cover page 1-4 - bombay stock exchange...3. to appoint a director in place of mr. pravin g. shah who...

42nd ANNUAL GENERAL MEETINGDate :- 27th September, 2011Day :- TuesdayTime :- 11.30 a.mPlace :- Babasaheb Dahanukar Sabhagriha,

Maharashtra Chamber of Commerce Trust,Oricon House, 6th floor, 12 K. Dubhash Marg,Fort, Mumbai - 400001.

CONTENTS Page No.

Corporate Information 2

Notice 3

Directors’ Report 5

Management Discussion and Analysis Report 8

Report on Corporate Governance 10

Auditors’ Report 18

Balance Sheet 21

Profit and Loss Account 22

Cash Flow Statement 23

Schedules forming part of Accounts 24

Significant Accounting Policies and Notes to Accounts 29

Schedule of Additional Information 34

Balance sheet Abstracts and General Business Profile 36

Annual Report 2010 - 2011


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BOARD OF DIRECTORS MANAGEMENT TEAMMrs.Bhavna H. Mehta Mr. R.G. TrasiMr. Hasmukh J. Shah Mr. Mukesh DoshiMr. Pravin G. Shah Mr. E.K. LalkakaMr. Manoj P. MehtaMr. Kisan R. ChokseyMr. Venkitaraman S. Iyer

COMPANY SECRETARY SHARE REGISTRAR & TRANSFER AGENTSMr. Bhavin P. Rambhia Adroit Corporate Services Pvt. Ltd.

Unit : Ruttonsha International Rectifier Limited19/20, Jaferbhoy Industrial Estate,First Floor, Makwana Road, Marol Naka,Andheri (East), Mumbai – 400059.Tel. No. 022-28594060/6060Fax No :- (022) 28503748Email :- [email protected]

STATUTORY AUDITORS INTERNAL AUDITORSAjay Shobha & Company Bhandarkar & KaleChartered Accountants Chartered Accountants.

BANKERSUnion Bank of IndiaState Bank of India

REGISTERED/CORPORATE OFFICE WORKS/ FACTORY139/141, Solaris No- 1, ‘B’ Wing, International House.First Floor, Saki-Vihar Road, Plot No. 338, Baska.Powai, Andheri (East), Taluka : Halol, Dist.: PanchmahalMumbai – 400 072. GUJARAT - 389350Tel. No.022-28471956/57/58Fax No.(022)28471959E-mail – [email protected] – www.ruttonsha.com

CORPORATE INFORMATION

IMPORTANT COMMUNICATION TO MEMBERS

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperlesscompliances by the companies and has issued circulars stating that service of notice / documents including Annual

Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, membersare requested to register their e-mail addresses by sending us an e-mail to [email protected] or

[email protected] mentioning your DP ID Client ID / Folio No.,Name of Shareholder with Joint Names, E-mail ID, and No of Shares held in the Company.

Alternatively, you can also send us duly filled form provided with this Annual Report at :-Adroit Corporate Services Pvt. Ltd., Unit: Ruttonsha International Rectifier Ltd,

19/20, Jaferbhoy Industrial Estate, 1st floor, Makwana Road, Marol Naka,Mumbai-400059, Maharashtra


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NOTICE is hereby given that the Forty Second Annual General Meeting of the members of RUTTONSHA INTERNATIONAL

RECTIFIER LIMITED will be held on Tuesday 27th September, 2011 at 11.30 a.m, at Babasaheb Dahanukar Sabhagriha,

Maharashtra Chamber of Commerce Trust, Oricon House, 6th floor, 12 K. Dubhash Marg, Fort, Mumbai - 400001, to transact the

following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2011 and the Profit and Loss Account for

the year ended on that date together with the report of Directors’ and Auditors’ thereon.

2. To Declare a Dividend on Equity Shares.

3. To appoint a Director in place of Mr. Pravin G. Shah who retires by rotation and being eligible offers himself for

re-appointment.

4. To appoint a Director in place of Mr. Kisan R. Choksey who retires by rotation and being eligible offers himself for

re-appointment.

5. To appoint Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of the next

Annual General Meeting and to fix their remuneration and to pass the following resolution thereof :

“Resolved that M/s Ajay Shobha & Co., Chartered Accountants, Registration No. 317031E be and are hereby

re-appointed as the Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the

conclusion of the next Annual General Meeting on such remuneration as may be determined by the Board of Directors

of the Company.”

NOTES :

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on a poll instead

of himself, and proxy so appointed need not be a member of the Company. In order to be effective, proxy form should

be deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting.

2. The Register of Members and the Share Transfer Books of the Company will remain closed from Saturday 24th

September, 2011 to Tuesday 27th September, 2011 (both days inclusive).

3. The dividend on equity shares, if declared at the 42nd AGM will be credited/dispatched on or before 24th October, 2011

to those members whose names appear in the Company’s Register of Members on 23rd September, 2011 in case of

shares held in physical form. In respect of the shares held in dematerialised form, the Dividend will be paid to those

members whose names are furnished by NSDL and CDSL as the beneficial owners as on that date.

4. Corporate members intending to send their authorised representatives to attend the meeting are requested to send to the

Company a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at

the meeting.

5. Members holding shares in physical form are requested to notify/send, quoting their folio number about any change in

their address/mandate/bank details to the Company’s Registrar and Transfer Agents Adroit Corporate Services Pvt. Ltd.

(Unit: Ruttonsha International Rectifier Limited) at 19/20, Jaferbhoy Industrial Estate, First Floor, Makwana Road, Marol

Naka, Andheri (East), Mumbai – 400059.

6. Members holding shares in the electronic/dematerialised form are advised to inform changes in their address/bank

mandate directly to their respective Depository Participants.

7. Intimation of your E-mail Id for receiving Notice of various Meetings/ Annual Reports and other documents/updates

from the Company.

Pursuant to Circular No. 17/95/2011 CL-V dated 21/04/2011 and 29/04/2011 issued by the Ministry of Corporate Affairs,

Govt. of India, shareholders desirous of receiving Notice of various Meetings/ Annual Reports and other documents/

NOTICE


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NOTICE (Cont’d...)

updates from the Company through e-mail may intimate their E-mail Id and any changes therein from time to time to the

Depositories (in case of shareholding in Demat mode) and to our Registrar and Transfer Agents (in case of shareholding

in Physical Share Certificates) with a view to pledge their support towards Green Initiative to Save Paper, Save

Environment campaign.

8. Members are requested to bring their Attendance Slip and copy of the Annual Report at the meeting, as copies of the

same will not be distributed at the meeting. Attendance Slip should be submitted at the entrance of the hall. For the

convenience of Members, a copy of attendance slip and proxy form are enclosed at the end of this report.

9. Members desirous of asking any questions at the Annual General Meeting are requested to send their questions so as

to reach the Company at least 10 days before the Annual General Meeting so that the same can be suitably replied, to

the satisfaction of shareholder.

10. Members holding shares in physical form are requested to consider converting their holding to dematerialised form to

eliminate all risks associated with physical shares and to enable smooth operations in dealing with their shares.

Members are requested to contact the Company or its Registrar and Transfer Agents – Adroit Corporate Services Private

Limited for any assistance, in this regard.

11. Members holding shares in Multiple Folios in identical order of names are requested to send to the Company or its

Registrar and Transfer Agents (RTA), the details of such folios together with the share certificates for consolidating their

holdings into a single folio.

12. As per latest available bank details on dividend payment, there is still ` 2,26,930/- lying in Unpaid Dividend Account of

the Company awaiting Dividend claims from the shareholders. We hereby request our shareholders who have not

received their Dividend for the Financial Year 2009-10 to kindly claim the same by contacting our Registrar and Transfer

Agents or you may also contact us at our Registered Office for the same.

13. In terms of SEBI circular no.MRD/DoP/Cir-05/2009 dated 20th May 2009, it is now mandatory for the transferee of the

physical shares to furnish copy of PAN card to the Company or its RTA for registration of transfer of shares.

Shareholders are requested to furnish copy of PAN card at the time of transferring their physical shares.

14. Members holding shares in physical form may obtain the Nomination forms from the Company’s Registrar and Share

Transfer Agents (RTA). Members holding shares in electronic form may obtain the Nomination Forms from their

respective Depository participants.

15. Brief Details in respect of Directors seeking re-appointment at this Annual General Meeting as required under Clause 49

of the Listing Agreement with the Stock Exchange is provided in the Report on Corporate Governance forming part of

the Annual Report.

By the order of the Board of Directors

Place : Mumbai Bhavin P. Rambhia

Date : 30th May, 2011 Company Secretary


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Dear Members,

Your Directors have pleasure in presenting the Forty Second Annual Report on the business and operations of the Companyand the financial accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS AND OPERATIONS : (` in Lacs)

DIRECTORS’ REPORT TO THE SHARE HOLDERS

Particulars Year ended Year ended31.03.2011 31.03.2010

Gross Turnover 2824.36 2179.53

Operating Profit (before Interest and Depreciation) 456.87 412.93

Less - (i) Interest 120.95 113.67

(ii) Depreciation 117.58 116.26

Profit for the year before Tax 218.34 183.00

Less - Provision for Taxation 69.82 80.12

Profit after Tax 148.52 102.88

Less - Prior period adjustments 1.39 0.51

Profit after prior period adjustments 147.13 102.37

Add - Balance brought forward from previous year 220.51 166.82

Amount Available for Appropriation 367.64 269.19

Less - Appropriations – (i) Proposed Dividend on Equity Shares 52.18 41.74

(ii) Dividend Distribution Tax 8.67 6.93

Balance carried to Balance Sheet 306.79 220.52

PERFORMANCE :

During the financial year under review, your Company took various growth initiatives to improve sales volumes, which resultedin an impressive performance for the year. The income from operations and other income for financial year improved to` 2522.79 Lacs as against ` 2003.80 Lacs in the previous year, showing a growth of 25.90%. Operating Profit before Depreciation, Interest and Tax increased by 10.64% from ` 412.93 Lacs to ` 456.87 Lacs.Net profit after tax increased from `102.37 Lacs to ` 147.13 Lacs showing an increase of 43.72%.

DIVIDEND

Your Directors have decided to continue rewarding the shareholders due to improved performance of the Company and hence,for the second successive year, have recommended a dividend, of ` 0.75 per Equity Share of ` 10/- each for the financial yearended 31st March, 2011 (Last year ` 0.60) subject to your approval at the ensuing Annual General Meeting.

The dividend payout for the year under review has been formulated in accordance with the Company’s policy to paysustainable dividend linked to long term performance, keeping in view the Company’s need for capital, for its growth plans andthe intent to finance such plans through internal accruals to the maximum.

