Management Discussion and Analysis Report
Your Directors have pleasure in presenting the Twenty First Annual Report together withthe Audited Statements of Accounts of the Company for the Financial Year ended March 312017. The Management Discussion and Analysis is also included in this Report.
|The performance of your Company for the year under review is summarized below: || ||(Rs. in Lakhs) |
|Particulars ||2016-2017 ||2015-2016 |
|Sales & Other Income (Net of Excise Duty) ||260.64 ||319.06 |
|Profit/(Loss) before Interest Depreciation & Tax ||(31.17) ||(47.69) |
|Less: Interest ||2.07 ||2.44 |
|Profit before Depreciation & Tax ||(33.24) ||(50.13) |
|Less: Depreciation ||36.26 ||37.91 |
|Profit/ (Loss) before Taxation ||(69.50) ||(88.04) |
|Less: Provision for Current Tax / (MAT) ||- ||- |
|Deferred Tax and adjustments prior year ||- ||- |
|Less MAT Credit ||- ||- |
|Profit/ (Loss) after tax for the year ||(69.50) ||(88.04) |
Dividend and Reserves
In view of losses suffered by the Company your Directors do not recommend any dividendfor the financial year ended March 31 2017. During the year under review no amount wasrequired to be transferred to General Reserve.
During the year the Company has not issued shares with differential voting rights norhas granted any stock options or sweat equity. There was no provision made of the money bythe Company for purchase of its own shares by employee or by trustee. As on March 312017 none of the Directors of the Company hold instruments convertible into equity sharesof the Company.
During the year there was no change in the Share Capital of the Company.
As on March 31 2017 the issued subscribed and paid up share capital of your Companystood at Rs. 130 955070/- comprising 13095507 Equity shares of Rs.10/- each.
Directors and Key Managerial Personnel
As per the relevant provisions of Companies Act 2013 and SEBI (LODR) Regulations2015 during the period under review the following changes in Directors are detailed asfollows:
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.Gautam Khandelwal Executive Chairman of the Company retires by rotation at the ensuingAnnual General meeting and being eligible offers himself for reappointment. The boardrecommends his re-appointment for the consideration of the Members of the Company at theensuing Annual General Meeting. A brief profile and other related information of thedirectors has been given in the Notice convening the Annual General Meeting.
The Board of Directors had appointed Mr. Ajit Parundekar as an AdditionalDirector of the Company w.e.f. June 01 2017. In accordance with the provisions of theaforesaid section Mr. Ajit Parundekar holds office upto the date of the ensuing AnnualGeneral Meeting of the Company. The Company has received a notice in writing under Section160 of the Companies Act 2013 from a Member proposing his appointment as Director of theCompany. The board recommends his appointment as a Non-Executive Non-Independent Directorof the Company liable to retire by rotation. A brief profile and other relatedinformation of the directors has been given in the Notice convening the Annual GeneralMeeting.
The Board of Directors had appointed Mr. Virat Mehta as an Additional Directorw.e.f. August 30 2017. In accordance with the provisions of the aforesaid section Mr.Virat Mehta holds office upto the date of the ensuing Annual General Meeting of theCompany. The Company has received a notice in writing under Section 160 of the CompaniesAct 2013 from a Member proposing his appointment as Director of the Company. The boardrecommends his appointment as a Non-Executive Independent Director of the Company notliable to retire by rotation and to hold office for a term of five consecutive yearscommencing from the date of ensuing Annual General Meeting. Mr. Virat Mehta has givendeclaration that he meets the criteria of independence as laid down under Section 149(6)of the Companies Act 2013 and Regulation 16 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. A brief profile and other related informationof the directors has been given in the Notice convening the Annual General Meeting.
Mr. Gautam Khandelwal shall be re-appointed as a Whole-Time Director designatedas "Executive Chairman" w.e.f. July 01 2017 for the period of three years whoshall be liable to retire by rotation subject to approval of shareholders at the ensuingAnnual Gerneral Meeting. The board recommends his re-appointment for the consideration ofthe Members of the Company at the ensuing Annual General Meeting. A brief profile detailsof remuneration proposed to be paid and other related information of the directors hasbeen given in the Notice convening the Annual General Meeting.
