The Board has pleasure in presenting the (12th) Twelfth Annual Report on business andoperations of the Company for the year ended 31st March 2017.
|1. FINANCIAL HIGHLIGHTS || || |
| || ||(Rs. in lakhs) |
|PARTICULARS ||YEAR ENDED ||YEAR ENDED |
| ||31-03-2017 ||31-03-2016 |
|Revenue from operations (A) ||44231.09 ||25768.11 |
|Other Income (B) ||297.44 ||215.91 |
|Operating expenditure (C) ||37104.84 ||24933.18 |
|Earnings before interest tax depreciation and amortisation (EBITDA) ||7423.69 ||1050.84 |
|[D=A+B-C] || || |
|Finance Cost (E) ||10393.81 ||12520.96 |
|Depreciation and amortization expense (F) ||2834.17 ||2657.08 |
|Profit / ( Loss) before tax [G=D-E-F] ||(5804.29) ||(14127.20) |
|Provision for Taxation (incl. deferred income tax) (H) ||14.23 ||0 |
|Profit / ( Loss) after tax [I=G-H] ||(5818.52) ||(14127.20) |
2. PERFORMANCE REVIEW
During the year under review the Company achieved turnover of Rs. 44231.09 lakhs duringthe financial year 2016-17 as compared to Rs. 25768.11 lakhs in the previous yearan increase of 71.65%. The Earnings before interest tax depreciation and amortisation("EBITDA") of Rs. 7423.69 lakhs in the financial year 2016-17 ascompared to Rs. 1050.84 lakhs in the previous year an increase of 606.45% due tofull utilization of running capacity but at lower realisation.
Your Directors feel that the Company will be seeing a turnaround in the financial year2017-18 keeping in view the certain measures taken or expected to be taken by theGovernment to support of the domestic manufacturers in India viz. Central Public SectorUndertakings "CPSU" Scheme to replace the Domestic Content Requirement"DCR" Policy viability gap funding policy etc.
3. RESERVES AND SURPLUS
During the year under review the Company has not transferred any amount to generalreserves due to losses incurred.
Due to non-availability of profit the Board does not recommend any dividend for theyear ended 31st March 2017.
Your Company has implemented International Quality Management System based on therequirement of ISO 9001:2015. The Company has established implemented and maintaining aQuality Management System. During this year ISO 14001 surveillance was carried out by TUVNord and the auditors recommended the continuation of the ISO 9001: 2015. Apart from theabove your Company is also OHSAS-18001:2007 and ISO-14001:2015 certified. Your Companyhad also taken various initiatives during the year for ISO awareness like ISO Audits ISOAwareness sessions specially week observations (POI) point of improvement NCRs (NONConformities) safety week which enhances the three values viz. Integrity Quality andSafety.
6. FIXED DEPOSITS
During the year under review the Company has not accepted any fixed deposit within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 and no amount of principal or interest is outstanding as on thebalance sheet closure date.
7. STATUS OF IMPLEMENTATION OF 250 MW PROJECT
In view of the market viability over Solar Industry the Company is expected that thefull utilization of capacity will use by end of the financial year 2017-18.
8. NUMBER OF MEETINGS OF THE BOARD
Eight (8) meetings of the board were held during the year. For details of the meetingsof the board please refer to the point no. 2 of the Corporate Governance Report whichforms part of this Report. The intervening gap between any two consecutive Board Meetingsdid not exceed 120 days.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors
The Independent Directors of the Company have given a declaration confirming that theymeet the criteria of independence as prescribed under Section 149(6) of the Companies Act2013 ("the Act") and the SEBI (Listing Regulations and Disclosure Requirements)Regulations 2015.
Mr. Hulas Rahul Gupta [DIN: 00297722] Managing Director liable to retire by rotationat the ensuing Annual General Meetingand being eligible has offered himself for there-appointment. The Board of Directors recommended his reappointment for the considerationof the shareholders in ensuing Annual General Meeting. A brief profileand other details asrequired under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 are provided in the Notice of 12th Annual General Meeting of theCompany. However there was no change in the board of the company during the financialyear.
Key Managerial Personnel
During the year there was no change in Key Managerial Personnel. Pursuant to theprovision of Companies Act 2013 the key managerial personnel of the Company are Mr.Hulas Rahul Gupta Managing Director Mr. Anand Kumar Agarwal Chief Financial Officer andMr. Manish Gupta Company Secretary.
10. BOARD EVALUATION
The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations").
The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc.
In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the concerned independent director beingevaluated.
11. REMUNERATION POLICY
The Nomination and Remuneration Committee of the Company leads the process for BoardAppointment in accordance with the requirements of the Companies Act 2013 SEBI (ListingRegulations and Disclosure Requirements) Regulations 2015 and other applicableregulations or policy guidelines.
The policy for determining the remuneration for Directors Key Managerial Personnel& other employees is available on website of the Company i.e.http://www.indosolar.co.in/images/pdf_file/NOMINATION%20AND%20 REMUNERATION%20POLICY.pdf.
