SRM Energy Ltd.
|BSE: 523222||Sector: Others|
|NSE: N.A.||ISIN Code: INE173J01018|
|BSE LIVE 15:15 | 31 Aug||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 523222||Sector: Others|
|NSE: N.A.||ISIN Code: INE173J01018|
|BSE LIVE 15:15 | 31 Aug||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
The Members of
SRM Energy Limited
The Directors present their 29th Annual Report and Audited Financial Statements for thefinancial year 2015-16.
1. Financial Summary/highlights on Performance of the Company
(In Rs. Million)
There is no operating income or profit hence no dividend is being recommended.
There is no surplus available to be carried forward to Reserves.
4. Brief description of the Companys working during the year/ State ofCompanys affair
As reported earlier the Company is in the process of setting up Thermal Power Projectsat various locations more particularly in the state of Tamilnadu. The project at Tamilnaduis consisting of 3X660 MW i.e. 1980 MW capacity is being set up by the Wholly OwnedSubsidiary SRM Energy Tamilnadu Pvt. Ltd. As such there are no other operations at presentand the related expenses incurred during the current period are considered aspre-operative expenses pending allocation to the power project.
The Company had plan to induct financial / strategic investor into the subsidiary totake care of the equity requirements for the project and the debt portion was proposed tobe met through loans from the Chinese Banks Consortium in spite of the same theaforesaid plans have met with a road block in view of non-availability of funds downfallin the energy sector delays and changed socio-economic conditions in the country. Thissituation has significantly impacted the development of the project and has brought it tothe standstill.
The Groups networth has been significantly reduced and it has been incurring cashlosses the promoters have infused funds by way of unsecured loan and are committed toprovide necessary funding to meet the liabilities and future running expenses of theGroup.
Amidst aforesaid situation where the Company is incurring cash losses increasingamount of unsecured loans from the promoters changed socio-economic conditions etc. theBoard of Directors of the Company have decided to sell/dispose off the proposed Powerplant in its wholly owned subsidiary subject to necessary approvals from the shareholdersand other statutory authorities if any.
The power plant in the wholly owned subsidiary which is intended to be sold /disposedoff as explained above is in Pre-operative stage and no expenses have been charged toStatement of Profit and Loss. Accordingly the loss for the year does not include any lossrelating to ordinary activities attributable to discontinuing operations.
Shifting of Registered office of the
Further for the ease of doing business and effective control over the administrativeactivities of the Company Your Company had filed the petition to Regional DirectorWestern Region Mumbai for shifting of the Registered office of the Company from MumbaiMaharashtra to NCT of Delhi.
Pursuant to the aforesaid petition the Regional Director Western Region Mumbai videorder dated 06.06.2016 have ordered for such shifting of registered office from state ofMaharashtra to the NCT of Delhi hence the Registered Office of the Company has beenshifted to "Unit No. 206 2nd Floor Suneja Tower-2 District Centre Janakpuri NewDelhi-110058" with effect from the aforesaid order.
5. Change in the nature of business if any
There was no change in the nature of business of the Company during the financial year2015-16.
6. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report.
There are no changes and commitments which are affecting the financial position of theCompany from the end of the financial year i.e. 31st March 2016 till the date of thisReport. i.e. 04th August 2016.
7. Details in respect of adequacy of internal financial controls with reference tothe Financial Statements.
The Company has adequately adopted the procedures to ensure the proper internalcontrol suitable policies and guidelines as required under various provisions of theCompanies Act 2013 and the Listing Agreement are in place. These policies e.g. VigilMechanism Policy/Whistle Blower Policy Risk Management Policy are meant to adhere to theproper guideline rules and regulations to comply with the requirement of the law toreduce the possible threats of fraud and to ensure the orderly and efficient conduct ofthe business of the Company. These policies and guidelines are adequately monitored by thedesignated Committees of the Board. The Members be further apprised that earlier theaffairs of Risk Management were being looked after by the Risk Management Committee of theCompany however the Board decided to dissolve the said committee and terms of referenceof the same shall be looked after by the Audit Committee of the Company.
The Company apart from the above has also in place a system of Internal Controladequate in respect to the size and operations of the Company. M/s Amarjeet Singh &Associates had been the Internal Auditor of the Company for the financial year 2015-16.He has been conducting internal audit at regular intervals at every quarter ending. Nomaterial discrepancies have been reported by him during the period of his Audit. TheCompany prepared the financial information/Reporting as per the requisite requirements ofthe Companies Act 2013 and the Listing Agreement/Regulations and place it to the AuditCommittee and Board for the approval once approved the said financial results aresubmitted to the stock exchange and also placed on the website of the Company.
