchanges, the details of
the Directors to be appointed / re-appointed are contained in the
accompanying notice for convening the ensuing Annual General Meeting.
During the period, Mr. Jayant Davar, Director, resigned and was
relieved from the Board of the Company with effect from 11th August,
2010. Mr. Girija Shankar Tripathy, Director, resigned and was relieved
from the Board of the Company with effect from 28th January, 2011. Your
Board of Directors wish to place on record their sincere appreciation
for the guidance and valuable contribution made by Mr. Jayant Davar and
Mr. Girija Shankar Tripathy in the deliberations of the Board during
their tenure as Directors of the Company.
AUDITORS
M/s. Arun K. Gupta & Associates, Auditors of the Company, retire at the
forthcoming Annual General Meeting, and being eligible offer themselves
for re-appointment. The Company has received an eligibility letter
under section 224(1B) of the Companies Act, 1956 from the Auditors and
recommend their appointment for your approval.
AUDITORS COMMENT IN THE AUDITORS REPORT
The Auditors Report of the Company do not carry any comment/
qualification to the Audited Financial Results for the financial year
ended 31st March, 2011.
LISTING OF SHARES
The Equity Shares of the Company are listed on Bombay Stock Exchange
Ltd. and National Stock Exchange of India Ltd. The Listing Fees for the
financial year 2011-2012 has been paid.
COST AUDIT
The Board of Directors, in pursuance of an order made under section
233B of the Companies Act, 1956, has appointed M/s. J.K. Kabra & Co.,
Cost Accountants, New Delhi as Cost Auditors for conducting audit of
the cost accounts maintained by the Company for the financial year
ended 31st March, 2011.
SUBSIDIARY COMPANY
The Company has one non-listed 100% wholly owned subsidiary company
"Halonix Technologies Limited". There are no operations during the year
in the Company. The Balance Sheet, Profit and Loss Account and
schedules thereto along with the Statement in terms of Section 212 of
the Companies Act, 1956 forms part of this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information under section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is given below:
A. Conservation of Energy
The company continues its policy of priority to energy conservation
measures including regular review of energy conservation, consumption
and effective control of utilization of energy.
The following energy conservation measures were implemented during the
year under review.
- APFC (Auto Power Factor correction Panel) 360 KVAR has been installed
to control the reactive power losses now the power factor reading is
completely controlled.
- Low wattage lamps replaced in place of high wattage
lamps like 250W MHL lamps have been replaced by T5 (28W) and spiral
lamps (55W) to reduce the power consumption of lights.
- Motion sensors and time based sensors installed for auto switching of
plant and boundary lights to control the unusual working of lights.
During the year under report, Company has consumed units of energy as
detailed below:-
Electric Energy - 137.43 (previous. year 135.22) lac units supplied by
Power Corporation, 21.47 (previous year 18.87) lac units generated by
DG sets.
Diesel - 7.09 (previous. year 5.78) lac litres for running of DG sets.
(b) Additional Investments and proposals, if any, being implemented for
reduction of consumption of energy
No major additional investment is required.
(c ) Impact of the measures at(a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
Not applicable
B. Technology Absorption
Particulars regarding Research & Development, Technology Absorption,
Adaptation and Innovation are given under in prescribed Form ÃB.
1. Research & Development (R & D) :
(i) Specific Areas in which R&D carries by the Company
1. Commercialized LED based tail lights E-Homologation.
2. For LED lighting investment close to about Rs. 30 lacs was done for
tooling/ testing/ new design testing and validating and generating IES
files related to LED.
(ii) Benefits derived as a result of the above R&D
1. Company has been able to develop products which on validation has
proven to be more effective products than the products available in the
market.
(iii) Future Plan of Action The Company will continue product
development and other regular activities related to for tooling/
testing/ new design testing and validating and generating new products
to improve quality and reduce cost by increasing the raw material
efficiency and reducing wastage. To commercialize the products
developed. Penetrate market.
(iv) Expenditure on R & D During the year Company has invested close to
INR 20 lacs for tooling / testing / New Design testing and validation.
2. Technology Absorption, Adaptation and Innovation
(i) Efforts in brief made towards technology absorption, adaptation and
innovation : Technology to manufacture Halogen Lamps and CFL Lamps has
been fully absorbed.