DIRECTORS

Mr. Pravin G. Shah and Mr. Kisan R. Choksey, Directors of the Company, are retiring by rotation and being eligible, offerthemselves for re-appointment.

DEPOSITS

Your Company has not accepted any fixed deposits during the year 2010-11 and there are no outstanding fixed deposits fromthe public as on 31st March, 2011.


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DIRECTORS’ REPORT TO THE SHARE HOLDERS (Cont’d...)

AUDITORS

M/s. Ajay Shobha & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the conclusion of this AnnualGeneral Meeting and being eligible, offer themselves for re-appointment. The Company has received a letter from the retiringauditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of TheCompanies Act, 1956 and that they are not disqualified from re-appointment within the meaning of Section 226 of the said Act.

AUDITORS’ REPORT

The Auditors’ Report is self-explanatory and do not call for any further clarifications/explanations.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the listingagreement is presented in a separate section forming part of the Annual Report.

CERTIFICATIONS

1) ISO 9001 : 2008

Your Company has obtained ISO 9001:2008 Certification, which is internationally recognized for quality managementsystems. The scope of certificate is design, manufacture, and supply of Semiconductor Devices and Rectifier Equipments.The ISO Certification lends international recognition to the Company and will help boost sales and manufacturing ofSemiconductor Devices and Equipments.

2) CERTIFICATE OF RECOGNITION

Your Company was recognized as Export House and conferred Certificate of Recognition by the Ministry of Commerceand Industry, Government of India, thereby adding one more feather in its achievements.

CORPORATE GOVERNANCE

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governanceas stipulated under the aforesaid Clause 49, is attached to this Report.

INFORMATION REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARDOF DIRECTORS) RULES, 1988.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Conservation of Energy

The requirements of Disclosure with respect to Conservation of Energy in prescribed format as per Section 217(1)(e) of TheCompanies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988,is not applicable to our Company.

The Company uses electricity as a major source of energy. Adequate steps for energy conservation, power factorimprovement have been taken wherever feasible. For effective treatment of effluents the Company has constructed anEffluent Treatment plant. There is adequate provision for the treatment of fumes resulting from the use of Sulphuric, Nitric,Hydrofluoric and other acids required for production.

b) Technology Absorption

Your Company has received complete technical know how for Silicon Rectifiers and Silicon Controlled Rectifiers upto 30 mmdevices from M/s. International Rectifier Corporation, California, U.S.A. The erstwhile Orient Semi conductors Pvt. Ltd., nowamalgamated with the Company, received technical know from Silicon Power Corporation U.S.A (an ex. General Electricfacility) for manufacturing semi-conductor devices upto 125 mm devices. The Company has not established a separateResearch & Development Department. However, routine research and development in the related field are being carried outby the Company as per customer requirements.

c) Foreign Exchange Earnings and Outgo

Exports during the year were ` 198.15 lacs against ` 428.85 lacs in the previous year.


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I) Foreign Exchange used –

(1) Raw materials, components and consumables – ` 705.27 lacs

(2) Capital goods – Nil

(3) Others – ` 6.72 lacs

II) Foreign Exchange earned – ` 198.15 lacs

PARTICULARS OF EMPLOYEES

During the financial year under review, none of the Company’s employees were in receipt of remuneration as prescribed undersection 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and hence noparticulars are required to be disclosed in this Report.

DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors responsibilitystatement, the Board of Directors of your Company confirm that:

1. in preparation of the annual accounts for the year ended 31st March 2011, the applicable accounting standards havebeen followed and that no material departures have been made from the same;

2. they have selected such accounting policies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2011and of the Profit and Loss Account for the year ended on that date;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;

4. they have prepared the attached annual accounts on a ‘going concern’ basis.

STATUTORY COMPLIANCE

Your Company gives highest priority to statutory compliances of all the applicable laws, rules and regulations. The Companyhas systems in place to remain updated with the changes in various law, rules and regulations. An affirmation regarding thecompliance of the statues by the Senior Executive is placed before the Board on quarterly basis for its review.

ACKNOWLEDGEMENTS

Your Directors wish to thank all the Members, Clients, Investors, Dealers, Suppliers, Bankers and the Government for theircontinued support during the year. Your Directors also wish to place on record their sincere appreciation for the contributionmade by employees of the Company at all levels. Our consistent growth was made possible by their hard work, co-operationand support.

For and on behalf of the Board of Directors

Place : Mumbai Hasmukh J. ShahDate : 30th May, 2011 Chairman

DIRECTORS’ REPORT TO THE SHARE HOLDERS (Cont’d...)


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INDUSTRY OVERVIEW

Indian economy has made tremendous growth in various fields such as expansion of road and railway network throughout thecountry, modernization of airports, etc. Power being one of the largest used items in business establishments, the demand forthe electrical equipments / machineries has gone up over the years. The Company at present is catering to domestic as wellas export demand. With the Indian economy growing by 8 to 9 % p.a., the demand for these products is expected to go upconsiderably.

BUSINESS REVIEW(a) Company Outlook : Your Company enjoys the advantage of being the only Company in private sector to manufacture

Semiconductor Devices from Diffusion stage and it takes pride in being called a pioneer in Manufacturing Diodes,Thyristor Modules, Rectifier Assemblies, Traction Rectifiers, Electrochemical Rectifiers and Battery Chargers. Thesedevices form one of the key components in Welding Business, DC Drives, Railways, UPS, Battery Chargers, DefenceIndustry and Power Sector. Over the years, the Company has achieved highest levels of Quality, Efficiency andSustainability in the Industry.

(b) Operational Performance Review: As the Company faced stiff competition in the Devices Business from the un-organised Sectors and other big players in the said Sector, which hitherto was being catered to by the Company, themove of entering the Niche market has started paying dividend and is contributing significantly not only to the top linebut to the bottom line as well.

In the past the Company had strategically decided to re-enter Semi-Conductor based equipments, Modules andCapsules Business as a forward integration in a phased manner to climb up the value chain and be a known andsignificant player in the related sector. The Company has successfully ventured into Business for supply of Equipmentsto Indian Railways despite stiff and cut throat competition. During the Financial Year 2010-11, the Company witnessedremarkable turnover of ` 2500.62 Lacs as Compared to ` 1983.22 Lacs last year achieving a growth rate in the TopLine at 26%.

(c) Technical Performance Review : The Company for the first time was instrumental in designing and manufacturing 1500Volts DC B.G. A.C. EMU for Central Railways. The Company also developed and operated BGMU for Western Railwaywhich is running sucessfully. 3 Mega Watt drive for steel industry was also developed and commissioned sucessfully bythe Company.

(d) Opportunities and Threats : Since last two years the Government of India has initiated several power generation andinfrastructure projects, in order to overcome shortage of power in the several parts of our country and to improve generalneeds of the people of India. The said sectors are now major interest areas for the Company. Our marketing team hasundertaken aggressive programme to satisfy the increasing demand from the related industry. However, day by day theunorganized sector is giving stiff competation and cheap imports continue to pose threats to the organized sector.

SEGMENT WISE PERFORMANCE:

Segment reporting as per Accounting Standard AS-17 is not applicable as the Company operates only in one segment i.e.Electronics.

OUTLOOK:

India is emerging as one of the largest electronics markets in the world, with an estimated 11 % global market share by 2015.The Indian Railways is planning to invest sizeable amount in expansion and modernisation; out of the budget allocationsdemanded by the Ministry of Railways, in the current financial year and your Company has already taken steps to increase itspresence in the segments where it has established its strong base. The Indian Government is also encouraging the Powersector – both conventional and alternative and the outlook appears to be better than previous years.

INTERNAL CONTROL SYSTEMS AND OTHER ADEQUACY

The Company’s internal control systems are well designed to provide reasonable assurance that assets are safeguarded,transactions are properly recorded in accordance with Management authorization and accounting records are adequate forpreparation of financial statements and other financial information. The Audit Committee formed under clause 49 of the listingagreement with the Stock Exchange looks after adequacy, relevance and effectiveness of the internal control systems alongwith compliance of Company strategies as well as formalities as required under various statutory laws, rules and regulations.

FINANCIAL PERFORMANCE

(i) Profits and Earnings : During the Year, the Company showed an increase in Gross Turnover to ` 2824.36 Lacs in2010-11 as compared to ` 2179.53 Lacs in 2009-10. The Bottom line also showed a growth of ` 147.13 Lacs duringthe year as against ` 102.37 Lacs last year. Earning before Depreciation, Interest and Tax (EBIDTA) showed an

MANAGEMENT DISCUSSION AND ANALYSIS REPORT


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increase in absolute terms at ` 456.87 Lacs in 2010-11 as compared to ` 412.93 Lacs last year. Inspite of increase inoperating expenses by 27% as compared to last year, due to better product mix the Company has earned a PAT of` 147.13 Lacs as against ` 102.37 Lacs in the previous year.

(ii) Capital Expenditure : During the year under review, the Company has not spent any substantial amount on CapitalExpenditure.

(iii) Interest Costs: Inspite of Ploughing back of funds, from internal accruals, and repayment of term loan, the high cost offunding and high working capital off take has resulted in increase in Interest cost from ` 113.67 Lacs to ` 120.95 Lacs.

HUMAN RESOURCES :

The Directors express their appreciation for the contribution made by the employees to the significant improvement in theoperations of the Company.

CAUTIONARY NOTE :

The statement in the Management Discussion and Analysis describing the Company’s objectives, projections and estimatesmay be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed.Important factors affecting the Company’s operations include global and domestic supply and demand conditions affecting theselling prices of finished goods, input availability and prices, changes in Government regulations, tax laws, economicdevelopments within the country and other factors such as litigation and industrial relations.

For and on behalf of the Board of Directors

Place : Mumbai Hasmukh J. ShahDate : 30th May, 2011 Chairman

MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Cont’d...)


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1. Company Philosophy and Corporate Governance :

Our Company firmly believes that Corporate Governance is about application of best management practices, compliance ofvarious statutory laws and adherence to ethical standards in order to achieve the Company’s objective of enhancingshareholders value and discharge of social responsibility. Accordingly, timely and accurate disclosure of information regardingthe financial situation, performance, ownership and governance of the Company is an important part of Corporate Governance.

At the highest level, the Company continuously endeavours to improve upon these aspects on an ongoing basis and adoptsinnovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment andmotivation, fostering a healthy growth and development of human resources to take the Company forward.

We have implemented the mandatory requirement of Corporate Governance as set out under clause 49 of the ListingAgreement with the Stock Exchange.

