The Board of Directors hereby submits the report of the business and operations of yourCompany ('the Company' or 'Solar') along with the Audited Financial Statements for thefinancial year ended on March 31 2017. The consolidated performance of the Company andits subsidiaries has been referred to whenever required.
The Company adopted Indian Accounting Standards ("Ind AS") from April 1 2016and accordingly financial results have been prepared in accordance with the recognitionand measurement principles laid down in the Ind AS 34 'Interim Financial reporting'prescribed under Section 133 of the Companies Act 2013 read with the relevant rulesissued thereunder and the other accounting principles generally accepted in India.
1. Financial Highlights
| || |
(Rs. in crore except per Equity share data)
|Particulars || |
| ||2017 ||2016 ||2017 ||2016 |
|Net Revenue from operations || || || || |
|(Including Other Income) ||1266.60 ||1139.22 ||1724.49 ||1587.26 |
|Less: Expenditure ||1036.38 ||941.16 ||1387.39 ||1269.76 |
|Operating profit (PBIDT) ||230.22 ||198.06 ||337.10 ||317.50 |
|Interest ||13.79 ||7.66 ||26.89 ||20.44 |
|Profit before Depreciation&Tax (PBT) ||216.43 ||190.40 ||310.21 ||297.06 |
|Less: Depreciation ||19.28 ||17.72 ||38.74 ||32.82 |
|Profit before Tax & Exceptional item ||197.15 ||172.68 ||271.47 ||264.24 |
|Less: Exceptional item || || || || |
|Profit before Tax ||197.15 ||172.68 ||271.47 ||264.24 |
|Less: Provision for Taxation ||64.57 ||63.82 ||76.74 ||86.74 |
|ProfitafterTax ||132.58 ||108.86 ||194.73 ||177.50 |
|Other Comprehensive Income ||(0.46) || ||(1.11) || |
|Share ofprofittransfertominority || || ||8.19 ||13.84 |
|Net profit (after Minoirity Interest) ||132.12 ||108.86 ||185.44 ||163.66 |
|Balance brought forward ||175.17 ||179.93 ||283.04 ||263.00 |
|Balance available for appropriation ||307.29 ||288.79 ||468.47 ||426.66 |
|Appropriation: || || || || |
|Interim Dividend ||18.10 ||57.01 ||18.10 ||57.01 |
|Tax On Dividend ||3.68 ||11.61 ||3.68 ||11.61 |
|Adjustment of Depreciation || || || || |
|General Reserve ||45.00 ||45.00 ||76.91 ||75.00 |
|Balance Profit Carried To Balance Sheet ||240.51 ||175.17 ||369.78 ||283.04 |
|Earning Per Share (EPS)* ||14.60 ||12.03 ||20.49 ||18.09 |
*With effect from July 15 2016 face value of Company's Equity shares has beensubdivided from Rs.0 per equity share to RS.2 per equity share and accordingly EPSfor all comparative periods have been restated.
Results of Operation Standalone Reaching
During the financial year ending on March 31 2017 revenue of the Companystands at Rs.266.60 Crores as against Rs.139.22 Crores achieved during the previous yearwhich is a significant increase in turnover by 11.18%.
The Profit After Tax (PAT) for the FY 2016-17 is Rs.32.12 Crores againstRs.08.86 Crores in the previous year 2015-16.
Profit before Interest Depreciation Amortisation Exceptional Items & Taxstood at RS.216.43 Crores as against Rs.90.40 Crores in the previous year.
Earnings Per Share as on March 31 2017 is Rs.4.60 vis a vis against Rs.2.03 ason March 312016.
The net worth of the Company has increased and stands at to Rs.658.63 Crores inthe Fiscal year 2017 from RS.548.29 Crores at the end of fiscalyear 2016.
During the Financial year ending on March 31 2017 revenue of the Companystands at Rs.724.49 Crores as against Rs.587.26 Crores achieved during the previous yearwhich is a significant increase in turnover by 8.65%.
The Profit After Tax (PAT) after transferring the share of profit of MinorityInterest for the Financial year 2016-17 is Rs.85.44 Crores against previous year Rs.63.66Crores in 2015-16.