(ii) Benefits derived as a result of the above efforts.
: Stabilized Operations
(iii) Details of technology imported during last five years
(a) Technology Imported : N.A.
(b) Year of Import : N.A.
(c) Has technology been fully absorbed : N.A.
(d) If not fully absorbed, area where this has not taken place.
: N.A.
Activities relating to export, initiative taken to increase the export,
development of new export markets for products and export plan.
The Company taking necessary steps to increase export activities. The
Company is having a unit in NSEZ. The Company is trying to acquire
marketing Company in Europe.
Nature of Employment
à The employment is contractual.
Other Terms and Conditions
à The terms and conditions of employment are based on the board
resolution, shareholders resolution and appointment letter.
Nature of Duties
à All the above personnel look after dayÃto-day activities of the
Company under the supervision of Board of Directors of the Company.
à No employee as mentioned above are related to each other.
The above employees are not holding any shares in the Company.
ACKNOWLEDGMENT
Your Directors wish to place on record their gratitude to NSEZ
Authorities, Banks, Business Associates and Shareholders for their
unstinted support, assistance and co-operation.
Your Company and its Directors also acknowledge with thanks the full
fledged co-operation received from the employees at all levels.
For and on behalf of the Board
Place : Noida RAJ KRISHAN SAHGAL
Date : 20.05.2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the Nineteenth Annual Report
on the business and operations of the Company together with the Audited
Statement of Accounts for the financial year ended 31st March, 2010.
FINANCIAL RESULTS (Rs. in lacs)
PARTICULARS Year ended Year ended
31.03.2010 31.03.2009
Gross Sales and other Income 45,651.23 40,268.88
Profit before Interest,
Depreciation & Tax 2,910.78 4,020.75
Depreciation 1,300.36 1,143.83
Gross Profit 1,610.42 2,876.92
Interest 1,445.83 1,469.46
Profit Before Tax 164.59 1,407.46
Less : Provision for Obsolete
Inventories, Doubtful Debts and
Warranty Claims 1,673.74 825.55
Less: Adjustments relating to earlier
years (Net) 421.11 260.16
Net Provision for Tax (3.12) 158.98
Profit After Tax (1927.14) 162.77
Balance of Profit / (Loss)
brought forward 5,980.66 5,949.02
Proposed Dividend on Equity Shares - 112.08
Tax on Dividend - 19.05
Balance of Profit carried forward
to next year 4,053.52 5,980.66
FINANCIAL AND OPERATIONAL PERFORMANCE
During the year under review, Gross Sales were Rs. 45,651.23 lacs, an
increase of 13% over 2008-09. Profit before tax (PBT) after providing
for Obsolete Inventories, Doubtful Debts, Warranty Claims and prior
period adjustments was Rs. (1,930.26) lacs and Net Profit at Rs.
(1,974.14) lacs. The Company produced 923.79 lacs electric lamps as
against 838.28 lacs last year, an increase of 10.2%. The operating
results of the Company have been sharply lower on account of :
- Warranty Returns
- Losses on account of Rupee depreciation and high commodity prices
during the year.
- Higher expenditure on Fixed Costs, coming from the development of a
retail marketing network and Brand launch expenses, including
advertising.
BUSINESS / OPERATIONS
AUTO BUSINESS
Your companys business in the Automobile Segment has seen a very
strong growth in the year 2009-2010 and we see that trend carrying
forward for the year 2010-2011. During the year gone by, all major
customer segments viz. Exports, and Original Equipment Manufacturers
(OEM) showed healthy demand. We expanded our markets with new customers
being added in Latin America, Japan and USA. The expectation is that
these new markets will start contributing to our sales from the year
2011. The major reason that held back growth in last quarter of FY10 was
capacity constraint. This critical issue has been addressed with the
planned addition of two H4 lines in the 2nd Quarter of 2010-2011. This
will help your company to maintain its growth pattern and allow it to
plan its penetration into new markets and geographies. The Company is,
therefore, confident of retaining its dominance in the domestic market
and simultaneously looking at aggressive growth in Exports, both for
replacement as well as OEM segments.
The volatile Euro was a risk factor which would have adversely affected
the company operations and profits despite a natural hedge on account
of our Euro purchases. But with the Euro stabilising, this risk seems
manageable.
