SWELECT ENERGY SYSTEMS LIMITED
(FORMERLY KNOWN AS NUMERIC POWER SYSTEMS LIMITED)
ANNUAL REPORT 2011-2012
DIRECTOR`S REPORT
Dear Shareholders,
We have pleasure in presenting the Seventeenth Annual Report together with
the Audited Accounts for the year ended March 31, 2012.
GROWTH OF THE COMPANY
During the Year 2011-12, SWELECT with a commitment to achieve a sustainable
growth, strived hard and marched successfully through the tough market
conditions to put the Company on top of all the Indian UPS Companies for
another year in succession. Our Company achieved a growth of 10.41% over
the previous financial year on net sales and other income. The EPS for the
Financial Year 2011-12 is Rs. 34.27.
FINANCIAL RESULTS
The Abridged stand-alone financial results are as under:
(Rs. in Lakhs)
S.No. Particulars For the year ended
31/3/2012 31/3/2011
1 Sales / Income from operations 56258.90 51116.66
Less: Taxes and duties 2794.69 2538.06
2 Net Sales/Income from Operations 53464.21 48578.60
Add: Other income 529.62 322.41
3 Total Income from Operations 53993.83 48901.01
4 Total Expenditure 48969.31 43237.03
5 Profit Before Depreciation, Interest & Tax (3-4) 5024.52 5663.98
6 Interest 103.71 92.49
7 Depreciation 564.96 489.74
8 Profit Before Tax (5-6-7) 4355.85 5081.75
9 Tax Expense 892.74 1059.85
10 Profit After Tax (8-9) 3463.11 4021.90
11 Transfer to General Reserve 346.31 402.19
12 Proposed Final Dividend 303.18 303.18
13 Tax on Dividend 49.18 49.18
14 Balance Carried Forward (10-11-12-13) 2764.44 3267.35
15 Equity Capital 1010.58 1010.58
16 Reserves and Surplus 26164.56 23053.80
17 EPS (Rs.) 34.27 39.80
Previous year`s figures have been regrouped / reclassified wherever
necessary.
DIVIDEND
The Board of Directors have pleasure in recommending a Dividend of Rs. 3/-
per equity share (@ 30 % on the equity share capital of the Company), free
of tax in the hands of the shareholders, for the year ended 31st March
2012, subject to approval of the shareholders.
PRODUCT LINES OF SWELECT
Green Energy Solutions
SWELECT ENERGY SYSTEMS LIMITED (SWELECT) has ventured into offering Green
Energy Solutions like Solar Power Systems, Wind Energy Generation and LED
lighting systems. The company offers specialised and standardised solar
product range to conserve energy under the Renewable Energy Program
combined with Energy Efficient LED Lighting Solutions for a wide range of
applications.
SWELECT has set perfect example of going green by being the first UPS
Company to have installed a 1.1 kWp solar power generation system at its
Fabrication Plant, Chennai in 1995. In addition to this, SWELECT has
installed about 1 MWp of solar power generation system commissioned
successfully for its captive power generation and over 1000 installations
for many Rural Schools, Banks, ATMs, and other Customer needs.
SWELECT currently offers the following products and solutions to Clients.
The product range includes:
* Solar PV Panels - Thin Film and Crystalline
* MPPT and PWM Solar Charge Controllers ranging from 12 V to 480 V and 5 A
to 140 A
* Grid Tied Inverters ranging from 1 kW to 100 kW and higher rating
inverter for Solar Energy farms in MW range
* Bi-directional Grid Interactive Inverter ranging from 1 kW to 100 kW
* Energy Storage Batteries 7.2 Ah to 300 Ah (VRLA, Solar Deep Cycle Gel,
Tubular)
* Customized Solar Power Conditioning Units as per the load and customer
requirements
The Solar Solutions offered by SWELECT are:
* Stand-alone and mini grid solar power converters
* Hybrid and Grid tied power systems
* Solar energy farms
Energy Efficient lighting products from SWELECT Includes:
* LED lighting system for office and home applications (Down lights and 2 x
2 lighting)
* LED Street lighting systems
* Solar LED street lighting systems
* LED decorative lighting systems
* Solar LED emergency Lights
* Customized LED Lighting solutions
SWELECT team`s in-depth technical knowhow and expansive service
capabilities enables it to provide its customers with high-quality
standalone or turnkey solutions, and deliver unparalleled global support.