8. Details of Subsidiary/ Joint Ventures/ Associate Companies
Your Company has one wholly owned subsidiary company viz. SRM Energy Tamilnadu PrivateLimited which does not have any operations at present. Though it is further to note thatduring the year of reporting:
No Company has become/ceased to be a subsidiary during the financial year2015-16.
No company has become/ceased to be a joint venture or associate during thefinancial year 2015-16.
The Policy for determining material subsidiaries as approved may be accessed on theCompanys website at the link:
9. Performance and financial position of each of the subsidiaries associatesand joint venture companies included in the consolidated financial statement.
A report on the performance and financial position is provided as Note 25 to theconsolidated financial statement and hence not repeated here for the sake of brevity.
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) - 21 on Consolidated Financial Statements and such other rules and laws asmay be applicable the audited consolidated financial statement is provided in the AnnualReport and the same is also proposed for the approval of shareholders.
However the annual financial statements of the subsidiary company and the relateddetailed information are available to the shareholders of the holding and subsidiarycompanies seeking such information at any point of time. The annual accounts of thesubsidiary company are kept for inspection by any shareholder at the Registered office ofthe holding company and of the subsidiary company concerned.
The Company has not accepted deposits during financial year 2015-16 under theprovisions of Chapter V of Companies Act 2013.
11. Statutory Auditors
M/s VATSS & Associates Chartered Accountants (ICAI Firm Registration No.-017573N) were appointed as Statutory Auditors of the Company for a period of 5 years inthe previous Annual General Meeting (AGM) of the Company held on 30th September 2015subject to ratification of their appointment by the members in every subsequent AGM. Theyhave completed the audit of the Company for the financial year 2015-16.
The Board hereby recommends appointment of M/s VATSS & Associates CharteredAccountants as the statutory auditors of the Company for the financialyear 2016-17 forratification of the members. Members are requested to consider and ratify the same.
12. Auditors Report
Though the Groups net worth has been significantly reduced and it has beenincurring cash losses the promoters have infused funds by way of unsecured loan and arecommitted to provide necessary funding to meet the liabilities and future running expensesof the Group. Further the Board of Directors of the Company have decided to sell /dispose off the Power plant transferred in its wholly owned subsidiary subject tonecessary approvals from the shareholders and other statutory authorities if any. In viewof above developments the accounts have been prepared under going concern basis.
The power plant in the wholly owned subsidiary which is intended to be sold / disposedoff as explained above is in Pre-operative stage and no expenses have been charged toStatement of Profit and Loss. Accordingly the loss for the year does not include any lossrelating to ordinary activities attributable to discontinuing operations.
The Notes on financial statement referred to in the Auditors Report areself-explanatory and do not call for any further comments. The Auditors Report doesnot contain any qualification reservation or adverse remark.
13. Share Capital
The Companys Capital Structure remains unchanged during Financial Year 2015-16.
14. Extract of the annual return
The extract of the annual return in Form No. MGT 9 is annexed as Annexure01.
15. Conservation of energy technology absorption and foreign exchange earnings andoutgo
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
(A) Conservation of energy and technology absorption
The Company has not initiated its operations till date no particulars in respect ofconservation of energy and technology absorption have been furnished as per Section134(3)(m) of the Companies Act 2013.
(B) Foreign exchange earnings and Outgo
There were no foreign exchange earnings and outgo during the year under review.
16. Corporate Social Responsibility (CSR)
Details relating to the Corporate Social Responsibility and the activities to beundertaken by the Company in respect to this is not applicable to the Company asgoverning Section 135 of the Act is not applicable to the Company.
A) Changes in directors and Key Managerial Personnel (KMP): Cessation of directors/KMP:
During the year under review Mrs. Sanjeevlata Samdani had resigned from her office ofthe Company Secretary of the Company w.e.f. 31st December 2015.
Appointment of new directors/KMP:
With the aforesaid Resignation of Mrs. Sanjeevlata Samdani from the post of CompanySecretary the said post was vacant in search of a suitable replacement till 12thFebruary 2016. The Board of Directors Pursuant to the requirements of Section 203 readwith Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 appointed Ms. Kanika Arora (ACS-36671) as the new Company Secretary of the Companywith effect from aforesaid date i.e. 12th February 2016. The members be furtherapprised that Ms. Kanika Arora was previously employed with Spice Energy Private Limitedand was working as a Company Secretary of the Holding Company of your Company.