The Company has following persons as Key Managerial personnel (KMP):
|Sr. No. ||Name of the person ||Designation ||Date of Appointment as KMP |
|1. ||Mr. Gautam Khandelwal ||Executive Chairman ||15.09.2014 |
|2. ||Mr. Santosh Khandelwal ||Chief Financial Officer ||30.09.2014 |
|3. ||Mrs. Nidhi Salampuria ||Company Secretary & Compliance Officer ||30.09.2014 |
Details of Board meetings
During the year the Board of Directors met 4 times details of which are provided inthe Corporate Governance report.
Committees of the Board
The details of the various committees of the board and their composition as on March31 2017 are as under:
|Name of Director(s) ||AuditCommittee ||Stakeholder Relationship Committee ||Nomination & Remuneration Committee |
|Mr. Nimis Savailal Seth ||Chairman ||Chairman ||Chairman |
|Mr. Gautam P. Khandelwal ||Member ||Member ||Member |
|Mr. Girish Bakre ||Member ||Member ||Member |
|Mrs. Nidhi Salampuria || || || |
* The Risk Management Committee was dissolved by the Company w.e.f. May 27 2016
Declaration by Independent Directors (IDs)
Mr. Nimis Sheth and Mr. Girish Bakre are Independent Directors of the Company. TheCompany has received declaration from them confirming that they meet the criteria ofindependence as prescribed under Section 149 (6) of the Companies Act 2013. During theyear the Independent Director meeting was held on November 07 2016.
Nomination and Remuneration Policy
The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes and independence of adirector and other matters provided under sub-section (3) of Section 178 of the CompaniesAct 2013 is adopted by the Board and may be accessed on the Company's website at thelink: http:// www.nagpurpowerind.com/investors/corporate-governance/. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was prepared asper the requirement of the act which included various aspects of Boards and Committeesfunctioning Composition of the Board and its Committees functioning of the Individualdirectors. The aspects covered in the evaluation included the contribution to andmonitoring of corporate governance practices and the fulfillment of Directors' obligationsand fiduciary responsibilities including but not limited to active participation at theBoard and Committee meetings.
Further the Independent Directors at their meeting reviewed the performance of BoardChairman of the Board and of Non -Executive Directors.
The Board expressed their satisfaction with the evaluation process.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals
There are no significant and material orders passed by the Regulators or Courts orTribunals which may impact the going concern status and Company's operations.
Internal Financial Controls
The details in respect of internal financial control and their advocacy are included inthe management discussion and analysis which forms part of this Annual Report
During the year your Company has not accepted any deposits under the provisions ofChapter V of the Companies Act 2013 and the rules made there under.
Subsidiary/Joint Ventures/Associate Companies:
The Company does not have Joint Ventures/Associate Companies. The Company has OneSubsidiary Company "The Motwane Manufacturing Company Private Limited".
Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under Section 186 of the CompaniesAct 2013 form part of the notes to the financial statements provided in this AnnualReport.
Management Discussion and Analysis
a) Economy review:
The long-term growth perspective of the Indian economy is changing due to goodgovernance stable policies and good initiatives like smart cities. Your Company (throughits Subsidiary) is in the business of manufacturing electrical equipment a significantportion of which is supplied to the power sector which has continued to be affected by thepolitical & economic situation. We hope to see a gradual recovery.
b) Business and Industrial review and future outlook:
The Company mainly operated on Metal Recovery Plant and produces Low Ferro Manganese(Slag) through its profitable slag recovery process. However there is no more re-useablewaste of fine particles remaining in the manganese slag which was dumped at various placesat the factory site which can be recovered. The technical consultants are of the same viewthat the entir stock have been depleted now and hence the company has disposed off themanganese slag recovery plant and closed the metal recovery operations.
