GUJARAT POLY-AVX ELECTRONICS LIMITED
ANNUAL REPORT 2011-2012
Your Directors present the Twenty Third Annual Report together with the
Audited Statement of Accounts for the year ended 31st March, 2012.
1. PRODUCTION ACTIVITIES:
During the Financial Year 2011-12 your Company recorded a Production of
1384.28 Lac pcs in comparison to 1488.01 Lac pcs in Financial Year 2010-11,
a decrease of 7%.
The total sales during the Financial Year 2011-12 was Rs.827.26 Lacs
against sales of Rs. 912.90 Lacs in last Financial Year, a decrease of 9%.
The market slow down was dominant in the 2nd & 3rd Quarters and signs of
improvement have been observed in Quarter-IV. Due to change in product Mix
the ASPs recorded were lower than last year. Major sales recorded were in
the Instrumentation & Industrial Electronics, EMS and Automotive Segments.
3. FINANCIAL RESULTS:
The Company`s operations for the year has resulted into profit of Rs.48.36
Lacs (Previous year Rs. 54.91 Lacs). However, before interest, depreciation
and tax there is Surplus of Rs.83.45 Lacs (Previous year Rs.165.32 Lacs).
After debit of Rs.123.40 Lacs under exceptional items, there is loss of
In view of the accumulated loss, your Directors have not been able to
recommend any Dividend for the year 2011-12.
The Company has fully repaid term loans with interest to Term Lenders.
5. FIXED DEPOSITS:
The Company has not received any deposits from Public during the year.
6. PARTICULARS OF EMPLOYEES:
Provisions of Section 217(2A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975 are not applicable to the
7. PROCEEDINGS BEFORE THE AAIFR/BIFR/HIGH COURT OF GUJARAT:
In compliance with the Order of the Appellate Authority for Industrial &
Financial Reconstruction (AAIFR) dated 27th March, 2002, the Company has
substantially fulfilled its obligations as per the directions of AAIFR. The
Board for Industrial & Financial Reconstruction (BIFR) vide its Order dated
28.04.2009 had directed that the Company shall implement the provision of
Sanctioned Scheme and redeem the non-cumulative Preference shares. The
Company thereafter, as legally advised, filed an appeal before AAIFR,
against the said Order. AAIFR vide its order dated 22.02.2011, upheld the
order of the BIFR.
The Company thereafter filed a writ petition in the High Court of Gujarat,
at Ahmedabad, which granted Stay vide its Order dated 21.06.2011 against
the order of AAIFR and the petition is pending in the High Court of
Gujarat. As informed to you in the previous year, the IFCI and IDBI had
revoked the One Time Settlement Scheme Sanctioned by Appellate Authority
for Industrial & Financial Reconstruction (AAIFR) due to alleged breach of
Terms and conditions committed by the Company in payment/redemption of
Preference share capital.
The Company negotiated with IFCI for one time settlement against their all
dues, costs etc. The Company paid Rs.123.40 Lacs as agreed and has received
"No due Certificate" from IFCI.
8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO ETC.:
As required by the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1968, the Report of Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo etc. is given
in Annexure-I forming part of this report.
Mr. Chandrakant Khushaldas and Mr. R. K. Jani retire from office by
rotation but being eligible, offer themselves for re-appointment.
10. AUDIT COMMITTEE:
Your Company has set-up an Audit Committee of Directors as mandated by
section 292(A) of the Companies Act, 1956 as amended. Mr. Chandrakant
Khushaldas, Brig. K. Balasubramaniam and Mr. T.R. Kilachand are the members
of the Audit Committee.
11. DIRECTORS` RESPONSIBILITY STATEMENT Your Directors confirm that:
(i) In the preparation of the annual accounts, applicable accounting
standards have been followed, with proper disclosure of any departures;
(ii) The accounting policies are consistently applied and reasonable,
prudent judgment and estimates are made so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year;
(iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going
12. CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the Listing Agreement a separate report on
Corporate Governance and a certificate from the Auditors of the Company
regarding compliance of the conditions of Corporate Governance are annexed
to the Directors` Report.
13. AUDITORS` REMARKS:
As regards the remarks in the Auditors` Report, please refer to the Notes
on Accounts which are self-explanatory.
