The Directors are pleased to present 7th Board's Report of the Company alongwith the Audited Financial Statements of the Company for the financial year ended 31stMarch 2017.
The financial results of the Company for the year 2016-17 is summarized in thefollowing table as compared to that of previous year:
(Figures In Lakhs)
|Particulars ||Year Ended on 31st March 2017 ||Year Ended on 31st March 2016 |
|Revenue from Operations ||1251.52 ||949.01 |
|Other Income ||7.18 ||10.53 |
|Total Revenue ||1258.71 ||959.54 |
|Less: Expenditure ||1390.36 ||889.10 |
|Profit before Financial Cost Depreciation and Tax ||(131.66) ||70.44 |
|Less: Financial Cost ||102.82 ||44.21 |
|Less: Depreciation and amortization ||401.31 ||395.58 |
|Profit/Loss before Tax (PBT) ||(635.79) ||(369.35) |
|Less: Tax Expenses ||195.19 ||122.12 |
|Profit/Loss after Tax(PAT) ||(440.60) ||(247.23) |
|Balance carried to Balance Sheet ||(1143.59) ||(702.99) |
Summary of Performance
During the year 2016-17 the Company has reported growth of 31.88 % in revenue fromoperations as compared to the previous financial year 2015-16. During the financial yearthe total revenue of the Company stood at Rs. 1251.52 Lakhs. However due to challengingbusiness environment for reclaim rubber industry and increase in cost of operations theCompany has suffered Loss of Rs. 440.60 Lakhs during financial year 2016-17.
Management of the Company believes that business environment will change and theCompany will come with better and positive results in upcoming years.
In the financial year under review Company has not earned profit therefore the Boardof Directors regret their inability to recommend any dividend for the year.
Company has not accepted any public deposits within the meaning of Section 73 ofCompanies Act 2013 read with the Companies (Acceptance of Deposit) Rules 2014 and assuch no amount of principal or interest on public deposits was outstanding as on the dateof balance sheet.
Board of Directors and Key Managerial Personnel
In accordance with the provisions of Companies Act 2013 and as per Articles ofAssociation of the Company Dr. Arun Gopal Agarwal Director retire by rotation at theforthcoming Annual General Meeting and being eligible offer himself for reappointment.
On 24th January 2017 Mr. Manendra Singh and Mr. Nikhil Bansal ceased to bethe Company Secretary and Chief Financial Officer (CFO) of the Company respectively due totheir resignation from the post and Ms. Lipika Garg and Mr. Hemant Kumar Jain have beenappointed as the Company Secretary and Chief Financial Officer (CFO) of the Companyrespectively by the Board of Directors w. e. f. 25th January 2017.
None ofthe Directors ofthe Company is disqualified under Section 164 ofthe CompaniesAct 2013.
Details of Directors seeking appointment/re-appointment at the forthcoming AnnualGeneral Meeting as required under clause 36 of SEBI (LODR) Regulations 2015 is enclosedwith the notice of Annual General Meeting.
Criteria for Board Membership of the Company
For the appointment of Directors the Company take into account following points:
Director must have relevant experience in Finance/ Law/ Management/ Sales/Marketing/Administration/ Research/ Corporate Governance/ Technical Operations or theother disciplines related to Company's business.
Director should possess the highest personal and professional ethics integrityand values.
Director must be willing to devote sufficient time and energy in carrying outtheir duties and responsibilities.
Director must be fit and proper person.
Independent Director is a Non-Executive Director who does not have any direct orindirect material pecuniary relationship with the Company or any of its officers otherthan as a Director or Shareholder of Company. Independent Director shall abide by the Codeof Conduct as prescribed under Schedule IV of the Companies Act 2013.
Independent Director shall meet all criteria specified in Section 149(6) of theCompanies Act 2013 and rules made thereunder and Regulation 25 of SEBI (LODR)Regulations 2015.
Mr. Dharam Vir Gupta Mrs. Anshu Gupta and Mr. Diwan Chand Arya are IndependentDirectors on the Board of the Company. In the opinion of the Board and as declarationsubmitted by these Directors under Section 149 (7) of Companies Act 2015 they complywith all the criteria of Independent Director as envisaged in Section 149(6) the CompaniesAct 2013 and Regulation 25 SEBI (LODR) Regulations 2015.