In terms of Clause 49 of the Listing agreement executed with the Stock Exchange, given below are the details of corporategovernance compliances:

2. Board of Directors

(a) Composition of the Board

The Board comprises of six Directors consisting of professionals selected from diverse fields such as engineering,finance and business management and all of them being non–executive directors out of which three areIndependent Directors. The day to day management of the Company is done by key management team ofexecutives and professionals subject to the supervision and control of the Board of Directors.

(b) Details of Composition, Meetings and Attendance of the Board

The Board meets frequently to discuss and decide on business policy and finalise strategy, among other routineagenda items. The Agenda for the Board / Committee meetings is generally accompanied by background material,notes and other material information which is circulated among the Directors well in advance to facilitatediscussion for taking informed decisions.

The Board of Directors duly met 6 times during the financial year 2010-11 on the following dates namely 29th

May, 2010, 23rd July, 2010, 31st July, 2010, 23rd August, 2010, 29th October, 2010 and 31st January, 2011 andthe gap between the meetings did not exceed 4 months as stipulated under clause 49 of the Listing Agreement.

The Company Secretary attends all the Board / Committee meetings and ensures compliance of all the statutorylaws, rules and regulations. The draft minutes of the proceedings of the meetings of the Board/Committees arenoted and circulated among the members of the Board/Committees for inviting their inputs/comments if any, andincorporating the same for preparation and finalisation of Minutes, in consultation with the Chairman.

Following is the summary of Composition and Attendance of the Directors at the meetings of the Board heldduring the year and at the last Annual General Meeting (AGM) as under:

Mrs. Bhavna Mehta Non-executive Director 6 Nil No -(Promoter)

Mr. Hasmukh J. Shah Alternate Director to 6 4 Yes -Mrs. Bhavna Mehta

Mr. Manoj P. Mehta Non-executive Director 6 6 Yes -(Professional)

Mr. Kisan R. Choksey Non-Executive Director 6 6 Yes Yes, Chairman(Independent) in 3 Committees

Mr. Pravin G. Shah Non-Executive Director 6 3 Yes -(Independent)

Mr.Venkitaraman Non-Executive Director 6 2 No Yes, MemberS. Iyer (Independent) in 1 Committee

Name of Director

Category of Directors(Whether Promoter/

Executive/Non Executive/Independent)

No. of Boardmeeting

heldduring

the year

No. of BoardMeetingsattendedduring

the year

Attendanceat last AGM

held on23/08/2010

Chairman/Committee Membership

in other Public Ltd.Companies

REPORT ON CORPORATE GOVERNANCE


11

(c) Disclosures regarding appointment or reappointment of Directors

Mr. Pravin G. Shah and Mr. Kisan R. Choksey retire by rotation at the ensuing Annual General Meeting and beingeligible offer themselves for reappointment. A brief resume and additional information required under Clause 49of the Listing Agreement is as under:

Mr. Pravin G. Shah has been Director of the Company since December 2005. He holds MS Degree in ChemicalEngineering and is a Businessman having more than 42 Years of experience in Chemical Industry, Trade andCommerce. He is Director in various Companies such as Multi-Arc India Limited, Creative Solutions PrivateLimited. He is also associated with various Educational and Welfare Institutions.

He is Chairman of Company’s Share Transfer and Investor Grievance Committee. He holds 2500 shares in theCompany.

Mr. Kisan R. Choksey has been Director of our Company since October 2005. He is a Commerce graduate andhas experience of more than 46 years in Financial Sector. He is member of the Bombay Stock Exchange since1974. He became a Director of BSE and held the post of Treasurer for 2 years. He was elected as Vice Presidentof Bombay Stock Exchange in the year 1992-93. He is also Director in Simplex Castings Limited and Chairmanof leading brokerage house Kisan Ratilal Choksey Shares & Securities Pvt. Ltd.

He is Chairman of Company’s Audit Committee. He holds 4100 shares in the Company.

3. BOARD COMMITTEES

The Board Currently has 3 Committees viz :- I) Audit Committee, II) Nomination and Remuneration Committee andIII) Share Transfer and Investor’s Grievances Committee. The Board is responsible for constituting, assigning and co-opting the members of the Committees.

I. Audit Committee

The Company has an independent audit committee which plays an important role in financial reporting ofperformance and review of internal control procedures. All the members of the Audit Committee are financiallyliterate and have sound accounting knowledge and financial management expertise.

The Audit Committee comprises of three Non- Executive Directors ;- Mr. Kisan R. Choksey – Chairman,(Independent Director) having Audit, Financial and Accounting knowledge, Mr. Venkitaraman S. Iyer, CharteredAccountant (Independent Director) and Mr. Manoj P. Mehta, Chartered Accountant as members.

Mr. Bhavin P. Rambhia Company Secretary acts as the Compliance Officer to the committee.

Role of Audit Committee:

(a) Overseeing the Company’s financial reporting process and disclosure of financial information to ensure thatthe financial statements are correct, sufficient and credible.

(b) Recommending the appointment and removal of external Auditor, fixation of audit fees and also approval ofpayment for any other services.

(c) Reviewing with the management the annual financial statements before submission to the Board, focusingprimarily on-

i) any changes in accounting policies and practices.

ii) major accounting entries based on exercise of judgment by management.

iii) adequacy and reliability of the internal control system.

iv) qualification in draft audit report.

v) significant adjustments arising out of audit.

vi) the going concern assumption.

(d) Compliance with Stock Exchange and legal requirements concerning financial statement.

(e) Any related party transactions. i.e. transactions of the Company of material nature, with promoters or themanagement, their subsidiaries or relatives, etc. that may have potential conflict with the interests of theCompany at large.

(f) Reviewing with the management the functioning of the Whistle Blower mechanism, in case same isexisting.

(g) Reviewing with the management the quarterly financial statements before submission to the Board.

REPORT ON CORPORATE GOVERNANCE (Cont’d...)


12


(h) Reviewing with the management, external and internal auditors, the adequacy of the internal controlsystem.

(i) Reviewing the adequacy of the internal audit function, including the structure of the internal auditdepartment, staffing and seniority of the official heading the department, reporting structure coverage andfrequency of internal audit.

(j) Discussion with internal auditors on any significant findings and follow up thereon.

(k) Reviewing the findings of any internal investigations by the internal auditors into matters where there issuspected fraud or irregularities or failure of internal control systems of a material nature and reportingthe matter to the Board.

(l) Discussion with the external auditors before the audit commences, nature and scope of audit as well ashave post audit discussion to ascertain any area of concern.

(m) Reviewing the Company’s financial and risk management policies.

(n) To look into the reasons for substantial defaults in the payment to the depositors, shareholders (in case ofnon-payment of declared dividends) and creditors.

Attendance of each Member at the Audit Committee meetings held during the year.

During the year 2010-11, four Audit Committee meetings were held on the following dates - 29th May 2010, 31st July2010, 29th October 2010 and 31st January 2011. The attendance of the members at the meeting were as follows:-

Sr. No. Name of Committee Member Status No. of Committee meetings

1. Mr. Kisan R. Choksey Chairman 4

2. Mr. Manoj P. Mehta Member 4

3. Mr. Venkitaraman S. Iyer Member 2

II. Remuneration Committee

The Company has formed a Remuneration Committee comprising of the following members-

Sr. No. Name of Members Status

1 Hasmukh J. Shah Chairman

2 Manoj P. Mehta Member

3 Kisan R. Choksey Member

4 Pravin G. Shah Member

The terms of reference of the Remuneration Committee are as mentioned below-

Appointment and retention strategies for employees.

Employees Development strategies.

Compensation (including salaries and salary adjustments, incentives/benefits, bonus, stock options) andperformance targets for the Chairman, Managing Director (MD) and Executive Directors (ED).

All Human Resources related issue.

Other key issues / matters as may be referred by the Board or as may be necessary in view of Clause 49of the Listing Agreement or any statutory provisions.

During the year under review one meeting of the Committee was held and attended by all the members.

The Company has not appointed Executive Director. The Company is managed by professional and experiencedexecutives under the guidance and supervision of the Board of Directors.

The details of the remuneration paid to the Non Executive Directors during the financial year 2010-11 are as follows:

The Non-Executive Directors Mr. Hasmukh J. Shah, Mr.Manoj P. Mehta, Mr. Kisan R. Choksey, Mr. Pravin G. Shah andMr. Venkitaraman Iyer were paid sitting fees of ` 2000/- for each Board meeting attended by them during the year.

No sitting fees are paid to the Directors for attending Committee Meetings.


13

III. Share Transfer and Investors’ Grievance Committee.

(a) The committee specifically looks into redressing of investors’ complaints with respect to transfer of shares,non-receipt of share certificate, and share transfer process. The committee also monitors and reviews theperformance and services standards of the Registrar and Transfer Agents of the Company.

(b) The Committee comprises of Mr. Pravin G. Shah as Chairman, Mr. Kisan R. Choksey and Mr. Hasmukh J.Shah as members. Mr. Bhavin P. Rambhia, Company Secretary acts as the Compliance Officer to theCommittee.

(c) Investor Grievance Redressal

Number of complaints received and resolved to the satisfaction of investors during the year under reviewand their break-up are as under :

Nature of Complaints Number of Complaints

Received Resolved

Non-Receipt of Annual Reports NIL NIL

Non-Receipt of Dividend Warrants 01 01

Non-Receipt of Share Certificates 01 01

Grievance Received through SEBI/ Stock Exchange NIL NIL

There were no investor complaints pending as on March 31, 2011.

(a) In order to expedite redressal of the investor grievances and complaints, the Company has developed adesignated e-mail id. All investors can send their queries and complaints to [email protected].

(b) All shares received for transfer were registered in favour of transferee and certificates despatched within amonth’s time, wherever the documents received were in order.

(c) All valid transfers received during the year ended 31.03.2011 have been acted upon.

(d) During the Financial Year 2010-11, 21 meetings of the Share Transfer and Investor Grievance Committeewere held on the following dates which were attended by all the members :-

15/04/2010, 30/04/2010, 15/05/2010, 31/05/2010, 30/06/2010, 15/07/2010, 31/07/2010, 14/08/2010, 20/08/2010, 15/09/2010, 30/09/2010, 15/10/2010, 30/10/2010, 15/11/2010, 30/11/2010, 15/12/2010, 31/12/2010,15/01/2011, 31/01/2011, 15/03/2011 and 31/03/2011.

4. General Body Meetings

The details of Last Three Annual General Meetings (AGM) of the Company are as follows:

2009-10 41st AGM Babasaheb Dahanukar Sabhagriha, Maharashtra Chamber 23rd August 2010 Nilof Commerce Trust, Oricon House, 6th Floor, at 11.30 a.m.12 K. Dubhash Marg, Fort, Mumbai - 400001.