14. APPOINTMENT OF AUDITORS:
You are requested to appoint Auditors. The retiring Auditors M/s. C.C.
Chokshi & Co., Chartered Accountants, Ahmedabad are eligible for re-
Your Directors express their sincere thanks to the Central and State
Government authorities, including Gujarat Industrial Investment Corporation
Ltd., Bank and Financial Institutions and the Collaborators Kyocera-AVX
Corpn of USA.
Sincere thanks are also due to the Management team, the staff and workers
for their valuable contribution during this critical period of the Company.
On behalf of the Board of Directors,
T. R. KILACHAND
Plot No. B-17/18
Gandhinagar Electronic Estate
Gandhinagar 382 024
Dated: 30th May, 2012.
ANNEXURE - I
A. CONSERVATION OF ENERGY:
a) Energy conservation steps taken:
i) Replacement of old control Instruments with more accurate instruments
have increased the performance of the machines with better productivity.
ii) Resulting in low consumption of energy and better performance of the
iii) Improve performance of utility equipments (chiller, compressor etc.).
b) Additional Investments & Proposals being implemented:
i) Effective utilization of all the installed equipments, thereby
minimizing the energy consumption.
ii) Planned Preventive Maintenance schedule and monitoring for effective
use of the Production machinery.
c) Impact of measures at (a) & (b) above:
The above implementation have resulted in achieving better productivity and
reduce energy cost.
d) Power & Fuel Consumption: Not Applicable
B. TECHNOLOGY ABSORPTION:
FORM - B
1. SPECIFIC AREAS IN WHICH R&D CARRIED OUT BY THE COMPANY:
i) Replacing/Repairing of imported spares by local vendors.
ii) Development of RTS Aluminum Track to increase the productivity.
iii) Effective management of manufacturing processes to reduce the
consumption of raw material.
2. BENEFITS DERIVED AS A RESULT OF ABOVE R&D:
i) Increased in product range.
ii) Reduce the procurement of imported spares.
iii) Consistent manufacturing process.
3. FUTURE PLAN OF ACTION:
i) Continuous indigenization of machine tooling, jigs & fixtures and raw
ii) To develop jigs & fixtures to increase the product range.
iii) Continue the development of products similar to our present range of
4. EXPENDITURE OF R & D:
TECHNOLOGY - ABSORPTION, ADAPTATION & INNOVATION:
(1) (a) Technology Absorption:
Technology Absorption is complete in the areas commissioned.
As part of continuous quality improvement, alteration of process condition
and parameters are being undertaken on a regular basis.
Systems adopted have led to improved the process.
i) Increase in product range.
ii) Reduction in down time and improve the processes of the equipment.
(3) IMPORTED TECHNOLOGY:
No additional import of Technology in the Financial Year 2011-12.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
i) Total Foreign Exchange used : Rs. 3,05,37,944/-
ii) Total Foreign Exchange earned : Rs. NIL
MANAGEMENT DISCUSSION AND ANALYSIS
Gujarat Poly-AVX Electronics Ltd (GPAEL) was established in 1989 &
Commenced Commercial Production in 1993. This state of the art facility has
been setup in the pollution free Electronic Estate in GANDHINAGAR, Gujarat
in Collaboration with AVX Ltd., USA, a world leader in Passive Components.
Your company manufactures Multilayer Ceramic Capacitors in Radial, Axial &
SMD Configurations, Single Layer Ceramic Disc Capacitors both High & Low
Voltage & Metal Oxide Varistors. The Complete Plant & Machinery has been
imported, installed & setup with AVX Support. Over the Years GPAEL`s
Products have been well received in the market & is, today, one of the
largest manufacturers of Ceramic Capacitors in India.
Industrial Structure and Development:
Electronics Components can be classified into Active & Passive Components.
These Components are the building blocks of any Electronic Industry. Our
Ceramic Capacitors are classified as Passive Components & find wide
application due to their miniature size, wide range & low cost. They find
applications primarily in the following Market segments:
(1) Computers Peripherals
(2) Instrumentation and Industrial Electronics
(3) Consumer Electronics
(4) Strategic Electronics
(6) Electronic Manufacturing Services (EMS)
Your Company supplies parts to the Original Equipment Manufacturers (OEM`s)
in the above segments. In addition to this our Components are also sold
through a country-wide Dealer Network.