The management of the company has foreseen this & thus entered another segment ofbusiness couple of years earlier via a majority stake in "The Motwane ManufacturingCompany Private Limited" now a subsidiary company and is looking to develop itsbusiness in electrical sector. The company is also looking at other business opportunitiesincluding monetizing its assets and redeployment of the same in better businessopportunities.
c) Risks Concerns & Threats:
Depletion of slag dumps posed a major problem for the Company. In order to counterthis the Company entered into another business through its subsidiary company "TheMotwane Manufacturing Company Private Limited" and is looking to develop it. The Sr.Managment of the Company meets frequently to take the stock of all the impending andimmediate threats to the business and takes necessary steps for positioning of the Companyto meet the same in time. Any major threats affecting the Company in general and businessenvironment indirectly affecting the functioning of the Company are discussed with theBoard from time to time.
d) Internal Control Systems:
The Company has adequate internal control systems in place with reference to thefinancial statements. The Audit Committee of the Board periodically reviews the internalcontrol systems with the management Internal Auditors and Statutory Auditors and theadequacy of internal audit function significant internal audit findings and follow-upsthereon.
e) Financial Performance / Overview of Operations:
During the year under review the revenue from operation of the Company decreased toRs. 7.52 Lakhs from Rs. 26.96 Lakhs in the previous year due to non- availability of anyslag at the site. This decrease is mainly attributable to the depletion slag dumps asCompany mainly operates on Metal Recovery plant and the profit margins have decreased dueto lower realizations of Ferro Manganese slags in 2016-2017.
Subsidiary Company and Consolidated Statements
Your Company has one subsidiary i.e The Motwane Manufacturing Company PrivateLimited' (MMCPL). During the financial year 2016-17 total revenue of the MMCPL hasdecreased to Rs. 20.54 crores from Rs. 21.49 crores in the previous financial year and thenet loss has reduced Rs. 0.24 crores against a loss of Rs. 0.99 crores in the previousfinancial year. MMCPL has also started export operations during the year and hassuccessfully exported to 10 countires during the financial year 2016-17.
The Consolidated Financial Statement of your Company for the financial year 2016-17are prepared in compliance with applicable provisions of the Companies Act 2013Accounting Standard and SEBI(Listing Obligations and Disclosure Requirements) Regulations2015. The Consolidated Financial Statements have been prepared on the basis of auditedfinancial statements of the Company its subsidiary as approved by their respective Boardof Directors.
Pursuant to sub-section (3) of section 129 of the Act the statement containing thesalient features of the financial statement of Company's subsidiary is given as AOC -1.Brief particulars about the business of each of the Subsidiary are given hereunder:-
MMCPL is an R & D based company and has developed various high technology test andMeasurement products which have applicability in the domestic and international markets.The company's products are sold primarily to the power sector and energy intensiveindustries. The company expects gradual pick up in its order book due to growth and reformin the distribution sector in which the company operates. Alternatively it is exploringits potential in the IOT space in adjacent areas like smart lighting and other IOT relatedindustrial solutions.
e) Material developments in human resources / industrial relations including number ofpeople employed
The human resource plays a vital role in the growth and success of an organization. TheCompany has maintained cordial and harmonious relations with employees.
During the year under review various training and development workshops were conductedto improve the competency level of employee with an objective to improve the operationalperformance of individuals. The Company has built a competent team to handle challengingassignments and projects.
The Company has 22 permanent employees as on March 31 2017.
The Company is aware of the risks associated with the business. The Senior Managementsregularly analyses and takes corrective actions for managing / mitigating the same. Interms of the requirement of the Act the Company has authorized Senior Management tomanage monitor and report on the principal risks and uncertainties that can impact theability to achieve the Company's strategic objectives. The Senior Management periodicallyinforms the board on various issues along with its recommendations and comments forBoard's review and necessary action.