2008-09 40th AGM Babasaheb Dahanukar Sabhagriha, Maharashtra Chamber 30th September 2009 Nilof Commerce Trust, Oricon House, 6th Floor, at 11.30 a.m.12 K. Dubhash Marg, Fort, Mumbai - 400001.

2007-08 39th AGM Babasaheb Dahanukar Sabhagriha, Maharashtra Chamber 27th September 2008 Nilof Commerce Trust, Oricon House, 6th Floor, at 11.30 a.m.12 K. Dubhash Marg, Fort, Mumbai - 400001.

FinancialYear

AGMSpecial

ResolutionsPassed

Venue Date and Time

There were no Special Resolutions passed by shareholders in last three Annual General Meetings of the Company.

5. Postal Ballot Resolutions

No resolutions were passed through Postal Ballot during the year. Presently there is no proposal for passing anyResolution through Postal Ballot till the ensuing AGM.



14

6. Disclosures

(a) There were no instances of non-compliance by the Company or penalty, strictures imposed on the Company bythe Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the lastthree years.

(b) Company has drafted “Whistle Blower Policy”. The Company has not denied access by any personnel of theCompany to the Audit Committee (in respect of matters involving alleged misconduct) and that it has providedprotection to “Whistle Blower” if there is any, unfair termination or other unfair prejudicial employment practices.

(c) Reconciliation of Share Capital Audit Report – Statutory Auditors of the Company has carried out Reconciliationof Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL)and the Central Depository Services (India) Limited (CDSL) and the total issued capital and listed capital. As perrecords, as on 31st March 2011, the Reconciliation of Share Capital Audit Report confirms that the total issued/paid-up capital is in agreement with the total number of shares in physical form and the total number ofdematerialized shares held in NSDL and CDSL.

(d) None of the transactions with any of the related parties were in conflict with the interest of the Company. TheDetails of materially significant related party transactions i.e. transactions of the Company of material nature withits promoters, the Directors or the Management, their subsidiaries or relatives, etc. are presented under Note no.2 (vi) in Schedule Q of Notes to Accounts forming part of this Annual Report.

7. Code of Conduct

Your Company has adopted a Code of Conduct for the Board members and Senior Management Personnel of theCompany in accordance with the requirements of Clause 49 (I)(D) of the Listing Agreement. The Code of Conduct hasalso been posted on the Company’s website. All the Board members and the senior management personnel haveaffirmed their compliance with the said Code of Conduct for the financial year ended 31st March, 2011. The declarationto this effect is signed by Mr. Manoj P. Mehta, Director of the Company forming part of this report.

8. Means of Communications

(a) Quarterly Results:- The Quarterly results of the Company are published in The Economic Times – English andGujarati edition, The Free Press Journal, and Nav Shakti news papers. As the results of the Company arepublished in newspapers, and intimated to the Stock Exchanges, hence quarterly/half-yearly reports are not sentto each shareholder.

(b) Annual Reports:- Annual Report containing, inter alia, Audited Annual Accounts, Consolidated FinancialStatements, Directors’ Report, Auditors’ Report and other important information is circulated to members and othersentitled thereto. Management Discussion and Analysis Report forming part of this Annual Report is also sent to theshareholders of the Company.

(c) The Company has not made any presentation to the institutional investors or to the analysts.

9. General Shareholder’s Information

i) 42nd Annual General Meeting

Date : 27th September, 2011

Time : 11.30 a.m.

Venue : Babasaheb Dahanukar Sabhagriha, Maharashtra Chamber of Commerce Trust,

Oricon House, 6th floor, 12 K. Dubhash Marg, Fort, Mumbai - 400001.

ii) Financial Year : 1st April, 2010 to 31st March, 2011.

iii) Date of Book closure : Saturday 24th September, 2011 to Tuesday 27th September, 2011 (Both daysinclusive)

iv) Dividend Payment date : On or before 24th October, 2011

v) Listing on Stock Exchange: The shares of the Company are listed on The Bombay Stock Exchange Ltd. (BSE)

vi) Stock Code : Bombay Stock Exchange (BSE) Scrip Code: 517035

ISIN Number : INE302D01016

vii) Dates for approval of : 1st Quarter: 4th week of July 2011

Quarterly Results for the : 2nd Quarter: 4th week of October 2011

Year 2011-2012* : 3rd Quarter: 4th week of January 2012

: 4th Quarter/Annual Results : 4th week of May 2012

(*Note – The above dates are tentative)



15

viii) Market Price data - (High/Low during each month of the Financial year : 2010-11)

Company’s Share Price at BSE

Month Monthly High (`̀̀̀̀) Monthly Low (`̀̀̀̀)

April 2010 15.68 13.00

May 2010 23.60 14.30

June 2010 19.25 15.25

July 2010 19.00 15.45

August 2010 22.60 17.95

September 2010 21.10 16.25

October 2010 21.85 18.15

November 2010 20.90 16.50

December 2010 18.60 16.20

January 2011 17.85 14.00

February 2011 16.38 13.75

March 2011 16.06 13.10

Stock Performance in Comparison to BSE SENSEXIndex Comparison

ix) Share Transfer System:Share transfers received in physical form are registered within 30 days from date of receipt.

x) Registrar and Transfer Agents : Adroit Corporate Services Pvt. Ltd.Unit : Ruttonsha International Rectifier Ltd.19/20, Jaferbhoy Industrial Estate.1st floor, Makwana Road,Marol Naka, Andheri (E)Mumbai – 400059Tel. No. : 28596060/28594060Fax No :- (022) 28503748Email :- [email protected]



16

xi) Distribution of Shareholding as on 31st March 2011.

(Nominal value of each share ` 10/-)

Upto 100 734 18.14% 64638 646380.00 0.93%

101 to 500 2761 68.22% 806233 8062330.00 11.59%

501 to 1000 365 9.02% 275531 2755310.00 3.96%

1001 to 2000 114 2.82% 175004 1750040.00 2.52%

2001 to 3000 38 0.94% 98368 983680.00 1.41%

3001 to 4000 11 0.27% 39880 398800.00 0.57%

4001 to 5000 6 0.15% 28150 281500.00 0.40%

5001 to 10000 9 0.22% 70894 708940.00 1.02%

10001 to 20000 2 0.05% 29625 296250.00 0.43%

20001 to 50000 2 0.05% 92625 926250.00 1.33%

50001 & Above 5 0.12% 5276292 52762920.00 75.84%

TOTAL 4047 100% 6957240 69572400.00 100.00%

No ofShareholding

No. ofshareholder’s % to total

Total Numberof shares Amount

% tototal capital

xii) Category of shareholders as on 31st March 2011

Sr.No. Classes of shareholders No. of shares held % to total capital

1 Promoters 5087958 73.13%

2 Banks 1400 0.02%

3 Trusts 213684 3.07%

4 Bodies Corporate 25433 0.37%

5 Clearing Member 300 0.00%

6 Corporate Body - Broker 2800 0.04%

7 Non-Resident shareholders 2620 0.04%

8 Resident shareholders 1623045 23.33%

TOTAL 6957240 100.00

xiii) Dematerialization of Shares and Liquidity :

The Company has received permission from NSDL and CDSL for dematerialization of its shares.

No. of Equity shares that have been dematerialized upto 31st March, 2011 are 60,52,901 i.e. 87.00 % of the total paid-up Equity Share Capital .

We take this opportunity to inform you that our Company’s scrip has been shifted from Trade for Trade Settlement -‘T’group to Normal Rolling Settlement -‘B’ group. As a result of this, shareholders will get better liquidity and value fortheir shares, also the earlier market lot of 100 shares has been removed and now shares can be traded in anydenominations, further settlement of our Company’s scrip can now be made in T+2 days as compared to squaring offthe trade on the same day earlier.

By way of this report Ruttonsha and its Management acknowledge the efforts made by its investors for converting theirphysical shareholding into demat mode, thereby resulting in elevation of our Company’s scrip from ‘T’ group to ‘B’group.

We once again appeal to all the shareholders and investors who have still not dematerialised their physical shares toget their holdings converted into demat mode to enable better price discovery, safe and smooth procedure for trading ofshares, avoiding loss or theft of physical shares, etc. In case you require any guidance in this regard and for any otherqueries/complaints or feedback you may contact our Registrar and Share Transfer Agents or you may also contact TheCompany Secretary at the Registered Office of the Company.



17

xiv) Outstanding GDR’s/ADR’s/Warrants/Convertible Instruments and their impact on equity: Not issued.

xv) Plant Location:

338, International House, Baska, Halol, Dist. Panchmahal, Pin - 389350, Gujarat

xvi) Address for Correspondence:

Shareholders correspondence should be addressed to the Company’s Registrar and Share Transfer Agents.

Shareholders may also contact the Company Secretary at the Registered Office of the Company for any assistance at:-

Ruttonsha International Rectifier Ltd.,

139/141, Solaris 1, ‘B’ Wing, First Floor, Saki-Vihar Road, Powai, Andheri (E) Mumbai 400072.

Tele Nos. 28471956 / 57 / 58 Fax No. 28471959

Please note – Shareholders holding shares in Demat form (electronic mode) should address all their correspondenceregarding change of address, non-credit/debit of shares after transfer, etc. to their Depository Participant.

xvii) Other information for shareholders –

Nomination facility –

Section 109A of the Companies Act, 1956 provides inter alia, the facility of nomination to shareholders. This facility ismainly useful for all holders holding the shares in single name. In case where the securities are held in joint names, thenomination will be effective only in the event of the death of all the holders.

Investors are advised to avail of this facility, to avoid the process of transmission of shares by law. Nomination form isavailable with the Company’s Registrar and Transfer Agents.

TO

THE MEMBERS OF RUTTONSHA INTERNATIONAL RECTIFIER LIMITED

I, Manoj P. Mehta, Director of the Company declare that all the Members of the Board and senior Management personnel haveaffirmed compliance with the Code of Conduct for the year ended 31st March, 2011.

Manoj P. MehtaMumbai, 30th May, 2011 Director

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of Ruttonsha International Rectifier Limited

We have examined the compliance of conditions of Corporate Governance by Ruttonsha International Rectifier Limited, for theyear ended 31st March, 2011, as stipulated in clause 49 of the Listing Agreement of the said Company with The Bombay StockExchange Limited.