GENERAL LIGHTING BUSINESS
The General lighting business grew 8.25% in the year 2009- 2010 over
last year. The year 2009-2010 was turbulent for the Compact Fluorescent
Lamp (CFL) market on account of change in the Government regulations to
transition lamps from Low Power Factor (LPF) to High Power Factor
(HPF). The HPF lamps required additional electronic components which
pushed up the cost of manufacturing by about Rs. 10 per lamp. The
transition was effective October 1, 2009. However flow of LPF lamps
from the organised sector continued unabated for quite some time after
the implementation date. This led to very severe pressure on pricing
as cost increases could not be passed on to the trade and consumers.
This has caused established players to lose market share till recently.
We have seen improvement in the last few months of 2010 and we expect
the situation to stabilise in the very near future.
During the year, we started our distribution network in South- India.
Despite the turbulence, we are confident of achieving significant
growth in 2010-2011.
Energy saving has emerged as one of the focus areas of the Government
of India and there is a lot of activity in this field. We expect CFL
distribution under "Clean Development Mechanismà (CDM) to take off in a
big way in the next two years. This will be the biggest driver of
growth with the Government estimating close to 400 million lamps to be
distributed across India under "Bachat Lamp Yojana" (BLY) program.
During the year, we started supplies under CDM to Chattisgarh and are
in the process of rolling out the distribution in Lucknow, Varanasi and
a pilot project in New Delhi in 2nd Quarter of 2010-2011. The
expectation is that several
Government organisations including Public sector Enterprises will
switch to the energy saving CFLs, this will fuel the growth in this
segment.
Your company took a conscious decision of reducing exposure in the
Private labelling business and this segment registered a decline of
more than 30% for the year 2009-10 over last year. We expect to bring
it down by another 40% in the year 2010-2011. This decision has been
taken on account of the high warranty returns in this segment which
have eroded the profitability of the company. We will be focussing on
developing our own brand and bring down the reliance on the private
labelling. The focus will also be on improved quality and better cost
efficiencies in manufacturing and distribution.
LUMINAIRES BUSINESS
To enhance the footprint in lighting business, we decided to enter the
Luminaires business about 2 years ago. As this business was started
when the economy was in a downturn, the initial efforts were not
successful. We have reworked the business model and recruited a
competent team to focus on high growth areas viz infrastructure
projects, home lighting and light emitting diodes (LEDs). We expect
this initiative to give significant results in the coming years.
AUDITORS COMMENTS IN THE AUDITORS REPORT
The Auditors, in their Auditors Report, have commented that "According
to the information and explanations given to us, and an overall
examination of the Balance sheet and Cash flow statement of the
Company, we report that funds raised on short term basis amounting to
Rs. 800.92 lacs have been used for long term investment". The Directors
have examined this comment and state that the Company had a Net Worth
of Rs. 10,653 lacs as on 31st March, 2010, while Net Fixed Assets were
Rs. 10,588 lacs. The Fixed Assets have, therefore, been entirely funded
out of Equity; no short-term bank borrowings have been used to finance
long-term assets. During the year under review, an escrow loan was
taken to pay off a long- term loan, in order to retrieve the first
charge on Fixed Assets given to the banks. This loan has since been
paid off.
DIVIDEND
Your directors have not proposed any dividend for the financial year
2009-10.
RE-STRUCTURING OF OPERATIONS OF THE COMPANY
The Company proposes to restructure its business into Automotive
lighting business (Auto Business) and the General lighting business
(General Business). The Auto Business was performing as per profit
expectations but the General Business was acting as a drag on the
CompanyÃs profitability. The Board of Directors considered various
options and felt that it was best to sell and/or transfer the General
Business to the CompanyÃs 100% owned subsidiary, Halonix Technologies
Limited, including by way of slump sale, along with all its rights,
obligations and liabilities, to Halonix Technologies Limited, effective
from 1st April, 2010 and subsequently sell and transfer its entire
holding in the shares of or interest in Halonix
Technologies Limited to the promoters of the Company, Argon India
Limited and Argon South Asia Limited, for which it has already received
an Expression of Interest. In addition to delinking the automotive
business from sub-optimal performance of the General Lighting business,
this exercise would also result in an infusion of cash in the Company
by way of consideration received for the General Lighting business.