The core principles of flexibility, speed, innovation, reliability, trust,
transparency, and accountability has been the growth enablers and has
helped develop and nurture long-term relationships with its key
stakeholders. There have been implementations of solar projects in India
and overseas including Japan, Nigeria, Kenya, etc. In India there have been
more than 1000 sites in the range 1 kW to 100 kW. With its experience in
design, supply and installation of high power systems SWELECT assures a
world class implementation using state-of-the-art SPV products and complete
solutions.
With continuous technological innovations, rich expertise, and strong
customer centric approach, SWELECT`s journey in the last 26 years has been
a powerful one and will soon set footprints across more countries with its
innovative Power Management Solutions.
AWARDS / CREDENTIALS
The winner of ISA Technovation Awards December 2011 in the OEM Enterprise
Indian Enterprise category.
Trail Blazer 2011 - Special Achievement Award
"Pathfinders - 2011", A coffee Table Book, was launched by Times of India
Group in Chennai and Mr. R Chellappan, Managing Director, is one of the
Elite Group of ten outstanding Entrepreneurs in the field of IT and ITES to
receive an award from his Excellency, Dr. K Rosaiah, Hon`ble Governor of
Tamil Nadu on 28th September 2011, at Darbar Hall of Raj Bhavan, Chennai.
Empanelment with Bureau of Energy Efficiency as an Energy Service Provider.
Accreditation by MNRE (Ministry of New and Renewable Energy) as authorized
channel partner for off-grid and decentralised solar applications under
JNNSM (Jawaharlal Nehru National Solar Mission) scheme.
No. 1 Solar Power company amongst UPS manufacturers (Source: SD awards
2011)
MANAGEMENT`S DISCUSSION AND ANALYSIS REPORT
Management`s Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate Section forming part of the
Annual Report.
Some of the major events which took place during the year 2011-12 are:
1. Acquisition of Amex Irons Private Ltd (AIPL):
Amex Irons Private Ltd-a Foundry unit-situated adjacent to our existing
Subsidiary unit-Amex Alloys Private Ltd (AAPL) - in Coimbatore was taken
over in full on 14th November, 2011. AIPL currently manufactures SG and
Grey iron Foundry Components used in Infrastructure, Automobiles,
Electrical Markets, etc. The products of AIPL , as in the case of AAPL
offer good export potential. The acquisition of AIPL, with an installed
capacity of 3,600 MT per annum gives a perfect synergy with AAPL. The AIPL
contributed a sales turnover of Rs 18 Crores during the year. AIPL is
expected to add a sales turnover of about Rs. 25 Crores during the full
year of operation in 2012-13.
2. Entering into Business Transfer Agreement (BTA) with M/s. Novateur
Electricals and Digital Systems Private Limited (Novateur) (formerly known
as M/s Indo Asian Electric Private Limited) for sale of UPS business:
SWELECT entered into a Business Transfer Agreement (BTA) on 9th February
2012 with Novateur for transfer of the entire UPS business of the company,
including 100% share sale of Numeric Lanka Technologies Private Limited and
sale of UPS Business in Singapore for a total consideration of Rs 837.08
Crores the consummation of which took place on 29th May 2012.
Post transfer of UPS business, your Company in the new name of M/s SWELECT
ENERGY SYSTEMS LIMITED will aggressively embark upon generation of Solar /
Wind energy, manufacture of LED products, etc besides up scaling Foundry
business.
DIRECTORS` RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies Act,
1956, with respect to Directors` Responsibility Statement, it is hereby
confirmed that:
(i) In the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
(ii) The directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the company
for the year;
(iii) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities: and
(iv) The directors have prepared the annual accounts on a going concern
basis.