Profit before Interest Depreciation Amortisation Exceptional Items & Taxstood at Rs.310.21 Crores as against RS.297.06 Crores in the previous year.
Earnings Per Share as on March 31 2017 is RS.20.49 vis a vis against Rs.8.09 ason 31st March 2016.
The net worth of the Company has increased and stands at to RS.928.59 Crores inthe Fiscal year 2017 from RS.805.44 Crores at the end of Fiscalyear 2016.
Based on company's performance the directors are pleased to recommend for approval ofmembers a final dividend of Rs.3 per share for the FY 2016-17 taking the total dividend toRS.5 per share (previous year RS.4.5 per share restated on the basis of RS.2 per equityshare). The final dividend on equity shares if approved by the members would involve acash outflow of Rs.32.67 crores including Dividend tax. The total dividend on equityshares including dividend tax for the FY 2016-17 would aggregate RS.54.46 crores resultingin payout of 29.37% of the unconsolidated profits of the Company.
Regulation 43A of SEBI Listing Regulations 2015 (LODR) requires that the top 500listed companies based on the market capitalisation to formulate Dividend DistributionPolicy the details of which are available on the company'swebsite-https://www.solargroup.com/Uploads/ Files/Investors/policies/PDD.pdf
3. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Sections 123 and 125 of Companies Act 2013; the relevant amounts whichhave remained unclaimed and unpaid for a period of seven years from the date they becamedue for payment have been transferred to the Investor Education and Protection Fund (IEPF)administered by the Central Government.
During the year under review in Compliance with the above Sections and InvestorEducation and Protection Fund (awareness and protection of investors) Rules 2011 Yourcompany has transferred Unpaid and unclaimed dividend amount of Rs.52416 and Rs.39639lying in the Final Dividend Account (2008-2009) and Interim Dividend Account (2009 -2010)respectively to IEPF.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason September 22 2016 (date of last Annual General Meeting) on the Company's website(www.solargroup.com) and also on the Ministry of Corporate Affairs' website.
4. Transfers to Reserves
The Company has transferred Rs.76.91 Crores to the general reserve out of the amountavailable for appropriations and an amount of Rs.369.78 Crores is proposed to beretained in the statement of profit and loss.
During the year the Company has not accepted deposits from the public falling withinthe ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.
6. Credit Ratings
CRISIL has revised its ratings for long term borrowings of Solar Industries India Ltdfrom 'CRISIL AA/Stable' to "CRISIL AA/Positive". The ratings reflect SIIL'Sstrong market position good operating efficiencies (backed by prudent raw materialprocurement policies and backward integration) and strong debt protection measures. Toarrive at its ratings CRISIL has combined SIIL's financial and business profiles withthose of its subsidiaries.
In addition to long Term rating CRISIL has also re-affirmed the rating of Short TermBorrowings and commercial paper to "CRISIL A1+".
7. Commercial Paper
During the year under review your company raised funds through issue of CommercialPapers of RS.50 crores by earmarking the Working Capital Limit from ICICI BankLimited and HDFC Bank Limited
Details of these Commercial Papers are summarised below:
|Name of Bank ||From ||To ||Rate of Interest |
|ICICI Bank Limited ||26th December 2016 ||17th March 2017 ||6.85% |
|HDFC Bank Limited ||22nd February 2017 ||24th April 2017 ||6.90% |
|ICICI Bank Limited ||24th March 2017 ||21st June 2017 ||6.89% |
8. Particulars of Loan Guarantees or Investments with Related Parties
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
9. Subsidiaries and Associates
As a purposeful strategy your Company carries all its business operations throughseveral subsidiaries and associate companies which are formed either directly or asstep-down subsidiaries or in certain cases by acquisition of a majority stake in existingenterprises.
During the year under review Company acquired "Australian Explosives Technologies(Pty) Limited" through its Step Down subsidiary Solar Overseas Singapore PTE Limited.Thus "Australian Explosives Technologies (Pty) Limited" is a step downsubsidiary of the Company.