The Company has entered into a Memorandum of Understanding with Halonix
Technologies Limited in connection with the sale and/or transfer of the
General Lighting Business of the Company to Halonix Technologies
Limited, subject to valuation by independent valuer(s) and all other
approvals as may be applicable. KPMG India Private Limited has been
appointed as the Tax advisors for re-structuring advise.
PricewaterhouseCoopers Private Limited and SSPA & Co., Chartered
Accountants, Mumbai, were appointed as independent valuer(s) for
valuing the General Lighting Business, who have submitted their
valuation reports. Enam Securities Private Limited have been appointed
as the Investment Bankers.
The Board has, vide a circular resolution of 1st July, 2010, sought
consent of the shareholders of the Company under section 293 (1) (a) of
the Companies Act, 1956 for (i) sale of the non-automotive lighting
business to its subsidiary Halonix Technologies Limited and (ii) sale
and transfer of the CompanyÃs entire holding/interest in Halonix
Technologies Limited to Argon India Limited and Argon South Asia
Limited and/ or their affiliates or representatives through Postal
Ballot process.
As a part of the demerger and subsidiarisation process, the Company is
consolidating its manufacturing/assembly lines for the Automotive
business at plants at Noida and for the General Lighting business, at
Haridwar plant.
ACQUISITION OF ASSETS AND TRADEMARK OF COMPANIES IN EUROPE
The Board is pleased to inform you that the Company has signed a
binding agreement with its distributor in Europe, who distributes the
CompanyÃs products in Europe, for the acquisition of its assets,
business and intellectual property. Legal and Financial Due diligence
has been done by the Consultants and Halonix shall acquire, through one
or more of European entities, certain assets (including stock-in-trade,
contracts, brand names and employees connected with certain goods) of
the Distributor for which the commercial terms and conditions have been
finalized. Once this acquisition is completed, the distribution in
Europe would get integrated with the quality manufacturing facility of
Halonix in India. This is expected to result in expansion of existing
brand portfolio, higher customer confidence, cost rationalisation and
help in increasing the customer base. With the consolidation of
accounts, Revenue and EBITDA for Halonix is expected to increase by the
same amount, thereby, enhancing EBITDA margin for the consolidated
operations.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
a) Industry Structure and Development
Your Company is a market leader in Automotive Halogen Lamps in India
with supplies to all major OEMs in 4-Wheeler and 2-Wheeler Industry. It
is also a major exporter to developed countries.
Your Company is also a leading player in Compact Fluo- rescent Lamps
and other General Lighting Lamps. In case of General Lighting Lamps, a
rapid shift is taking place from Ordinary Incandescent Lamps to energy
efficient Compact Fluorescent Lamps (CFLs). With increasing demand of
Energy Saving Lamps and the efforts of the Government taking the
initiative to replace Ordinary In- candescent Lamps with energy saving
Lamps, the CFL market is set to show tremendous growth over the next
few years.
The business model for Luminaires business has been revamped. The
Company has recruited a competent team to focus on high growth areas
viz infrastructure projects, home lighting and light emitting diodes
(LEDs). The LED luminaires is gaining greater acceptance by the day and
being expensive than the regular luminaires, is pushing up the market
size considerably.
b) Opportunities and Threats Opportunities
- Government thrust on use of energy efficient equipments and Energy
shortage in India as well as rest of the World will increase the demand
for Compact Fluorescent Lamps and thus tremendous growth opportunities
for your Company.
- Increase/Consolidate market share in fast growing domestic Auto
market à setting up of new lines.
- Greater Auto growth will result in more after market sales.
- Expand export of automotive lamps to new markets with the expansion
of brand portfolio à North America, Latin America and Europe.
- Focus on building the Brand.
- Enhanced Product portfolio à LED tail lamp assembly and Stop and Tail
lamps.
- Introduction of new low cost PCBs.
- Introduction of new Fixtures and Fitting for the new generation
lamps.
- Expansion of domestic distribution network by the Company will
increase pricing power with the final customer.
Threats
- Increasing prices of inputs and volatility in currency market may
impact the profitability of the Company.
- High Energy prices, high inflation and high Interest cost may
adversely affect the Company.
- Increase/ Volatility in cost of Raw Material, especially major
commodities like Molybdenum.
- New projects of Luminaries could be put on hold by various State
Governments.