DIRECTORS
Reappointment
Mr. N Natarajan and Mr. B G Giri, Directors, retire by rotation and being
eligible, offer themselves for reappointment at the ensuing Annual General
Meeting.
The resolutions in respect of the above reappointments are placed before
the shareholders for their approval at the ensuing Annual General Meeting.
STATUTORY INFORMATION
The information required under Section 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules, 1975 will be provided
on request. In terms of Section 219(1)(b)(iv) of the Act, the Report and
Accounts are being sent to the shareholders.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
/ Outgo
Particulars as required under Section 217(1)(e) of the Companies Act, 1956
read with the (Companies Disclosure of Particulars in the Report of the
Board of Directors) Rules, are annexed.
RESULTS OF SUBSIDIARY COMPANIES
The particulars of subsidiary companies, which are included in
consolidation are as under: (Please refer page 99)
Sl. Name of the Subsidiary Company Place of Incorporation
No.
1. Numeric Lanka Technologies Pvt. Limited Colombo, Sri Lanka.
2. Numeric Power Systems Pte. Limited Singapore
3. Numeric Power Systems (Mauritius) Private Ltd Mauritius
4. Numeric Solar Energy Private Limited Chennai, India
5. Amex Alloys Private Limited Coimbatore, India
6. Amex Irons Private Limited Coimbatore, India
7. BS Powertech Solution Private Limited Chennai, India
ACCOUNTS OF SUBSIDIARY COMPANIES
The company undertakes that the annual accounts of the subsidiary companies
and the related detailed information will be made available to shareholders
seeking such information at any point of time. The annual accounts of the
subsidiary companies are being kept for inspection for the shareholders at
the Registered Office of the Company. The hard copy of details of accounts
of subsidiaries shall be furnished to any shareholder on demand.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on Consolidated Financial
Statements read with Accounting Standard AS-23 on Accounting for
investments in Associates in consolidated financial statements and AS-27 on
Financial Reporting of interests in Joint Ventures, we have attached the
consolidated financial statements which form part of the Annual Report and
Accounts.
AUDITORS
M/s. S.R. Batliboi & Associates, Chartered Accountants, 6th & 7th Floor, A
Block, Tidel Park, No. 4, Rajiv Gandhi Salai, Taramani, Chennai - 600113
retire at the ensuing Annual General Meeting, and are eligible for
reappointment
FUTURE PROSPECTS AND BUSINESS
SOLAR ENERGY:
As you are aware, the business of Numeric Power Systems Ltd consisted of
three verticals viz, UPS Business, Solar and Wind energy,and LED Lighting
business. As the UPS Business having been sold off by virtue of the
Business Transfer Agreement with effect from May 29, 2012, your Company
under the new name of SWELECT Energy Systems Limited (SWEES), will
concentrate and accelerate the growth of business in the green field areas
of Solar and Wind energy generation on behalf of the company and undertake
Turn-Key Projects for various customers.
With over 27 years of expertise and experience in Power Electronics, power
Management Systems SWEES is well positioned to capture sizeable share of
Domestic and Global Market. This is evidenced from the fact that SWEES
already has more than 1000 Roof-Top installations at Customers` sites in
India and abroad.
As a Channel partner of MNRE, SWEES has the distinct advantage of being in
close proximity to customers for pre-sale guidance, project implementation,
commissioning and post-sale service with least possible lead time, so as to
enable the customers to have rich harvest of solar/wind energy.
SWEES fully equipped with the State-of the Art technology and know-how is
looking forward for strategic investment opportunities and Technical
Collaborations for taking your Company to greater heights.
WIND POWER:
SWEES has already installed a 1.5 MW wind mill quite successfully and also
commissioned an off-grid Solar-Wind Hybrid System. The R&D wing is actively
engaged in developing different prototypes to revolutionize generation of
alternate renewable and green energy.
