To the Members
The directors present the 30th annual report together withthe audited financial statements (standalone and consolidated) for the financial yearended March 31 2022 of Genus Power Infrastructures Limited (hereinafter may be referredto as "Genus" or "the Company").
FINANCIAL RESULTS OF OPERATIONS
The financial results of operations of the Company for the financialyear ended March 31 2022 ("FY 22") have been as under:-
(Rs. in lakhs except per share data)
| || |
|Particulars || |
Year ended March 31 2022
Year ended March 31 2021
Year ended March 31 2022
Year ended March 312021
|Income || || || || |
|Revenue from contracts with customers || |
|Other income || |
|Total income || |
|Expenses || || || || |
|Cost of raw material and components consumed || |
|Change in inventory of finished goods and work-in-progress || |
|Employee benefit expenses || |
|Other expenses || |
|Depreciation and amortization expenses || |
|Finance costs || |
|Total expenses || |
|Profit before tax || |
|Tax expense || |
|Profit after tax before share of net (loss)/profit from associates for the year || |
|Share of net (loss)/profit from associates || |
|Net profit for the year after share of net (loss)/profit from associate entities || |
|Other comprehensive income (net of tax) || |
|Total comprehensive income (net of tax) || |
|Earnings per share (before and after extraordinary item) (of Re.1 each) || || || || |
|- Basic earnings per share (amount in Rs.) || |
|- Diluted earnings per share (amount in Rs.) || |
|Nominal value per share (amount in Rs.) || |
The above audited financial results of the Company have been reviewedby the audit committee and approved by the 'Board of Directors' ("the Board") ofthe Company at their meetings held on May 12 2022. The joint statutory auditors haveissued an unqualified report thereon. The financial statements for FY 22 have beenprepared in accordance with Indian accounting standards (Ind AS) notified under theCompanies (Indian Accounting Standards) Rules 2015 (as amended from time to time) andpresentation requirements of Division II of Schedule III to the Companies Act 2013 (IndAS compliant Schedule III) as applicable to the financial statements read with Section133 of the Companies Act 2013 ("the Act") and other relevant provisions of theAct. There are no material departures from the prescribed norms stipulated by theaccounting standards in preparation of the annual accounts. Accounting policies have beenconsistently applied. Management evaluates all recently issued or revised accountingstandards on an ongoing basis.
REVIEW OF STANDALONE ANNUAL FINANCIAL PERFORMANCE AND THE STATE OFCOMPANYS AFFAIRS
The revenue for FY 22 was Rs. 68506.74 lakhs higher by 12.56% overthe previous financial year's revenue of Rs. 60859.73 lakhs. The revenue was mainly fromsales of metering solutions to utilities. The sales operations were severely hamperedprimarily in the months of April and May on account of the second wave of COVID-19 whichhad led to lockdowns across various geographies in India and resulted in delayedinspection by the customers. It was also severely hampered since the month of June 2021due to acute shortages of semiconductors.
The other income slightly increased to Rs. 2679.38 lakhs from Rs.2673.32 lakhs in the previous year because of higher income on investments and deposits.
The earning before interest tax depreciation and amortization(EBITDA) (excluding other income) was Rs. 5963.04 lakhs as compared to Rs. 10193.33lakhs in the previous year. The EBITDA margin reduced to 8.70% from 16.75% in the previousyear. The earnings growth continued to remain impacted due to higher raw material pricescoupled with reduced capacity utilization on account of acute shortage of semiconductorsand other key electronic components.
The finance cost was slightly increased to Rs. 2565.01 lakhs from Rs.2449.50 lakhs in the previous year. The borrowings increased to Rs. 26994.56 lakhs fromRs. 20676.71 lakhs in the previous year. This was primarily attributable to higher ordersbooking which had led to maintain higher raw material inventory. The Company continued torely on shortterm debt to meet its working capital requirements. The Company used itslong-term debt largely to support the capital expenditure incurred towards expansion. InFY 22 Rs. 1545.74 lakhs was incurred towards capital expenditure primarily on account ofmodernization re-planting and other programs undertaken in various units of the Company.
The profit before tax (PBT) was Rs. 4032.10 lakhs as against Rs.8241.42 lakhs in the previous year. The profit after tax (PAT) was Rs. 2582.08 lakhs asagainst Rs. 5115.64 lakhs in the previous year. The cash PAT (which comprises of PATdepreciation and deferred tax) was Rs. 4692.71 lakhs as against Rs. 7404.21 lakhs inthe previous year.
The earning per share (EPS) was Re. 1.00 as against Rs. 1.99 in theprevious year.