- Frequent changes in government regulations especially BIS norms.
e) Outlook
The Government thrust on development of Infrastructure and Housing
sector as a whole and use of Energy efficient Lamps will further boost
demand for the products of the Company. Compact Fluorescent Lamps are
expected to witness exponential growth in the near future.
With the economy reviewing, the auto OE business may see some inventory
build-up, which should be positive for the auto business.
The Company has taken various steps to rationalize its operating cost
as well as to manage its current assets better. This should improve
both profitability and capital efficiency.
d) Risks and Concern
The CompanyÃs risk management strategy encompasses the proper and
in-depth identification, assessment and prioritization of risk followed
by the speedy mobilization of resources to minimize, monitor, and
control the profitability of unfortunate events.
Excessive volatility in the CompanyÃs key raw materials can have severe
impact on its profitability. As the Company derives a portion of its
revenues from exports and pays for purchases with foreign exchange,
excessive volatility in currency rates can significantly impact
profitability.
e) Financial Performance vis-a-vis Operational Performance
During the year under review, Gross Sales were Rs. 45,651.23 lacs, an
increase of 13% over 2008- 09. Profit before tax (PBT) after providing
for Obsolete Inventories, Doubtful Debts, Warranty Claims and prior
period adjustments was Rs. (1,930.26) lacs and Net Profit at Rs.
(1,974.14) lacs. The Company produced 923.79 lacs electric lamps as
against 838.28 lacs last year, an increase of 10.2%.
f) Segment wise or Product wise Performance As per the relevant
reporting requirements, though the Company operates in a single segment
i.e. Electrical Lamps, it has decided to segregate its business into
two product lines, Automotive and General Lighting. Automotive Lamps
sales constituted 48% of total sales and 52% sales came from General
Lighting side.
g) Internal Control System and their adequacy
The Company has a proper and adequate system of internal controls
commensurate with its size to ensure that all assets are safeguarded
and protected against loss from unauthorized use or disposition and the
transactions are authorized, recorded and reported correctly.
The Companys internal control systems are further supplemented by an
extensive programme of internal audit by an independent firm of
Chartered Accountants and periodic review by management.
The internal control system is designed to ensure that all financial
and other records are reliable for preparing financial statements and
other data and for maintaining accountability of assets.
h) Developments on Human Resources & Industrial Relations Front
The Company believes that employees are the real strength and their
contribution is always the main engine for growth. Sound human resource
development policies of the Company ensure that each employee grows as
an individual and contributes to the performance of the Company.
Regular in-house training programs for employees at all levels help in
this objective.
Industrial relations continued to remain harmonious during the year and
morale of the employees working in the Company is very high. The number
of persons employed in the Company is 3094 as on 31st March, 2010.
i) Cautionary Note
Certain statements in the ÃManagement Discussion and Analysisà section
may be forward looking and are stated as required by applicable laws
and regulations. Many factors may affect the actual results, which
would be different from what the Directors envisage in terms of the
future performance and outlook.
Investors are cautioned that this discussion contains forward looking
statement that involve risks and uncertainties including, but not
limited to, risks inherent in the CompanyÃs growth strategy, dependence
on certain businesses, dependence on availability of qualified and
trained manpower and other factors discussed. The following discussion
and analysis should be read in conjunction with the CompanyÃs financial
statements and notes on accounts.
CORPORATE GOVERNANCE
Your Company always strives to incorporate the appropriate standards
for good corporate governance. As a listed Company, necessary measures
are taken and systems put
in place to comply with the Listing Agreement with Stock Exchanges.
A separate Report on Corporate Governance along with a Certificate of
Compliances of conditions of Corporate Governance from the Practicing
Company Secretary forms part of this Report.
QUALITY POLICY
The Company is committed to provide consistent quality products to its
customers worldwide. For the achievement of world class quality in the
products manufactured, It is necessary that every employee is involved
in ensuring and improving of products at all time. The Management on
its part is fully committed to quality and provides all resources to
accomplish this task.
SAFETY, HEALTH AND ENVIRONMENT POLICY
The Company is committed to prevent injury and ill health and
continually improve its safety, health and environment, legal and other
requirements through institutionalizing proactive safety, health and
environment management strategies.