The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was limited toa review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions ofthe Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Companyhas complied with the conditions of Corporate Governance as stipulated in the Clause 49 of the above mentioned ListingAgreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For AJAY SHOBHA & CO.Chartered Accountants

(Registration No.317031E)

(AJAY GUPTA)Place : Mumbai PartnerDate : 30th May, 2011 M. No.053071



18

To the Members of Ruttonsha International Rectifier Limited

1. We have audited the attached Balance Sheet of Ruttonsha International Rectifier Limited, as at 31st March 2011, theProfit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto.These financial statements are the responsibility of the Company’s Management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by the management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriateand according to information and explanation given to us, we enclose in the annexure hereto a statement on the mattersspecified in paragraphs 4 & 5 of the said Order to the extent applicable to company.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that :

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, werenecessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appearsfrom our examination of those books ;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreementwith the books of accounts;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report arein compliance with the applicable Accounting Standards referred to in Sub-section (3C) of Section 211 of theCompanies Act 1956;

e) On the basis of written representations received from the directors, and taken on record by the Board, we reportthat none of the directors are disqualified as on 31st March, 2011 from being appointed as a director in terms ofClause (g) of Sub section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accountsread together with significant accounting policies and notes thereon, gives the information required by theCompanies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March , 2011;

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date;and

iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.




AUDITORS’ REPORT


19

(Referred to in paragraph 3 of the Auditors Report of even date)

1. In respect of the Fixed Assets :-a) The Company has maintained proper records showing full particulars, including quantitative details and situation

of fixed assets.

b) The fixed assets are physically verified by the management according to a phased programme designed to coverall the items over a period of three years, which in our opinion, is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has beenphysically verified by the management during the year and no material discrepancies between the books recordsand the physical inventory has been noticed.

c) In our opinion, a substantial part of fixed assets has not been disposed off by the Company during the year andthe going concern status of the company is not affected.

2. In respect of Inventories:-

a) The inventories have been physically verified by the management during the year. In our opinion, the frequencyof verification is reasonable.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining properrecords of inventories. The discrepancies noticed on physical verification of inventories as compared to booksrecords were not material and have been properly dealt with in the books of account.

3. a) As per the information and explanations given to us, the Company has not granted any loan to the companies,firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In view our comment in para 3 (a) above, clause 4 (iii) (b) and 4 (iii) (c) of Paragraph 4 of the said Order is notapplicable to the Company.

c) As informed, the Company has taken unsecured loans from the directors covered in the register maintained underSection 301 of the Companies Act, 1956 on demand basis. The maximum amount outstanding during the yearwas ` 229.81 Lacs and the year end balance due to them was ` 217.99 Lacs.

d) In our opinion and according to the information and explanations given to us, the rate of interest and other termsand conditions of the loans taken by the Company are prima facie not pre-judicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal controlprocedures commensurate with the size of the Company and the nature of its business, with regard to purchase ofinventories and fixed assets and sale of goods and services. During the course of our audit, we have not observedcontinuing failure to correct major weaknesses in internal control system.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956 :

a) Based on the audit procedures applied by us and according to the information and explanations provided by theManagement, we are of the opinion that the transactions that need to be entered into the register maintainedunder Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuanceof such contracts or arrangements entered in the register maintained under Section 301 of the Companies Act,1956 and exceeding the value of Rupees five lacs in respect of each party during the year have been made atprices which are reasonable having regard to the market prices prevailing at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted anydeposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956, and the rules framedthere under. Therefore, Clause 4 (vi) of the paragraph 4 of the Order is not applicable.

7. The Company has an internal audit system, which in our opinion, is commensurate with the size of the Company andthe nature of its business.

ANNEXURE TO THE AUDITORS’ REPORT


20

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenanceof cost records under Clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

9. a) According to the records of the Company, undisputed statutory dues including Provident Fund, Employees’ StateInsurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutorydues have been generally regularly deposited with the appropriate authorities. According to the information andexplanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at31st March, 2011 for a period of more than six months from the date of becoming payable.

b) According to the information and explanations given to us and the records of the Company examined by us, thereis no amount due in respect of any disputed Sales-Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, etc.

10. The Company has no accumulated losses at the end of the financial year and has not incurred cash losses during thefinancial year ended 31st March, 2011 and also in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, the Company has notdefaulted in repayment of dues to banks.

12. According to the information and explanations given to us, the Company has not given loans and advances on the basisof security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions ofclause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer / trader inshares and securities. Accordingly, the provisions of clause 4 (xiv) of the paragraph 4 of the Order are not applicable tothe Company.

15. According to the information and explanations given to us and the records examined by us, the Company has not givenany guarantee for loans taken by others from banks or financial institutions.

16. In our opinion, on the basis of information and explanations given to us, on an overall basis, the term loans wereapplied for the purposes for which the loans were obtained.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to theinformation and explanations given to us, there are no funds raised on a short term basis that have been used for longterm investments.

18. During the year, the Company has not made any preferential allotment of shares to parties or companies covered in theregister maintained under section 301 of the Companies Act, 1956. Accordingly, clause 4(xviii) of the paragraph 4 of theOrder is not applicable.

19. The Company has not issued any secured debentures. Accordingly, Clause 4(xix) of the paragraph 4 of the Order is notapplicable.

20. The Company has not raised any money by way of public issue during the year.

21. During the course of our examination of the books of account and audit carried out in accordance with the generallyaccepted auditing practices in India and according to the information and explanations given to us, we have neithercome across any instance of fraud on or by the Company, noticed or reported during the year nor have we beeninformed of such case by the management.




ANNEXURE TO THE AUDITORS’ REPORT (Cont’d...)


21

BALANCE SHEET AS AT 31ST MARCH, 2011

As at 31st As at 31st

March, 2011 March, 2010Schedule `̀̀̀̀ `̀̀̀̀ ` `

SOURCES OF FUNDS :

1 SHAREHOLDERS’ FUNDS :(a) Share Capital “ A ’’ 110,072,400 110,072,400(b) Reserves and Surplus “ B ’’ 37,861,585 29,237,525

147,933,985 139,309,9252 LOAN FUNDS :

(a) Secured Loans “ C ’’ 55,343,560 65,808,052(b) Unsecured Loans “ D ’’ 23,198,575 20,330,925

78,542,135 86,138,977

3 DEFERRED TAX LIABILITY 18,329,115 15,947,291

TOTAL 244,805,235 241,396,193APPLICATION OF FUNDS :

4 FIXED ASSETS “ E ’’(a) Gross Block 220,038,656 218,013,611(b) Less : Depreciation 88,967,777 77,205,580

(c) Net Block 131,070,879 140,808,031(d) Capital Work in Progress 801,245 493,781

131,872,124 141,301,812

5 INVESTMENTS “ F ’’ 847,665 847,665

6 CURRENT ASSETS, LOANS AND ADVANCES(a) Inventories “ G ’’ 47,830,055 56,802,557(b) Sundry Debtors “ H ’’ 98,271,427 63,435,091(c) Cash and Bank Balances “ I ’’ 17,377,108 15,291,198(d) Loans and Advances “ J ’’ 15,401,095 15,723,589

178,879,685 151,252,4357 CURRENT LIABILITIES AND PROVISIONS “ K ’’

(a) Current Liabilities 49,841,994 37,690,780(b) Provisions 16,952,245 14,314,939

66,794,239 52,005,7198 NET CURRENT ASSETS [( 6 ) LESS ( 7 )] 112,085,446 99,246,716

TOTAL 244,805,235 241,396,193

NOTES TO ACCOUNTS “ Q ’’

As per our attached Report of even date

For AJAY SHOBHA & CO. FOR AND ON BEHALF OF THE BOARD OF DIRECTORSChartered Accountants(Regn. No. 317031E)

(Hasmukh J Shah) (Pravin G Shah)Director Director

(AJAY GUPTA)PartnerMembership No. 053071 (Manoj P Mehta) (Kisan R Choksey)

Director Director

Place : Mumbai (Venkitaraman Iyer) (Bhavin P Rambhia)Date : 30th May, 2011 Director Company Secretary


22

2010-2011 2009-2010Schedule `̀̀̀̀ `̀̀̀̀ ` `

INCOMEGross Sales 282,435,672 217,953,474Less : Excise Duty 25,428,919 13,987,526Less : VAT and CST 6,944,267 5,643,663Net Sales 250,062,486 198,322,285Other Income “ L ’’ 2,216,069 2,057,824

TOTAL 252,278,555 200,380,109 EXPENDITURE

Materials Consumed “ M ’’ 153,102,017 128,110,051Variation in Stocks “ N ’’ 7,091,757 (15,225,553)Manufacturing and Other Expenses “ O ’’ 46,396,937 46,202,134Financial Charges “ P ’’ 12,095,369 11,367,087Depreciation [( Net of transfer from Revaluation 11,758,252 11,626,062Reserve ` 3945/- (P.Y. ` 4530/-)] “ E ’’

TOTAL 230,444,332 182,079,781

PROFIT BEFORE TAXATION 21,834,223 18,300,328Less : Provision for Taxation (a) Current Tax 4,600,000 3,235,000 (b) Deferred Tax Liability 2,381,824 4,776,887

6,981,824 8,011,887

PROFIT AFTER TAXATION 14,852,399 10,288,441Less : Prior period adjustments (Net) 139,831 51,524

PROFIT FOR THE YEAR 14,712,568 10,236,917Add : Balance Brought Forward from Previous Year 22,051,782 16,682,515

PROFIT AVAILABLE FOR APPROPRIATION 36,764,350 26,919,432APPROPRIATIONS :-

(a) Proposed Dividend 5,217,930 4,174,344 (b) Tax on Proposed Dividend 866,633 693,306

BALANCE CARRIED TO BALANCE SHEET 30,679,787 22,051,782

Earning per share - Basic and Diluted 2.11 1.47(Refer note no. 2 (xvi) in Schedule ‘Q’)

NOTES TO ACCOUNTS “ Q ’’

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2011





Director Director



23

CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEET FOR THE YEARENDED 31ST MARCH, 2011

2010-2011 2009-2010

`̀̀̀̀ in Lacs `̀̀̀̀ in Lacs ` in Lacs ` in Lacs

A CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax and extraordinary items 218.34 183.00

Adjusted for :Depreciation 117.58 116.26Bad Debts written off - 8.04Payment of Taxes (46.87) (23.32)Prior Period adjustment (1.40) (0.51)Profit / (Loss) on Sales of Assets - (0.14)Sundry Balances written off 0.21 2.86Dividend and Distribution Tax thereon (48.67) -

20.85OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 239.19 286.19(Increase)/Decrease in Receivables and Advances (330.87) (19.31)(Increase)/Decrease in Inventories 89.72 (240.60)Increase/(Decrease) in Current Liabilities and Provision 122.06 131.54Cash Used in Operating Activities (119.09) (128.37)CASH GENERATED FROM OPERATIONS 120.10 157.82

B CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (23.32) (61.41)Revaluation Adjustment 0.04 -

(23.28) (61.41)

C CASH FLOW FROM FINANCIAL ACTIVITIESIncrease/(Decrease) in Unsecured Loan 28.68 (47.14)Increase/(Decrease) in Secured loan from Banks (104.64) (75.96) (21.36) (68.50)

Net Increase in Cash and cash Equivalents (A+B+C) 20.86 27.91Cash and Cash Equivalents as at 01-04-2010 152.91 125.00

Cash and Cash Equivalents as at 31-03-2011 173.77 152.91





Director Director



24

SCHEDULES FORMING PART OF THE BALANCE SHEET

As at 31st As at 31stMarch, 2011 March, 2010

`̀̀̀̀ `̀̀̀̀ ` `SCHEDULE “A”SHARE CAPITAL :AUTHORISED :

(1) 1,00,00,000 Equity Shares of ` 10 each 100,000,000 100,000,000(2) 40,50,000 2% Redeemable Optionally

Convertible Cumulative Preference Sharesof ` 10/- each 40,500,000 40,500,000

TOTAL 140,500,000 140,500,000 ISSUED, SUBSCRIBED AND PAID UP :

(1) 14,71,420 Equity shares allotted as fully 14,714,200 14,714,200paid up in cash

(2) 4,200 Equity shares allotted as fully paid up for 42,000 42,000consideration other than cash

(3) 17,31,620 Equity shares allotted as fully paid 17,316,200 17,316,200up Bonus Shares by capitalisation of reserves

(4) 37,50,000 Equity Shares allotted as fully 37,500,000 37,500,000paid up, Issued to the erstwhile shareholders ofOrient Semiconductors Pvt. Ltd. onamalgamation.

(5) 40,50,000 2% Redeemable optionally 40,500,000 40,500,000convertible cumulative preference sharesof ` 10/- each Issued to erstwhileshareholders of Orient SemiconductorsPvt. Ltd. on amalgamation.

TOTAL 110,072,400 110,072,400 SCHEDULE “B” RESERVES AND SURPLUS

(1) Capital Reserve on re-valuation of assetsBalance as per last account 105,851 110,381Less : Depreciation on revalued assets 3,945 101,906 4,530 105,851for the year

(2) Capital reserveCreated on acquisition of 100 % E.O.U. by the 2,396,456 2,396,456erstwhile Orient Semiconductors Pvt. Ltd.

(3) Cash subsidy reserve 323,500 323,500(4) Amalgamation reserves. 4,359,936 4,359,936(5) Balance in Profit and Loss account 30,679,787 22,051,782

TOTAL 37,861,585 29,237,525 SCHEDULE “C” SECURED LOANS

(1) From Union Bank of India(a) On cash credit account 25,669,926 24,803,344(b) On vehicle loan account 438,971 600,136(c) On term loan account 394,099 1,573,814

(2) From State Bank of India(a) On cash credit account 17,797,305 3,468,586(b) On export packing credit account - 3,526,128(c) On term loan account 11,043,259 31,836,044(All the above loans are secured byassets mentioned under item No. 2(ii) Notes to accounts Schedule - “Q”)

TOTAL 55,343,560 65,808,052SCHEDULE “D”UNSECURED LOANS

(1) Fixed deposits / loans[(Including Interest accrued and due)( due to Directors ` 217.99 lacs)(Previous Year ` 196.98 lacs.)] 21,798,575 20,330,925

(2) Inter corporate deposit 1,400,000 -

TOTAL 23,198,575 20,330,925


25

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SCHEDULE FORMING PART OF THE BALANCE SHEET (Cont’d...)


26

SCHEDULES FORMING PART OF THE BALANCE SHEET (Cont’d...)

As at 31st As at 31st March, 2011 March, 2010

`̀̀̀̀ `̀̀̀̀ ` `SCHEDULE “F”INVESTMENTS

(1) 2,10,584 Equity Shares of ` 10/- each 847,665 847,665of the Company held in trust Pursuantto the scheme of amalgamtion of whichCompany is the sole beneficiary.

TOTAL 847,665 847,665SCHEDULE “G”INVENTORIES

(As valued and certified by the management) (1) Raw materials 24,005,984 25,886,729 (2) Semi finished goods 22,112,175 27,955,169 (3) Finished goods 1,711,896 2,960,659

TOTAL 47,830,055 56,802,557SCHEDULE “H”SUNDRY DEBTORS(Unsecured, considered good )

(1) Outstanding for more than six months(Refer Item No.2 (iv) in notesto accounts Schedule-”Q”) 5,145,788 7,411,852Less : Provision for doubtful debts 3,831,278 5,681,222

1,314,510 1,730,630 (2) Others debts 96,956,917 61,704,461

TOTAL 98,271,427 63,435,091 SCHEDULE “I” CASH AND BANK BALANCES

(1) Cash on hand 142,038 195,678 (2) Balances with scheduled banks

(a) In current accounts 720,153 653,301(b) In fixed deposit accounts 16,514,917 14,442,219

TOTAL 17,377,108 15,291,198SCHEDULE “J”LOANS AND ADVANCES(Unsecured, considered good)

(1) Advances recoverable in cash orin kind for value to be received 2,797,739 6,291,245

(2) Payment of taxes 4,302,553 2,875,381 (3) Sundry deposits 7,665,794 5,904,436 (4) Advances to staff 259,200 184,703 (5) Pre-paid expenses 375,809 467,824

TOTAL 15,401,095 15,723,589SCHEDULE “K”CURRENT LIABILITIES AND PROVISIONS(I) CURRENT LIABILITIES

(1) Sundry creditors(a) Due to small scale Industrial undertaking 13,112,734 8,862,324(b) Others 30,700,553 20,278,437

(2) Other current liabilities 5,598,334 4,604,694 (3) Advances and deposits from customers 430,373 3,945,325

49,841,994 37,690,780(II) PROVISIONS

(1) Current Income-tax 4,600,000 3,235,000 (2) Employees’ leave encashment 838,149 1,089,062 (3) Employees’ Gratuity 5,429,533 5,123,227 (4) Proposed Dividend 5,217,930 4,174,344 (5) Tax on Proposed Dividend 866,633 693,306

16,952,245 14,314,939

TOTAL 66,794,239 52,005,719


27

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT

2010 - 2011 2009 - 2010 `̀̀̀̀ `̀̀̀̀ ` `

SCHEDULE “L”OTHER INCOME

(1) Interest [Tax deducted at source 1,781,325 1,529,996` 142371/- (Previous year ` 165199/-)]

(2) Profit on sale of assets - 13,891(3) Labour charges 91,746 4,263(4) Other income 342,998 509,674

TOTAL 2,216,069 2,057,824

SCHEDULE “M”MATERIALS CONSUMED

Opening Stock 25,886,729 17,052,184Add : Purchases 151,221,272 136,944,596

177,108,001 153,996,780Less : Closing Stock 24,005,984 25,886,729

153,102,017 128,110,051

TOTAL 153,102,017 128,110,051

SCHEDULE “N”VARIATION IN STOCKSOPENING STOCK

(a) Semifinished goods 27,955,169 13,706,235(b) Finished goods 2,960,659 1,984,040

30,915,828 15,690,275CLOSING STOCK OF

(a) Semifinished goods 22,112,175 27,955,169(b) Finished goods 1,711,896 2,960,659

23,824,071 30,915,828

Net Change 7,091,757 (15,225,553)

SCHEDULE “O”MANUFACTURING AND OTHER EXPENSES

(A) PAYMENTS TO AND PROVISIONSFOR EMPLOYEES(1) Salaries, wages and other benefits 19,559,654 18,593,554(2) Gratuity paid / provided 651,087 809,965(3) Contribution to provident and other funds 1,871,577 1,783,097(4) Welfare expenses 724,707 571,298

22,807,025 21,757,914

(B) OPERATING EXPENSES(1) Power and fuel 5,580,007 5,570,580(2) Rent, rates and taxes 1,013,822 1,536,566(3) Repairs and maintenance to (a) Building 510,497 279,426 (b) Machinery 221,627 310,372 (c) Others 207,337 187,537(4) Insurance 589,035 380,507

8,122,325 8,264,988Carried Forward 30,929,350 30,022,902


28

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT (Cont’d...)

2010-2011 2009-2010

`̀̀̀̀ `̀̀̀̀ ` `SCHEDULE “O” -(CONT’D)MANUFACTURING AND OTHER EXPENSES

Brought Forward 30,929,350 30,022,902

(C) ADMINISTRATIVE AND OTHER EXPENSES(1) Packing, Forwarding and Freight outward 2,559,235 2,659,635(2) Travelling and Conveyance expenses 3,649,680 2,981,341(3) Advertisement and Promotional expenses 647,317 1,422,554(4) Printing and Stationery expenses 515,458 540,369(5) Telephone Charges 530,791 582,737(6) Commission 318,581 528,191(7) Vehicle expenses 1,116,174 860,516(8) Legal and Professional charges 2,422,938 1,970,030(9) Services and Security charges 2,159,438 1,795,721(10) General expenses 1,116,901 1,381,584(11) Postage and Courier charges 302,222 254,405(12) Bad Debts written off 20,852 285,789(13) Provision for doubtful debts - 804,360(14) Auditors’ remuneration (a) Audit fees 47,000 47,000 (b) Tax audit fees 19,000 19,000(15) Directors’ sitting fees 42,000 46,000

15,467,587 16,179,232

TOTAL 46,396,937 46,202,134SCHEDULE “P”FINANCIAL CHARGES

(1) Interest(a) to bank on cash credit account 4,618,302 3,611,352(b) to bank on term loan account 3,708,158 4,517,286(c) on fixed deposits 2,386,626 2,134,020(d) to others 14,214 101,061

10,727,300 10,363,719(2) Bank charges and commission 1,368,069 1,003,368

TOTAL 12,095,369 11,367,087


29

1. Significant Accounting Policies:

(i) Basis of Preparation of Financial Statements

a. The financial statements have been prepared and presented under the historical cost convention onaccrual basis of accounting to comply with the accounting standards prescribed in the Companies(Accounting Standards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.

b. The preparation of financial statements is in conformity with Generally Accepted Accounting Principles(GAAP) in India and requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and the disclosures of contingent liabilities on the date of financialstatements.