The net worth increased to Rs. 93918.25 lakhs from Rs. 92425.65 lakhsin the previous year mainly on account of the retained earnings. Return on net worthreduced to 2.75% as against 5.53% in the previous year due to lower earnings as explainedabove.
The Company has written-off the bad debts of Rs. 268.53 lakhs ascompared to Rs. 515.89 lakhs in previous year. Management makes a detailed assessment ofamounts not-recoverable from the customers and accordingly makes a write-off.
The liquidity of the Company is supported by 275.44 lakhs equity sharesof the Company (treasury shares) and 475.44 lakhs equity shares of Genus Paper &Boards Limited arisen as a result of the scheme of arrangement between the Company andGenus Paper Products Limited as approved by the Hon'ble Allahabad High Court in the FY 14.As on March 31 2022 the market value of these shares was Rs. 26426.40 lakhs and thebook value was Rs. 5995.08 lakhs.
KEY FINANCIAL RATIOS
The details of the key sector-specific financial ratios are provided innote no. 55 to the standalone financial statements and note no. 57 to the consolidatedfinancial statements forming part of the annual report.
COVID-19 PANDEMIC AND ITS IMPACT
The COVID-19 pandemic continued to be a challenge in the first threemonths of FY 22. The second wave of the pandemic which had led to lockdowns acrossvarious geographies in the world and resulted in delayed inspection by the vendorsseverely hampered our operations in the months of April and May. It has impacted ourrevenue and earnings in the first quarter of FY 22. The Company has made an assessment ofliquidity and going concern assumption recoverable values of its financial andnon-financial assets impact on revenue recognition owing to changes in cost budgets offixed price contracts impact on leases and impact on effectiveness of its hedges.
The Company continued to use effective cost control measures across theorganization to preserve liquidity to survive tough times and respond to any unexpectedevents in the future due to the pandemic. The Company is in a comfortable liquidityposition to meet its commitments to service debt and other financial obligations. TheCompany does not foresee any challenge in maintaining operations at itsfactories/units/offices and in realizing/recovering its assets.
The Company has not closed its operations during the financial yearunder review.
The Company continued to take all the possible steps to ensure smoothfunctioning of operations. It has assured the DISCOMs that the meters would be installedin a manner with least risk of Covid-19 spread which Genus could credibly demonstrate.The Company has also implemented stringent cost control measures across the organizationto reduce the cost of production and to preserve liquidity to survive tough times andrespond to any unexpected events in the future due to the pandemic. The Company hasadopted a YOYO system to manage the cost according to level of operations and to buildflexibility and an operation system to reach minimum/maximum level in a very short span oftime. The Company has also adopted a system of initiating discussions with its customersvendors and other stakeholders to protect the business deliver its services and to propelthe business forward.
For safety and security of our employees and associates the Companyhas built a constant system of sanitization across all the establishments and offices. AllCOVID safety protocols related to temperature sensing wearing of safety gears (masksgoggles face shields oxygen concentrators) social distancing sanitizing and washinghands have been adhered to very stringently and would continue to be taken care of. TheCompany continued to take all necessary steps to adhere to the guidelines for socialdistancing and other safety measures provided by the government along with the variousdirectives issued by relevant government authorities keeping in mind safety health andwell-being of the employees and other stakeholders across all our locations.
The extent of adverse impact on the Company's operation will depend onon-going developments. The Company continues to closely monitor material changes ineconomic conditions markets and operating environment.
There are no such contracts or arrangements which would lead tononfulfillment of the obligations by any party or shall have any significant impact on thebusiness.
OPERATIONS AND BUSINESS OVERVIEW AND PERFORMANCE
The Company is involved in the business of manufacturing and providingmetering solutions and also undertaking 'engineering construction and contracts' onturnkey basis for the power sector (core business division). The Company has also beeninvolved in making strategic investment activity wherein investments are made in sharesand securities on the basis of a thorough and systematic evaluation by the Companyprofessional experts and the management on an on-going concern basis with dedicatedpersonnel and technical staff.
The operational and business overviews including performances of theCompany have been appropriately described in the report on management discussion andanalysis which forms part of this report.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the Company in FY 22.ORDER BOOK POSITION
In FY 22 the order inflow had remained flattish as the finalization oftender ordering was delayed by about 6 months due to COVID-19 led disruptions. The orderbook as on March 312022 was at Rs. 107963 lakhs (net of tax). Currently we are seeingthe impact of 'Reforms-Based Result-Linked Power Distribution Sector Scheme' announced bythe government in July 2021 as most State Electricity Boards (SEBs) have raised enquiriesand floated tenders for installation of smart meters. The Company has been receivingorders for Smart Meters from the SEBs in response to a few of the above tenders. TheCompany anticipates robust order inflow in the coming years.