Familiarization Programme for Independent Directors
Every new Independent Director of the Board attends an orientation program which is tofamiliarize the new Non-Executive Director with the strategy operations and functions ofthe Company. The Executive Directors / Senior Managerial Personnel conduct meetings withthe Non-Executive Directors to make them understand the Company's strategy operationsproduct and organization structure human resources facilities and risk management.Through meetings and interaction among Senior Managements and Non- Executive Directors andIndependent Directors Company has made its best effort to ensure that the Non- ExecutiveDirectors understand their roles rights responsibilities in the Company.
Further at the time of appointment of an Independent Director the Company issues aformal letter of appointment outlining his/her role function duties and responsibilitiesas an Independent Director. The format ofthe letter of appointment is available onCompany's website.
Directors' Responsibility Statement
Pursuant to the requirement of Section 134(3)(c) read with Section 134(5) oftheCompanies Act2013 (the Act) your Directors confirm that:
a) in the preparation of the annual accounts for the financial year 2016-17 theapplicable accounting standards had been followed and there are no material departure fromthe same;
b) the Directors has selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view ofthe state of affairs ofthe Company at the end of the financial year and of theprofit and loss of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions ofthe Act for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis;
e) the Directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and were operating effectively;and
f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Company's Policy on Directors' Appointment and Remuneration
Company has constituted Nomination and Remuneration Committee as required under Section178 of the Companies Act 2013 and Regulation 19 of SEBI (LODR) Regulations 2015 whichinter-alia has recommended and formulated a Remuneration Policy ("the policy").
The Policy is framed in accordance with the provisions of Companies Act 2013 andlisting Regulations. In case of any subsequent changes in the provisions of Companies Act2013 and Listing Regulations which makes any of the provisions of the policy inconsistentwith the Act or regulations the provisions of the Act or regulation shall prevail overthe policy.
The objective of the policy is to provide criteria for appointment of Directors viz.experience qualification positive attributes understanding of the Company's business andsocial perspective personal achievements and Board diversity. The Policy also containedthe provisions to ensure that Executive Directors KMP and other employees aresufficiently compensated for their performance. Under the Policy Nomination andRemuneration Committee is entrusted with the responsibility to evaluate the variousaspects relating to recommend the appointment and remuneration ofthe Directors of theCompany.
Independent Non-Executive Directors are appointed for their professional expertise intheir individual capacity as independent professionals. Independent Non-ExecutiveDirectors shall be entitled for sitting fees reimbursement of expenses paid forattending the meeting of the Board and Board Committees and commission as approved by theBoard or/and shareholders.
The remuneration of employees largely consists of basic salary perquisites allowancesand performance incentives. Perquisites and other benefits are paid according to theCompany policy subject to prescribed statutory ceiling. The components of the totalremuneration vary for different grades and are governed by the industry patternqualification & experience / merits performance of each employee.
The Companies Act 2013 states that formal annual evaluation required to be made byBoard of its own performance and that of its Committees and individual Directors andSchedule IV of the Companies Act 2013 states that the performance of IndependentDirectors shall be evaluated by the entire Board of Directors excluding the Directorbeing evaluated. Further listing regulations also mandates that the Board shall monitorand review the Board evaluation framework.
Accordingly the Board in consultation with the Nomination and Remuneration Committeehas set the criteria for evaluation of performance of Executive/Non-Executive/IndependentDirectors. Such criteria provides that the evaluation of performance of Board as wholeits Committees and Directors shall be carried out on annual basis and the Board may availservices of independent consultant to facilitate it for evaluating the performance ofdirectors individually or collectively.