Opportunities and Threats:
* Ceramic Capacitors as elicited above are immensely popular in the
Electronic Industry & find applications in any Electronic Circuit.
* Ceramic Capacitors due to its variable Dielectric constant exhibit
superior Electrical properties & have a wide Range.
* The sales are directly to OEM`s & is an Industrial Product.
* The company is also Trading in other Electronic components like TANCAP`s
* Ceramic Capacitors are Fiercely Competitive & is very easy to import.
* The Customs Duty on our capacitors is NIL.
* These parts are also imported in KIT form.
* The Dollar & Commodity Price volatility directly effects the margins.
Risks and Concerns:
* The evolution of the EMS segment has led to Global sourcing thereby
making our products very competitive.
* New Technology areas continue to Import Components in KIT form.
* Voltality in currency, Metals, oil etc. have a direct impact on the Raw
Performance by Sector:
The overall market sentiment during the Financial Year 2011*2012 was
negative. All segments across the board recorded a drop in the Sales of our
products. This was particularly evident in the Instrumentation & Industrial
Electronic segment wherein for the first time in many years the sales
recorded a drop. Similarly the EMS segment sales were very sluggish &
cautious, leading to purchase decisions being postponed to as & when
required. The Telecommunication Sector too was hit by uncertain market
conditions due to political fallout.
Despite negative growth there was no major change in the Product mix. Sales
of Radial MLCC was a front runner followed by SMD MLCC`s & High Voltage
Single Layer Disc Ceramic Capacitors.
Overall the sales achieved in FY 2011-12 was Rs. 827.26 Lacs in comparison
to Sales of Rs. 912.90 Lacs in FY 2010-11 a drop of 9%. Similarly the
Production during the FY 2011-12 slipped to 1384.28 Lacs pcs in Comparison
to 1488.01 Lacs pcs in FY 2010-11 a decrease of 7%.
Despite the above the Directors are hopeful of increasing the sales
Turnover of the Company.
The Company is Cautiously optimistic about the growth prospects for the
current Financial Year.
Internal Control System and their Adequacy:
Gujarat Poly-AVX Electronics Ltd has adequate system of internal controls
to ensure all assets are safeguarded and protected against loss from
unauthorised use or disposition and that transactions are authorised,
recorded and reported correctly.
Your Company has nominated Internal Auditors who evaluate all financial and
operating system control of the company. The Internal Auditors also review
the internal controls to ensure Accounts of the Company are maintained and
transactions are in accordance with the prevailing laws and regulations.
Internal Audit findings and recommendations are reviewed by the top
management and the Audit Committee of the Board. The Committee reviews the
quarterly, half yearly and annual financial statements before these are
submitted to the Board and ensures compliance of internal control system.
Reserves & Surplus:
During the year under review there has been no changes in the capital
reserves of the company which stands at Rs.29,75,000/-.
Fixed Assets (Net Block):
The Net Block as on 31.3.2012 is Rs.246.92 Lacs compared to Rs.264.10 Lacs
for previous year. The net block has gone down due to depreciation/
adjustment for the year.
The Company has not made any investments during the year.
Net Current Assets:
The net current assets of the Company have decreased from Rs. 222.88 Lacs
to Rs.165.09 Lacs.
Results of operations:
The revenue during the year has decreased from Rs.912.90 Lacs to Rs. 827.26
Lacs due to over all negative market segment during Financial Year 2011-
There is profit of Rs.48.36 Lacs (previous year Rs.54.91 Lacs) Provisions
for the interest and financial charges are Rs. 8.93 Lacs compared to
Rs.14.60 Lacs during the previous year.
Payment to and provision for employees amounts to 20% of sales compared to
18% in the previous year. Depreciation amounts to 3% of sales during the
year compared to 10% in the previous year.
The Company cannot recommend dividend due to accumulated losses.
Material Development in Human Resources:
Your Company`s vision for the future is designed to provide a total quality
environment, which will delight its customers-both internal & external. To
achieve this objective the company has embark on developing its Human
Resources by sharpening the industrial skills for multitasking. This
empowers every employee to be a leader in its stride towards total quality.