The Board has recommended a dividend of Re 0.25 (Twenty Five paisa) perequity share on equity shares of the face value of Re.1 each (i.e. 25%) for FY 22. Thedividend is subject to approval of the members at the ensuing annual general meeting (AGM)and shall be subject to deduction of income tax at source as applicable. The dividend ifapproved by the members at the ensuing AGM will result in cash outflow of Rs 574.96lakhs.
The dividend recommended is in accordance with the parameters andcriteria as set out in the dividend distribution policy. The dividend distribution policyof the Company as approved by the Board is placed on the website of the Company at"https://genuspower.com/investor- category/corporate-governance/" in terms ofregulation 43A of the "SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015" (the "SEBI Listing Regulations').
There was no change in the authorised share capital of the Companyduring FY 22. It stood at Rs. 832000000/- (Rupees Eighty Three Crore and Twenty Lakhsonly) as on March 31 2022.
The paid up equity share capital of the Company has increased to Rs.257512762/- consisting of 257512762 equity shares of Re.1/- (Rupee One) during FY22 on account of issuance and allotment of 153797 equity shares of face value of Re.1/-each on exercise of employee stock options/employee stock appreciation rights.
The Company has neither issued shares with differential voting rightsnor issued sweat equity shares.
TRANSFER TO RESERVES
The Board has not proposed to transfer any amount to reserve during theyear under review.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Details of loan guarantees and investments covered under Section 186of the Act along with the purpose for which such loan or guarantee was proposed to beutilized by the recipient are provided in note nos. 4 5 6 34 and 48 to the standalone& consolidated financial statements forming part of the annual report. The Company isholding certain strategic investments generally long-term in nature and the Board mayevaluate further opportunities in this regard with a view to enhance value for thestakeholders of the Company.
During FY 22 the Company has not accepted deposits within the meaningof Section 73 of the Act and the Companies (Acceptance of Deposits) Rules 2014. As such noamount of deposit or interest thereon is outstanding as on March 31 2022.
SCHEME OF ARRANGEMENT
The Board had approved a 'scheme of arrangement' (the"scheme") subject to approvals of the applicable/relevant authorities includingapproval of the members creditors stock exchanges SEBI and National Company LawTribunal. The scheme has already been approved by the members and creditors of the Companyin the duly court-convened meetings. Currently it is pursuing other regulatory approvals.
The scheme inter-alia provides for demerger of the investment businessdivision of the Company into Genus Prime Infra Limited. Post demerger the members of theCompany will get 1 (One) Equity share of face value Rs. 2 (Two) each of Genus Prime InfraLimited as fully paid up for every 6 (Six) Equity share of face value of Rs 1 (One) eachof the Company. The above restructuring/arrangement once achieved will enable the Companyto participate in its core activities and provide focused areas for growth.
A copy of the scheme has also been made available on the Company'swebsite at www.genuspower.com.
EMPLOYEES' STOCK OPTION SCHEME
The employees' stock option scheme 2012 ("ESOS-2012" or"ESOP scheme") of the Company are in compliance with the SEBI (Share BasedEmployee Benefits and Sweat Equity) Regulations 2021 ("SEBI ESOP Regulations").Further there has been no material variation in the terms of the options granted underESOP schemes of the Company.
The ESOP scheme is administered by the Nomination & RemunerationCommittee ("NRC") and it is implemented in accordance with the applicable SEBI'srules and regulations.
The Company has received a certificate from the secretarial auditors ofthe Company that the ESOP scheme has been implemented in accordance with the SEBI ESOPRegulations and the resolution passed by the members. The certificate would be availableat the annual general meeting for inspection by members.
In FY 22 the Company has not granted any stock options. Disclosures asrequired under Regulation 14 of the SEBI ESOP Regulations have been placed on the websiteof the Company at www.genuspower.com.
EMPLOYEES STOCK APPRECIATION RIGHTS PLAN
The 'Employees Stock Appreciation Rights Plan 2019' (the"ESARP-2019" or "ESAR plan") of the Company are in compliance with theSEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 ("SEBI ESOPRegulations"). Further there has been no material variation in the terms of theoptions granted under ESAR plans of the Company.
The ESAR plan is administered by the NRC and it is implemented inaccordance with the applicable SEBI's rules and regulations.
The Company has received a certificate from the secretarial auditors ofthe Company that the ESAR plan has been implemented in accordance with the SEBI ESOPRegulations and the resolution passed by the members. The certificate would be availableat the annual general meeting for inspection by members.