CERTIFICATION(S)
The Company is certified for ISO 9002 since Nov.-1994 & QS
9000:1998/ISO 9001:1994 since Jan.Ã2002, ISO/TS 16949:2002 since May
-2003 by RWTUV, Germany. The Company has also certified for ISO
14001:2004 and OHSAS 18001:1999 since Apr.-2005 by RWTUV, Germany.
The Company has been certified for ISO 9001:2008 and ISO/ TS 16949:2002
for all units located in Noida, valid until 2012 and ISO 14001:2004,
OHSAS 18001:2007 is valid until Apr.- 2011 for all units by TUV NORD
INDIA PVT. LTD., Germany. The Company has been recently conducted
surveillance audit for ISO/TS 16949:2009 in the month of Mar.-2010.
The Certification of ISO 9001:2008 & ISO/TS 16949:2009 valid are until
Aug.-2010 for Dehradun plant and Haridwar plant certification of ISO
9001:2008 valid is until Aug. -2011.
The Companys (59-A) testing lab is NABL accredited in July 2010 and SA
8000 certification during this financial year.
The Companys units at A1, Phase-II, Noida and Haridwar are certified
for ROHS compliance and the audit was performed by Intertek. Your
Company was the first Company in India to be certified with ROHS
compliance through certification audit last year and this certification
is valid till 2013 and also approved by BIS for the CFL products.
DIRECTORS RESPONSIBILITY STATEMENT
Board of Directors of your Company state:
i. that in the preparation of the annual accounts, applicable
accounting standards have been followed;
ii. that the directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company
at the end of the financial year and of the profit of the Company for
the year under review;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with
provisions of the Companies Act, 1956 safeguarding assets of the
Company and for preventing and detecting fraud and other
irregularities;
iv. that the directors have prepared annual accounts on a going concern
basis.
PUBLIC DEPOSITS
The Company has not accepted any deposits from Public, during the year
under review.
DIRECTORS
Mr. Gurdeep Singh, Director and Mr. Steven Mark Enderby, Director,
retire by rotation at the forthcoming Annual General Meeting, and being
eligible offer themselves for re-appointment.
During the year Mr. S.K. Neogi was appointed as an Additional Director
on 24th August, 2009, subsequent to the dispatch of the Notice for AGM.
Hence, he was re-appointed as an Additional Director on 8th September,
2009 for a period of one year. He was subsequently also appointed as
Executive Director of the Company. Mr. S. K. Neogi has now been
re-appointed as an Executive Director as approved by the Board in their
meeting held on 26th August, 2010 for another period of one year,
effective September 08, 2010. The Company has received notice under
section 257 of the Companies Act, 1956 for his appointment at the
ensuing Annual General Meeting. The Board recommends the same for your
approval.
Mr. Rajesh Kochhar was appointed as an Additional Director and Managing
Director of the Company with effect from 16th day of November, 2009.
The Company has received notice(s) under section 257 of the Companies
Act, 1956 for his appointment at the ensuing Annual General Meeting.
The Board recommends the same for your approval. In terms of Clause 49
of the Listing Agreement with Stock Exchanges, the details of the
Directors to be appointed / re- appointed are contained in the
accompanying notice for convening the ensuing Annual General Meeting.
During the period, Mr. Rajiv Prasad, Managing Director, resigned and
was relieved from the Board as well as from the office of the Company
with effect from 17th day of August, 2009. Your Board of Directors wish
to place on record their sincere appreciation for the guidance and
valuable contribution made by Mr. Rajiv Prasad in the deliberations of
the Board during his tenure as Managing Director of the Company.
AUDITORS
M/s. Arun K. Gupta & Associates, Auditors of the Company, retire at the
forthcoming Annual General Meeting, and being eligible offer themselves
for re-appointment.
LISTING OF SHARES
The Equity Shares of the Company are listed on Bombay Stock Exchange
Ltd. and National Stock Exchange of India Ltd. The Listing fees for the
financial year 2010-2011 has been paid.
COST AUDIT
The Board of Directors, in pursuance of an order made under section
233B of the Companies Act, 1956, has appointed M/s. J.K. Kabra & Co.,
Cost Accountants, New Delhi as Cost Auditors for conducting audit of
the cost accounts maintained by the Company for the financial year
ended 31st March, 2010.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information under section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is given below:
A. Conservation of Energy
The Company continues its policy of priority to energy conservation
measures including regular review of energy conservation, consumption
and effective control of utilization of energy.