During the year evaluation of performance of all the Directors and the Board as awhole and its Committees was conducted based on criteria set in this regard. TheEvaluation process focused on various aspect of the Board and Committees functioning suchas composition of the Board and Committees competencies and experiences performance ofduties and obligation assigned etc. A separate process was also carried out to evaluatethe performance of individual Director on the criteria such as contribution in decisionmaking governance issue independent judgment experience and presence in the meetings ofBoard and Committees. The results of evaluations were satisfactory. In addition to aboveevaluation the performance of Non-Independent Directors performance of Board as a Wholeperformance of Chairman of the Company have also been reviewed by Independent Directors intheir separate meeting held on 14th March 2017 in terms of provisions ofSchedule IV of the Companies Act 2 013 and Listing Regulations.
The Company owned hundred percent shares of M/s Shubham Electrochem Limited (WhollyOwned Subsidiary Company). At the year ended 31st March 2017 the turnover of M/s ShubhamElectrochem Limited stood at Rs. 10.55 Lakhs. Duringthe reporting period SubsidiaryCompany reported profit before tax of Rs. 2.48 Lakhs.
Statutory Auditor and Audit Report
In terms of Section 139 of the Companies Act 2013 M/s R. Lai and Company CharteredAccountants has been appointed as Statutory Auditor of the Company in 6thAnnual General Meeting of the Company up to the conclusion of 11th AnnualGeneral Meeting of the Company subject to annual ratification. Accordingly Board ofDirectors recommends the ratification for appointment of Statutory Auditor being eligibleto continue as Statutory Auditor for financial year 2017-18.
The observations of Statutory Auditor and Secretarial Auditor in their reports readwith notes thereto are selfexplanatory and do not call for any further explanation. TheAuditors of the Company have not given any adverse remark or disclaimer in their reports.
The report of the Statutory Auditors and Secretarial Auditors are enclosed to thisreport.
Secretarial Auditor and Secretarial Audit Report
As stipulated in the Section 204 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Secretarial Audit forthe financial year 2016-17 has been carried out by a qualified Practicing CompanySecretary and submitted Secretarial Audit Report on the compliance of applicable ActsRules Regulations Guidelines Standards etc. The Secretarial Audit Report is enclosed tothis Annual Report as an integral part of this report. The findings of Secretarial Auditare satisfactory and do not call for any further explanation.
Internal Financial Controls
Internal Financial Control System is an integral component of the Risk ManagementSystem of the Company. The internal financial control policies and internal audit programadopted by the Company plays an important role in safeguarding the Company's assetsprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and timely preparation of reliable financial disclosures.
The Board has adopted procedures for ensuring the orderly and efficient conduct of itsbusiness including risk management feedback loop in which the information generated inthe internal control process is reported back to Board and Management.
A firm of Competent Chartered Accountants has been engaged by the Company forconducting internal audit to examine and evaluate the adequacy and effectiveness ofinternal financial control system of the Company. The Audit Committee of Board ofDirectors Statutory Auditors and the Business Heads are periodically apprised of theinternal audit findings and corrective actions taken.
The Audit Committee of Board of Directors actively review the adequacy andeffectiveness of internal financial control system and suggests improvements forstrengthening them. Internal Financial Control System of the Company are adequate with therespect to the operations of the Company.
Particulars of Contracts or Arrangements with Related Parties
During the year under the review there were no materially significant related partytransactions which could have had a potential conflict with the interests of the Company.Transactions with related parties are in the ordinary course of business on arm's lengthbasis and do not attract the provisions of Section 188(1) of the Companies Act 2013. Therelated party transactions were periodically placed before the Audit Committee and/orBoard for its approvals or review as and when required. The policy on Material RelatedParty Transactions is available on the Company's website.
CARE BB+ and CARE A4 rating has been assigned by Credit Analysis & Research Ltd.(CARE Ratings) to the Company for Long Term Bank Facilities and Short Term Bank Facilitiesrespectively.
Particulars of Employees
In accordance with the provisions of Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 information regarding employees is annexed as Annexure-A to this report.
Extracts of Annual Return
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 Extracts of Annual Return in the prescribedform MGT-9 is annexed as an integral partofthis report as Annexure-B.
Meetings of the Board of Directors
During the financial year under review Five (5) meetings of the Board of Directors wereduly convened details of which are given in the Corporate Governance Report that formspart of this Annual Report. The intervening gap between any two meetings was within theperiod prescribed by the Companies Act 2013.