In FY 22 the NRC in its meeting held on June 19 2021 has approved thegrant of 800000 stock appreciation rights (SARs) at the base price of Rs. 54 per SAR tothe eligible employees of the Company in terms of the ESARP-2019. The aforesaid SARs willvest over a period of (six) 6 years from the date of grant. The vested SARs shall beexercisable within a period of (three) 3 years from the date of vesting of such SARs.Disclosures as required under Regulation 14 of the SEBI ESOP Regulations with regard tothe ESAR Plan of the Company have been placed on the website of the Company atwww.genuspower.com.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
In terms of Section 134(3)(l) of the Act except as disclosed elsewherein this report/annual report no material changes and commitments affecting the financialposition of the Company have occurred between the end of the financial year and the dateof this report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
In FY 22 the following companies have become a subsidiary or associatecompany:
Genus Power Solutions Private Limited (incorporated on February24 2022 as wholly owned subsidiary Company); and
Hop Electric Manufacturing Private Limited (become associatewith effect from December 14 2021)
In FY 22 no company ceased to be a subsidiary joint venture orassociate company.
As on March 31 2022 the Company has the following subsidiary andassociate companies:
Genus Power Solutions Private Limited (Wholly-Owned Subsidiary)
M.K.J. Manufacturing Pvt. Ltd. (Associate)
Greentech Mega Food Park Limited (Associate)
Hop Electric Manufacturing Private Limited (Associate)
In terms of the provisions of Section 129(3) of the Act a statementcontaining performance and salient features of the financial statements of thesubsidiaries/associates/joint ventures of the Company in the prescribed form AOC-1 isattached as 'Annexure-A' to this report.
The audited financial statement including the consolidated financialstatement of the Company and all other documents required to be attached thereto areavailable on the website of the Company at"https://genuspower.com/investor-category/financials/". The financial statementsof the associate and subsidiaries are available on the website of the Company at"https://genuspower.com/investor-category/investor- information/".
The policy for determining material subsidiaries as approved by theBoard may be accessed on the website of the Company at "https://genuspower.com/investor-category/corporate-governance/".
CONSOLIDATED FINANCIAL STATEMENT
Pursuant to the applicable provisions of the Act the accountingstandard on consolidated financial statements and the SEBI Listing Regulations theaudited consolidated financial statement is provided in the annual report. Theconsolidated revenue stood at Rs. 68506.74 lakhs and the consolidated net profit stood atRs. 5745.75 lakhs in FY 22.
A statement containing the salient feature of the financial statementsof each of the subsidiaries/associates/joint ventures of the Company in the prescribedform AOC-1 is annexed as 'Annexure-A' to this report.
In compliance with the provisions of Section 136 of the Act thefinancial statements of the subsidiaries/associates/joint ventures of the Company are keptfor inspection by the members at the registered office of the Company. The Company shallprovide free of cost the copy of the financial statements of itssubsidiaries/associates/joint ventures to the members upon their request. The statementsare also available on the website of the Company.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All related party transactions in FY 22 were in the ordinary course ofbusiness and at arm's length basis. All these transactions were approved by the auditcommittee. There were no materially significant related party transactions that may havepotential conflict with the interests of the Company at large. There are no transactionsthat are required to be reported in Form AOC-2. For further details of the related partytransactions please refer to note no. 46 to the standalone & consolidated financialstatement which sets out related party disclosures.
The policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board can be accessed on the website ofthe Company at "https://genuspower.com/investor-category/corporate-governance/".
CORPORATE SOCIAL RESPONSIBILITY
The Company has a policy on 'corporate social responsibility'("CSR") in line with Schedule VII of the Act and the same has been posted onthe website of the Company at "https://genuspower.com/investor-category/corporate-governance/".
In FY 22 the Company has undertaken a number of projects and programsas part of its CSR initiatives in line with its CSR policy. The focus areas of theCompany's CSR programs/initiatives were (1) promotion of health care including preventivehealth care (2) promotion of education including special education and employmentenhancing vocational skills (3) animal welfare promotion and (4) protection of nationalheritage art and culture. The Company's dedicated staff members monitor theimplementation of projects and programs regularly by site visits meeting beneficiariesand checking records.
In FY 22 the Company spent Rs. 225.73 lakhs (inclusive ofadministrative overheads) (around 2.17% of the average net profits of the last threefinancial years) on CSR activities. The statutory disclosures with respect to the CSRcommittee and an annual report on CSR activities are annexed as 'Annexure-B' which formspart of this report.
Pursuant to the Companies (Corporate Social Responsibility Policy)Amendment Rules 2021 the Company has also adopted an annual action plan on CSR for FY23 which is in line with its CSR policy.
RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has a duly constituted Risk Management Committee (RMC)which was responsible to formulate a detailed risk management policy. In view of this theRMC has framed a risk management policy which is in accordance with the provisions of theAct and Regulation 21 of the SEBI Listing Regulations. It has identified major risks andclassified these in six broad categories of strategic financial operational ESGcompliance and other risks. A risk management plan has also been devised for this riskspectrum. The Company follows a proactive risk management process which aims toanticipate and report potential risks on time and to prompt implementation of controls tomitigate the potential negative impact of various risks. The Company has developed acomprehensive risk management and control mechanism which mandates the participation ofevery department/division in formulation & execution of appropriate controlmeasures/techniques. It also mandates the sharing of relevant information across thedivisions of the Company. The Company has also integrated its risk management and controlmechanism with internal controls and audit supported by SAP ERP which ensures smoothrunning of day-to-day operations regulatory standards and mitigates risk.
The internal audit department continually audits all the key areas ofoperations so that weak areas of operations can be identified and appropriate actionscould be taken early to improve the overall efficiency by making informed decisions. Themanagement also periodically reviews the efficacy of all the existing policies andstrategies followed by the Company. Regular training programs and workshops are conductedfor recording monitoring and controlling internal risks and mitigating them throughconversant and objective strategies and plans.
The details of the risk management committee risk management policyand internal financial control systems are also provided in the report on 'managementdiscussion and analysis' and the 'corporate governance report' forming part of thisreport.
The Company has continued to insure its assets and projects adequatelyto cover most risks. Some of the important insurance policies taken by the Company in FY22 are as follows:
Consequential loss (fire) policy to insure the profit affectedduring the interruption/cessation of the business operations due to fire and alliedperils.
Group mediclaim policy for its permanent employees coveringtheir spouse and dependent children.
Personal accident policy (group) for insuring its employees andgiving coverage like disability cover permanent disability cover and death cover due toaccident.
During the year under review the Company has also taken a 'Directorand Officer Liability Insurance Policy to provide protection to its directors and keyofficers who are in a decision making position against their personal liability forfinancial losses arising out of wrongful acts or omissions in their capacity as directorsor officers. It provides insurance cover to directors or officers to indemnify them forlegal & defense costs damages and expenses incurred arising from claims broughtagainst them personally due to wrongful acts in their capacity as Director or Officer ofthe Company.
In FY 22 India Ratings and Research (Ind-Ra) has affirmed to theCompany 'Long-Term Issuer Rating' at 'IND A+' vide its letter dated December 08 2021.The outlook is stable. The instrument-wise rating actions are as follows: -
|Instrument Type || |
Size of Issue (billion)
|Long-term loan || |
INR 0.17 (reduced from INR 0.23)
|Fund-based limits || || |
IND A+/ Stable/IND A1
|Non-fund- based limits || || |
IND A+/ Stable/IND A1
|Commercial paper (CP)* || |
Up to 365 days
*carved out of fund-based limits
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34(2) of the SEBI Listing Regulations themanagement discussion and analysis report for the year under review is annexed as'Annexure-C' to this report.
CODE OF CONDUCT
Pursuant to Regulation 26(3) of the SEBI Listing Regulations all Boardmembers and senior management personnel have affirmed compliance with the Company's codeof conduct for directors and senior management on an annual basis. The code of conduct isalso placed on the website of the Company at www.genuspower.com.
The Company has been in compliance with all the applicable provisionsof corporate governance as stipulated under Chapter IV of the SEBI Listing Regulations. Adetailed corporate governance report along with a certificate of the joint statutoryauditors of the Company regarding compliance of the conditions of corporate governance asstipulated under the SEBI Listing Regulations is attached as 'Annexure-D' to this report.
WHISTLEBLOWER POLICY AND VIGILANCE MECHANISM
The Company's whistleblower policy and vigil mechanism as requiredunder Section 177(9) of the Act established a formal vigil mechanism for directors andemployees to report genuine concern of unethical behaviour actual or suspected fraud orviolation of the Company's code of conduct. The audit committee reviews the existence andeffectiveness of the vigil mechanism from time to time. The above policy and mechanismhave been appropriately communicated across all sections within the Company. Thewhistleblower policy and vigil mechanism have also been posted on the Company's internalHR management system as well as on the website of the Company at"https://genuspower.com/investor-category/ corporate-governance/".
The audit committee affirmed that no personnel have been denied accessto the audit committee in FY 22.
PREVENTION OF INSIDER TRADING PRACTICES
The Company has adopted a 'code of conduct for regulating monitoringand reporting of trading by designated persons and their immediate relatives' 'code ofpractices and procedures for fair disclosure of unpublished price sensitive information'and 'policy for procedure of inquiry in case of leak of unpublished price sensitiveinformation' which comply with the provision of the SEBI (Prohibition of Insider Trading)Regulations 2015 as amended ("SEBI PIT Regulations"). The above codes preventinsiders from procuring communicating providing or allowing access to unpublished pricesensitive information except where such communication is in furtherance of legitimatepurposes performance of duties or discharge of legal obligations. The above codes alsoprohibit the insider to trade in securities when in possession of unpublished pricesensitive information and during the period when the trading window is closed. However aninsider is entitled to formulate a trading plan for dealing in securities of the Companyand submit the same to the compliance officer for approval and public disclosure.