During the financial year under review in continuation of the efforts to realign thegroup structure and consolidate the multi layered structure the Board has decided todissolve the following three subsidiary companies:
Solar Industries Mozambique LDA
Solar Explochem (Ghana) Limited
Solar Mining Services Australia PTY Limited.
10. Audited Financial Statements oF the Company's Subsidaires
The Board of Directors of your Company at its meeting held on May 29 2017 approvedthe Audited Consolidated Financial Statements for the FY 201617 which includes financialinformation of all its subsidiaries and forms part of this report. The ConsolidatedFinancial Statements of your Company for the FY 2016-17 have been prepared in compliancewith applicable Indian Accounting Standards (Ind-AS) and SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 requirement.
A report on the performance and financial position of each of subsidiaries of yourCompany including capital reserves total assets total liabilities details ofinvestment turnover etc. pursuant to Section 129 of the Companies Act 2013 in the FormAOC-1 forms part of this report.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww.solargroup.com. These documents will also be available for inspection during businesshours at our registered office of the Company.
11. Share Capital
The paid up Equity Share Capital as on March 31 2017 was Rs.809.80 Lakhs. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity.
During the year under review the shares of the company were splitted from 1 share offace value of Rs.0/- per share into 5 shares of RS.2/- per share. The sub-division wasapproved by the shareholders through postal ballot. The results of the Postal Ballot wereannounced on July 01 2016. The sub division of shares was with effect from July 15 2016.The paid-up share capital of the company remained unchanged.
12. Corporate Governance
The Company has complied with the corporate governance requirements under CompaniesAct 2013 and as stipulated under Listing Regulations. A separate section on CorporateGovernance along with a certificate from the auditors confirming compliance is annexed andforms part of this Annual Report.
13. Board Diversity
Your Company has laid down well-defined criteria for the selection of candidates forappointment as Directors Key Managerial Personnel and Senior Management. There has beenno change in the policy since last Fiscal.
14. Declaration by Independent Directors
The Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
15. Board Meetings
During the year Five Board Meetings were convened and held on May 16 2016 July 012016 September 07 2016 November 23 2016 and February 14 2017. The details of whichare given in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
16. Board Committees & its Meetings
The Board of the Company has total four Committees namely Audit Committee Nominationand Remuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility Committee. Each Committee met atleast once in every quarter. The details ofcomposition and committee meetings during the year are given in the Corporate GovernanceReport which is a part of this report.
17. Vigil Mechanism
The Vigil Mechanism of the Company which also incorporates a Whistle Blower Policy todeal with instance of fraud and mismanagement if any. The details of the Whistle BlowerPolicy is explained in the Corporate Governance Report and also posted on the website ofthe Company at the link https://www.solargroup.com/Uploads/Files/Investors/policies/WBP.pdf
18. Policy on Sexual Harassment oF Women at Workplace
The Company has zero tolerance towards sexual harassment at the workplace and towardsthis end has adopted a policy in line with the provisions of sexual harassment of womenat workplace (Prevention Prohibition and Redressal) Act-2013 and the rules madethereunder. All employees (permanent contractual temporary and trainees) are coveredunder the said policy. During the Financial year under review the company has notreceived complaints of sexual harassment from any employee of the company.
19. Directors and Key Managerial Personnel
Director's Retiring by Rotation
In terms of Articles of Association of the Company and as per Section 152(6) of theCompanies Act 2013 provides that 2/3rd of the Board of Directors is consideredto be Directors liable to retire by rotation of which 1/3rd shall retire atevery Annual General Meeting of the Company as per Section 152(6) (e) of the CompaniesAct 2013 and the Company shall have an option to re-appoint the retiring Director orappoint someone else in his place.
This year Shri Kailashchandra Nuwal (DIN: 00374378) shall retire by rotation and beingeligible offer himself for re-appointment at this Annual General Meeting.
The Boards of Directors recommends his re-appointment at Item No. 3 of the NoticeCalling 22nd Annual General Meeting for consideration of the Shareholders.
The brief resume and other details relating to Shri Kailashchandra Nuwal (DIN:00374378) who is proposed to be re-appointed as required to be disclosed under Regulation36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isincorporated in the annexure to the notice calling 22nd Annual General Meeting.