LED PRODUCTS:
Globally, the future lighting system is going to be highly eco-friendly,
mercury free and cost effective Light Emitting Diode(LED) lighting products
SWEES is confident of capturing a good share of LED market.
UPSCALING FOUNDRY PRODUCTS:
The two Foundries at Coimbatore viz: AAPL and AIPL are progressing as per
schedule and they are expected to contribute considerably during the
current year.
CORPORATE GOVERNANCE
A report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement is attached to this Report.
A Compliance Certificate from Mr. R. Kannan, Practicing Company Secretary,
regarding compliance of conditions of Corporate Governance as stipulated
under the aforesaid Clause, is annexed to this report.
ACKNOWLEDGMENT
Your Board places on record its appreciation of the support and co-
operation received from the Government of India, State Governments,
Financial Institutions, Banks, Suppliers, Customers and Vendors, whom your
company looks upon as valued partners in progress. Your Directors also wish
to place on record their appreciation for the valuable services rendered by
Depositories, Stock Exchanges, and the Registrar and Transfer Agents. Your
Directors commend the zeal and zest of employees at all levels culminating
in the Company setting yet another new record on its operational
performance for the year. Your Directors thank all our valuable Investors
who have been with the Company all these years and are also very much
pleased to welcome all the new Investors and thank them for their continued
patronage and confidence reposed in the Management.
For and on behalf of the Board of Directors
Chennai A.BALAN R.CHELLAPPAN
May 30, 2012. Director Managing Director
ANNEXURE TO THE DIRECTORS` REPORT
Information under Section 217(1)(e) of the Companies Act, 1956 read with
Companies (Disclosure of particulars in the report of Board of Directors)
Rules, 1988.
PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT,
FOREIGN EXCHANGE ETC.
A. CONSERVATION OF ENERGY
1. Continuing Implementation of Solar Power Projects in all manufacturing
facilities to address Renewable Energy and Energy Savings from Utility /
Generator run time and fuel consumption. 2. Progressive installation of
Solar Lighting in the place of conventional lights.
B. RESEARCH & DEVELOPMENT
1. Specific areas in which R&D carried out by the Company:
Utilisation of Solar Energy with the support of Solar Power Converters.
2. Benefits derived as a result of the above:
Energy Efficient Systems and Affordable energy alternatives, reduces
pollution and green house gas emission from local power plants, combats
global warming.
3. Future Plan of Action:
To enhance the product design to reach the high capacity grid connected
invertors and intelligent power monitoring systems.
4. Expenditure on R & D Rs. In Lakhs
a. Capital 86.33
b. Recurring 124.83
c. Total 211.16
d. Total R&D expenditure as percentage of total turnover 0.42%
C. TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION
1. Efforts made towards Technology absorption, adaptation and innovation:
a. Solar Power convertors MPPT Change controllers for optimization of Solar
Power recovery.
b. Solar Power Converters.
2. Benefits derived as a result of the above:
a. Progressive Cost Savings and Lesser Emission of Carbon Foot Print.
b. Enhanced product range and imports substitution.
2. Benefits derived as a result of the above:
a. Progressive Cost Savings and Lesser Emission of Carbon Foot Print.
b. Enhanced product range and imports substitution.
3. Technology imported : Nil
D. External Growth : More overseas focus for export promotion
E. FOREIGN EXCHANGE EARNINGS AND OUTGO: (Rs. In Lakhs) (Rs. In Lakhs)
2011-2012 2010-2011
Foreign Exchange Earnings :
Export at F.O.B. value 731.78 920.98
Royalty and Technical Services - 5.11
Dividend 304.17 -
Foreign Exchange Outflow :
Import of Machinery & Advance payments. 1,190.72 1.42
Raw materials 5,128.54 7346.05
Traded goods 7,989.94 8588.16
Travelling 17.95 13.55
Freight and Insurance 48.99 -
Interest 31.28 45.56
Dividend 21.15 21.15
Others 3.12 34.43
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Company is continuously monitoring the Risks and Concerns and taking
adequate measures to ensure high level stability and satisfactory
performance in all the major areas and introducing necessary back-up
processes also.