Pursuant to above the Company has put in place an adequate andeffective system of internal controls to ensure compliance with the requirements of SEBIPIT Regulations.
Pursuant to Sections 92(3) and 134(3)(a) of the Act a copy of theannual return of the Company as on March 312022 is available on the Company's website andcan be accessed at "https://genuspower.com/investor-category/corporate-governance/".
In FY 22 the members at the 29th annual general meeting ofthe Company had approved the appointment of Mr. Subhash Chandra Garg (DIN: 01064347) as anindependent and non-executive director of the Company to hold office for a term of threeconsecutive years from November 11 2020 to November 10 2023. The members at the 29thannual general meeting of the Company had also approved the appointment of Dr. Keith MarioTorpy (DIN: 01451387) as a director of the Company in the capacity of non-executivenon-independent director.
In accordance with the provisions of Section 152 of the Act and thearticles of association of the Company Mr. Ishwar Chand Agarwal and Mr. Kailash ChandraAgarwal directors of the Company retire by rotation at the ensuing annual general meetingand they being eligible have offered themselves for re-appointment. The Board recommendstheir re-appointment. A resolution seeking members' approval for their re-appointmentalong with other required details forms part of the notice of the ensuing annual generalmeeting.
Pursuant to the provisions of Section 134(3)(d) of the Act with respectto statement on declaration given by independent directors under Section 149(6) of theAct the Board hereby confirms that all the independent directors of the Company havegiven declaration that -
they meet the criteria of independence as provided in Section149(6) of the Act and in the SEBI Listing Regulations;
they have registered their names in the independent directors'data bank as prescribed under the Act in terms of Rule 6(3) of the Companies (Appointmentand Qualification of Directors) Rules 2014; and
they have complied with the code for independent directorsprescribed in Schedule IV to the Act.
In terms of Rule 6(4) of the Companies (Appointment and Qualificationof Directors) Rules 2014 out of five independent directors as on March 31 2022 oneindependent director has passed the Online Proficiency SelfAssessment Test conducted byIICA and four independent directors were not required to appear for the said OnlineProficiency Self-Assessment Test. All the directors have confirmed that they are notdisqualified for being appointed as directors pursuant to Section 164 of the Act.
Based on the confirmation/affirmation received from an independentdirector that he/she was not aware of any circumstances that are contrary to thedeclarations submitted by him/her the Board acknowledged the veracity of suchconfirmation and recorded the same.
The Company issues a formal letter of appointment to the independentdirectors outlining their role function duties and responsibilities and the format ofwhich is available on the Company's website. Pursuant to Regulation 25(7) of the SEBIListing Regulations the Company arranges familiarization programs for independentdirectors to provide them an opportunity to have a clear understanding of their rolesrights and responsibilities. This also makes it possible for independent directors tounderstand the Company's business model operational systems nature of the industry andother relevant information thoroughly. The details of familiarization programs have beendisclosed on the website of the Company and the web link thereto is"https://genuspower.com/investor- category/corporate-governance/".
Policy on directors' appointment and remuneration and other details
The Company has a 'Policy on Selection of Directors and DeterminingDirectors' independence (Criteria for Board Membership)' and a 'Policy on Remuneration ofDirector Key Managerial Personnel and Senior Management Personnel' as recommended by theNRC and approved by the Board.
The said remuneration policy is in compliance with the provisions ofSection 178 the Act and regulations of the SEBI Listing Regulations. The policy ensuresthat -
the level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors of the quality required to run thecompany successfully;
relationship of remuneration to performance is clear and meetsappropriate performance benchmarks;
remuneration to Directors and SMP involves a balance betweenfixed and incentive pay reflecting short and long-term performance objectives appropriateto the working of the company and its goals; and
remuneration matches the level in comparable companies whilstalso taking into consideration the required competencies effort and scope of theDirectors and SMP's work.
The policy on selection of directors sets out the guiding principlesfor the NRC for identifying persons who are qualified to become directors and also todetermine the independence of directors in case of their appointment as independentdirectors of the Company. This policy is in line with the provisions of the Act and theSEBI Listing Regulations.
Pursuant to the provisions of Section 134(3) of the Act the aforesaidpolicies are available on the website of the Company at "https://genuspower.com/investor-category/corporate-governance/". For further details relating to directorsand their remuneration please refer to the corporate governance report which forms partof this report.