Pursuant to the recommendation of Nomination and Remuneration Committee the Board ofDirectors of the Company passed a resolution on May 29 2017 approving re-appointment ofShri Roomie Dara Vakil as Executive Director of the Company for a further period of oneyear with effect from April 012017 to March 312018.
The requisite notices together with necessary deposits have been received from aDirector pursuant to Section 160 of the Companies Act 2013 proposing the election ofShri Roomie Dara Vakil in as an Executive Director of the Company.
Key Managerial Personnel
Pursuant to the Section 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The Key ManagerialPersonnel of the Company are:
Shri Satyanarayan Nuwal-Chairman and Executive Director
Shri Kailashchandra Nuwal-Vice Chairman and Executive Director
Shri Manish Nuwal-Managing Director and Chief Executive Officer
Shri Anil Kumar Jain-Executive Director
Shri Roomie Dara Vakil-Executive Director
Shri Niiesh Panpaiiya-Chief Financial Officer and
Mrs. Khushboo Pasari-Company Secretary & Compliance Officer.
20. Board Evaluation
Pursuant to the provisions of Section 134(3)(p) of the Companies Act 2013 andRegulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out an annual performance evaluation of its ownperformance and individual directors as well as the evaluation of the working of itsBoard Committees. Performance evaluation of independent directors was done by the entireboard excluding the independent director being evaluated. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
21. Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
22. Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure A".
23. Particulars oF Employees
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the FY 2016-17:
|Name of Executive Directors ||Designation ||Ratio to median remuneration |
|Shri Satyanarayan Nuwal ||Chairman and Executive Director ||145.95 |
|Shri Kailashchandra Nuwal ||Vice Chairman and Executive Director ||145.95 |
|Shri Manish Nuwal ||Managing Director & CEO ||145.95 |
|Shri Anil Kumar Jain ||Executive Director ||15.45 |
|Shri Roomie Dara Vakil ||Executive Director ||14.26 |
Note: Non-Executive Independent Directors were paid sitting fees for attendingBoard and Board Committee Meetings for the year 2016-17.
b. The percentage increase in remuneration of each Director Chief Executive Officer(CEO) Chief Financial Officer (CFO) Company Secretary (CS) in the FY 2016-17 are asfollows:
|Name of Directors and KMP ||Designation || |
% increase in remuneration in the Financial year 2016-17
|Shri Satyanarayan Nuwal ||Chairman and Executive Director ||20% |
|Shri Kailashchandra Nuwal ||Vice Chairman and Executive Director ||20% |
|Shri Manish Nuwal ||Managing Director & CEO ||20% |
|Shri Anil Kumar Jain ||Executive Director ||96.98% |
|Shri Roomie Dara Vakil ||Executive Director ||6.20% |
|Shri Nilesh Panpaliya ||ChieF Financial Officer ||5.59% |
|Smt Khushboo Pasari ||Company Secretary and Compliance Officer ||16.30% |
c. The percentage increase in the median remuneration of employees in the financialyear: 8.19%
d. The number of permanent employees on the rolls of Company: 2038.
e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration andjustification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average annual increase of employees other than Key Managerial Personnel was13.79%. The average annual increase of Key Managerial Personnel was 20.50%. The increasein remuneration of employees other than the Key Managerial Personnel is considerably inline with the increase in remuneration of Key Managerial Personnel.
f. The key parameters for any variable component of remuneration availed by thedirectors:
The key parameters for the variable component of remuneration availed by the directorsare considered by the Board of Directors based on the recommendations of the Nominationand Remuneration Committee as per the Remuneration Policy of the Company.
g. Affirmation that the remuneration is as per the remuneration policy of the Company:
It is affirmed that the remuneration paid to the Directors key Managerial Personneland Senior Management is as per the Nomination & Remuneration Policy of the Company.
h. Company has no such employee who is in receipt of remuneration as per Rule 5(2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
24. Related Party Transactions
All related party transactions that were entered into during the FY 2016-17 were on anarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
All Related Party Transactions were placed before the Audit Committee and also theBoard for approval. Prior omnibus approval of the Audit Committee is obtained on aquarterly basis for the transactions which are of a foreseen and repetitive nature. Thetransactions entered into pursuant to the omnibus approval so granted are audited and astatement giving details of all related party transactions is placed before the AuditCommittee and the Board of Directors for their approval on a quarterly basis. The Companyhas formulated a Related Party Transactions policy indicating the Standard OperatingProcedures for purpose of identification and monitoring of such transactions.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website. None of the Directors has any pecuniary relationships or transactionsvis-a-vis the Company.