12. EXTRACT OF THE ANNUAL RETURN
The extract of Annual Return in Form MGT -9 as required under Section 134(3)(a) of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 is given in Annexure - I to this Report.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES REFERRED TO INSECTION 188(1) OF THE COMPANIES ACT 2013
None of the transactions entered into by thecompanywithrelatedpartiesduringthefinancialyear 2016-17 falls under the scope of section188(1) of the Companies Act 2013. Information on transactions with related partiespursuant to section 134(3)(h) of the Companies Act 2013 read with rule 8(2) of theCompanies (Accounts) Rules 2014 are given in Annexure II in Form AOC-2 and thesame forms part of this Report.
However omnibus approval is obtained from the Audit Committee for the related partytransactions which are foreseen and repetitive in nature.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the financialyear 2016-17 the Company has not given loans guarantees/surety orinvestment as described under Section 186 of the Companies Act 2013.
15. DETAIL OF SUBSIDARIES JOINT VENTURES AND ASSOCIATE COMPANIES
There is no subsidiary joint venture or associate of the Company during the FinancialYear 2016-17.
16. AUDIT COMMITTEE
The details pertaining to composition of audit committee are included in the point no.3 of the Corporate Governance Report which forms part of this Report. The intervening gapbetween any two consecutive Audit Committee Meetings did not exceed 120 days.
17. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Due to the continued losses incurred by the Company the CSR provisions of CompaniesAct 2013 are not applicable.
18. CHANGES IN CAPITAL STRUCTURE
There was no change in capital structuring during the period 2016-17.
19. RISK MANAGEMENT
The Board of Directors is overall responsible for identifying evaluating and managingall the significant the Company. The Board has approved the Risk Management Policy whichacts as the guideline by which the key risks are managed across the organization.
The Risk Management Policy is available on the Company's Website www.indosolar.co.in.
20. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The details in respectofinternalfinancialcontrol and their adequacy are included in thepoint no. 6 of the Management Discussion & Analysis Report which forms part of thisreport.
21. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company promotes ethical behaviour in all its business activities and has put inplace a vigil mechanism for
Directors Employee and other person dealing with the Company for reporting illegal orunethical behaviour actual or suspected fraud or violation of the company's Code ofConduct. The mechanism provides for adequate safeguards against victimization ofDirectors employees or other persons who avail the mechanism. In exceptional casesDirectors and employees have direct access to the Chairman of the Audit Committee.
The Vigil Mechanism (Whistle Blower Policy) is available on the Company's websitewww.indosolar.co.in.
During the year under review M/s B S R & Co. LLP Chartered Accountants (FirmRegistration Number:101248W/W-100022) stepped down as the Statutory Auditors of theCompany.
Subsequently M/s. Arun K Gupta & Associates Chartered Accountants New Delhi(Firm Registration Number: 000605N) was appointed as Statutory Auditors of the Company tohold office till the conclusion of Annual General Meeting. Accordingly the Board ofDirectors in their meeting held on 11th August 2017 on the basis of therecommendations of the Audit Committee approved the appointment of M/s. Arun K Gupta& Associates Chartered Accountants New Delhi (Firm Registration Number:000605N)(subject to ratification of the appointment by the members at every interveningAnnual General Meeting) for the period of 5 (Five) years from the conclusion of the 12thAnnual General meeting of the Company till the conclusion of 17th Annual General Meetingof the Company to be held in the year 2022 in place of retiring Auditors.
Clarification/explanation on remarks in Independent Auditors' Report
On the Auditors' qualified opinion with regards to Going Concern Status of the Companythe reply from the management is as under: a. With reference to point no. 4(a) of theIndependent Auditor's Report we clarify that the management has evaluated the impact ofCDR exit and is of the view that there would not be any material impact of the same on thefinancial results. b. With reference to point no. 4(b) of the Independent Auditor'sReport the management is in view that Double Bench of High Court of Delhi upheld theorder of the single bench vide order dated 10th April 2017 against Company'sclaim for eligibility of capital subsidy under SIP Scheme of Government. Departmentpreferred Special Leave Petition "SLP" against the said order before HonorableSupreme Court on 07th July 2017. In view of the uncertainty and reasonable assurance thesaid grant has not been recognized. c. With reference to point no. 4(c) of the IndependentAuditor's Report we clarify that being an Export Oriented Unit the Company needs toachieve positive NFE during a period of 10 years from the start of commercial productionand in view of the future projections the management is hopeful of achieving positive NFEand expects no cash outflow on this account. d. With reference to point no. 4(d) of theIndependent Auditor's Report we clarify that as Andhra Bank and Indian Bank hastransferred absolute assignment to Asset Reconstruction Company (India) Limited (ARCIL).In the absence of execution of restructuring agreement with ARCIL regarding suchassignment of facilities adjustments if any in the carrying value of borrowings couldnot be ascertained. e. During the year under review the Statutory Auditors have notreported any matter under Section 143 (12) of the Companies Act 2013 therefore no detailis required to be disclosed under Section 134(3)(ca) of the Companies
Pursuant to the provision of Section 148 of the Companies Act 2013 read with Companies(Cost Records and Audit) Rules 2014 the Board of Directors at their meeting held on 08thAugust 2016 has appointed M/s Kabra & Associates Cost Accountants (Firm RegistrationNumber: 000075) as the Cost Auditors to conduct audit of cost records relating to theproducts manufactured by your Company for the financial year 2016-17.