1. ASSET MANAGEMENT & LOSS PREVENTION
Asset management has been achieved by bar-coding the Current and Non-
current assets as well as the entire work in progress in all the plants.
Remote monitoring of the logistics results in loss prevention during
transit.
2. RISKS AND CONCERNS
Your Company continuously monitors business and operations risk through an
efficient risk management system. All Key functions and divisions are
independently responsible to monitor risks associated within their
respective areas of operations such as production, insurance, legal and
other issues like health, safety and environment.
- RISK MANAGEMENT COMMITTEE
The Risk Management Committee of the Company continuously monitors business
and operations risk through an efficient risk management system. All Key
functions and divisions are independently responsible to monitor risks
associated within their respective areas of operations such as production,
insurance, legal and other issues like health, safety and environment.
- FOREX MANAGEMENT COMMITTEE
The Forex Management committee has been reviewing the day to day forex
movements and also has been actively taking the forward contracts with
specific underlying transactions as per RBI guidelines.
3. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has proper and effective internal control systems commensurate
with its nature of business and size of operations to ensure that all
controls and procedures function satisfactorily at all times and all
policies are duly complied with in this regard. These are considered
adequate to safeguard its assets against loss or misappropriation through
unauthorized or unintended use.
There is adequate and effective internal control system that employs
periodic checks on on-going process. The Audit Committee and the Board of
Directors regularly reviews the effectiveness of Internal control system in
order to ensure due and proper implementation and due compliance with
applicable laws, accounting standards and regulatory guidelines.
4. HUMAN RESOURCES
Employees are vital and most valuable assets. The Company has a favourable
work environment that encourages innovation and motivation. The Management
continues to invest in people through various Learning & Development
initiatives and believe in nurturing leaders from within us as far as
possible and provide opportunities for growth across all levels and derive
our ability to maintain our No1 position from them. The total staff
strength of the Company as on 31.3.2011 was 2369 which increased to 2499
during the year ended 31.03.2012.
5. WELFARE / SOCIAL ACTIVITIES
The Company sponsors several sports and social welfare activities to derive
internal team building. EMPLOYEES` WELFARE TRUST is a welfare society with
its main object of working towards the welfare of its employees.
6. QUALITY AND ENVIRONMENT MANAGEMENT
The Company has an Environmental Policy, which is read every morning in the
Public Announcement System along with the Quality Policy so as to make the
employees conscious of their roles and responsibilities in achieving
conformity with the requirements of the quality and environment management
system. The Environmental Policy goes as under:
Company is committed,
- To minimize the environmental impact of its operations by a fully
involved EMS Program, with continual improvement strategies by:
- Providing Products and Services that are environmentally sound throughout
their lifecycle,
- Creating Health & Safety Practices and Work environment,
- Strong practices to protect the Natural Resources like Land, Air, Water
and conservation of Energy,
- Complying with all the applicable legal and other requirements and
reaching higher standards,
- Setting and tracking measurable environmental objectives to mitigate
adverse impacts on Environment,
- Evaluating and continually improving our Environmental performance.
7. FINANCIAL PERFORMANCE
The Net Sales and other Income of the Company registered an increase of
10.41% as compared to the previous year (FY 2010-11) and the profit after
tax is Rs.3,463.11 lakhs during the current year (FY 2011 - 12).
The Management Discussion and Analysis relates to the Standalone audited
financial statements of the Company.
8. CAUTIONARY STATEMENT
Certain statements in this Management Discussion and Analysis Report
describing the company may be `Forward Looking Statements` within the
meaning of applicable laws and regulations. Actual results could differ
materially from those expressed or implied. Important factors that could
make a difference to the Company`s operations include economic conditions
affecting demand/supply and price conditions in the domestic and overseas
markets in which the company operates, changes in the Government
regulations, tax laws and other statutes and other incidental factors.
For and on behalf of the Board of Directors
A.BALAN R.CHELLAPPAN
Director Managing Director
Chennai,
May 30, 2012. |