None of the transactions with related parties falls under the scope of Section 188(1)of the Companies Act 2013. Information on transactions with related parties pursuant toSection 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014are given in "Annexure B" in form AOC-2 and the same forms part of theDirectors Report.
M/s Gandhi Rathi & Co. Chartered Accountants Statutory Auditor of the Company holdoffice till the conclusion of 22nd Annual General Meeting of the Company.
The Board places on record its appreciation for the contribution of M/s. Gandhi Rathi& Co. Chartered Accountants during their tenure as the Statutory Auditors of theCompany.
The Board of Directors has recommended the name of M/s SRBC & Co. LLPjointly withM/s Akshay Rathi & Associates Chartered Accountants to be appointed as StatutoryAuditors of the Company in their place for a term of five consecutive years from theconclusion of the 22nd Annual General Meeting till the conclusion of 27thAnnual General Meeting to be held in the year 2022 for approval of shareholders of thecompany based on the recommendation of Audit Committee.
The Company has received written consent(s) and certificate(s) of eligibility inaccordance with Sections 139 141 and other applicable provisions of the Companies Act2013 and Rules issued thereunder (including any statutory modification(s) orre-enactment(s) thereof for the time being in force) from M/s. SRBC & Co. LLP and M/s.Akshay Rathi & Associates. Further M/s. SRBC & Co. LLP and M/s. Akshay Rathi& Associates Chartered Accountants have confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India asrequired under the Listing Regulations.
The Report of Auditors of the Company M/s Gandhi Rathi & Co. Chartered Accountantson the Annual Accounts of Solar Industries India Limited Standalone and Consolidated withSubsidiary Companies forms part of this report. There were no adverse remarks orqualification on accounts of the Company from the Statutory Auditors.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments.
Pursuant to the provisions of Section 148 of the Companies Act 2013 and The Companies(Cost Records and Audit) Amendment Rules 2014 the Cost Audit of the Cost and relatedrecords of the Company for the year 2016-17 was undertaken by Shri Deepak Khanuja Partnerof M/s Khanuja Patra & Associates Nagpur the Cost Auditor of the Company.
There were no adverse remarks or qualification on accounts of the Company from the CostAuditors.
The Board of Directors of the Company has appointed Shri Deepak Khanuja Partner of M/sKhanuja Patra& Associates to conduct the Cost Audit as per Section 148 of theCompanies Act 2013 read with The Companies (Cost Records and Audit) Amendment Rules 2014for the FY 2017-2018.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and The Companies(Accounts) Rules 2014 during the year under review the Internal Audit of the functionsand activities of the Company was undertaken by the Internal Auditors of the Company onquarterly basis by M/s Ekbote Deshmukh & Co. and M/s D L & Associates the InternalAuditors of the Company.
There were no adverse remarks or qualification on accounts of the Company from theInternal Auditors.
The Board of Directors of the Company has appointed M/s Ekbote Deshmukh & Co.Chartered Accountants and M/s D L & Associates Chartered Accountants to conduct theInternal Audit as per Rule 13 of the Companies (Accounts) Rules 2014 prescribed underSection 138 of the Companies Act 2013 for the FY 2017-2018.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Secretarial Auditfor the FY 2016-17 was undertaken by Shri Anant B. Khamankar Practicing Company Secretarythe Secretarial Auditor of the Company.
The Report of Auditors of the Company M/s Anant B Khamankar & Co. CompanySecretaries on the Secretarial and related records of the Company is annexed herewith as "AnnexureC".
There were no adverse remarks or qualification on accounts of the Company from theSecretarial Auditors.
The Board of Directors of the Company appointed Shri Anant B. Khamankar practicingCompany Secretary to conduct the Secretarial Audit as per Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 prescribed underSection 204 of the Companies Act 2013 for the FY 2017-2018.