Pursuant to the applicable provisions of the Act and the SEBI ListingRegulations the Board has carried out an annual evaluation of its own performanceperformance of directors including chairperson managing directors and its committees.
The performance of the Board was evaluated after seeking inputs fromall the directors on the basis of criteria such as composition structure effectivenessof processes information functioning etc.
The performance of the committees was evaluated after seeking inputsfrom the committee members on the basis of criteria such as composition terms ofreference effectiveness of committee meetings etc.
The performance evaluation of non-independent directors board as awhole and the chairperson were evaluated at a separate meeting of the independentdirectors. The same was also discussed in the meeting of NRC and the Board. Theperformance evaluation of independent directors was done by the entire Board excludingthe independent director being evaluated.
The evaluation was carried out through a structured questionnaireprepared by the NRC separately for the board board committees and directors includingchairperson and managing directors. The questionnaire and evaluation process were reviewedin the context of amendments to the SEBI Listing Regulations and the Act. The abovecriteria are broadly based on the guidance note on board evaluation issued by the SEBI onJanuary 5 2017.
The independent directors at their separate meeting (without thepresence of non-independent directors and the members of management) reviewed &assessed inter-alia the performance of non-independent directors and board as a whole andthe performance of the chairperson of the Company after taking into consideration theviews of executive and non-executive board members. The independent directors at theirseparate meeting also assessed the quality quantity and timeliness of flow of informationbetween the Company's management and the board that was necessary for the board toeffectively and reasonably perform their duties.
The NRC has also carried out evaluation of performance of everydirector. The Board was satisfied with the evaluation process carried out.
KEY MANAGERIAL PERSONNEL
In terms of the provisions of Sections 2(51) and 203 of the Act thefollowing are the key managerial personnel (KMP) of the Company:
Mr. Rajendra Kumar Agarwal Managing Director & ChiefExecutive Officer
Mr. Jitendra Kumar Agarwal Joint Managing Director
Mr. Nathulal Nama Chief Financial Officer
Mr. Ankit Jhanjhari Company Secretary NUMBER OF MEETINGS OF THEBOARD
During FY 22 six meetings of the Board were convened and held inaccordance with the provisions of the Act and the details of which are given in thecorporate governance report which forms part of this report. The maximum interval betweenany two meetings did not exceed 120 days as prescribed by the Act.
COMMITTEES OF THE BOARD
As on March 31 2022 the Board had the following eight committees:
(a) Audit Committee
(b) Nomination and Remuneration Committee
(c) Stakeholders' Relationship Committee
(d) Risk Management Committee
(e) Corporate Social Responsibility Committee
(f) Finance Committee
(g) Sales Committee
(h) Committee of Independent Directors
The details of the compositions powers roles terms of referenceetc. of the said committees are given in the corporate governance report which forms partof this report. During the year all recommendations made by the committees were approvedand adopted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act the directorsconfirm that -
(a) in the preparation of the annual accounts for the financial yearended March 31 2022 the applicable accounting standards read with requirements set outunder schedule III to the Act have been followed and there are no material departures fromthe same;
(b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively; and
(f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
AUDITORS AND AUDITORS' REPORT Statutory Auditors & Auditor'sReport.
M/s. S.R. Batliboi & Associates LLP chartered accountants (firmregistration no. 101049W/E300004) were appointed as joint statutory auditors of theCompany at the annual general meeting held on September 06 2019 for the second term offive consecutive years i.e. to hold office till the conclusion of the 32nd AGMof the Company to be held in 2024. M/s. Kapoor Patni & Associates charteredaccountants (firm registration no. 019927C) were appointed as joint statutory auditors ofthe Company at the annual general meeting held on September 06 2019 for the first term offive consecutive years i.e. to hold office till the conclusion of the 32nd AGMof the Company to be held in 2024. The auditors have confirmed that they are notdisqualified for continuing as auditors of the Company.
The notes on financial statements referred to in the auditors' reportare self-explanatory and do not call for any further comments. The auditors' report doesnot contain any qualification reservation adverse remark or disclaimer.
Cost Auditors and Cost Audit Report
Pursuant to the provisions of Section 148(1) of the Act read with rulesframed thereunder the Company is required to maintain the cost records as specified andaccordingly such accounts and records are made and maintained by the Company.
In terms of the provisions of Section 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time the Boardbased on the recommendation of the audit committee has appointed M/s. K. G. Goyal &Associates cost accountants as cost auditor of the Company for conducting the cost auditfor the financial year ended on March 31 2023 on a remuneration as mentioned in the noticeof 30th annual general meeting. A certificate from M/s. K. G. Goyal &Associates cost accountants has been received to the effect that their appointment ascost auditor of the Company if made would be in accordance with the limits specifiedunder Section 141 of the Act and rules framed thereunder. A resolution seeking member'sratification for the remuneration payable to the cost auditor forms part of the notice of30th annual general meeting and the same is recommended for your considerationand ratification.