Reappointment of directors:
Further Subject to the provisions of Section 152(6) of Companies act 2013 Ms. TanuAgarwal Director of the Company is liable to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered herself for re-appointment. Brief resumeof directors seeking appointment and re-appointment along with other details as stipulatedunder regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 are provided in the AGM Notice for convening the Annual General Meeting.
B) declaration by an independent director(s) & re- appointment if any
All Independent Directors have submitted 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.
C) details of training imparted to independent directors
The Compliances under relevant Regulation 25 (7) read with Regulation 15 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 are not applicable tothe Company and hence Company has exempted herself from the strict compliance of therequirements of the regulation however every new Independent Director inducted on theBoard attends an orientation program in which he/ she is familiarized with the strategyoperations and Status of the Company. They are further briefed with history of the Companyand also handed over a Copy of the bunch of Companys Annual reports its Memorandumand Articles of Association various policies and the Code of Conduct of the Company.
Further at the time of appointment of an Independent Director the Company issues aformal letter of appointment outlining his/her role functions and duties/responsibilitiesas a Director. The Format of the letter of appointment is provided on our website a weblink thereto is given below:
D) Formal Annual Evaluation
The Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 states that a formal annual evaluation needs to be made by the Board ofits own performance its committees Chairman and individual Directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of Independent Directors shallbe done by the entire Board of Directors excluding the Director being evaluated.
The Independent Directors of the Company in their meeting held on February 12 2016reviewed the performance of the Non Independent Directors in case of our Company Mr.Vishal Rastogi the Managing Director of the Company Ms. Tanu Agarwal and the Board as awhole. Further the Board of Directors in their meeting held on May 27 2016 evaluated theperformance of all the Independent Directors based on set questionnaires circulated to theBoard. Also the Nomination and Remuneration Committee in meeting held on May 27 2016evaluated every directors performance. On the Basis of the above evaluations theperformance of the entire Board Executive Directors and Independent Directors was foundsatisfactory specially taking into consideration of the existing circumstances in whichthe Company is operating.
18. Number of meetings of the Board of directors
The Board met 5 times during the year the details of which are given in CorporateGovernance report forming part of this annual report. The intervening gap between any twomeetings was within the time prescribed time limit under Companies Act 2013.
19. Audit Committee
During the year the Audit Committee was constituted with Mr. Sameer Rajpal Chairmanof the Committee with the other members Mr. Vijay Kumar Sharma and Mr. Vishal Rastogi.
A detailed description about the audit Committee is given in the Corporate GovernanceReport forming part of the Directors Report.
Further all recommendations made by Audit Committee during the year were accepted bythe Board.
20. details of establishment of vigil mechanism for directors and employees
The Company has in place a Vigil Mechanism/Whistle Blower Policy framed as per therequirements of Section 177 of Companies Act 2013 and Clause 49(II) (F) of the ErstwhileListing Agreement [Now Regulation 22 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015]. A weblink to the policy is mentioned below:
21. Nomination and Remuneration Committee
The policy formulated by the Board relating to the remuneration for the Directors KeyManagerial Personnel and other employees and also the Criteria for determining theQualifications positive attributes and Independence of a Director pursuant to Section178(3) of Companies Act 2013 is annexed as Annexure-02 to this Report.
22. Particulars of loans guarantees or investments under section 186
The Company has not granted any Loans extended any Guarantees or made Investmentsduring the Financial year 2015-16 pursuant the provisions of Section 186 of CompaniesAct 2013.
23. Particulars of contracts or arrangements with related parties
The Company has not made any contracts with related parties pursuant to Section 188 ofCompanies Act 2013.
However your Company has been obtaining loan from Spice Energy Pvt. Ltd. a relatedparty as per Section 2 (76) of the Companies Act 2013 to meet its day to day financialneeds and also to meet the statutory dues necessary compliances and the legal expenses.Such arrangements of obtaining loan from related party falls into the category of materialrelated party transaction as per Regulation 23 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. However Regulation 15(2) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 provides that the provisions of Regulation23 dealing with Related Party Transactions are not applicable on a Company having paid upshare capital not exceeding 10 crores and net worth not exceeding 25 crores as on the lastday of the previous financial year. Therefore the aforesaid compliances under the saidprovision not falling under the above thresholds the Company is exempt from therequirements of this regulation.