None of the auditors of the Company have reported any fraud as specified under Section143(12) of the Companies Act 2013.
26. Corporate Social Responsibility
As part of its initiatives under "Corporate Social Responsibility" (CSR) theCompany has undertaken various projects in the areas like:
Rural InFrastructure Development
Health Care Initiatives
Ensuring environment sustainability
Reducing inequalities faced by socially and economically backward groups.
The projects are largely in accordance with Schedule VII of the Companies Act 2013.
The primary beneficiaries of CSR shall be the people in the areas within and around theCompany's Plant Locations.
The Report on CSR activities is annexed herewith as "Annexure D".
27. Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureE".
28. Statement of Management's Responsibility for Consolidated Financial Statements
Management is responsible for the preparation of the Consolidated Financial Statementsand related information that are presented in this report. The Board of Directors of yourCompany at its meeting held on May 29 2017 has approved the Audited ConsolidatedFinancial Statements for the FY 2016-17 and its subsidiaries in accordance with Regulation33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andapplicable provisions of Companies Act 2013 read with rules issued thereunder. TheConsolidated Financial Statements of your Company for the FY 2016-17 are prepared incompliance with applicable Accounting Standards based on management's estimatesassumptions and judgments where applicable as well as Listing Regulations as prescribed bythe Securities and Exchange Board of India.
The Company has built adequate systems of internal controls aimed at achievingefficiency in operations optimum utilisation of resources effective monitoring andcompliance with all applicable laws.
The Internal Audit function monitors the effectiveness of controls and also providesan independent and objective assessment of the overall governance processes in theCompany including the application of a systematic risk management framework. The AuditCommittee of the Board reviews major internal audit reports as well as the adequacy ofinternal controls.
29. Management Discussion and Analysis Report
A detailed review of operations performance and future outlook of your Company and itsbusinesses is given in the Management Discussion and Analysis which forms part of thisReport as stipulated under regulation 34(2)(e) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
30. Business Responsibility Report
The SEBI Listing Regulations mandates the inclusion of the BRR as part of the Annualreport for the top 500 listed entities based on market capitalisation. In compliance ofListing Regulations we are pleased to present the first Business Responsibility Reportinto our Annual Report.
31. Director's Responsibility Statement
Pursuant to Section 134 (3) (c) of the Companies Act 2013 the Board of Directorshereby confirms that:
i. In the preparation of the annual accounts of the Company for the year ended March31 2017 the applicable Accounting Standards had been followed and there are nodepartures;
ii. Accounting policies have been selected and applied consistently and judgments andestimates made that are reasonable and prudent so as to give true and fair view of thestate of affairs of the Company at the end of the financial year March 31 2017 and of theprofit of the Company for that year ended on that date;
iii. Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this act for safeguarding theassets of the Company and detecting fraud and other irregularities;
iv. Annual accounts for the year ended March 312017 have been prepared on a goingconcern basis.
v. Internal Financial controls were in place and that the financial controls wereadequate and were operating effectively.
vi. Systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
32. CEO/CFO Certification
As required Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the CEO/ CFO certification is attached withthe annual report.
33. Appreciation & Acknowledgement
Your Directors would place on record their sincere appreciation to customers businessassociates government agencies & shareholders for their continued support.
Your directors are also happy to place on record their sincere appreciation to theco-operation commitments & contribution extended by all the employees of the SolarFamily & look forward to enjoying their continued support & co- operation.
| ||For and on behalf of the Board |
|Place : Nagpur ||(Satyanarayan Nuwal) |
|Date : May 29 2017 ||Chairman |
Conservation oF Energy Technology Absorption and Foreign Exchange Earnings and Outgo
Information as required under Section 134(3) (m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014.
A. CONSERVATION OF ENERGY
The Company has always been a forerunner in conservation of energy and naturalresources. All manufacturing processes and products are designed for minimising carbonfootprints and are being continuously upgraded to consistently achieve this goal. TheCompany has a distinction of having all its plants certified for ISO 14000 and 18000 whichis a culmination of our sustained efforts and our policy of protecting environment andnatural resources.