Statutory Auditors their Report and Notes to Financial Statements
As per the provisions of Section 139 of the Act read with the Companies (audit andAuditors) Rules 2014 the term of office of M/s. M.V. Ghelani & Co. CharteredAccountants (ICAI Registration No. 119077W) as the Statutory Auditors of the Company willconclude from the close of the forthcoming AGM of the Company. The Board of Directorsplaces on record its appreciation for the services rendered by them as the StatutoryAuditors of the Company. Subject to approval of the members the Board of Directors of theCompany has recommended the appointment of M/s. Parekh Sharma and Associates Charteredaccountants (Firm Registration No. 129301W) as the Statutory Auditors of the Companypursuant to Section 139 of the Act.
As required under the provisions of section 139(1) of the Companies Act 2013 theCompany has received a written consent from M/s. Parekh Sharma And Associates. CharteredAccountants in respect to their appointment and a Certificate to the effect that theirappointment if made would be in accordance with the Companies Act 2013 and the Rulesframed thereunder and that they satisfy the criteria provided in section 141 of theCompanies Act 2013.
The Board of Directors has on the recommendation of the Audit Committee proposed theappointment of Parekh Sharma and Associates Chartered Accountants (Firm Registration No.129301W) as the Statutory Auditors of the Company for a period of 5 years to hold officefrom the conclusion of this Annual General Meeting till the conclusion of the Fifthconsecutive Annual General Meeting of the Company to be held in the year 2022 (subject toratification of their appointment at every AGM) from the conclusion of this AGM till theconclusion of the Twenty-Sixth (26th) AGM of the Company to be held in 2022 subject toratification of their appointment at every AGM if so required under the Act.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments.
The Auditors' Report does not contain any qualification reservation or adverse remark.
In terms of Section 204 of the Companies Act 2013 and the rules made there under M/s.DSM & Associates Practicing Company Secretary (Certificate of Practice Number : 9394)have been appointed Secretarial Auditors of the Company. The report of the SecretarialAuditor is enclosed as Annexure I to this report. The report is self-explanatoryand do not call for any further comments.
Related Party Transactions
There have been no materially significant related party transactions between theCompany and the Directors the management the key managerial personnel the subsidiariesor the relatives except for those disclosed in the financial statements.
Accordingly particulars of contracts or arrangements with related parties referred toin Section 188(1) along with the justification for entering into such contract orarrangement in Form AOC-2 does not form part of the report.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website and can be accessed at the Web link:http://www.nagpurpowerind.com/investors/corporate-governance/
Extract of the Annual Return
Pursuant to the provisions of section 92(3) of Companies Act 2013 the extract of theannual return in Form No. MGT 9 is enclosed with the report as Annexure II.
Disclosures pursuant to The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
A) Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014:
|Sr. No. ||Name of Director/ KMP and Designation ||Remuneration of Director/KMP for financial year 2016-17 (Rs. in Lacs) ||% increase in Remuneration in the financial year 2016-17 ||Ratio of remuneration of each Director/ to median remuneration of employees ||Comparison of the Remuneration of the KMP against the performance of the Company |
|1. ||Mr. Gautam Khandelwal ||12.00 ||NIL ||8.24:1 ||Loss Dereased by 2.28% in FY 2016-17 |
| ||Executive Chairman || || || || |
|2. ||Mr. Nimis Sheth ||NIL ||N.A. ||N.A. ||N.A. |
| ||Non-Executive Director || || || || |
|3. ||Mr. Girish Bakre ||NIL ||N.A. ||N.A. ||N.A. |
| ||Non- Executive Director || || || || |
|4. ||Mrs. Nidhi Salampuria ||N.A. ||N.A. ||N.A. ||N.A. |
| ||Non-Executive Director || || || || |
|5. ||Mr. Santosh Khandelwal ||9.10 ||20.69% ||N.A. ||Loss Decreased by 2.28% in FY 2016-17 |
| ||Chief Financial Officer || || || || |
|6. ||Mrs. Nidhi Salampuria ||18.00 ||105.95% ||N.A. || |
| ||Company Secretary & Compliance Officer || || || || |
* The Company has not paid any sitting fees to any directors during the year.