However as a matter of practice the Company puts forwards the details of all relatedparty transactions quarterly before the audit Committee of the Company for their notingand record. Moreover the Company has formulated a policy on materiality of related partytransactions and also on dealing with Related Party Transactions which can be downloadedfrom the link mentioned below:
24. Managerial Remuneration
Disclosure pursuant to Section 197(12) of Companies Act 2013 and Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided below:
i) The Ratio of the remuneration of each Director to the Median remuneration of theemployees of the Company for the year 2015-16:
None of the Director of the Company has drawn any remuneration in any form during theyear. Hence no such ratio could be calculated.
ii) The percentage increase in remuneration of each Director CFO CEO CS or Managerin the financial year:
None of the Director of the Company has drawn any remuneration in any manner whatsoeverfrom the Company during the year and hence there was no such increase in the remunerationof any of the Director during the financial year 2015-16.
No increment in the remuneration of Company Secretary and Chief Financial Officer ofthe Company has taken place during the year of reporting.
iii) The percentage increase in the median remuneration of employees in the financialyear:
Since no Remuneration of any employee was increased during previous year thiscalculationed not to be made.
iv) The number of permanent employees on the rolls of Company: During the year 2015-16there were 2 employees on the rolls of the Company. Ms. Kanika Arora was appointed at theplace of outgoing CS of the Company in the mid of the year hence as on 31st March 2016only 2 employees were continuing on the rolls of the Company.
v) average percentile increase already made in the salaries of employees other thanmanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: There aretotal 2 employees in the Company presently both being the KMPS (CS & CFO).There has been no increase in the remuneration of any employee of the Company.
vi) The Remuneration is as per the remuneration policy of the Company.
vii) The names of Top 10 employees during the year in terms of remuneration are:
* Ms. Kanika Arora was appointed as the Company Secretary of the Company w.e.f 12thFebruary 2016 in the place of Mrs. Sanjeev Lata Samdani who worked as Company Secretarytill 31st December 2015.
viii) There were no employees in the Company during the year who were in receipt ofremuneration in excess of Rs. 10200000/- per annum or Rs. 850000/- per month.
25. Secretarial Audit Report
A Secretarial Audit Report in Form No. MR-3 for the Financial year 2015-16 given byM/s. Ritika Agarwal & Associates Company Secretaries is annexed as Annexure-03with this report.
26. Risk management policy
Pursuant to the requirements of Regulation 21 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Earlier Clause 49(VI) of the Listingagreement) the Board had constituted the Risk Management Committee and had also laid downthe Risk Management Plan of the Company. The Committee was responsible for the monitoringand reviewing of the Risk Management Plan. The Major elements of Risk which may threatenthe existence of the Company was to be identified and laid down in the Risk ManagementPlan of the Company.
However as per Regulation 21(5) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the provisions of Clause 49(VI)(C) [Now Regulation 21(1)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015] statesthat the risk management committee are applicable only to top 100 listed Companies basedon the market Capitalization as at the end of the immediate previous financial year.
In light to the aforesaid situation the Company was not required to maintain the saidCommittee as it does not fall in the list of top 100 listed Companies based on the saidmarket capitalization. Hence the Board in their meeting held on 14.11.2015 dissolved thesaid Committee with immediate effect.
It was ensured that the Risk Management System of the Company is now to be looked afterby the Audit Committee. There is a system to analyse the Risk and ensure Management thereof is implemented in that was that it is commensurate with the Nature Size and Operationsof the Company. The Committee shall look after the areas of Financial Risk and Controlsetc.
27. Management discussion and Analysis Report
The Management Discussion and Analysis Report as required under Regulation 21(1) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with the stockExchange forms part of this Report.
28. Corporate governance Report
A separate Section on Corporate Governance forming part of the Directors Reportand a certificate from the Practicing Company Secretary confirming compliance of theCorporate Governance Norms as stipulated in Regulation 34 (3) read with Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is included withthis Annual Report.
29. Listing of Securities
The Securities of your Company are currently listed with Bombay Stock Exchange (BSE)with ISIN- INE173J01018 and scrip code 523222. The Company has paid listing fee to theBombay Stock Exchange for the financial year 2015-16. All compliances with respect to thelisting agreement is being made in regular course.
30. directors Responsibility Statement
In terms of the provisions of Section 134(5) of the Companies Act 2013 your Directorsconfirm that-
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had 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 of the state of affairs of the company at the end of the financial year and ofthe profit 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 of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors wish to place on record their appreciation for the Cooperation andassistance received from Regulatory Bodies Government Banker Shareholders businessassociates and various other Stakeholders who have extended their valuable sustainedsupport and encouragement during the year under review.
The Directors would also like to place on record a hearty thanks to the management andthe employees of the Company who have been standing the Company and giving theirtireless support in the adverse circumstances.