The pioneering effort of the Company in rainwater harvesting has started giving goodresults. Construction of benches trenches open reservoirs and check dams in the largeopen land areas in the plant will result in considerable increase in the water table inand around the plant area thus ensuring year-round water availability for our plantoperation & plantation. Moreover availability of rain waters-a soft water-in the openponds saves on water softening and pumping energy cost.
The effluents are treated in the Effluent Treatment Plants and the treated water isused for gardening and used in the process wherever possible. We have almost achieved zerodischarge level.
The Company gets energy audit conducted internally and experts regularly takecorrective actions.
The steps have resulted not only in saving the energy and conserving natural resourcesbut also in reducing our running costs of the operations.
The Company has spent RS.4.75 crores as capital investment on energyconservation equipment during the FY 2016-17.
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
Efforts in Brief :
The Company has full-fledged Research & Development Division engaged in research onnew products processes and study on the existing manufacturing process optimisation ofprocess parameters to improve the product quality safety and cost saving.
After successful development of new technology for a product or manufacturing processit is tested in our specified testing plants before implementing it on regular basis. Mostof the existing manufacturing processes and technology has been developed in house andoccasionally seeks advice of experts from India as well as from overseas sources. TheCompany is not dependent on any foreign Technology for its existing product line andstrives continuously for technology development and absorption for new products. We areopen for buying technologies from abroad leading technological players.
Product quality improvement reduction production losses production flexibility andimproved safety.
Research and Development (R& D)
a. Specific area in which R&D carried out by the company
Our R&D activities run parallel to the activities in our principal areas ofoperation.
Products for Defence application.
Bulk Explosives for tunneling operations.
Safety enhancements in Processes and Products Quality improvements in packagedExplosives and Accessories.
Improving packaging standards enhancing shelf life of packaged Explosives andAccessories.
Process efficiency in Packaged Bulk Explosives and Accessories.
Development of alternate primary charge for Detonators
b. Benefits derived as results of above:
Improved safety compliance and enhanced environment protection.
Modification of existing process for some of the products and savings in cost ofproduction.
R & D has benefited in improving the quality of Packaged Bulk Explosivesand delay timings of detonators.
Introduced products for defence application.
Developed shock tube with high tensile strength and reduction in cost.
P3 formulation have been developed and approved by CMIFR P5 under development.
Safe primary explosives composition developed which has result in improving theoperational safety.
c. Future plan of action:
Introducing new products for different application in Defence Sector.
Developing various composition based on HMX and RDX.
Development of variety of propellants.
Tracking and traceability of Finished Goods in collaboration with PESO.
Develop substitute Eco-friendly chemicals to eliminate hazardous chemicals inthe processes.
Development of New formulation of permitted P5 explosive.
Improving Quality and Shop-floor safety of Packaged Explosives and Detonators.
Development of reliable & Eco-Friendly delay composition
d. Expenditure on R&D:
| || || ||(Rs. in crores) |
|Particulars ||2016-2017 ||2015-16 |
|1. ||Capital ||1.43 ||0.62 |
|2. ||Recurring ||2.89 ||2.39 |
|3. ||Total ||4.32 ||3.01 |
|4. ||R&D Expenditure percentage of Turnover ||0.35% ||0.27% |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
| || ||(Rs. in crores) |
|Sr. No. Particulars ||2016-17 ||2015-16 |
|a. Earnings in Foreign Exchange || || |
|Export of goods calculated on FOB basis ||100.96 ||78.18 |
|(CIF basis value) ||121.37 ||89.86 |
|b. Remittances in Foreign Exchange: || || |
|On account of Raw Material & Capital Goods ||78.99 ||87.69 |
|On account of Bank Interest ||6.85 ||6.12 |
|On account of Sales Commission ||1.07 ||0.39 |
|On account of Ocean Freight ||Nil ||Nil |
|On account of Sales Promotion ||1.49 ||0.93 |
|On account of Other Expenses ||2.89 ||1.97 |
| ||For and on behalf of the Board |
|Place: Nagpur ||(Satyanarayan Nuwal) |
|Date : May 29 2017 ||Chairman |