Pursuant to the provisions of the Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration) Rules 2014 the Company had appointed M/sChandrasekaran Associates a firm of Company Secretaries in Practice to undertake thesecretarial audit of the company for the Financial Year 2016-17. The report of SecretarialAudit is annexed to this report as Annexure III.
The Secretarial Auditor's Reportdoes not contain any qualification reservation oradverse remark or disclaimerand does not require further comment except the following:With reference to the observation on imposition of fine of Rs. 55000 each by NationalStock Exchange of India NSE' and BSE Limited BSE' in respect of non-complianceof Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 in the Secretarial Audit Report. The Company exited from Corporate DebtRestructuring CDR' Mechanism on 04th November 2016 due to which Company needed moretime to calculate the impact of the same over financial results. As such the unauditedfinancial results for the quarter ended 30th September 2016 could not be submitted ontime as required under Regulation 33 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the Company advised the same to NSE & BSE on 14thNovember 2016. Due to CDR matter and uncertainties arising thereof M/s. B S R & Co.LLP Chartered Accountants stepped down as Statutory Auditors of the Company on 19thNovember 2016. The Company appointed M/s. Arun K Gupta & Associates CharteredAccountants as Statutory Auditors on 21st November 2016. The Company submitted theunaudited financial results for the quarter ended 30th September 2016 on 26th November2016 and Stock Exchanges imposed fine of Rs. 5000 per day for 11 days for the delay insubmission of results.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
Information relating to conservation of energy technology absorption and foreignexchange earnings and outgo as required to be furnished under the provisions of section134(3)(m)of the Companies Act 2013 given as Annexure IV
to this Report.
24. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 of the Companies Act 2013 the Directorsconfirmed that: a. in the preparation of the annual accounts for the year ended 31stMarch 2017 the applicable accounting standards had been followed along with properexplanation relating to material departures; b. they had selected such accounting policiesand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theend of the financial year and of the profit and loss of the Company for the period ended31st March 2017; c. they had taken proper and sufficientcare for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d. they had prepared the annual accounts on a going concern basis;e. they had laid down Internal financialcontrols to be followed by the Company and suchinternal financial controls are adequate and were operating effectively; and f. they haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.
25. PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 givenas Annexure V forming integral part of the Annual Report.
26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review in terms ofRegulation 34 of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations 2015 given as AnnexureVI forming integral part of the Annual Report.
27. CORPORATE GOVERNANCE REPORT
Your Company strives to ensure that best Corporate Governance Practices are identifiedadopted followed.
The Report on the Corporate Governance forms an integral part of this report and is setout as Annexure VII to this Report. The Certificate from the practicing CompanySecretary M/s Chandrasekaran Secretaries certifying compliance with the conditions of theCorporate Governance as stipulated under Regulation 15(2) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is annexed with the Report on CorporateGovernance.
28. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes have occurred and commitments made affecting the financialposition of the Company between the end of the financial year of the Company i.e. 31stMarch 2017 and the date of this Report i.e. 11th August 2017.
29. DETAILS OF SIGNIFICANT AND MATERIAL ORDER
No significant and material order have been passed by any regulator or court ortribunal impacting status or future operations of the Company.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandate under "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" the Company has in place a formal policy forprevention of sexual harassment of its women employees.
The Company has an Anti Sexual Harassment Policy in line with the requirement of"The Sexual Harassment of
Women at Workplace (Prevention Prohibition and Redressal) Act 2013".
Further the Company has constituted Internal Complaints Committee to redressComplaints received regarding sexual harassment during the period 2016-17. The followingis a summary of sexual harassment complaints received and disposed off during the period:
|Number of Complaints received ||Nil |
|Number of Complaints disposed off ||Nil |
Your Directors wish to place on record their sincere appreciation of the efforts anddedicated services of all the employees which have contributed by staying with the Companyin the tough period.
The Board of Directors places on record its appreciation for the support assistanceand co-operation received from Government Regulators and the bankers to the Company i.e.Union Bank of India Bank of Baroda Corporation Bank and Asset Reconstruction Company(India) Limited (ARCIL).
The Board is thankful to the shareholders for their support to the Company.
The Board is also thankful to the employees of the Company for their co-operation andunstinted dedication to duty leading to cordial industrial relations during the year underreview.
On behalf of the Board of Directors
For INDOSOLAR LIMITED
| ||H. R. GUPTA ||GAUTAM SINGH KUTHARI |
| ||Managing Director ||Director |
| ||DIN: 00297722 ||DIN: 00945195 |
|Place : Greater Noida || || |
|Date : August 11 2017 || || |