The cost audit report for FY 21 issued by M/s. K. G. Goyal &Associates cost auditors was filed with the ministry of corporate affairs (MCA) onSeptember 27 2021 within the stipulated/extended due date.
Secretarial Auditors and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the secretarial auditfor FY 22 has been carried out by M/s. ARMS & Associates LLP Company Secretaries. Thesecretarial audit report submitted by them in the prescribed form (i.e. MR-3) is attachedas 'Annexure-E' and forms part of this report. There are no qualifications or observationsor adverse remarks or disclaimer of the secretarial auditors in the report issued by themfor FY 22 which call for any explanation from the Board.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings & outgo stipulated under Section 134(3)(m) of the Act readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is provided in 'Annexure-F whichforms part of this report.
PARTICULARS OF EMPLOYEES AND OTHER RELATED DISCLOSURES
The disclosure as required under the provisions of Section 197 of theAct read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In terms of second proviso to Section 136(1) of the Act the annual report andaccounts excluding the aforesaid information are being sent to the members and othersentitled thereto. The said information is available for inspection by the members at theregistered office of the Company during business hours on working days of the Company upto the date of ensuing annual general meeting. Any member interested in obtaining a copythereof may also write to the company secretary of the Company. It is hereby affirmed thatthe remuneration is as per the remuneration policy of the Company.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the SEBI Listing Regulations a 'BusinessResponsibility Report is annexed as 'Annexure-G' to this report and is also available onthe Company's website www.genuspower.com.
CEO AND CFO CERTIFICATION
The managing director & CEO and the chief financial officer of theCompany have given annual certification on financial reporting and internal controls tothe Board in terms of Regulation 17(8) of the SEBI Listing Regulations copy of which isannexed as 'Annexure-H' to this report. The said annual certificate was placed before theBoard at its meeting held on May 12 2022. The managing director & CEO and the chieffinancial officer of the Company have also given quarterly certification on financialresults while placing the financial results before the Board in terms of Regulation 33(2)of the SEBI Listing Regulations.
The directors state that during FY 22 -
(a) the Company has not received significant or material orders passedby any regulatory authority court or tribunal which shall impact the going concernstatus and Company's operations in future.
(b) the Company has adopted a 'policy on prevention of sexualharassment at workplace' in line with the requirements of the 'Sexual Harassment of Womenat the Workplace (Prevention Prohibition and Redressal) Act 2013'. The said policy coversall employees with no discrimination amongst individuals at any point on the basis ofrace colour gender religion political opinion social origin or age. The Company hasalso complied with provisions relating to the constitution of internal complaintscommittee under the 'Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013'. The Company has an internal committee (which includes a womanmember) to monitor the behavior of all employees and to redress complaints if any.Further the Company has not received any complaint regarding sexual harassment in termsof the provisions of the 'Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013'.
(c) neither the managing directors nor the whole-time directors of theCompany receive any remuneration or commission from any of its subsidiary/associate/jointventure.
(d) the statutory auditors or cost auditors or secretarial auditors ofthe Company have not reported fraud to the audit committee or to the Board under theprovisions of Section 143(12) of the Act including rules made thereunder.
(e) the Company maintained healthy cordial and harmonious industrialrelations at all levels.
(f) the Company has complied with the applicable provisions of thesecretarial standards issued by the Institute of Company Secretaries of India andnotified by the Ministry of Corporate Affairs.
(g) there is no corporate insolvency resolution process initiated underthe Insolvency and Bankruptcy Code 2016.
(h) there was no instance of one time settlement with any bank orfinancial institution.
(i) in line with our commitment towards the green initiatives and goingbeyond it electronic copy of the notice of 30th annual general meeting of theCompany including the annual report for FY 22 are being sent to all members whose e-mailaddresses are registered with the Company or depository participant(s) or registrar andshare transfer agent of the Company.
The directors would like to thank the members clients vendorsdealers and business associates of the Company for their abundant support and valuablesustenance given during the financial year under review. The directors would also like tothank the Government of India the State Governments SEBI BSE NSE BankersDepositories Tax Authorities RBI MCA Ministry of Power Ministry of Finance StateElectricity Boards and Power Utilities for their unstinting cooperation and look forwardto their continual support. The directors would like to express their sincere appreciationfor the hard work team spirit commitment and support extended by the members of theGenus family.
For and on behalf of the Board of Directors
Ishwar Chand Agarwal
Jaipur August 03 2022