The following energy conservation measures were implemented during the
year under review.
- Roof extractor and transparent fiber sheet has been installed to
dilute the heat in production area, increase natural cooling, improve
the natural illumination and replace electricity driven fans and lights
to take care of the power consumption.
- Up-gradation of machine electrical panels by using advance PLCs.
Absolute encoders, Drives, HMIÃs, vision systems and more than 25 new
advance electrical panels have been made inhouse at various plant
locations to increase the machine efficiency and reduction of power
consumption.
- Kwh meters installed on different locations of plants to monitor the
actual power consumption.
- Inspite of increased production & existing machine load, 16.9
thousand units saved in comparison to the last year.
During the year under report, company has consumed units of energy as
detailed below.
Electric Energy - 135.22 (previous. year
123.64) lac units supplied by
Power Corporation,
18.87 (previous. year
16.34) lac units generated
by DG sets.
Diesel - 5.78 (previous. year 4.97)
lac litres for running of DG
sets.
(b) Additional
Investments - No major additional
and proposals, if any, investment is required.
being implemented for
reduction of consumption
of energy
(c ) Impact of the
measures - Not applicable
at(a) and (b) above for
reduction of energy
consumption and
consequent impact
on the cost of production
of goods.
B. Technology Absorption
Particulars regarding Research & Development, Technology Absorption,
Adaptation and Innovation are given under in prescribed Form B.
FORM B
1. Research & Development (R & D) :
(i) Specific Areas 1. LED based TATA NOVA tail
in which R&D lights testing and E
carried out by Homologation. ARAI
the Company Certification launched and
sets sold.
2. LED based 600 * 600 mm
recessed fitting for use in
Commercial Complexes
commercialized and sold in
bulk.
3. Bulk head fixtures for general
lighting on AC mains
commercialized and sold
several pieces..
4. Ministry of New and Renewal
Energy (MNRE) type test
approved Home Lighting
System for use in remote
locations. Home lighting system
commercialized and sold.
5. MNRE type test approved street
lighting system for use in Urban
and remote areas. Production
commercialized and sold in bulk
quantities.
6. MNRE approved lantern under
type testing and approval
completed.
7. TERI lanterns under the Bill
Clinton Fund approved for
supply and production
commercialized.
8. Introduction of Sparkle for mass
consumer Understanding of
LED. We have sold more than
25000 such units for generating
awareness of LED.
(ii) Benefits derived 1. Power saving.
as a result of the 2. Power provided to areas
above R&D where grid has not reached.
Installed 15 KW power
generating capacity till last
financial year.
(iii) Future Plan of : The Company will undertake
Action : R&D activities in the
organization to improve quality
and reduce cost by increasing
the raw material efficiency and
reducing wastage.
To commercialize the products
developed.
Penetrate market. Reduce cost
and enhance quality To
introduce Organic LED.
To introduce sensors.
To introduce LED 8Watt general
lighting lamps.
(iv) Expenditure : During the year Company has
on R & D developed and completed
tooling for LED based tail lights
and expenditure incurred for
design and tooling fees was 200
lacs INR.
2. Technology Absorption, Adaptation and Innovation
(i) Efforts in brief : Technology to manufacture
technology Halogen Lamps and CFL
absorption, Lamps has been fully
adaptation absorbed.
innovation
(ii) Benefits derived : Stabilized Operations
as a result
of the above efforts.
(iii) Details of technology imported during last five years:
(a) Technology Imported : tail lamp
manufacturing.
(b) Year of Import : 2010.
(c) Has technology been
fully absorbed : yes
(d) If not fully absorbed,
area where this : N.A.
has not taken place.
C. Foreign Exchange Earnings and Outgo
Current Year Previous Year
PARTICULARS
(Rs. in Lacs) (Rs. in Lacs)
1. Foreign Exchange Earnings 12542.38 9925.24
2. Foreign Exchange Outgo - - -
(a) Raw Materials 11017.68 14377.29
(b) Capital Goods 183.38 767.94
(c) Spare Parts 220.10 778.13
(d) Foreign Traveling/ 83.51 103.27
Selling Expenses
(e) Dividend 85.82 775.38
D. Export Activities
Activities relating to exports,
initiatives taken to increase The Company is taking necessary
steps to increase
exports; development of new export
markets for products export activities.The Company is
having a unit in
and services; and export plans: NSEZ. The company is trying to
acquire marketing company in
Europe.