i) The Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-17: As per table given above
ii) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2016-17 and: As per table given above.
iii) The percentage increase in the median remuneration of employees in the financialyear 2016-17: In the financial year there was a decrease of 2.62% in the medianremuneration of employees.
iv) There were 22 confirmed employees on the rolls of the Company as on March 31 2017.
v) Average percentage increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentageincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: As pertable given above
vi) Affirmation that the remuneration is as per remuneration policy of the Company- Yes
B) Particulars of employee's remuneration as required under section 197(12) of theCompanies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016:
During the year under consideration none of the employees of the Company were inreceipt of remuneration in excess of limits prescribed section 197(12) of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Amendment Rules 2016 hence particulars as required under section197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016 are notgiven.
Conservation of Energy Technology Absorption Foreign Exchange Earning and Outgo
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 are given below:
(A) Conservation of Energy:
The Company continues to take appropriate measures with regard to conservation ofenergy:
Total Energy consumption and energy consumption per unit of production is as follows:
|Particulars ||Financial Year 2016-17 ||Financial Year 2015-16 |
|Electricity purchased:- || || |
|Units (KWH)- ||70744 ||118226 |
|Total Amount (Rs in lakhs)- ||13.99 ||23.14 |
|Rate / KWH (Rs.) ||19.79 ||19.58 |
|Consumption per unit of Production: || || |
|Ferro Manganese Slag (Low MnO)- || || |
|Units in KWH ||90.70 ||151.57 |
(B) Technology Absorption:
a. Research and Development (R & D):
The Company has not undertaken any R&D activity in the current year.
b. Technology Absorption Adaptation and Innovation:
The Company has not imported any technology during the year.
(C) Foreign Exchange earnings and outgo:
During the year the foreign Exchange outgo was Rs 1.69 lakhs (Previous year Rs.1.62 lakhs). The foreign exchange earning was Nil (Previous year Nil).
Corporate Social Responsibility (CSR)
Since the CSR norms are not applicable to the Company hence the disclosures as perRule 9 of Companies (Corporate Social Responsibility Policy) Rules 2014 is not requiredto be made.
Vigil Mechanism and Whistle Blower Policy
The Company has adopted a Vigil Mechanism and Whistle Blower Policy to report genuineconcerns about any unethical behavior actual or suspected fraud or violations of theCompany's code of conduct. The provisions of this policy are in line with the provisionsof Section 177 (9) of the Act. The policy can be accessed on the Company's website atfollowing link http:// www.nagpurpowerind.com/investors/corporate-governance/
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The following is a summary of Sexual Harassment Complaints received and disposed offduring the year 2016-2017.
|Sr. No. ||No. of Complaint received ||No. of Complaints disposed off |
|1 ||Nil ||N.A. |
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthis report relates and the date of the report except as otherwise mentioned in thisdirector report if any.
There had been no changes in the nature of Company's business. To the best ofinformation and assessment there has been no material changes occurred during thefinancial year generally in the classes of business in which the Company has an interestexcept as otherwise mentioned in this director report if any.
Directors' Responsibility Statement
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 (the Act) theBoard of Directors to the best of their knowledge and ability confirm that:
i) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed and that there are no material departures;
ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the loss ofthe Company for that year;
iii) they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis;
v) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Company adheres to the requirements set out by the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Corporate Governance practices and haveimplemented all the stipulations prescribed. The Company has implemented several bestcorporate governance practices.
The Corporate Governance which form an integral part of this Report are set out asAnnexure III together with the Certificate from the Auditors of the Company regardingcompliance with the requirements of Corporate Governance as stipulated in SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Your Board of Directors wishes to place on record their appreciation for thewhole-hearted co-operation received by the Company from the Shareholders variousGovernment departments Business Associates Company's Bankers and all the employeesduring the year.
| ||For and on behalf of the Board |
|Place: Mumbai ||Gautam Khandelwal |
|Date: August 30 2017 ||Chairman |
| ||DIN 00270717 |