(ii) Fixed Assets :

a. Fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation andimpairment (except for Land, Building and Machinery of erstwhile Orient Semiconductors Private Limitedwhich have been revalued on 30th May, 1986).The cost of fixed assets includes taxes (other than thosesubsequently recoverable from tax authorities), duties, freight and any other costs directly attributable forbringing the asset to its working condition and other indirect costs specifically attributable to the acquisitionor construction of the respective assets. Interest on borrowed funds directly attributable to the qualifyingassets up to the period such assets are put to use, is included in the cost.

b. Depreciation for the year is provided on written down value method, at the rates specified under ScheduleXIV to the Companies Act, 1956, as amended vide Notification No. GSR 756 (E) dt.16.12.1993 except fordepreciation on the fixed assets acquired on amalgamation, which is provided on straight line method basisin accordance with section 205(2)(b) of the Companies Act, 1956.

c. Depreciation on revalued assets has been adjusted against Capital Reserves on Revaluation of Assets.

d. Individual fixed assets having cost of ` 5,000/- or below have been written off during the year.

(iii) Borrowing Costs: Borrowing costs are charged to revenue.

(iv) Inventories:a. Raw materials, stores and spares are valued at cost on weighted average basis. Stock in the case of work

in process is determined on the basis of cost of manufacturing, which includes material, labour, andoverhead cost on an average basis as certified by the management. There has been no significant variationin the method of valuation during the year.

b. Finished Goods are valued at lower of cost or net realisable value.

c. The method of valuation is in line with Accounting Standard 2 regarding Valuation of Inventory, issued by theInstitute of Chartered Accountants of India.

(v) Sundry Debtors, Loans and Advances :

All sundry debtors, loans and advances are considered good and realisable at the value stated in the normalcourse of business, though, unconfirmed except in cases where legal proceedings for recovery have beeninitiated. Adequate provision is made for debts considered doubtful.

(vi) Sales and Service :Sales are recognised when goods are supplied and are net of trade discounts, rebates, sales tax and exciseduty. Sales tax liability and set off are accounted on mercantile basis.

(vii) Interest Income :

Interest income is accounted for on accrual basis.

(viii) Retirement Benefits :

Defined Contribution Plans

a. Provident Fund

In accordance with law, all the eligible employees of the Company are entitled to receive benefits under theprovident fund. The Company’s contribution to provident fund is charged to profit and loss account eachyear.

b. Leave Encashment

The Company provides for the leave encashment based on actuarial valuation at the balance sheet date,determined every year.

SCHEDULE ‘Q’ SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS


30

SCHEDULE ‘Q’ SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Cont’d..)

c. Gratuity

The Company provides for the Gratuity liability on actuarial valuation at the balance sheet date andcontributes to Life Insurance Corporation (LIC) under LIC’s Group Gratuity Scheme determined every yearusing the projected Unit Credit Method. The Company has created a Trust administered by the trusteesand managed under the Scheme of Group Gratuity with LIC.

(ix) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction.

Exchange difference arising on foreign currency transactions settled during the year are recognised in the Profitand Loss account for the year.

Monetary items in the form of Current Assets and Current liabilities in foreign currency, outstanding at the end ofthe year, are converted in Indian Currency at the appropriate rate of exchange prevailing on the date of BalanceSheet and resultant gain or loss is accounted during the year.

(x) Taxation :

(a) Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance withapplicable taxation laws), and deferred tax charge or credit (reflecting the tax effects of timing differencesbetween accounting income and taxable income for the period).

(b) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognisedusing the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferredtax assets are recognised only to the extent there is reasonable certainty that the assets can be realized infuture; however, where there is unabsorbed depreciation or carry forward loss under applicable taxationlaws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.Deferred tax assets are reviewed as at each Balance Sheet date to reassess realisation.

(xi) Provisions, Contingent Liabilities and Contingent Assets :

Provisions are recognized only when there exists a present obligation as a result of past events that probablyrequires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosurefor contingent liability is made when there is :

(a) Possible obligation which will be confirmed by future events not wholly within the control of the Company or

(b) Present obligations arising from past events where it is not probable that an outflow of resources will berequired to settle the obligation or where a reliable estimate of the amount of the obligation cannot bemade. Contingent assets are not recognized in the financial statements since this may result in therecognition of income that may never be realized.

(xii) Segment Accounting:

The segment of the Company has been identified in line with the Accounting Standard 17 on “SegmentReporting” issued by the Institute of Chartered Accountants of India. However during the year under review thecompany was operating in single segment of Semi-conductors manufacturing business, hence Segment reportingis not applicable.

(xiii) Impairment of Assets

The Company makes an assessment of any indicators (based on internal or external factors) that may lead toimpairment of assets on an annual basis. An asset is treated as impaired when the carrying cost of the assetexceeds its recoverable value, which is higher of net selling price and value in use. Any impairment loss ischarged to profit and loss account in the year in which it is identified as impaired.

2. Notes to Accounts: (Amt in ` Lakhs)

(i) Contingent Liabilities in respect of :- 2010-11 2009-10

(a) Guarantees issued by the Company to

the Development Commissioner at Kandla 150.00 150.00

in respect of E.O.U. unit

(b) Against performance Guarantee issued by Banks 16.66 8.77

(c) Letter of Credit 45.00 25.00

(ii) (a) Cash Credit Advances

(I) From Union Bank of India is secured by hypothecation of stocks and current assets and by first charge onLand and Building under Survey Nos. 338/P2, 338/P3 and 338/P4 situated at Baska, Taluka Halol, District


31

Panchmahal and hypothecation of entire plant and machinery and other fixed assets both present and future,as collateral security to the bank. The said facility is further secured by lien on STDR of ` 82 Lacs kept with thebank.

(II) From State Bank of India is secured by hypothecation of stocks and current assets and by first charge on landand building under Survey No. 338/1 situated at Baska, Taluka Halol, District Panchmahal and hypothecation ofentire plant and machinery and other fixed assets both present and future, of the erstwhile Orient Semiconductors Pvt. Ltd. (since merged), as collateral security to the bank. The said facility is furthersecured by lien on STDR of ` 50 Lacs kept with the bank.

(b) Term Loan Advances

(I) From Union Bank of India is secured by hypothecation of plant and machinery purchased and by firstcharge on land and building under Survey Nos. 338/P2, 338/P3 and 338/P4 situated at Baska, TalukaHalol, District Panchmahal and hypothecation of entire plant and machinery and other fixed assets bothpresent and future, as collateral security to the bank. The said facility is further secured by lien on STDR of` 82 Lacs kept with the bank.

(II) From State Bank of India is secured by Hypothecation plant and machinery purchased and by first chargeon land and building under Survey No. 338/1 situated at Baska, Taluka Halol, District Panchmahal andhypothecation of entire plant and machinery and other fixed assets both present and future, of theerstwhile 100% EOU, Orient Semiconductors Pvt. Ltd.(since merged) as collateral security to the Bank. Thesaid facility is further secured by lien on STDR of ` 50 Lacs kept with the bank.

(c) Vehicle Loans From Union Bank of India is secured by hypothecation of the vehicles purchased.

(iii) During the year 1999 - 2000 the Government of Gujarat vide notice issued under Land Acquisition Act 1984 hadacquired 15000 Sq. ft. of land belonging to the Company for purpose of widening of Vadodara - Halol road and hadawarded compensation of ` 46,309/- towards acquisition. The Company had filed an application against the Govt. ofGujarat, with the Deputy Collector, Godhra Region claiming inadequacy of compensation towards the above-mentionedacquisition of land. The case is pending to be heard.

(iv) Confirmations have been received from most of the Debtors and Creditors. The letters were sent to the partiescontaining a note to the effect that the correctness would be presumed if not contested. Debtors outstanding for morethan 180 days amount to ` 13.15 Lacs (Previous year ` 17.31 Lacs) are considered recoverable as per management.During the year Debtors of ` 0.21 Lacs (Previous year ` 2.86 Lacs) were considered as bad and written off, Howeverno provision for bad and doubtful debts has been made during the year (Previous Year ` 8.04 Lacs). Adequateprovisions have been made towards amount due from two State Government undertakings against whom legalproceedings have been initiated for recovery amounting to ` 38.31 Lacs. The earnest money deposits received fromcustomers are also not confirmed.

(v) Employee Benefits

Disclosure as required by Accounting Standard 15

a) The amount recognized in the statement of Profit and Loss Account are as follows:

DEFINED BENEFIT PLAN

Current Service Cost (Included under the head payments to and provisions 6,51,087 8,09,965 for employees in Schedule ‘O’ Manufacturing and Other Expenses.)

Gratuity 31/03/2011(Amt in `̀̀̀̀)))))

31/03/2010(Amt in `)


Current Service Cost (Included under the head payments to and provisions NIL 2,30,422for employees in Schedule ‘O’ Manufacturing and Other Expenses.)

Leave Encashment 31/03/2011(Amt in `̀̀̀̀)))))

31/03/2010(Amt in `)

Current Service Cost (Included under the head payments to and provisions 11,45,065 11,96,137for employees in Schedule ‘O’ Manufacturing and Other Expenses.)

Provident Fund 31/03/2011(Amt in `̀̀̀̀)))))

31/03/2010(Amt in `)


32

Opening defined benefits 51,23,227 48,54,286

Current service cost 6,51,087 8,09,965

Benefits paid during the year 3,44,781 5,41,024

Closing defined benefit obligation (as per actuarial valuation) 54,29,533 51,23,227

Particulars31/03/2011 31/03/2010

b) The amount recognized in the Balance Sheet are as follows :

Gratuity (Amt in `)))))

Opening defined benefits 10,89,062 10,01,297Current service cost NIL 2,30,422Benefits paid during the year 2,50,913 1,42,657Closing defined benefit obligation (as per actuarial valuation) 8,38,149 10,89,062

Particulars31/03/2011 31/03/2010

Leave Encashment (Amt in `)))))

The Company has contributed ` 42.59 Lacs under the Scheme of Group Gratuity with Life Insurance Corporation ofIndia (LIC) as per the deferred plan of contribution sanctioned by LIC against the total fund requirements worked out byLIC at ` 46 Lacs to administer the total Gratuity Liability of the Company.

(vi) Related Party Transactions as required by Accounting Standard 18, issued by the Institute of Chartered Accountants ofIndia.

(Amt. in ` Lacs)

Name of Related Party Relationship Transactions 31/03/2011 31/03/2010

Bhavna H. Mehta Director Interest on Loan 20.24 20.72

Bhavna H. Mehta Director Rent for Office Premises 6.00 6.00

Manoj P. Mehta Director Interest on Loan 1.33 N.A.

Plus Securities Management Company in which a Interest on Inter 1.75 N.A.Private Limited director has significant Corporate Deposit

influence or control

(vii) In accordance with Accounting Standard - 28 ‘Impairment of Assets’, the Company has not written off any assets duringthe year. There are no other assets of this nature. Hence no future liability.