Particulars of Conservation of Energy Technology Absorption Foreign Exchange Earningsand Outgo
The particulars pursuant to Section 134(3)(m) of Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014to the extent applicable are as under:
(A) Conservation of energy-
i. Company has been continually working on energy conservation and has taken andimplemented various measures towards this in production domestic lightning and coolingfacilities. Company has installed significant numbers of powerless turbo ventilators inthe entire working shed for ventilation using 'zero' power. Building have been designedfor ingress of adequate natural light thus requiring no artificial lightning during theday time. Many provisions have been made in various machines for consuming energy duringprocessing line losses has been maintained close to 'zero' by adequate design of cablesand other systems.
ii. No step has been taken by the Company for utilization of alternate source ofenergy. However Company at its non-conventional energy division generate electricity bywind energy and transfer the same to power grids.
iii. Company has invested Rupees Three Lakhs on proposals for power generation forcaptive consumption at its reclaim rubber plant through solar route.
(B) Technology absorption-
|I. ||The efforts made towards technology absorption ||It's a continual process and the drive for reaching and adapting new technology is always under progress. |
|II. ||The benefits derived like production improvement cost reduction product development or import substitution ||Performance improvement is a continual process with respect to productivity delivery quantity cost and safety. Company is regularly following this and each department has set its own objective for performance improvement which is closely monitored and regulated. With continued improvement in technology our production rate has been improved. |
|III. ||In case imported technology (imported during last 3 years reckoned from the beginning of the financial year)- || |
|(a) ||The details of technology imported ||Company is using imported machines in its reclaimed rubber division. |
|(b) ||The year of import ||2013 |
|(c) ||Whether technology been fully absorbed ||Yes |
|(d) ||Research and developments ||The company seeks regular technical support from experts in this field and undertake appropriate R&D activities depending upon future requirements. |
(C) Foreign exchange earnings and Outgo-
The details of the foreign exchange exposure during the period under review are asunder:
(Amount In Lakhs)
|Particulars ||Current Year ||Previous Year |
|Total Foreign Exchange Earnings ||Nil ||Nil |
|Total Foreign Exchange Outgo ||5.86 ||1.71 |
Vigil Mechanism/ Whistle Blower Policy
Pursuant to the requirement of the Companies Act 2013 the Company has establishedvigil mechanism/ whistle blower policy. Section 177 of the Companies Act 2013 whichinter-alia provides for a requirement to establish a mechanism for all the Directors andemployees to report to the management instances of unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy.
Accordingly the Mechanism is established to provide adequate safeguards againstvictimization of persons who use such mechanisms. Whistle blower Policy is available onCompany's website.
Prevention of Sexual Harassment at Workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and rules made thereunder. The Directors of theCompany state that during the year under review there was no case filed pursuantto sexualharassment of woman at workplace (Prevention Prohibition and Redressal) Act 2013.
Material Changes and Commitments
No material changes and commitments affecting the financial position of the Companyhas been occurred between the end of the financial year 2 016-17 and till the date of thisreport.
No significant and material orders were passed by Courts Tribunals and otherRegulatory Authorities affecting the going concern status of the Company's operations.
Management Discussion and Analysis Report
In terms of Regulation 34 of SEBI (LODR) Regulations 2015 Management Discussions andAnalysis Report is appended to this Board's Report as Annexure-C.
The Company is committed to maintain the good standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Company continues tobenchmark its corporate governance policies in its true sense. The report on CorporateGovernance as stipulated under the Listing Regulations forms an integral part of thisreport as Annexure-D. The requisite certificate from the Auditors of the Companyconfirming compliance with the conditions of corporate governance is annexed to the reporton Corporate Governance.
We place on record our appreciation to employees at all level for their contributiondedication and commitment. The Board take this opportunity to thank all InvestorsClients Vendors Banks Government and Regulatory Authorities for their support and lookforward for their continued support in the future.
|Place: New Delhi ||For and on behalf of the Board of |
|Date : 08th August 2017 ||S. E. Power Limited |
| ||Sd/- |
| ||(DR. ARUN GOPAL AGARWAL) |
| ||Chairman |
| ||DIN:00374421 |