PERSONNEL
Report on particulars of the employees required in terms of Section 217
(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975, is as under:
Sr. E-Name Age Designation No.
1. S K Neogi 65 Executive Director
2. Amar Singh Saini 60 Director Operations
3. Pawan Kumar Sharma 59 General Manager-Sales
4. Arvind Raman 43 General Manager
Operations
5. Rakesh Zutshi 42 Director Sales & Mktg.
6. Sanjeev Pandiya 49 Director Finance
7. Lalit Ramsharan Bhatia 44 General Manager-SCM
1. C.B.Satija 63 Vice President
2. Muralidhar Manvi 45 VP-luminaires
3. Devarshi Deb 43 Vice President-HR
4. Sanjiv Kashyap 46 CFO & CS
5. Seema Arora 38 Marketing Head
6. Rajesh Kochhar 53 Managing Director
7. Rajiv Prasad 49 Managing Director
Remuneration
Sr. No. E- Name Received Qualification
(Rs.)
Employed throughout the year
1. S K Neogi 3491358 M.Tech, BSC(H)
2. Amar Singh Saini 3055008 D.M.E
3. Pawan Kumar Sharma 1956022 B.com., Diploma in
Business Management
4. Arvind Raman 2003835 B.E. (Industrial&
Prod. Engg.)
5. Rakesh Zutshi 3776280 BSC., MBA
6. Sanjeev Pandiya 4738210 C.A. (Inter), ICWA
(Inter), MBA
7. Lalit Ramsharan Bhatia 2294257 B.SC (Power Electronics)
Employed for part of the year
1. S K Neogi 977162 C.A.
2. Amar Singh Saini 487135 MBA (Marketing)
3. Pawan Kumar Sharma 188777 PGDPM
4. Arvind Raman 158166 ACA, ACS, PGDFM
5. Rakesh Zutshi 72313 MBA
6. Sanjeev Pandiya 5472268 B.E. Electronics
7. Lalit Ramsharan Bhatia 9606944 B.E. Electronics, PGDM,
IIM Bangalore
Date of
Sr. E- Name Experience Comm. of Last
No. (Years) Employment Employment
1. S K Neogi 40 03.06.1993 HMTLtd.
2. Amar Singh Saini 39 03.05.1991 Ece Industries
Ltd.
3. Pawan Kumar Sharma 40 01.04.1989 Halonix Electric
Ltd.
4. Arvind Raman 18 02.01.2008 ITC Ltd.
5. Rakesh Zutshi 20 09.07.2007 Gujrat Glass Ltd.
6. Sanjeev Pandiya 23 14.10.2008 Renuka Sugar Ltd.
7. Lalit Ramsharan Bhatia 14 05.02.2009 Supreme
Industries
1. S K Neogi 36 02.06.2008 Surya Roshini
Ltd.
2. Amar Singh Saini 21 11.02.2010 Ingersoll Rand
3. Pawan Kumar Sharma 18 02.03.2010 Quatrro
4. Arvind Raman 21 15.03.2010 Hero Motors
Limited
5. Rakesh Zutshi 14 15.03.2010 Beetel Teletech
Ltd.
6. Sanjeev Pandiya 32 16.11.2009 Landis + Gyr
Limited
7. Lalit Ramsharan Bhatia 26 10.05.2007 Gujrat Glass
Ltd.
- The employment is contractual
- The terms and conditions of employment are based on the board
resolution, shareholdersà resolution and appointment letter.
- Nature of duties of all the above personnel is to look after
day-to-day activities of the Company under the supervision of Board of
Directors of the Company.
- No employee as mentioned above are related to each other.
ACKNOWLEDGEMENT
Your Directors wish to place on record their gratitude to NSEZ
Authorities, Banks, Business Associates and Shareholders for their
unstinted support, assistance and co-operation.
Your Company and its Directors also acknowledge with thanks the full
fledged co-operation received from the employees at all levels.
For and on behalf of the Board
Place : Noida RAJ KRISHAN SAHGAL
Date : 10.08.2010 Chairman