(viii) Income tax assessments have been completed upto the Assessment Year 2008-09 and adjustments in the accountshave been made up to the Assessment year 2008-09. Appeals/ rectifications arising out of assessments/appeals arepending before the Income Tax Authorities.

(ix) During the year, the Company has made provision for Deferred Tax Liability relating to the Current Year of ` 23.82 Lacs(Previous Year ` 47.77 Lacs) as per AS-22 on Accounting for Taxes on Income, issued by the Institute of CharteredAccountants of India.

(x) As on the date of the balance sheet Sales-tax assessments have been completed up to 31st March 2007.

(xi) Depreciation on revalued assets amounting to ` 3,945/- has been directly adjusted against Capital Reserve onrevaluation of assets.

(xii) As on the date of the balance sheet there are no unclaimed/unpaid deposits as per Companies (Acceptance ofDeposits) Rules 1975.



33

(xiii) Sundry creditors include ` 83.92 Lacs due to small-scale industrial undertakings (SSI) to the extent such parties havebeen identified from the available documents/information. The names of SSI units to whom amounts are due for morethan 30 days are furnished below.

1. M.M. Associates 2. Shree Ambica Steel Industries 3. Dinbond Engineering Works

4. Mccom Industries India Pvt. Ltd 5. S.P.Rubber Industries 6. Ganesh Industries

7. Sri Ram Fluxes & Industries 8. Sri Ram Industries 9. Sahjanand Engineering Works

10. Aseem Technologies Pvt. Ltd. 11. Western Rubber Industries India Pvt.Ltd. 12. Shree Tulja Industry

13. Samir Tech-Chem Pvt. Ltd. 14.Silica Scientific Works

(xvi) There are no unclaimed interest due and payable by the Company, however as on the date of this report there are still` 2,26,930/- lying in Unpaid Dividend Account of the Company awaiting Dividend claims from the shareholders for theFinancial Year 2009-10. In terms of Section 205A and 205C of The Companies Act, 1956, the Company is required totransfer the amount of dividend remaining unclaimed for a period of seven years from the date of transfer in the unpaiddividend account of the Company to Investor Education and Protection Fund (IEPF). Shareholders are hereby requestedto ensure that they claim the dividend(s) from our Registrar and Transfer Agents – M/s Adroit Corporate Services Pvt.Ltd. before the said amount is transferred to the Investor Education and Protection Fund.

FINANCIAL YEAR TYPE OF DIVIDEND LAST DATE FOR CLAIMING UNPAID DIVIDEND

2009-10 FINAL DIVIDEND 22/08/2017

Currently, there is no amount due to be transferred to Investor Education and Protection Fund in terms ofSection 205 C. (1) of the Companies Act, 1956 vide notification dated October 1, 2001.

(xv) The Board of Directors in their meeting held on 30th May, 2011 have recommended a dividend of ` 0.75/- per equityshare of ` 10/- each for the Financial Year ended 31st March, 2011 subject to approval of shareholders at the ensuingAnnual General Meeting of the Company.

(xvi) Earning per share

Particulars 2010-11 2009-10

Net Profit for the year (Amt. ` In Lacs) 147.13 102.37

Average no. of shares 6957240 6957240

Earning per share basic and diluted (`) 2.11 1.47

Face value per Equity share (`) 10 10

(xvii) Figures of previous year have been regrouped/ rearranged wherever necessary.

As per our attached Report of even dateSignature to Schedules “A” to “Q”




Director Director




34

SCHEDULE OF ADDITIONAL INFORMATION PURSUANT TO THE PROVISION UNDERPARAGRAPH 3 & 4 OF PART - II OF SCHEDULE VI TO THE COMPANIES ACT, 1956

SR. 2010-11 2009-10No. UNIT QUANTITY VALUE QUANTITY VALUE

Nos. `̀̀̀̀ Nos. `1. TURNOVER

CLASS OF GOODS( a ) Semiconductor Diodes / S.C.R’s Nos 740010 188,124,855 678055 166,588,361( b ) Power Rectifier Assemblies Nos 4604 48,881,612 609 15,092,523

Power Modules Nos 1050 1,256,654 - -( c ) Junctions Nos - - 450 12,807,750( d ) Others —- 1461 1,555,150 1445 985,719( e ) Trading Sales —- - 10,244,215 - 2,847,932

TOTAL 747125 250,062,486 680559 198,322,2852. QUANTITY AND VALUE OF

MATERIALS CONSUMED( a ) Copper, Bases,Wires & sheets etc. Kgs. 76025 35,312,100 55155 26,430,448( b ) Diodes, SCRs Parts & Components,

Ceramic Housings, Moly Discs,Tungsten and Silicon Diff.chips. Nos. 4392816 73,132,366 3583809 61,515,994

( c ) Chemicals & Acids Ltrs./ Bottles 26097 4,165,516 26967 4,239,668( d ) Gas Cu.Mtrs. 21264 1,077,879 22274 1,034,410( e ) Power Equipments, Sub-Assemblies,

Transformers, Switches etc., Nos. 184746 12,792,160 3923 2,115,626( f ) Hardware,Components,Bakelite and

Fibre Sheet Rods & Boxes etc. - 17,797,639 - 23,845,384( g ) Others - 8,824,357 - 8,928,521

TOTAL 153,102,017 128,110,051

3. OPENING STOCK OF GOODS PRODUCED( a ) Semiconductor Diodes / Rectifiers Nos. 5130 1,949,659 5346 1,984,040( b ) Power Rectifier Assemblies Nos. 3 1,011,000 - -

TOTAL 5133 2,960,659 5346 1,984,040

4. CLOSING STOCK OF GOODS PRODUCED( a ) Semiconductor Diodes / Rectifiers Nos. 5272 1,711,896 5130 1,949,659( b ) Power Rectifier Assemblies Nos. - - 3 1,011,000

TOTAL 5272 1,711,896 5133 2,960,659

5. CLASS OF GOODS MANUFACTURED

( a ) Semiconductor Diodes / Silicon Control 740152 5130 5272 677839 5346 5130Rectifier’s and Junction

( b ) Power Rectifier Assemblies 4601 3 - 612 - 3Power Modules 1050 - - - - -

( c ) Junctions - - - 450 - -( d ) Others 1461 - - 1445 - -( e ) Silicon Chips for captive Consumption 137584 - - 569078 - -

TOTAL 884848 5133 5272 1249424 5346 5133

ActualProduction

Nos.

OpeningStockNos.

ClosingStockNos.

ActualProduction

Nos.

OpeningStockNos.

ClosingStockNos.

2009-102010-11

Par t icu lars

6. Employees in receipt of remuneration over `̀̀̀̀ 5 Lacs per month or `̀̀̀̀ 60 Lacs per annum - nil


35

SCHEDULE OF ADDITIONAL INFORMATION PURSUANT TO THE PROVISION UNDERPARAGRAPH 3 & 4 OF PART - II OF SCHEDULE VI TO THE COMPANIES ACT, 1956 (Cont’d...)

7. LICENSED AND INSTALLED CAPACITIES : LICENCED INSTALLEDCLASS OF GOODS CAPACITY CAPACITY

NOS. NOS.a Silicon Control Rectifiers (S.C.Rs.) 504200 504200b High Power Semiconductor Diodes 1104200 1104200c Junctions 30000 30000

Power Rating Capacity onRange Maximum

Utilisation Basisd Industrial Rectifier for Chemicals, Electro - 1 KW to 5 KW 100 Nos.

Mechanical Process, Traction, Welding,Battery Chargers etc.

e Inverters / Uninterrupted Power Supply 1KVA to 50KVA 10 Nos.systems ( Better than 0.01 regulation)

f Thyristor Controlled DC / AC motor phase 5 KW to 500 KW 20 Nos.

g Thyristor Controlled static tap changers / 10KVA to 50MVA 10 Nos.Power controlled.

h Converters-various type such as single 10KVA to 500 KVA 50 Nos.phase to three phase and cycle -converters

i Semiconductor hybrid power assemblies. - 10000 Nos.Pace Packs, Solid State Relays andAdd-A-Packs configuration.

2010-11 2009-10

8. Value of Imports on C.I.F. basis : (Amt in `) (Amt in `)Raw Materials, Components and Stores 70,526,859 76,813,902

70,526,859 76,813,902

9. Value of Imported and IndigenousRaw Materials and Spares Consumed

PARTICULARS % %a Imported Raw Materials and Components

Consumed 76,716,202 50.11 71,757,756 56.01

b Indigenous Raw Materials and ComponentsConsumed 76,385,815 49.89 56,352,295 43.99

TOTAL 153,102,017 100 128,110,051 100

10. Earnings in Foreign CurrencyF.O.B. Value of Exports 19,815,342 42,885,225

19,815,342 42,885,225

11. Expenditure in Foreign CurrencyForeign Bank and other Charges 671,564 661,374

671,564 661,374

12. Previous Year’s Figures have been re-grouped/ rearranged wherever necessary


36

I. REGISTRATION DETAILS

Registration No. : L31109MH1969PLC014322State Code : 11Balance Sheet Date : 31/03/2011

II. CAPITAL RAISED DURING THE YEAR ( AMT. IN ` THOUSANDS)

Public Issue —NIL—- Right Issues —NIL—-Bonus Issue —NIL—- Private Placement —NIL—-

III. POSITION OF MOBILISATION & DEPLOYMENT OF FUNDS(AMT. IN ` THOUSANDS)

TOTAL LIABILITIES 244,805.23 TOTAL ASSETS 244,805.23

SOURCES OF FUNDS APPLICATION OF FUNDSPaid up Capital 110,072.40 Net Fixed Assets 131,872.12Reserves & Surplus 37,861.58 Net Current Assets 112,085.44Secured Loans 55,343.56 Investments 847.67Un-secured Loans 23,198.57 Misc. Expenditures NILDeferred Tax Liability 18,329.12 Accumulated Losses NIL

IV. PERFORMANCE OF COMPANY ( AMT. IN ` THOUSANDS)

Turnover & Other Income 252,278.56 Total Expenditure 230,444.33 Profit before Tax 21,834.22 Profit after Tax 14,852.40 Earning per share (`̀̀̀̀) 2.11 Dividend Rate % 7.50

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF COMPANY(AS PER MONETARY TERMS)

ITEM CODE NO. 85411000, 85413010, 85044029PRODUCT DESCRIPTION : DIODES

THYRISTORSOTHER INDUSTRIAL RECTIFIERS

INFORMATION PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956.BALANCE SHEET EXTRACT AND COMPANY’S GENERAL BUSINESS PROFILE.





Director Director


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